Evidence of meeting #8 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 cattle.
A recording is available from Parliament.
Bloc
André Bellavance Bloc Richmond—Arthabaska, QC
Are the amounts of money involved at the present time approximately the same as what they were back then?
Bloc
André Bellavance Bloc Richmond—Arthabaska, QC
I would like to clarify something for the public who is following the work of the Committee but who is not necessarily familiar with the agriculture file. One must be careful: when we talk about inspection fees, there is no intention here of eliminating inspections. We know that the whole food safety issue is tremendously important. We know what happened. There is a difference between eliminating inspection fees and eliminating the inspections themselves.
Executive Director, Canadian Meat Council
That is exactly it. In the food sector, we are the only industry in Canada for which, in accordance with the law and the regulations, a large number of inspections are assigned to each federally regulated plant. On top of that, we pay inspection fees. We believe that we should not have to pay such fees. However, even though we are paying these fees, we do not like their present structure. If we are required to pay fees, then we want to see them adjusted in order to reflect the model that is followed in the United States, in order to be more competitive. We would like to be charged only for overtime hours but not for regular hours.
Bloc
André Bellavance Bloc Richmond—Arthabaska, QC
You also talked about the increase in the kill capacity. We found a measure in the last budget. You might be able to comment on that, Mr. Read. You are fighting like we are for the viability of the Levinoff-Colbex slaughterhouse. Given what has come out of the budget, will you be able to qualify for financial assistance from the federal government for the Levinoff-Colbex slaughterhouse? Have you had any indication from the minister as to the possibility of obtaining financial assistance under the program? We know that $50 million over three years is not an enormous amount of money. You have just gone through a $30 million recapitalization. This is what producers have done. What is the nature of your needs? In your view, is there some openness as far as obtaining this aid is concerned?
Chairman, Beef Committee, Canadian Meat Council
Thank you for that question.
Again, I don't think I thanked this committee for allowing me into it. I congratulate all of you for your efforts to sustain our industry in this country; that's our objective.
To answer your question, yes, we do feel we qualify. I think we have a real success story. We have a total commitment from the producers in the province of Quebec, as you're aware, of $30 million. You can't ask for much more support than that.
Are we sustainable? It's been there for almost 50 years. There's no reason why we're not sustainable for tomorrow.
We're not looking at increased capacity with that $50 million. We do not support that as an initiative in this country. We have ample capacity. We're looking at efficiencies. That's where we would qualify 100% under that $50 million. Specifically with regard to my operation, yes, it does, within the guidelines.
Do we know where it's at? The moneys haven't flowed. I just heard today a rumbling that it goes to committee tomorrow, all the applications. Maybe you know more than I do, André; that's all I've got.
That said, absolutely we do qualify in the spirit of the $50 million. Again, we look at it for food safety initiatives as well as for increasing efficiencies in this country in the beef sector.
Conservative
The Chair Conservative Larry Miller
Thank you very much.
We move on to Mr. Allen, for seven minutes.
Welcome, Mr. Allen. I think this is your first chance at the committee here.
NDP
Malcolm Allen NDP Welland, ON
Yes, it is, Mr. Chair. I thank you for that. I guess B.C. is not the sunshine place we think it is; Mr. Atamanenko is snowed in, it seems.
Let me follow up on my colleague's questions around slaughterhouses. On the one hand, we hear producers talk about slaughterhouses from the perspective of needing to see more across the country; on the other, there's the perspective of needing access to them. We're really kind of caught, it seems to me, between the producer saying they need access in that competitive sense, and the others saying....
I understand your sense of efficiencies. I come out of an industry that relies on efficiencies. Your sense is that you need to have a certain number go through every day. Otherwise you're not efficient. And that's fair. That's usually what happens with industries when they get extremely efficient and when they get more automated, or if, indeed, they use new processes.
Perhaps you could square that circle for me; I'm new to the agriculture committee. Producers are saying that it's not necessarily great for them. But it may necessarily be great for you, at the processing end of the business.
Chairman, Beef Committee, Canadian Meat Council
I'll take the first swipe at it.
That's a fairly broad question. The people sitting to my right do a lot of good work for the beef sector. Believe me, we appreciate all the efforts of the cattle industry as well as the marketing strategies. We're the policy side on the CMC. We appreciate all the good work and the efforts that go into things for us, but when we look back, we have the ability to learn from history.
