Agriculture Committee on Nov. 3rd, 2009

[Brian Storseth, Conservative, Westlock—St. Paul, AB]

That does help.

[Brian Read]

We're looking for equivalency with the United States.

[Philip Cola]

Could I just add something to the point?

Pre-BSE, the Canadian industry—I don't know if we ever really touched on it, but I think it's a very important point to look at.... As a company, when we were on a level playing field, we were importing cows from the U.S. and processing, slaughtering, and deboning them in Canada. We increased our capacity year after year pre-BSE to accommodate a lot of these American cows that are right on our border in Quebec. We were doing a lot and importing jobs into Canada, when we were on a level playing field. It's very frustrating for us as a company to be in this situation. We never looked for government money or handouts ever, but when it comes to a situation when you're in dire need and ready to close your doors, I think it's very clear now.

You have to forgive me for being so up front, but I think it's very important to understand that the players who are left in the industry today—and there are not many left—are serious players who have been through many ups and downs in the beef cycle. The fact is that when we were on a level playing field, we were able to compete as well as or better than many of our American counterparts.

[Brian Storseth, Conservative, Westlock—St. Paul, AB]

Agreed, but we're not going to be on a level playing field anytime soon. Even with $31.70, we haven't even started talking about COOL or further adaptations that the Americans are continuing to make. So I guess I'll only bring two concerns that I have--and I'm glad you guys clarified that because it does make your position more tenable.

One is the issue of opening other markets. I'm only going to tell you what I hear from my producers. They constantly say they feel that even the national organizations that represent them have become too dependent on the American market. Now, is it the easiest market for us to get into? Absolutely. Is it potentially the most profitable? Probably. They do feel that we've become too trade-dependent on one market.

The other concern that is raised in looking at this is where does the cow-calf producer come in here? Where does your farmer come in here? Maybe $24 million a year to the slaughter industry is needed, but I do have some reservations, as we've seen in the past, as to whether that's going to mean an alleviation of pressure on my cow-calf producers in Westlock—St. Paul. All too often, they come to me after situations like this, or working with an industry like this, and say, “We're not receiving anything out of this. We're not receiving the benefit, and when I go to the Clyde auction mart, it's not meaning any more dollars in my pocket.”

So where is the plan with those producers that is going to make the difference, so you can say you have them on side?

I'll give the rest of my time to you.

[Brian Read]

Thanks a lot.

That's an important question. I sure don't have all the answers for you, but when we were looking at this rule, we asked, what's the advantage to us? In this case we ended up with none on the OTM.

One thing that will happen when we're complete and the $31.70 is awarded is at least your producers will have a place to have them processed, and they will be able to get U.S.-equivalent dollars. Right now, we're into a cow run. You have the Americans buying out dairy herds this winter. All you hear is, “This is number four here, it doesn't look like this one's going to be too big”, but it definitely distorts their need to come up and buy livestock out of Canada. They're filling their kills. They don't need to, and again we're into the fall.

It's hard to pick it, but without it you put the OTM plants at risk. That's what we do. As an employee of the meat industry--I've been a meathead a long time--as I said to you, I've supported this rule. I think it was the right thing for our country to do. I believe some parts of our industry have benefited by it. But again, it's UTM, not OTM.

Keep in mind, with UTM, with this current rule, market access, yes, it's important, but when we show up, our first competitor is the United States. It's not Australia and New Zealand. Yes, they're there, but they're two back from us. Our current competitor is the United States. For OTM--we're talking OTM product here today--that's our number one competitor. The minute you show up, you're disadvantaged.

That's the slippery slope we're on.

[Brian Storseth, Conservative, Westlock—St. Paul, AB]

Don't get me wrong, I do believe this disparity between the countries needs to be eliminated--

[Brian Read]

It's hard to quantify the value to the producer, right?

[Brian Storseth, Conservative, Westlock—St. Paul, AB]

--and more than just on OTM.

[Brian Read]

Those are two different subjects.

[Laurent Pellerin]

As a farmer, I don't think we are expecting return on this $31.70, especially on the cow-calf and finished beef. As a farmer, I don't think--

[Brian Storseth, Conservative, Westlock—St. Paul, AB]

It's their money, though, too. It's the farmers' tax dollar, too.

[Laurent Pellerin]

Yes. We are talking about cows, old cows. I think if there is better security at the slaughter plant.... We don't like the packers to make a lot of money, but we'd like them to make a little bit of money to make sure they stay there. Now we are afraid they will close. We're quite sure that if there is this investment at the packing level, it will be more secure for farmers to run their cows there. It's not a matter of finished beef or cow-calves.

[The Vice-Chair, Liberal, Mark Eyking]

Thank you very much, Mr. Pellerin.

We'll go back to the Liberals, with Mr. Easter.

[Wayne Easter, Liberal, Malpeque, PE]

Thanks, Mr. Chair.

There might not be another opportunity. The parliamentary secretary mentioned earlier that there was a committee looking at the issue. I wonder if he could table before the committee the names of the members of that committee, their terms of reference, and who the chair might be, at some point in time. Can we get that?

[Pierre Lemieux, Conservative, Glengarry—Prescott—Russell, ON]

Yes, at some point in time.

[Wayne Easter, Liberal, Malpeque, PE]

Thursday would be great.

