Agriculture Committee on March 22nd, 2010

[John Masswohl]

I guess what we heard--and perhaps you've heard some similar reports coming out of some of these small facilities--is that a certain amount of meat, and I've heard different numbers, was being required to be disposed of. I don't know what you found in your investigation, but I was not able to find anything in the regulations requiring that meat to be disposed of. I think as we started to look into that, the situation seemed to improve.

That said, with respect to the SRMs that get disposed of, there still is a tolerance around the bone. We're trying to see if that can be improved to be more like the U.S. approach.

[The Chair, Conservative, Larry Miller]

Again, there's this discrepancy from region to region, and it does seem to be more in Ontario here. Is that discrepancy because of the packers' interpretation overall, or is it from the CFIA side? Any comment on that?

[John Masswohl]

My impression is that it was the inspectors. I couldn't say that definitively, but that was my impression, that it was the inspectors. I only heard it in Ontario.

[The Chair, Conservative, Larry Miller]

Thanks, John.

[Wayne Easter, Liberal, Malpeque, PE]

Point of information on that, before I get to my question.

I think it would be useful.... I don't know if there's a plant close by here that this committee could go to, but I've been in a plant, and John is absolutely right. It's inspector to inspector even in the same plant. In the plants, where they come down and they cut the spine, if they're too far away, I think it is--one way or the other--the people on the line are so fearful that they're going to be out.... And you're not even talking centimetres, you're talking about the width of two hairs. If they're too far out then they lose the whole piece of meat. You've actually got to go into a plant, look at an animal strung up on the rail and see how different the tolerance can be. For the plant, it's absolutely phenomenal. So if the people working the line are overly cautious, then they're losing a lot of meat in the run of a day.

[The Chair, Conservative, Larry Miller]

I'm going to be really generous and not add that to your time. You have five minutes, Mr. Easter.

[Wayne Easter, Liberal, Malpeque, PE]

Guys, thanks for coming.

If the government doesn't get this money out there fast, there will be fewer producers left in this country. We're seeing it in eastern Canada--I think in Ontario east. Certainly we're seeing it out west, where the cow-calf operators are leaving in droves. We're seeing bigger feed lots close, to the point that it's beyond belief.

I'm told by producers that right now they're losing $275 to $350 an animal. What are your figures? How much are they losing per animal?

[Travis Toews]

That's going to be variable across the country. In fact, in the last couple of weeks we've seen some strength in the market across the country in the fed market. I'd be hesitant to throw out a number as to what they're losing. Obviously, this topic is pointed towards over-30-month slaughter costs.

On the fed market, you're absolutely correct. We've seen significant losses in the feeding industry and in the cow-calf sector for quite a period of time. We've seen some recent strength in the market to where I think some of these cattle are coming out of the feed lots at close to break-even.

[Wayne Easter, Liberal, Malpeque, PE]

So, Travis, that having been said, is AgriStability working for beef producers in this country right now?

[Travis Toews]

I would say not as uniformly across the country as I think a lot of producers would hope.

[Wayne Easter, Liberal, Malpeque, PE]

The minister was here the other day claiming it was. The Ontario Cattlemen's Association and the Ontario Federation of Agriculture have a big ad in today's Hill Times, saying it's not. So I'll just put that on the record.

It's now five months less five days since your letter of October 27, 2009, was written to the minister. We supported that letter here. The opposition supported strenuously a motion from André to get that money out there.

All this time later, I assume your position is still the same: that the money is based on a per-head basis. It's $25 million. It is in the budget, we think. We just don't know how.

Has the government given you any timeline as to when this money will actually be out there, and what it's going to mean to producers at the production level?

[Travis Toews]

I am not aware of a timeline in terms of getting the money out, other than of course we believe it's urgent to implement this program quickly. And yes, we believe the program funds need to be earmarked to disposal costs related to SRM.

As I mentioned before, the benefit to the producer is going to be twofold. The long-term benefit is that this program will go some distance to ensuring a competitive processing sector in Canada for the benefit of Canadian producers down the road. In the short term, in order for those processors to kill Canadian cattle and benefit from this program, they're going to have to outbid their American counterparts. So there will be some direct benefit back to producers on the sale of over-30-month slaughter cattle in Canada.

[Wayne Easter, Liberal, Malpeque, PE]

But we still don't have a timeframe, and that's what worries me. If it hadn't been for the resistance on the government side, this could have been.... There is no new money in the budget for this. We didn't have to wait for this budget to get this $25 million. It comes out of funding already there. The finance department has admitted there is not a new dime in this budget. We didn't have to wait for this. This is five months later. Are we going to be back here in October still wondering how this money is going to be spent?

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

Point of order, Mr. Chair.

Mr. Easter has said several times "the finance department has admitted" to him. I wonder if he could give us his source if he's going to continue with this line of questioning.

[Wayne Easter, Liberal, Malpeque, PE]

All you had to do was go to lock-up and you'd know. You should know that. Your own minister should at least tell you the truth and be honest with you guys that there's no money in this budget for producers. It would be kind of nice.

Anyway, on the Canada-U.S. situation relative to the beef industry, we're hearing lots about the minister being out there and marketing around the world, and we'll congratulate him on that. What is our net position relative to the U.S., however? Are we losing market share to the U.S.? Are we gaining market share? Are we selling more beef cattle into the U.S.? Are they selling more into Canada? Can you give us any of those numbers?

