Agriculture Committee on Nov. 5th, 2009

[The Chair, Conservative, Larry Miller]

I think at this point we can call the meeting to order. The photographer will still be at work for a couple of minutes; maybe he's finished.

Before we go to our witnesses, Mr. Hoback, I'll go to you.

[Randy Hoback, Conservative, Prince Albert, SK]

Thank you, Mr. Chair.

I've talked to members of the opposition about this. In the Western Producer of October 29 you'll see a notice of removal of sidings from the list of available sidings. They've added more sidings onto the list that they had previously given us. I find it really interesting that this was seven days after they'd met us here at committee.

I want to highlight the fact that the sidings they're talking about removing or putting on notice are Beamer, Alberta; Burbank, Alberta; Claysmore, Alberta; Egremont, Alberta; Ryley, Alberta; Buchanan, Saskatchewan; Flaxcombe, Saskatchewan; Kindersley, Saskatchewan; Leney, Saskatchewan; Sturgis, Saskatchewan; Makaroff, Manitoba; Roblin, Manitoba; and St. Lazare, Manitoba. These sidings will be removed no earlier than 60 days from the date of this notice, which would be January 1.

I'll have the committee clerk photocopy this and distribute it. I'll table it here today.

[The Chair, Conservative, Larry Miller]

Are you suggesting any further action other than that, Mr. Hoback?

[Randy Hoback, Conservative, Prince Albert, SK]

I'd be open for suggestions, but I find it very frustrating. We had them here in front of the committee, and then we see this show up a week later. I'm not sure what the appropriate action would be, except maybe to get an explanation from CN on what they said at committee versus what's presented here today.

[The Chair, Conservative, Larry Miller]

Are you suggesting a letter from the chair to them, basically?

[Randy Hoback, Conservative, Prince Albert, SK]

If that's appropriate and if the opposition members agree, I have no problem with that.

[Wayne Easter, Liberal, Malpeque, PE]

Mr. Chair, we don't want to take time from this meeting, because we have to deal with a crisis, but I wonder if we could get together and get a letter from the chair.

This is unacceptable. While they were here, they tried to keep from us the fact that they're making a 20% return on capital under the revenue cap, and this notice treats Parliament with disrespect. CN and the railways are going to have to be reined in. I would say we have to find some way. You could draft a letter, and Frank said he'd be willing to put a motion in the House, but we need to get something out really quickly to make the point that this is unacceptable.

[The Chair, Conservative, Larry Miller]

On hearing the comment and, I think, getting general approval for some response, I believe we could have a letter ready for late morning or noon tomorrow. It would be e-mailed out to all your offices, maybe with a deadline for a response back from your offices by three o'clock. If everything is fine, we could go ahead and send it out. Is that acceptable to everybody?

[Some hon. members]

Agreed.

[The Chair, Conservative, Larry Miller]

Mr. Shipley, I'm sorry, you had your hand up.

[Bev Shipley, Conservative, Lambton—Kent—Middlesex, ON]

Mr. Chair, I don't want to hold things up, but I'm wondering about November 17, which is the first Tuesday after we come back from the Remembrance Day break. We have a number of motions in front of us. When I look at the schedule, I'm wondering if on that day we could take the first hour to deal with motions and try to get some of them off the table. I know André has some, and so do I and Wayne. I'm just looking for what the committee thinks, that's all.

If you look at the number of witnesses, we could likely deal with them in the last hour. That would give us an hour to deal with business.

[The Chair, Conservative, Larry Miller]

Do you mean the last hour, or the first hour?

[Bev Shipley, Conservative, Lambton—Kent—Middlesex, ON]

I'm thinking that we could do this in the first hour.

[The Chair, Conservative, Larry Miller]

It would be the first hour. Okay.

[Bev Shipley, Conservative, Lambton—Kent—Middlesex, ON]

Then we will have the witnesses come in for the last hour.

[The Chair, Conservative, Larry Miller]

Mr. Eyking, as we were coming in, you mentioned something to me about Tuesday's business.

[Mark Eyking, Liberal, Sydney—Victoria, NS]

Let's try to pick one day, and if we want to, we can get all the motions done on Tuesday, whether we do it first or at the end. Maybe it should be at the front end. Witnesses aren't waiting here, and we could do it right off the bat.

