Evidence of meeting #11 for Agriculture and Agri-Food in the 40th Parliament, 2nd session. (The original version is on Parliament’s site, as are the minutes.) The winning word was chair.
A recording is available from Parliament.
Liberal
Wayne Easter Liberal Malpeque, PE
Mr. Chair, you ruled on the fact of the amendment to the motion. You ruled on that, and we may challenge that ruling at some point in time—
Liberal
Wayne Easter Liberal Malpeque, PE
—but if we had gone ahead and voted on Mr. Anderson's motion, as we should have done, we then would have had a new motion on the floor, which itself could have been amended.
In fact, does anybody in this room believe listeriosis is not a food safety issue? Is that what the parliamentary secretary is trying to argue, that listeriosis is not a food safety issue? Of course, Mr. Allen's motion made the point on listeriosis, because if you go back to the discussion and you go back to the original motion that was made at committee, it started with the “whereas” by talking about listeriosis. So it in fact had to be part of the discussion.
The bottom line, in terms of my argument, Mr. Chair, is this. We believe, number one, the subcommittee should have got started a lot faster than it did. Why the delay happened, I do not know. We know that on the schedule at the moment there are seven potential meetings, if we get started right away. We know there are 47 potential witnesses. The food safety issue is a huge, broad issue. We believe it can't be done by the end of June, so it could be scheduled into the fall. We'll do the best we can to get it done by spring, but I think the schedule, as laid out yesterday, was an opportunity for us to go ahead and do our work on food safety.
Liberal
Mark Eyking Liberal Sydney—Victoria, NS
Mr. Chair, I've been here eight years and I know what protocol is all about, but I think what happened yesterday is very sad in the way it happened. It's food safety, and listeriosis is part of it. But the government has taken a position, and our critic has taken a position; I think we should move on to the witnesses now, or tell the witnesses to go home, because this is not fair. This is a bad reflection on our committee. My suggestion to you, Chair, is that we allow the witnesses to make their presentations and move on with this meeting.
Conservative
The Chair Conservative Larry Miller
I asked that before I went to my speakers list. To be fair, Mr. Eyking, if I'm going to allow some to speak, I have to allow the names that I have on it.
Mr. Storseth, is there a point of order?
Conservative
Brian Storseth Conservative Westlock—St. Paul, AB
I have a point of order. I didn't catch all that Mr. Eyking said. Was it a motion that Mr. Eyking made, or is he just making a suggestion?
Liberal
Conservative
Conservative
Conservative
The Chair Conservative Larry Miller
I should note that joining us by videoconference are Mr. Henry Vissers, executive director of the Nova Scotia Federation of Agriculture, and Mr. John Tilley, vice-chair of the Nova Scotia Cattle Producers.
Thank you for joining us, gentlemen.
We'll move on to Mr. Cameron MacDonald and Mr. Brian Morrison of the Prince Island Cattle Producers Board for 10 minutes in total, please.
Cameron MacDonald Past Chair, Prince Edward Island Cattle Producers
Thank you.
Good morning, ladies and gentlemen, members of the Standing Committee on Agriculture and Agri-Food. We'd like to thank the Honourable Wayne Easter for inviting us here today. My name is Cameron MacDonald. I'm the past chair of the Prince Edward Island Cattle Producers. My colleague is Brian Morrison, a current director of the PEICP.
Our organization represents 450 beef producers in P.E.I. However, today we're also representing the Maritime Beef Council, which is made up of the three beef cattle organizations from Prince Edward Island, Nova Scotia, and New Brunswick.
In the past month we have been busy trying to impress upon our governments the importance of the beef industry to the economy of the Maritimes and the Canadian economy. Beef production is a critical part of agriculture, because it is vital to crop rotation, its manure byproduct is a natural fertilizer, and beef cattle consume excess feed grains, potato byproducts, and forages. Without beef production, all other agriculture is at risk. It makes valuable use of marginal land and converts forage to a valuable product. Beef production contributed $18.8 billion to the Canadian economy in 2008.
Beef cattle production in the Maritimes has severely declined in the past few years. Since 2007, beef cattle finishing has declined 8% each year. The same occurred in the cow-calf production. Comparably, the number of producers in 2007 in P.E.I. was 650. In 2009 this number is estimated to fall as low as 350, a decline of 53%. This decline is having a noticeable effect on the Atlantic Beef Products Inc. plant in P.E.I., the Maritimes' only federally inspected beef plant. Atlantic Beef Products are currently experiencing difficulties sourcing enough cattle to meet their requirements.
In the years since BSE in May 2003, our industry has suffered significant financial losses. The price pre-BSE was as high as $1.94 per pound, dressed weight. Over the past year this price has averaged $1.54. The price is set by Atlantic Beef Products and is based on the Ontario price minus 9¢ per pound. This places Maritimes producers at an immediate disadvantage to other Canadian producers.
