Agriculture Committee on June 9th, 2009

[James Mann]

If that were true, it would speak to how much collusion, if you wish, or how much lack of competitiveness there is in the U.S. market. Certainly if one were able to get an advantage over the other to the last dollar being saved in the acquisition of their stock to go to their abattoir, you'd think it would naturally happen that the price would rise to that point.

I'm not an expert on this topic, but I have been asked to speak to a number of U.S. farm organizations, including R-CALF, about COOL and the processes they use to discriminate against the Canadian marketplace to keep their costs down and of course capture a higher margin for U.S. beef. I believe it's a tactic. How widespread and how they are able to use it I'm not sure. But I do know that if you talk to a killing plant in the U.S. they will claim greater costs. It's not as simple as separating the two herds, because the processes they have are not readily conducive to that type of system.

My comment to them is to be careful what you wish for, because if the Canadian product is labelled “Made in Canada”.... We have some of the best beef and the best pork in the world, and when consumers start tasting what barley-fed beef is compared to corn-fed beef, there may be a reverse situation occurring. I say that somewhat tongue-in-cheek because the market is always right, and right now it's that much of a differential and it should not be. I'm not sure what the answers are, but definitely more work needs to be done with politicians in the U.S. to get that one fixed.

[The Chair, Conservative, Larry Miller]

Thank you very much.

Before I go to Mr. Bellavance, coming from a part of the country that has a lot of corn-fed beef, I won't bother commenting. We have some friendly kidding each other about it with my western colleagues.

Mr. Bellavance, seven minutes.

[André Bellavance, Bloc, Richmond—Arthabaska, QC]

Thank you very much for your testimony.

Mr. Godin, I have met you before because you are in my constituency. I am honoured that you are here with us today. Your testimony reflects the discussions that you and I have had together.

Mr. Valeriote has asked the minister why your industry was excluded. I can tell him that I have written to the minister to ask for the precise reason for the exclusion, but I have not had an answer yet. As soon as I receive it, I will share it with committee members.

Since we have been discussing this situation, it seems to me that you have been in administrative limbo, in a sense.

Before CAIS became AgriInvest, and such, some people in your industry already received benefits under the program. Some had to repay money that they had received, others did not. It was not very clear. Then changes were made to the guidelines that meant that you could all be stacked into one corner.

For the benefit of the committee, and for those who read our transcripts—I am sure that they do at Agriculture and Agri-Food Canada—can you tell me if someone who grows Christmas trees, for example, and sells them during the holidays, is an agricultural producer who is eligible for CAIS?

[Luc Godin]

You are right, I think. In Revenue Canada documents, Christmas tree producers are defined as agricultural producers, meaning that they can declare that income as farming income.

[André Bellavance, Bloc, Richmond—Arthabaska, QC]

Mr. Godin, if you produce Christmas tree seedlings, are you excluded?

[Luc Godin]

If I grow seedlings to sell to Christmas tree producers, I would not be excluded.

[André Bellavance, Bloc, Richmond—Arthabaska, QC]

How does the government know?

[Luc Godin]

We have no idea.

[André Bellavance, Bloc, Richmond—Arthabaska, QC]

They do not tell you?

[Luc Godin]

We declare our income by using product codes. We put “nursery“ and “ornamental“.

As you said, there is an administrative limbo, and we really do not know where we fit. When we have asked, we have never been told when and why we were excluded, nor which piece of paper allows it.

[André Bellavance, Bloc, Richmond—Arthabaska, QC]

Let me continue with the same example. When the Christmas tree seedlings go to a producer, you are telling me that you are not excluded. But, still, you produce large quantities of them. You do not know exactly where your product ends up.

[Luc Godin]

No. The same seedlings, the same species, can be used for soil rehabilitation. In Alberta, for example, a lot of seedlings are used to rehabilitate the tar sands. The same client can buy seedlings and use them for reforestation or just for planting on waste land. That is reforestation too, it is making a new forest. They can also be used to protect the soil or for energy.

When the seedlings are used for energy plantations, will they be excluded? Is that reforestation? Nothing is clear.