If so, we'd have to run a little later on Tuesday. Maybe we can run to 6 p.m. if we have to and if the witnesses need it, but we'll get the business done right away on Tuesday. We could do that every week. Some have to leave on Thursday, and that way it's not a big issue. Let's clean it up.

[The Chair, Conservative, Larry Miller]

We'll have the clerk make those invitations accordingly.

I'm sorry to have kept our witnesses waiting. I understand that one of our witnesses had a plane delay, so we'll leave him until the end. We'll start with Seaside Farms and....

I'm sorry; go ahead, Mr. Bellavance.

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

I would like to come back to what Bev and Mark were talking about earlier. I simply want to be certain about one thing. As Mark said, if we spend some time on motions on November 17, we would still need to hear from witnesses on this matter. If the motions do not give rise to too much debate, we could dispense with them in less than one hour.

[The Chair, Conservative, Larry Miller]

That's a good suggestion. What I've actually just said to the clerk is that we're going to ask the witnesses to come here 45 minutes into the meeting, and if we can get to them in that time, that's great. If we have consensus here to cut it off at 45 minutes, so be it. I think that if we come here to deal with the motions, I don't see that as an issue.

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

That's fine.

[The Chair, Conservative, Larry Miller]

With no further ado, we'll go to Ms. Matheson-Wolters from Seaside Farms. Welcome.

Again, thank you very much to all of you for coming here today. We appreciate it.

[Leza Matheson-Wolters, Producer, Seaside Farms]

Good afternoon. I'm a bit nervous, so I'll try to stay on track with my notes here.

I'd like to thank you first for inviting me to the table today for this serious issue. I'm proud to be in our nation's capital just a few short days before we honour our veterans who have served and continue to serve our country. So it was quite a walk up the lane today, knowing that next week you will honour them. So thank you. The timing was perfect for me.

Because I only have 10 minutes to share my story, I would welcome any questions regarding possible solutions and comments during the question period.

My name is Leza Matheson-Wolters. My husband, Ilke, and I own and operate a hog farm on Prince Edward Island, and we have two children. My husband is a Dutch immigrant who has farmed his entire life. He emigrated with his family to Canada at the age of 15. We have been married 23 years, since the age of 19. We've worked extremely hard over those years and we're very proud of what we do.

After we got married, we went to work for a hog farmer. His dad was a dairy farmer who had been given an opportunity to work in rural P.E.I. on a hog farm, and we took that opportunity at age 19. Meanwhile, I attended university and obtained my Bachelor of Arts in psychology and political science, and then my social work degree when I moved to Dalhousie. After I finished university in 1995, we bought the house next to the hog operation where he was employed.

In 2002, we purchased the 500-sow, farrow-to-finish multiplier breeder operation. It was a huge undertaking. Our years of dedication had paid off. We worked our way from having nothing at age 19 to being educated and successful business owners. Then in 2005, it was discovered that our animals had contracted disease, PRRS and pneumonia. It was devastating. We could not believe that all our hard work had been ended by disease. We had lost our multiplier breeder status and the associated market, and our cost of production went through the roof from purchasing antibiotics and other medication, and from decreased litters and the number of days it took to go to market.

We knew we had to do something to decrease our costs, produce a healthier meat for consumption, and set ourselves up in a niche market—because the prices weren't great then either. In 2007, we partnered with Dr. Daniel Hurnik from UPEI. He's a renowned veterinarian in animal health at the vet college in Prince Edward Island. Together we pioneered a disease eradication program, an innovative program in which we attempted to eliminate our major diseases—just the two of them—while maintaining the genetic value of our herd, which we were well known for in our community. In other words, we didn't want to sell our breeding stock or our sows, because they were our livelihood and we were very proud of the genetics we had.

It took months of very long, hard hours, researching, writing, and coming up with strict schedules with Dr. Hurnik. We were very proud of the farm community; they really rallied behind us. They gave us free barns, and we moved. It was a whole schedule, a European model, that we had pioneered in Prince Edward Island. In 2006, we were the first farm to successfully complete this process, and today we still have disease-free animals. That was quite a feat for us.