Beef production in the Maritimes is very different from that in western Canada. For example, animals in the Maritimes are housed indoors in the winter months, adding extra costs for manure handling and feed storage requirements. Maritime provinces also pay some of the highest electricity costs in Canada. Another example is that by the time the Maritimes cattle go to market, they're traditionally older than those in western and central Canada. This also means we have higher production costs and less cashflow.
Because of these factors we cannot overstress the importance of recognizing regional differences.
Brian Morrison Director, Prince Edward Island Cattle Producers
We have had several opportunities to meet with government officials. On October 21, 2008, the Maritime Beef Council met in Halifax with three maritime ministers. A meeting with the P.E.I. Cattle Producers and the Hon. Gail Shea resulted in a meeting with the Hon. Gerry Ritz in Ottawa. During this meeting, Mr. Ritz assigned a staff person, Dustin Pike, to be a direct link between the maritime groups and the minister's office, and he agreed to visit the Maritimes to meet with our commodity groups for all three maritime provinces. This was a historical meeting. In attendance were representatives from the three beef associations, the three hog associations, the Atlantic Grains Council, and the three federations of agriculture. Also present were three maritime ministers of agriculture.
From this meeting, the maritime red meat and feed grain working group was created. Its first meeting was held on March 10, 2009, during which two priorities were identified. The first was to find resources to ensure the working group could carry out all its responsibilities. The second was to undertake a study of the strategic plans from the three maritime beef, hog, and grains industries. This study will be used to develop a plan for the maritime red meat industry. It will also help identify similarities and differences that will be used to develop future programs.
Other elements of the study will identify the need for market infrastructure and brand development funding. This funding will be used to develop a maritime brand to market beef and pork and develop value-added products. However, the group unanimously agreed there is urgent need for transitional money to help producers survive until the long-term plan is in place.
Two proposals for transitional funding, one for beef and another for hogs, have already been presented to both levels of government. Under the beef program, called growth and sustainability, the object is to pay producers 40% of their eligible net sales over a five-year period. An additional 17% per year of annual net sales could be targeted towards capital investments for breeding stock, buildings, machinery, pasture management, and environmental goods and services.
There are many other issues impacting beef production profitability in the Maritimes. An advance payment program, which designated 2008 as severe economic hardship, has returned to normal standards of advancing. We welcome that the payments for livestock for 2008 have been deferred until September 30, 2010. However, this does not resolve the working capital deficiencies our producers are experiencing for 2009 and moving forward.
Therefore, we request to release the livestock that has been assigned as security for the 2008 production year to enable producers to receive advances on this livestock for 2009 production. As well, we request the advances for 2008 be set aside so that they do not impact on the 2009 maximum limit of $400,000.
Debt restructuring is another challenge facing our producers. There is an urgent need for a guaranteed low interest loan program to help producers manage their debt. In some isolated cases, producers have reported extreme difficulty when dealing with Farm Credit Canada. They report Farm Credit is often more difficult to deal with than the regular banking system. This is unfortunate, considering Farm Credit is the federal government's primary agriculture lending agency. Also, other producers who have gone through receivership are facing unexpected bills from Revenue Canada as their written-off debt is considered income. Revenue Canada needs to address this issue and find a way to resolve it, immediately.
Past Chair, Prince Edward Island Cattle Producers
There are challenges for other sectors of our industry. The $50 million announced in the federal budget to strengthen slaughter capacity has caused frustration for many federally inspected plants, including Atlantic Beef Products, because the federal government is either unsure of or unwilling to release the details of this program. This is also the case with the $500 million agriculture flexibility program. Without the parameters for these programs, opportunities to access this funding may be missed.
On the national scale, the beef cattle industry is facing challenges from its primary export market, the United States. The U.S. has implemented COOL, or country-of-origin labelling. This has created challenges for both the Canadian cattle and hog industries, which rely heavily on export.
COOL requires segregation of cattle before slaughter and labelling of beef after slaughter. This has created extra work for U.S. packers and uncertainty in the marketplace. As a result, many of them are refusing to accept live Canadian cattle.
Producers shipping live cattle to the U.S. are facing additional processing fees as a result of COOL, estimated at $90 per head. In the Maritimes there is less dependency on U.S. slaughter to market our animals; however, some who relied on this market in the past are finding it less profitable to market their animals there.
The option to slaughter cattle in Canada also has its drawbacks. Canadian slaughter costs producers an estimated $150 per head for fees and regulations, such as the handling of specified risk materials, something U.S. producers do not have to pay.
We would like to close by saying thank you for allowing us to present to you today and by restating that we are actively seeking solutions to help address the challenges we face by working together to develop a long-term plan for the maritime red meat industry. However, we need our governments to work with us to develop funding strategies that will preserve what we have left and to help restore our industries to the healthy and viable industries they once were.