We're in the agriculture standing committee. A lot of us were present there in 2004. When we looked at increased capacity in Canada because of the BSE and the border closures, etc., one of the things the meat industry did comment—and darn it all, we can say we were right, historically—was that if we increase capacity, we'll see its demise when we resume so-called trade, as we know trade. And lo and behold, here we are in five years—five years in May, from the time we met in 2004.
When we talk about efficiencies, if we want to be in the global world, if we believe we are global, and I think we do, we need plant efficiencies. It sounds foolish, but if you increase efficiencies, you reduce your costs. That's the only way we will compete with our American counterparts. We always look at them as our counterparts or our benchmark because they're direct competitors. We have similar food safety protocols. They're not identical—i.e., inspection fees without detail—but we do have similar protocols we can benchmark ourselves against. So when you look at it, we need equivalency with them.
I don't know; did that answer your question?
Chairman, Beef Information Centre
Regionally, there are places in Canada that are in a deficit of capacity to slaughter animals. However, one of the best ways to address that issue, I believe, is openness across that international market. We need to be able to move cattle from areas of surplus in Canada to some meat-packing plants just south of the border. When you talk about this discrepancy, Manitoba is the first place that comes to mind.
I believe you are from B.C., aren't you?
NDP
Malcolm Allen NDP Welland, ON
No, I'm actually from Ontario, but that's all right. I want to be from B.C. when the weather's nice.
Chairman, Beef Information Centre
Manitoba is the first one to come to mind there. They're in a deficit in that particular area, but they have plants in the United States across the border that do kill that meat for them, and they need access to that. Although they still have access to the plants, COOL has allowed many of those plants to shy away from Canadian cattle, because of the complications of trying to segregate the Canadian product from the American product. As a result, they have a decreased price in that particular area.
Malcolm Allen NDP Welland, ON
You talked earlier about input cost. I think one of the numbers you rolled out was $5 for food safety. That's kind of an all-in figure, and I would imagine the different things you do internally. Is that beyond the fees you were talking about for CFIA?
Chairman, Beef Committee, Canadian Meat Council
In the beef sector we have a pathogen called E. coli 0157:H7, and that $5—it could be more per plant—is a minimum per head for just the interventions to attack that specific pathogen, which have been put in place in the last five or six years. It's over and above all the other food safety initiatives we have within our buildings.
Conservative
NDP
President, Canada Beef Export Federation
No problem.
It's one thing to increase meat-processing capacity, but it reminds me of the saying “all revved up, but you have to have some place to go”, and that's trade. The U.S. and Canada generate revenue from cattle a little differently. In the U.S., in the best environment, they export about 12% of their production to world markets. We, when we're healthy, export 60% of our production to international markets. We are significantly constrained from generating revenues in many of our international markets. As such, that historic self-sufficiency of beef-processing capacity in 2006-07, at about 5 million head, has dropped now to a beef-processing capacity of about 4.4 million head. A large part of that was the inability to run full-capacity runs, because we didn't have access and don't have access to international markets such as we did before BSE, and cannot generate the revenues to be profitable.
The revenue side of the equation is also incredibly important. Trade is the solution toward moving back, and bringing capacity back, into our industry profitably, maintaining that capacity, and going back toward an eventual self-sufficient level. Just building it is only part of the story.
Conservative
The Chair Conservative Larry Miller
You have about half a minute, so if you have a question, keep it brief so that we can get an answer.
NDP
Malcolm Allen NDP Welland, ON
That brings up an obvious question, at least for me. Looking at the actual producers, I'm hearing this whole sense about trade and that we need to make sure we can access it. Is it the belief across the table—hearing what the chair has said about time limitations, I can take either yeses or the nodding of heads—that trade is going to be the be-all and end-all for the producers at the end of the day? Will they actually be profitable in this business they have decided to go into? Or are they still going to be at the bottom of the chain, trying to survive?
Board Chair, Canada Beef Export Federation
Yes, I think trade is the be-all and end-all. On the other hand, the producers have a job to do themselves in getting organized and branding their product and doing the traceability required to access these markets.
You have in your own province the excellent example of Ontario corn-fed beef, which is solving that slaughter problem by organizing at the producer level to get a volume of cattle to the packer. He can take it from there and demand a premium.
Conservative