[André Bellavance, Bloc, Richmond—Arthabaska, QC]

This committee has considered you agricultural producers. You said that, in 2006, Danny Foster, of Agriculture and Agri-Food Canada appeared before the Standing Committee on Agriculture and Agri-Food. Mr. Atamanenko spoke to him specifically about the nursery operators' situation. Mr. Foster's answer was that it depended on whether Revenue Canada and Revenu Québec felt that producers were conducting an agricultural activity, which you do. You are also established in western Canada. I imagine that the province where you became established considers you...

[Luc Godin]

We have been agricultural producers since 1980.

[André Bellavance, Bloc, Richmond—Arthabaska, QC]

We have to understand that all producers do not necessarily qualify for all programs. Mr. Foster said that, to qualify, you had to be considered an agricultural producer by Revenue Canada, which you are.

So how come something has been added that excludes you?

[Luc Godin]

We operate in good faith. We explain, we provide details, we make our case. People take our arguments and sort of use them against us. This was only added afterwards and spelled out in that way in the documents of Revenue Canada, the AgriInvest and AgriStability programs, even CAIS. They did not make the same claim before, but they interpreted it that way and then they added it, as if to slam a door.

[André Bellavance, Bloc, Richmond—Arthabaska, QC]

Ms. Dawes, if I understood correctly, earlier, you read a passage from a letter from Mr. Stahl, the former Minister of Agriculture.

[Robin Dawes]

Yes, the reference I read was from a letter that Mr. Strahl wrote to the B.C. Landscape Nurseries Association when they queried him on this. But you know, similar to Luc's experience, our applications were filed before we even had access to guidelines that even mentioned seedlings. They were processed before those guidelines were available.

Going back to the question of whether we were ever given a reason, I have to say the reason we were given was that the committee voted us out. To me, that's a rather circular argument, because there was a vote apparently, but no one will provide us with the minutes to prove that. They say they voted us out.

My position is that clearly under legislation and under the implementation agreements, they had no right to vote us out, because they had agreed not to make any of those changes without changes to the legislation first, which clearly do not allow them to exclude agricultural producers on the basis of who they market to. So I still don't have a legitimate reason for why we have been excluded.

[The Chair, Conservative, Larry Miller]

Thank you, Mr. Bellavance.

We'll go to Mr. Atamanenko for seven minutes.

[Alex Atamanenko, NDP, British Columbia Southern Interior, BC]

Thanks to all of you for being here.

By the way, Robin, thanks for taking the time to show me your nursery sometime last year.

I would like to have a clarification.

Do not hesitate to comment, Mr. Godin.

If I have a nursery and this year I'm growing seedlings and they're sold to a company for reforestation, I'm not eligible for any programs.

[Robin Dawes]

That's correct.

[Alex Atamanenko, NDP, British Columbia Southern Interior, BC]

What happens if next year I decide to sell the seedlings for ornamental use or for Christmas trees? Does the same form for funding apply ?

[Robin Dawes]

Apparently that's the case, but I have to add that it's even more bizarre than that. This truly has happened.

We've sold trees to forest companies who were forest companies when we sold the trees to them, and I'm sure you've read this in British Columbia. Most forest companies have been allowed to sell those forest-licensed lands now for real estate. So the trees that were planted on them, even though ostensibly we thought they were going for reforestation, they were going to land beautification and landscaping for a real estate project. But we don't get to retroactively go back and say “Hey, wait a second, the end-user changed his purpose for those trees.” We're not in control of what the end-user does with the trees once they've left our farm, so it's even more than that.

But yes, in answer to your question.

[Alex Atamanenko, NDP, British Columbia Southern Interior, BC]

Do you normally sell to a distributor who then sells to the forest company or to Christmas tree people? Do you have to then disclose who the end-user is right away?

[Robin Dawes]

Some of our contracts are directly with forest companies, for example, TimberWest, which has now become a real estate company. Some of our producers sell through food cooperatives. In the case of Alberta, they sell through a cooperative, and some of our product is sold to brokers. We sell to brokers in both Alberta and in the United States, and we have no idea where those seedlings are sold afterwards.