Agriculture Committee on Nov. 24th, 2011

[The Chair, Conservative, Larry Miller]

Thank you.

We're way over time. Maybe we'll get back into this discussion.

Mr. Hoback for five minutes.

[Randy Hoback, Conservative, Prince Albert, SK]

Thank you, Chair.

Actually, it appears we've started on something that I think a lot of us on this committee feel—the frustration. Sometimes you look at the Competition Bureau and what it can or can't do, or seems to be unable to do, and that frustration shows up.

But there are many different ways to have competition. For example, you can have competition on railways by having value added on the Prairies. Another way to have competition is to have another means to use the product somewhere else that they're not handling it. I look forward to the days when we're going to see more of that competition in the grains sector.

One thing I want to talk about is our competitiveness. As we look forward and try to make sure that our farmers are competitive on a global playing field, we need to look at what we need to have that edge.

I'll start with you, Richard. When we start looking at the niches or the edges we need, research is a big one. Where do you see or how do you see the research—there's a combination of research for research, but then there's also research for specific industries and specific products.

How do we as a government allocate funding to one or the other, or should we even be involved in that? Is this something that we should just let the private sector take care of, and we just encourage it to keep moving along through tax incentives and stuff like that? I'm looking for some input on what you think we should do there.

[Richard Phillips]

I would say that moving to the clusters was actually like starting something brand new. This is probably the biggest change we've seen in how research funding was allocated in years, so I think if we look at how those are going and say, how could we make that better, or is that the model? It certainly was fresh thinking, different from what's been done in the past.

We actually just spent almost two full days working with the grains round table, and the whole focus was on research. We're actually looking as producers at how could we step up to the plate, too, rather than expecting government to do everything for us. Do we want some sort of end-point royalty? Do we want a broader check-off? The Western Grains Research Foundation, for example, has the check-off on wheat and barley, but the barley only captured a small number of their producers, because most of the barley was sold outside the Wheat Board. So how do we broaden the base so that all farmers contribute?

We're looking at—and we're not ready to present this to you yet, so I won't go too far down this road. We're spending a lot of time as producers asking what we could bring to the table so that we are equal partners, and whether it's with the commercialization stage or innovative research at the start, or the people who are actually bringing it to market. We have to do more as producers, too. That's what I would say.

Maybe within a few months we'll be.... I think by March, actually, we'll have all of this done and ready to present to you.

[Randy Hoback, Conservative, Prince Albert, SK]

Gord, what would you say to that?

[Dr. Gord Surgeoner]

I live by a quote: research is global; implementation is local. I totally agree that we have to have what I call fundamental discovery research, but as we do so, we should be looking at research around the world, too, and saying, can we take that and implement that in Canada and be first to market with somebody else's research?

For example, in Sarnia, Ontario, BioAmber just announced a $75 million plant that will make succinic acid and will be de-icing plants with it. It's all through a fermentation using corn. All the research was from elsewhere around the world and we're implementing it here in Ontario.

I totally agree. NSERC and people like that do what I call the high-end discovery. The Ontario Research Fund, at the provincial level, that's the discovery research. I, personally, am more interested in...if we do that research and we expend taxpayer dollars, the last thing I want to see is that being implemented in another country. As Jim Grey, the head of the Integrated Grain Processors Co-operative, says—as we're looking at bringing a big company in to hook up where our ethanol plant is an anchor tenant for a whole new biorefinery—“stolen with pride”.

The concept that $100 million was spent in another country, doing primary research and building it up, but we implement it, and it's our farmers who sell the product to those customers, rather than the other, where we, the taxpayer, have paid for that discovery research, the development research, and then we don't have the receptor capacity to take it.... Part of that deals with the business and the forms and the time to go through the process here.

I absolutely agree that you need both types, but remember that primary research is going on all around the world. In my opinion, we have been overshooting the discovery research, particularly when we have NRC that can do a lot of that, and we should be looking more at the implementation research and the back and forth with industry, the development side.

[Randy Hoback, Conservative, Prince Albert, SK]

I'm running out of time here, but that tells me then—and again, like you said, the primary research should be part of it—that maybe more of our focus at this point in time should be on the implications of getting our farmers using the latest research, and it doesn't matter where it comes from, and how we get that into their hands as quickly as possible. Is that fair to say?