Thank you.
Conservative
The Chair Conservative Larry Miller
Thank you very much, gentlemen.
We will now move to Mr. Henry Vissers and Mr. John Tilley. You have about 10 minutes, please.
Henry Vissers Executive Director, Nova Scotia Federation of Agriculture
Thank you.
My name is Henry Vissers. I'm the executive director of the Nova Scotia Federation of Agriculture. John Tilley wasn't able to make it today, but with me is Dave Oulton, the chair of the Nova Scotia Cattle Producers Association. We'll be sharing the address this morning.
I just want to extend our appreciation for the opportunity to meet with the standing committee today and to discuss the red meat sector in Nova Scotia and the Maritimes. You've already had a bit of an outline of the efforts being made and that it's a joint effort between different organizations to find a way forward for the industry.
To start, I just want to go over a few points about the Nova Scotia Federation of Agriculture—maybe a bit of a sales pitch.
Our mission is to ensure a competitive and sustainable future for agriculture and a high quality of rural life in Nova Scotia, through our goals of financial viability, ecologically sound practices, and social responsibility.
Our organization has existed since 1895. Today we have over 2,500 members in Nova Scotia. Our structure includes county federations and over 20 recognized commodity groups.
Agriculture in Nova Scotia employs over 15,000 people and is worth in excess of $1 billion in economic activity to the province. Our farm gate sales exceed $470 million a year.
The current situation as we see it in Nova Scotia is that because of support from the Government of Canada over the last 15 years, encouraging the red meat industry to expand and develop export markets, plus the favourable Canadian dollar relative to the U.S. dollar, there's been a rapid expansion of the red meat sector. Pork production, as you probably well know, soared to a point that over 50% of what we produce is exported, and beef production has kept pace with that effort.
At the same time as this rapid expansion was occurring, feed freight assistance was eliminated, which put the Maritimes at a further disadvantage. Therefore, the margins for livestock producers in the Maritimes became even tighter than during the days that feed freight assistance existed.
Maritime livestock production—beef, pork, and sheep—is mainly a domestic market. We produce far less in Nova Scotia than our consumption of all red meats.
In spite of that, the market establishes the price, and that price is based on a U.S. converted price. Nova Scotia red meat producers have been forced to produce meat for the Nova Scotia market at U.S. prices and to face all of the trade risks of exporting a large portion of the production. We face the same currency risk, disease risk, and tariff risk without any of the benefits of the higher profits other regions of Canada have enjoyed over the past number of years. Our margins over the last few years have been low—or negative for a number of those years. For the beef industry, this reflects back to the BSE fiasco mentioned in the prior presentation.
We're now facing the same kinds of challenges with COOL. Even though, as I said, Nova Scotia red meat exports are minimal and we produce less than 10% of our domestic consumption, our prices for both beef and pork have been discounted because of the restrictions on Canadian exports imposed by the U.S. COOL legislation. The Maritimes take a lot of their prices from the Ontario formula prices, so they're all U.S.-based prices converted to Canadian dollars. That's because of the nature of the marketplace and the limited number of retailers in Canada. So those are the prices our industry has been forced to take.
The two-year high value of the Canadian dollar, the high grain prices, and the low meat prices have put our industry on its knees. In Nova Scotia in 2009, we project that hog production will virtually disappear. At one point we had between 150 and 200 producers marketing 220,000 hogs a year to two federally inspected plants, plus a couple of provincially inspected plants. This year we're now down to 13 producers producing 10,000 market hogs and 60,000 early wean pigs, some of which were going to the U.S. but are now being shifted to or marketed to Quebec and Ontario. We feel that the beef industry is a year or so behind what happened with pork producers, and without some quick action, we're going to see the same kind of result we did with the pork industry.
I'm going to turn it over to Dave now to provide some highlights on beef production in Nova Scotia.
David Oulton Chair of the Nova Scotia Cattle Producers Association, Nova Scotia Federation of Agriculture
I'll add what I can here, fellows. In particular, the Nova Scotia beef industry still suffers from various bans that were implemented as a response to the appearance of BSE in western Canada back in May of 2003. Most of the Canadian beef industry experienced a sharp drop in price as well as the collapse of the equity in cowherds. Nova Scotia beef producers—in fact, all maritime beef producers—experienced that drop in price, the collapse in equity, and more. The Maritimes became the place to get rid of embargoed supplies of beef, embargoed because they couldn't move into the U.S. market.
That has changed, but profitability still hasn't come back to our marketplace. An industry already struggling to survive the brutal combination of economic forces--discounted cattle prices and increasing costs of production--found prices for cattle driven further down as we began the race to the bottom. How difficult it has been to stand by and watch producers contract and then abandon production in response to the ravages of the post-BSE era.