[Travis Toews]

I can give you some trends, I guess, in terms of our sales into the U.S.

Fed-cattle sales into the U.S. directly for slaughter and feeder cattle sales into the U.S. have declined significantly due to a few variables. Country-of-origin labelling legislation is a significant factor affecting, in our view, the flow of live cattle into the U.S.

I think what's of interest is that in 2009, contrary to that trend, we exported more slaughter cows to the U.S. than we did in 2008, and I think that highlights the competitive disadvantage our processors are experiencing in Canada on over-30-month cattle.

[The Chair, Conservative, Larry Miller]

Thank you very much.

We'll now move to Mr. Richards, for five minutes.

[Blake Richards, Conservative, Wild Rose, AB]

Thank you.

Thank you both for being here today.

I'm going to switch gears just a little bit here, because there's another topic I think we need to spend a little bit of time on today as well, in relation to your industry. Certainly, in my view, marketing options, marketing choices, are a key thing for any industry, really. But agriculture is a great example of where marketing options are very important. For example, for the grain farmers in western Canada in particular, there is the fact that they only have one monopoly they can sell to. To have an opportunity to have more marketing choices for western grain farmers certainly would be helpful for them.

We can also talk, of course, about the work our government has been doing in terms of opening markets to give livestock producers better market access to additional markets and the benefit of that for the industry. I know that you certainly, in your opening comments, made some reference to some of the good work that is being done by Minister Ritz, by Minister Day, and by the Prime Minister himself in terms of working very hard to see markets open up. I know that the Minister of Agriculture, in particular, has been working very hard on that. I'm sure you're well aware of that. You know, obviously, that we're meeting with some success there. I'm sure you're appreciative of that.

I wanted to talk specifically about the market access secretariat that has been set up, as well. Ministerial and prime ministerial efforts are important, but the work behind the scenes by the market access secretariat is also something that can be important. I wanted to get a comment from you as to how you see the work that has been done by the market access secretariat and whether there is anything that needs to be done differently.

[Travis Toews]

Well, we were very pleased with the establishment of the market access secretariat. Obviously, as an industry that depends on exports, this secretariat that has been wholly set aside to deal with market access issues is welcome. The market access secretariat has been working to get established. It is being staffed up. They have already been engaged in several markets, and I expect that the structure is evolving. There are a number of recommendations that we believe are important that have not yet been implemented. But we continue to work with the government on those details to ensure that all of agriculture has as strong a market access secretariat as possible and that Canada can truly punch above its weight in terms of market access issues.

[Blake Richards, Conservative, Wild Rose, AB]

I appreciate that. Certainly the idea there, of course, is to give our producers more market opportunity. Of course, the United States market is still always going to be a very crucial market for us, so we can't ignore it. The biggest hindrance, at this point in time, has been their country-of-origin labelling. As a government, we've been working very hard to try to deal with that and respond to a threat to our producers.

I would like to get your feedback on our government's response. How do you feel our response has been? Have you been satisfied with the work we've been doing to try to combat country-of-origin labelling?

[Travis Toews]

Unfortunately, we got to a point where we believed that there was no other option than to request action at the WTO. So we, as an industry, are appreciative that action has been taken by the Government of Canada. We have certainly been committed to working with the government on this case to ensure that we can have as positive an outcome as possible. We think we have a strong case. And it's going to be important, long-term, for the industry to see that legislation corrected in the U.S.

[Blake Richards, Conservative, Wild Rose, AB]

I couldn't agree more with those comments.

In discussing exports, as we currently are, one of the things that's always a factor there is certainly beyond control for most of us, but I just wanted to get your take on it from an industry viewpoint. I'm talking about the strength of the Canadian dollar and what impact that will have on your industry--or has had.

[Travis Toews]

That's a very pertinent question, because there's probably not a news story in our industry that merits more attention in a lot of ways than the strength of the Canadian dollar. As exporters, we have an industry that really grew at a time when our currency was in that 70¢ to 80¢ range. So we have a cost structure that's been established at those levels, and now, as we compete globally and within North America with a par dollar, it's challenging for us as an industry.

As we look down the road, if continued strength in our currency is going to be a reality, we will be challenged as an exporting industry, and we won't be the only industry that will be challenged.

[The Chair, Conservative, Larry Miller]

Thank you very much, Mr. Richards. Your time has expired.

Mr. Guimond.

[Claude Guimond, Bloc, Rimouski-Neigette—Témiscouata—Les Basques, QC]

Thank you, Mr. Chair.

Good day, gentlemen. I am a farmer and a dairy producer. Considering the BSE crisis, I have been aware for several years of the problems that Quebec and Canada's farms are faced with when it comes to being profitable businesses. Members of the opposition and of the government have taken a long time to recognize that SRM is a real problem and that we need financial support to find a sustainable solution. It now seems that the problem has been recognized. Sums have been budgeted for helping us, but there is also much confusion surrounding the issue. The Minister of Finance says one thing, the Minister of Agriculture and Agri-Food says another, and the Minister of Veterans Affairs and Minister of State (Agriculture) says something else. It is difficult to follow what is going on. You and I know how important it is to solve this problem once and for all, that is, to get rid of SRM.

You are surely familiar with my friend Michel Dessureault, Chairman of the Fédération des producteurs de bovins du Québec. In Quebec in particular, agricultural producers try to find solutions when a problem appears.

What do you as farmers think the best solution for your association would be to get rid of SRM in a satisfactory way?