[Dr. Gord Surgeoner]

That's absolutely right.

[The Chair, Conservative, Larry Miller]

You have just a little time left, Mr. Hoback.

[Randy Hoback, Conservative, Prince Albert, SK]

One other comment, on the transportation file, is that when we talk about competitiveness and stuff like that...I know Mr. Storseth has been talking about the different rail cars. We have Mr. Dinning now as part of the process. How do you see the process moving forward?

Maybe I'll go to Mr. Phillips again. Do you see that process actually starting to...? Mr. Dinning has just been hired, and it's taken a while to get someone hired in that position. How do you see that? Are your organizations interacting with him?

[Richard Phillips]

What I'll say is that we're pleased to see him there. I would say in fairness to Mr. Easter's comments, it did seem to take a very long period of time. On the other hand, towards the end of it we said to the government, “You know what? If you're having trouble finding the right person, we're not going to open this act and do this again for 20 years. Maybe we need to wait and make sure we get the right person.” We kind of sucked it up a little bit and said, “Get the right person and do this thing right.”

We're staying in very close touch with the lumber industry, the mining industry, the fertilizer industry, the coal shippers—all the major shippers. We have a very tight coalition, and we're still working together very closely to see this thing move ahead.

We have a fair amount of optimism that Mr. Dinning will be able to help them pull together the model service-level agreements, because without a good service-level agreement, all the penalties will continue to be one-sided and there will be no financial repercussions to the railways for poor service. We simply have to balance the playing field, and this is probably the only reasonable and cost-effective way for shippers of all sizes to see that through.

[Randy Hoback, Conservative, Prince Albert, SK]

Of course, you're looking into the future for that level of service, right?

[Richard Phillips]

Yes.

[The Chair, Conservative, Larry Miller]

Thank you very much.

Virginia, feel free at any point to jump in. I don't want you to feel that we're ignoring you.

We now move to Ms. Raynault, for five minutes.

[Francine Raynault, NDP, Joliette, QC]

Thank you, Mr. Chair.

I want to thank each and every one of you for accepting the committee's invitation.

My question is for Ms. Labbie.

In your brief, you say that the regulations and red tape are burdensome and frustrating for your members. With that in mind, should we be worried that more producers will give up their business?

I want to link that question to slide 5 of your document. Is that one of the reasons why 51% of people have no succession plan to transfer or sell their business?

[Virginia Labbie]

Thank you for the question.

Certainly, a trend we're seeing is that our members do not have formal succession plans. But I don't see that as a direct link in terms of folks not continuing on with farming because of the regulatory burden. As I said, it's our top priority. In every survey we've done on our farm members' top priorities, the top responses are regulatory reform and the reduction of red tape. I think we have a huge opportunity here to unleash entrepreneurship at the farm gate by reducing some of those major costs for our farm members on the regulatory side. Focusing on that regulatory reform I think will make it easier for farmers to get into the industry, get interested in farming and agriculture, and free up some time for our farm members to invest in their businesses, invest in their communities, and invest in their own families.

We have farm members and agribusiness owners spending hours and hours just on complying with things like Stats Canada surveys and a number of items. If they had that time, there would be a huge opportunity for them to invest in those things to make their farm businesses more competitive. It would inspire a lot more innovation at the farm gate.

Thank you.

[Francine Raynault, NDP, Joliette, QC]

Thank you.

My question is for Mr. Surgeoner.

You said that Canada needs bilateral trade agreements to facilitate access to foreign markets. What do you think needs to be done to make it easier to reach those agreements?

[Dr. Gord Surgeoner]

First of all, I want to give the current government credit. Mr. Ritz has been going around the world helping to create these bilateral trade agreements. I try to be totally non-partisan, but that has helped a lot.

The other key thing that really helps us in getting access to new markets, and it's something I was hammering away at last night at the rural-urban night in Chatham, Ontario, is that we have a wonderful ethnic community in Canada. Most of the population growth is in the cities, and it's in ethnic communities—from China, Southeast Asia, the Middle East—that have smart engineers and smart food processors.