We operate an extremely efficient and fiscally, socially, and environmentally responsible farm. We produce a high-quality, safe product. We treat our staff with dignity, giving them a fair wage for their work. We have an alternative source of energy to cut our fuel costs. My husband works for little or no wages, every day, 15 hours a day.

Two summers ago, we knew that prices were poor and that we couldn't even afford to eat. We were feeding the nation with good, safe, genetic food, but we had no income in our own family or household. So we decided to go to the bank and remortgage our house and buy a local restaurant. We would supply good local meat through a buy-local campaign, which we engaged in two summers ago. We bought the restaurant. I now employ 30 people and run the restaurant four months a year. It is successful, and we're quite proud of that. Our local community is quite proud of it too, and they're very much behind us.

However, as I am before you today, I am losing everything I've worked for. We are not fairly compensated for our product; we have suffered for years from prices well below our cost of production, for no fault of our own. To feed fellow Canadians, we are competing with countries that do not share the same rules and regulations. We are a highly regulated business. With labour laws, safety standards, health standards, environmental standards, social standards, high energy costs, no feed subsidies, and low prices, we are in a disadvantaged position.

So the question today, as I sit before you, is how does my farm survive? If my cost of sending a pig to market is $1.55—which is the mean cost of production, or COP—and I'm receiving 95¢ a kilo, can I make it? No, I can't. I can't do it.

So where do I turn and where do I go from here? We need farm priority—and I stress, farm priority—federal programming that meets the needs of farmers. We're not looking willy-nilly for a handout. Currently, we have the HILLRP program, the hog industry loan loss reserve program, and the HFTP, the hog farm transition program. Neither of these programs will help, or save, the existence of my farm. The HILLRP program lends $85 per hog. I would first need to find a bank that would agree to consolidate my loans for a term of 60 months or less; but it would be at a higher interest rate than I have now, with the stipulation that I would pay off my APP first. But with our size of operation, it would mean that I'd first have to find a bank that would agree to this, then I would have to take a higher interest rate and pay off my APP, and then I wouldn't have any money left over. Therefore, the program is of no use to my operation. The result is that it will make things worse, not better, for me.

Some might argue that we could apply for more APP if we took the HILLRP. Well, I can't do that either, because APP is not for those in severe economic hardship, and I would have to get the bank to sign off on a first-priority agreement—the same bank that just consolidated my loans—and that's just not going to happen.

Or, because I can't participate in those two programs, I still have the HFTP program. With this program, I would need to realize enough money to clean out my barns and be able to meet the minimum payments, loan demands, and expenses, and then repopulate my herd in three years. All the hard work my husband and I have done to keep our disease-free genetics would be lost, as my herd would be slaughtered. I understand this process is to decrease the number of hogs in the marketplace by approximately 6.5 million hogs. Supply and demand, I get it.

Well, Atlantic Canada has never contributed to the oversupply in Canada—and for argument's sake, if we had contributed to oversupply, we have already significantly decreased our supply since. On P.E.I., we have gone from approximately 203 producers to 30 producers currently—over 200 producers to 30—and approximately 15% of those producers represent 90% of production. Our production has decreased by 50% now, so we are not contributing to the oversupply in Canada.

We have met the mandate of the HFTP program without the program. We have transitioned. What the hog transition program will do for us is to become an HFEP, a hog farm exit program. We need a phase-two approach in Atlantic Canada. If we decrease our production in Atlantic Canada, we will run the risk of losing our closest plant. On P.E.I., our plant has in fact closed, and now we ship off-island.

It will also jeopardize the existence of farming on Prince Edward Island. Agriculture on P.E.I. is approximately 11.7% of our GDP. Atlantic Canada is unique; it is not in the same position as the rest of the country. A one-size-fits-all approach is not going to help us. These programs will not help my farm survive; they will shut me down. I need help.

