Thank you, Mr. Chair.
Ladies and gentlemen, thank you for the invitation to this meeting of the committee.
First of all, I would like to quickly introduce Pampev. We are an agricultural company from Quebec City, founded in 1980. Our main product is forest seedlings.
I would like to use these few minutes to bring to your attention a situation that adversely affects forest seedling producers, who have been excluded from the CAIS program since 2003, and, most recently, from the AgriInvest and AgriStability programs. This leads to dysfunctional competition between producers, their products and other similar products.
In 2004-2005, after applying for compensation under CAIS, after some nurseries had gone through all the administrative steps, after others had received cheques, some nurseries were excluded from the program, had their applications turned down, and received demands for cheques to be returned and money to be reimbursed. We believe that others received the amounts they had asked for and have not been bothered since, and that they have received money under subsequent programs until very recently in 2009.
The first indication of the exclusion from the programs comes in paragraph 4.3.4 of the program guidelines, entitled “Wood Sales and Tree Production“. This contains the words: “for use in reforestation“.
Then, in Canada Revenue Agency documents—the Farming Income and the AgriStability and AgriInvest Programs Guide, number RC4060, the Farming Income and the AgriStability and AgriInvest Programs Harmonized Guide - Joint Forms and Guide, number RC4408, and the Farming Income form, number T4003—we see the same text, word for word, as in the program guidelines. One paragraph mentions woodlots. A nursery is not a woodlot. Seedlings are generally grown in greenhouses, tended, fertilized, irrigated, and monitored for growth, health and quality. These are the same production infrastructures that are found, for example, in market gardens, or ornamental and horticultural operations.
Seedlings can be sold for reforestation, afforestation, soil rehabilitation, the prevention of erosion, windbreaks, education, ornamentation and even promotional gifts. Often the nursery operator does not know what his products are going to be used for. The client can do whatever he wants with them.
The same documents jointly issued by the Canadian Revenue Agency and the NISA program in 2001 and 2002 make no mention of any exclusion. It is only in 2007, in the Canada Revenue Agency documents Farming Income and the AgriStability and AgriInvest Programs Harmonized Guide - Joint Forms and Guide, that the words “trees and seedlings for use in reforestation“ occur as one of the categories that are ineligible for the program. It is interesting because the word “seedling“ is an addition. A seedling is defined as a young tree, grown from seed, having a diameter at breast height equal to or less than 1 cm and a maximum height of 1.5 m. The word “tree“ is generally used for something bigger. Before, only the word “tree“ was used. Seedlings are usually described as growing from seeds, but products used in reforestation can also come from cuttings, root cuttings, tips of branches or even tissue culture. This is another injustice that the use of the word “seedling“ causes. An analogy might be with the exclusion of aquaculture products. Salmon was not excluded in order to keep trout; young fish were not excluded while mature fish were kept; there was no difference between fish for processing, whether for smoking, for fish paste or even for omega-3 capsules, and fish for stocking bodies of water, lakes and rivers. There was no difference.
It goes further. On the first page of the guidelines, we read that where discrepancies exist between the guidelines and the text of Part II of the federal-provincial-territorial agreement on a policy on agriculture, food or agri-industrial product—on implementation—the text in the federal-provincial-territorial agreement shall be deemed to be correct. The text of the agreement mentions no exclusions.
Seedling producers meet the requirements for participant eligibility and for the definition of farming income in all respects.
In a CAIS program handbook that came into effect on January 1, 2003 and in two subsequent handbooks, the only exclusion is in point 10.8 that reads: “Income and expenses related to the sale of wood are not eligible“ and “Income from sales of wood or agricultural activities conducted outside Canada are not eligible...“
In the various guidelines, there is no consistency in the way in which the text is interpreted.
In all the research that we did to understand when and how we were excluded, we found no evidence to support the legality of the exclusion. Under which section of the federal-provincial-territorial framework agreement can an exclusion of this kind be made? Do the agreement or the guidelines reflect the Farm Income Protection Act, 1991, as to the agricultural products covered and the eligibility criteria? Paragraph 5(1)(b) of that act, dealing with the content of agreements, states that an agreement must list the products and the criteria for determining their eligibility. Neither in the agreement nor in the guidelines is any restriction placed on seedlings.
What has happened since the meeting of this committee on November 7, 2006, in which Danny Foster confirmed that, in the specific case of forest seedling producers, the condition for eligibility to the program was that it would be farming income as defined by the Canada Revenue Agency? What has happened? A new element appeared in the text of the handbook that came into effect on January 1, 2007, for the 2006 year. Let me read you point 8.10: “Tree production for the purposes of reforestation is not allowable under the Program.“ But point 8.9, which was there previously, remains: “Income and expenses related to wood sales are considered non-allowable.“ It is interesting to note that a distinction is now made between the two products, a distinction that was not made beforehand.
In the Farming Income and the AgriStability and AgriInvest Programs Harmonized Guide - Joint Forms and Guide, we can see on page 19, in the paragraph on non-allowable items, “Trees and seedlings for reforestation“.
Mr. Chair, our only hope is that our presence before this committee will not further block our initiatives, but, rather, will resolve a situation where the competitiveness and the survival of some agricultural companies are threatened.
Mr. Chair, ladies and gentlemen, thank you for the attention that you have given to my remarks.