What we need to do in agriculture, in my opinion, is engage our ethnic Canadians—again, if we look around this table, we don't see a lot—and allow them to go back as ambassadors for Canada to get us access to those markets. If I went there to build that trust, it would take five, ten years. We send over our people who, like me, went to an agricultural college and grew up on a farm. We need to send new Canadians who worked in those food processing industries and who came to Canada. I was just with one yesterday. It took him 10 years to get here. He ran seven companies for a billion-dollar Middle East food company. He can get us access to that marketplace.

We need to celebrate our ethnic diversity and utilize those new Canadians. I think that's one of the key ways we can get access to new markets.

[Richard Phillips]

We have an excellent example of that in Saskatchewan. The largest pulse processor and exporter has family ties throughout the Middle East. Here, business is sometimes done dollar to dollar. If I don't like Mr. McKay's store, I'll go to someone else's store, where it's a little cheaper. But in other parts of the world, it's a lot about family relations and long-time relations and trust between people. Our new Canadians have those connections back there to build on. If we found ways to utilize them, that would move us forward much more quickly.

[The Chair, Conservative, Larry Miller]

You have a little time left, Ms. Raynault.

[Francine Raynault, NDP, Joliette, QC]

Very well. I am still addressing myself to Mr. Surgeoner.

According to your document, Growing Forward 2 addresses only innovation and not business risk management. Could you expand on that idea?

[Dr. Gord Surgeoner]

On business risk management, I have been in agriculture all my life and I leave that to the farmers and the farm associations. I know very well that it's a touchy area to get into. I think the best thing we can do for business risk management is give our farmers access to more markets.

Our farmers want to farm the marketplace. As everybody is saying, they want a level playing field to do that. I've shown this new way of agriculture because I have different types of customers I can go to, so I don't have to go to one of the seven grain companies. I can say, “There's a car company just down the road that's making a part. We can supply the product there.”

So diversity of sales opportunities is one way to reduce the need. Business risk management is important, but when it gets into the details, we all have to understand that in agriculture there are hundreds of different kinds of businesses. From the grain farmer in the west to the greenhouse pepper grower I was with yesterday, who grows 48 tonnes of peppers a year, they're totally different kinds of markets, totally different things. That's why the idea that we combine federal and provincial resources in one cookie cutter for the entire country doesn't work.

I think Growing Forward 1 was novel and did an excellent job. It should continue.

[The Chair, Conservative, Larry Miller]

Thank you very much.

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

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

Thank you very much.

Virginia, I have some questions for you, particularly on the CFIB. I appreciated your comments on succession planning. The questions I'm going to ask are related to business acumen within the farm sector.

Our committee did a study on the future of farming. Certainly one of the discussions we ended up having with witnesses concerned succession planning and just how difficult it is to have those discussions. There aren't many resources in place to trigger those discussions. There are many different facets to succession planning, some of which are business related; for example, the capital gains exemption. They're also very personal, as far as how to move the farm from mom and dad to the kids, which kids, and exactly how you do that.

That leads to my question, because I think you're in a unique position in the CFIB. You work with all businesses from all sectors. I appreciated the numbers you gave us on the agricultural sector. Do you find that farmers who are running their farms, hopefully as businesses, have the same sort of business acumen as other businesses within the CFIB?

[Virginia Labbie]

I'm glad you asked that question. We surveyed our members on a number of business practices they employ. We found that the farm members in our organization were more Internet savvy than many of our general business owners. We know that they are adapting and adopting new technology. So it's really important that our members are on the cutting edge and adapting to new technology.

Succession planning is difficult for any farm business owner or any general business owner. We look at the numbers for our general business owners as well, and the figures are similar for our members on how many have succession plans in place. I think this committee has a real opportunity to examine how to...[Technical difficulty—Editor]...focused with a business plan moving forward so we make sure we have that successful transfer of farms.

CFIB has been part of the solution. We've developed our own guide that we provide to our members. It basically gets the conversation started and helps folks have those difficult discussions. It gets the ball rolling to start thinking about how they'll transfer to the next generation.

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

On what you were saying about the support you provide to your members, including farmers, do you offer courses or give out written material encouraging farmers to seek out business-type courses that would help them with business-type decisions on succession planning, when to pay down debt, how much debt to pay down, when they should reinvest, how much to reinvest, and how much they should have in savings? Do you offer courses? Do you recommend courses? How does that work?