It is very difficult to explain the emotional side of this. For me personally, the HFTP is not as I mentioned, a transition program, but a program that will put me out of business. Everything my husband and I have worked for will be slaughtered and lost. The bid process, which my husband and I looked into and participate in, feels like playing Russian roulette. I am holding a gun to my head and I have to decide whether or not I'm going to pull the trigger, but I have no idea how many bullets are in the barrel or what the bullets are even worth. It's a bid process. It's inhumane. So if I pull the trigger, will I be successful? This is how the bid process has made me feel.

Folks, each one of you was successful when you went door to door asking for the nod to govern our country in the best interests of Canadians. You were the chosen few; you were elected. You were elected to represent us, and with that representation came the privilege of making decisions affecting me as a Canadian and hog farmers. Your responsibility is to make decisions that affect the health and prosperity of Canadians. As I sit before you today, a hard-working, successful hog farmer, I ask for your support. I am trying to save my livelihood, my farm, my house, my agricultural community, everything we have worked for. I am tired, tired of wondering if this will be the last year my kids will spend in their home.

Thank you for your time.

[The Chair, Conservative, Larry Miller]

Thank you very much.

We'll now move to Canada Pork International.

We have Mr. Asnong and Mr. Pomerleau, for 10 minutes or less, please.

[Edouard Asnong, President, Canada Pork International]

Thank you.

Canada Pork International is the export market development agency of the Canadian Pork Industry. Established in 1991, it is a joint initiative of the Canadian Pork Council and of the Canadian Meat Council. Our organization deals primarily with market access issues, the promotion of Canadian pork abroad, providing market intelligence as well as working on other significant export-related issues.

For the first eight months in 2009, total Canadian pork exports amounted to 690,593 tonnes, down by 4.7% when compared to the same period in 2008. However, their value reached $1.75 billion, up by 4% when compared to 2008.

I believe all of you have a copy of the export figures for each country. The two most affected markets have been China, whose H1N1 measures taken against us have had a significant impact, and Russia who has delisted most of our plants that were eligible to export their product, owing to very strict and unjustified regulations. Aside from China, the H1N1 virus has not had to date a lasting effect on consumption in our export markets.

However, the ongoing economic crisis is a contributing factor in the decrease or stagnation of our sales to several major markets. U.S. pork exports are also down by more than 12% over last year. Combined with lower Canadian exports, it means there is more pork to be sold in North America, thereby compounding the current crisis. It should also be noted that Canadian pork production is currently up by 4%.

The $17 million allocated over four years by the Government of Canada through the International Pork Marketing Fund is a very timely initiative that supports our efforts to maintain and improve our position on foreign markets. We have undertaken consultations to finalize the related Strategic Plan that will be submitted to the Minister of Agriculture and Agri-Food Canada and the Minister responsible for the Canadian Wheat Board in early 2010. We can already foresee very good opportunities on export markets in the medium to long term, provided we successfully differentiate our products from our main competitors, especially the Americans, and more importantly, if we can resolve a good many market access issues that work against us.

We expect that Prime Minister Harper's visit to China in December will result in the lifting of H1N1 restrictions, especially since the Chinese have already announced that they would lift restrictions against the United States. Furthermore, we are counting on the Prime Minister's visit to South Korea to see the free trade agreement between our two countries finalized.

South Korea is a major market for us with significant potential for additional sales of value added products. Given the lack of an FTA, coupled with the fact that the Americans and Europeans have concluded one with South Korea, this means that our industry will be completely shut out of this market within two years. However, we do not support finalizing an agreement at any cost, as current Korean offers regarding Canadian pork are unacceptable. We expect that Canadian negotiators will be able to get Korea to offer us access conditions that are more or less identical to those given to our competitors.

It is also our hope that the two chambers will quickly ratify the Free Trade Agreement with Colombia in order for our industry to respond to the demand for our products, which is very strong following a successful visit by Colombian buyers to Canada.

The negotiations with the European Union are of particular interest to our industry. One of our plants recently became EU-approved and initial shipments have made us realize that the potential of this market is much greater than we had anticipated. Improved access to this large and lucrative market would allow us to sell a wide range of cuts and to add value to the whole carcass, which would benefit both packers and producers.

In conclusion, maintaining and improving our access to foreign markets, especially to larger markets, will be key to the long-term sustainability of the pork industry, as it should remain a major exporter.

Thank you.