Cattle numbers in Nova Scotia have dropped from more than 30,000 in the late 1990s to around 23,000 today. That's a drop of one-third. Clearly, the beef industry is in crisis. As Henry has suggested, the pork industry may simply be the first red meat to collapse, and beef is not all that far behind. All the economic multipliers and economic advantages are being lost to our local economy.
Yet the industry struggles to find a way forward—something consistent with our values and reflective of the Maritimes' streak of stubborn determination. For more than a year, the Nova Scotia beef industry has been working to reposition itself and to find a way forward within our history and among our producers and partners, a plan or strategy that will again create profitability and sustainability that were the essence of agriculture in Nova Scotia and the Maritimes not that long ago.
Who would ever have imagined Nova Scotia, P.E.I., or New Brunswick without a pork and beef industry? That is the reality facing our producers every day. Without change, assistance, and direction from our government, a centuries-old agricultural way of life will evolve into irrelevance and disappear.
Executive Director, Nova Scotia Federation of Agriculture
The Province of Nova Scotia has recently started talking about the five capitals: financial, built, natural, human, and social capitals. We risk losing much of this capital as it relates to the farm community in Nova Scotia.
When we talk about financial capital, we're talking about the funds available for public-private sector investment in business activities, research and development, social programs, and other services. The loss of the agricultural sector in rural Nova Scotia will reduce the investments we are able to make in these areas.
Similarly, with built capital, which is manufactured assets, equipment, technology, and infrastructure, again, the loss of rural jobs will burden these public networks.
Natural capital is the natural environment, which is made up of dynamic and interacting systems of organisms and habitat: air, water, land, and the minerals on which they depend. Renewable and non-renewable natural resources are components of the natural capital. This is the heart of the agricultural society, and the loss of farms directly affects the natural capital we possess.
Human capital is the capacity of individuals to participate actively and productively in society and the economy; individual capacities are health, skills, knowledge, creativity, education, training, and experience. Once lost, farm skills and other related skills rarely come back.
Social capital is relationships and networks that support individual and societal well-being and healthy, prosperous communities--again, the heart of rural Nova Scotia.
Without agriculture, where are our rural communities in Nova Scotia?
Now we want to talk a bit about planning for the future. There are a number of things that can be done to support the red meat sector.
The maritime farm community, as mentioned previously, has organized what we call the maritime red meat and feed grains working group. That group has made requests to Minister Ritz for different things. One of them is securing funds for development of a business plan that will not reinvent the wheel but will build upon the current and previous study material. The second is to develop the guidelines for the request for proposal and the business plan development.
There were also some things that need clarification from the federal budget. We still don't have any details around the $500 million agriculture flexibility program to facilitate the implementation of new initiatives federally and in partnership with the province. We've had some discussions with the provincial government in Nova Scotia, and they're still waiting to know whether matching funds are required, how that will be allocated to the provinces, and how much flexibility we really will have for those programs.
The other is the $50 million that was announced, over the next three years, to strengthen the slaughterhouse capacity in the various regions of the country. We have a great deal of interest in that. The Province of Nova Scotia is working with a couple of our small packers to develop a submission once we have an application process for that.
We were recently told that this is now a loan rather than a grant. That's a disappointment to us. We believe it should be a grant, with matching funds from slaughter facilities and some support from the province.
Chair of the Nova Scotia Cattle Producers Association, Nova Scotia Federation of Agriculture
To follow up on that, the maritime beef industry would like to reposition itself in the marketplace--
Conservative
The Chair Conservative Larry Miller
Mr. Oulton, if you could be very brief, we are well over the time.
Chair of the Nova Scotia Cattle Producers Association, Nova Scotia Federation of Agriculture
Are you? Have we talked that long?
Conservative
The Chair Conservative Larry Miller
I don't want to take away from your comments. If you can address them in the question segment, that's great. I'll leave it up to you. I will give you that lenience.
Chair of the Nova Scotia Cattle Producers Association, Nova Scotia Federation of Agriculture
Good. Let us run through this real fast.
We need to begin the difficult transition away from imported food--and by imported, I mean imported from other parts of Canada into our marketplace.
The beef industry will launch its strategy plan in the first week of June. The industry is committed to a new way of doing business and an approach dedicated to the principles that Nova Scotia will be better off when Nova Scotians put food in our own stores and on our tables.
This can be nothing more than strategic right now. In creating stability and encouraging growth and change, we need a climate that allows and invites people to invest in a better future.
A crisis is an awful thing to waste. We would like a partnership with the federal government at the table and somehow define how we can take advantage of this present crisis, for all of our producers.
Thank you.
Conservative
The Chair Conservative Larry Miller
Thank you very much, gentlemen.
We'll move to our seven-minute round.
Mr. Easter.