[Pierre Lemieux, Conservative, Glengarry—Prescott—Russell, ON]

I don't have that information here, Mr. Easter, but I'll have a look at it.

[An hon. member]

Mr. Read is on it.

[Wayne Easter, Liberal, Malpeque, PE]

I'm actually surprised at the resistance on the government side to this issue. We have a consensus from the industry. I'm going through the list of groups here. There's everybody from the Dairy Farmers of Canada, to the Canadian Federation of Agriculture, to the Canadian Cattlemen's Association. There seems to be good support from producers and industry.

At $31.70, are you talking net cost to the government of $25 million? That's really all we're talking about here, $25 million for an issue that has good consensus from the industry. It's not even a drop in the bucket. It's not going to solve the problems, but it would be a step in the right direction. I just find the resistance absolutely amazing. They could do that and it would only cover, as Frank said, a few signs.

On the under 30 months, what's the---

[Brian Storseth, Conservative, Westlock—St. Paul, AB]

On a point of order, Mr. Chair, I don't believe he's seen resistance from this side. As Mr. Valeriote demonstrated, there is a desire at this committee to have probing questions to the presentations put before us.

We're not all here to issue press releases, Wayne.

[The Vice-Chair, Liberal, Mark Eyking]

Mr. Easter has his time.

[Wayne Easter, Liberal, Malpeque, PE]

Thank you, Mr. Chair.

There are two issues with country-of-origin labelling: how it affects cattle over 30 months and cattle under 30 months. Are there other things we ought to be doing there? This is going to be a long, drawn-out fight at the WTO. Even if we win it, I think we'll see the Americans do like they did in softwood lumber and say they want to change the rules now. Do you have any suggestions on what we should be doing in the meantime? Canada, regardless of which party is in power, is always a boy scout when it comes to trade rules. Do you have any suggestions in that area?

Secondly, do you have any distinct proposals on what we can do in regard to the cattle under 30 months?

[Laurent Pellerin]

I've made some comments in the last six months, at least, if not more, about this industry. Those comments are really in line with what is happening in beef, but pork is not that much different. Those two commodities in our country are at risk. And they're not just at risk of losing money; they're at risk of completely disappearing from this Canadian market. We will still have beef meat and pork meat in our country, there's no doubt about that, and probably some niche markets here and there, but in terms of the volume that we are now doing in Canada, both in processed meat and the secondary processing industry, we are at risk of losing that.

People were laughing at fisheries ten years ago for thinking that they were at risk of losing it. Now it's done in Canada. Five years ago we had that same discussion about pulp and paper and lumber. It's gone, it's finished. We face other risks in beef--the dollar value, the high delivery cost, other types of regulation. Those risks are there, and they are not smaller than they were five years ago; they are bigger. So we have to sit down and look at all the other factors that affect this sector--those sectors, if we extend it to pork--in Canada, and as soon as possible. And not in a committee of 60 people. Really, the people who are involved with that product should come, from farmer to processor, and look at the future of this industry--if there is a future. We cannot look only at opening markets. That's very good, and we have to do that, but we have to look at reinforcing our slaughter capacity in Canada--numbers. Losing the critical mass is losing the killing facility in this country. That's what happened in the Maritimes. That's what is happening in Quebec. Guelph and Ontario are losing volume, and in western Canada it's the same. So we have to look at that very rapidly.

In the short term, this issue of risk material has to be addressed. Why are only farmers paying for that? Because we are suffering from that relationship. I agree with everybody else here; it was not the intent at the beginning. But it's there now. Who benefits from this economic activity in Canada? It's the workers in the plant, the government from taxes. So you have to share the risk with us. This is our demand regarding this $24 million, until, as Brian said, we are able to reduce that amount of money or we come to an agreement with the U.S. on harmonization. Don't lose that part. It's there also. We don't want support forever. If there's a way to counteract, invest in some different way of processing, or energy.... We look at that in our plan in Quebec.

There are all types of possibilities, but we have to sit down very rapidly on the overall situation of beef and hogs in this country, because we are at risk of losing those.

[The Vice-Chair, Liberal, Mark Eyking]

Does anybody else want to comment on this?

[Brian Read]

I fully support Laurent and his comments.

Mr. Easter, I think some of your questions are valid, such as the question of country-of-origin labelling and the opportunity to just stand up and say no. It continues to be a fear of ours. Currently we have the U.S. market back. It's beneficial to the livestock sector and the meat sector, although not the hog sector.

I think, Brian, you brought up that we have to look at diversifying our country for long-term sustainability.

I think market access to new markets--and when I say “new”, I'm not talking about the traditional Asian markets. Korea is probably putting us at a disadvantage of $25 a head, because we don't have the seventh fleet to move in or what have you. We don't have that political power. I think we do well for our country. We produce a good product. One of the things we could do urgently for the pig sector, and this is just me talking to you--I guess I can't do that, because this is public--is spend serious marketing dollars in the United States.

My biggest concern with the United States, and we still don't have that question answered.... We have a balanced agricultural trade with them, uniquely enough; at least the last time I looked at the graph it was close enough. When they came out with the country-of-origin labelling, I just didn't understand why they'd want to do it to us. That's the big question. I say that tongue-in-cheek. It's protectionism. I'll leave it like that.

But I think we could market the shit out of our product. We have a good product to sell.