Evidence of meeting #16 for Agriculture and Agri-Food in the 41st Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was farmers.

A recording is available from Parliament.

On the agenda

MPs speaking

Also speaking

Gregory Aziz  Chairman and Chief Executive Officer, National Steel Car Limited
Michael Hugh Nicholson  Executive Vice-President, Marketing, Sales and Quality, National Steel Car Limited
Marion Wrobel  Vice-President, Policy and Operations, Canadian Bankers Association
Greg Stewart  President and Chief Executive Officer, Farm Credit Canada
Bertrand Montel  Market Segment Manager, Agriculture, National Bank, Canadian Bankers Association
David Rinneard  National Manager, Agriculture, BMO Bank of Montreal, Canadian Bankers Association
Peter Brown  Director, Agriculture, Scotiabank, Canadian Bankers Association
Lyndon Carlson  Senior Vice-President, Marketing, Farm Credit Canada
George Da Pont  President, Canadian Food Inspection Agency

4:55 p.m.

Conservative

Bob Zimmer Conservative Prince George—Peace River, BC

Good. Thank you.

4:55 p.m.

Conservative

The Chair Conservative Larry Miller

You have about a minute and a half, Mr. Payne.

4:55 p.m.

Conservative

LaVar Payne Conservative Medicine Hat, AB

Thank you for the last minute and a half, Chair.

Thank you for coming, Minister.

We heard, Mr. Minister, a couple of weeks ago, that the World Trade Organization has said that the U.S. country-of-origin labelling certainly discriminates against foreign markets, particularly us, in Canada. Could you maybe update this committee on why the decision is good news? What does that mean for Canadian families and workers in the livestock industry?

4:55 p.m.

Conservative

Gerry Ritz Conservative Battlefords—Lloydminster, SK

Of course, this is the next step in the process. I fully expect that the Americans will appeal. They have a history of doing that. Having said that, we're a long way down the road to completing getting back to normalcy, in both directions, along that 49th parallel.

As you well know, the country-of-origin labelling put our livestock sector, predominantly, into a tailspin. American producers and processors, who were buying feeder cattle or weanling hogs, weren't sure if they should or could, because they had to be held separately all the way through the system—they had to be labelled separately, and so on—to go on the store shelves. We never saw it get to that extent, but there was always that hammer hanging over our head.

There's always been a differential in price between Canadian and American stock. This spread that differential. Our dollar climbing actually exacerbated the problem.

It's good news for our livestock sector. We have tremendous allies in the livestock and processor sectors on the U.S. side as well.

I fully expect them to appeal it, which means that our day of celebration will be held in abeyance for six or eight months.

4:55 p.m.

Conservative

The Chair Conservative Larry Miller

Thank you.

I'll move to Mr. Valeriote for five minutes.

4:55 p.m.

Liberal

Frank Valeriote Liberal Guelph, ON

Thank you, Minister, for coming in today.

I can assure you that there will be a day when I'll be able to share my time with somebody again.

4:55 p.m.

Some hon. members

Oh, oh!

4:55 p.m.

Liberal

Frank Valeriote Liberal Guelph, ON

I have two questions for you.

Gerry, you know these names. You know Dave Smardon, from Bioenterprise. You know Gord Surgeoner. You know about their efforts to commercialize all this wonderful innovation that's out there.

I put it to you that we have some wonderful innovation. You know where it's going on. It's going on in Guelph and in other communities. I'm wondering why we are not putting more effort into putting the minds and the money together, supporting it with some government money so that it can leveraged, and really keeping our innovation from heading south. I don't see it in the estimates. I wrote you a letter on this, and I'm anxious to get your response. There's so much good stuff going on. I'm asking you to do that. If it's not in the estimates, what will you be doing?

My second question you may find a little more offensive. It is about the Wheat Board and the $200 million cap. There are a lot of people, including Stephen Vandervalk, who are plenty angry about this. From our perspective, and you can deny it, it's being used to fund the eventual liabilities for transitioning the Wheat Board. I see nothing in the estimates at all for that transition, which will probably start as soon as this legislation goes through. I understand that it has gone through second reading at the Senate and is likely to be law before Christmas. So that transition is going to start right away.

What's going to be the cost of that, which the $200 million you've raised the cap by isn't going to cover? It is not showing up in your estimates,

5 p.m.

Conservative

Gerry Ritz Conservative Battlefords—Lloydminster, SK

Starting with the moneys for commercialization of good ideas, absolutely, we agree with you. There are some tremendous opportunities to do that.

Historically, it is money at risk. A lot of people back away from it, because there's always a larger risk factor. That's why, in last spring's budget, we committed another $50 million to do exactly what you're talking about.

5 p.m.

Liberal

Frank Valeriote Liberal Guelph, ON

That's for innovation.

5 p.m.

Conservative

Gerry Ritz Conservative Battlefords—Lloydminster, SK

Yes. Well, no, but I mean that—

5 p.m.

Liberal

Frank Valeriote Liberal Guelph, ON

That's not commercialization.

5 p.m.

Conservative

Gerry Ritz Conservative Battlefords—Lloydminster, SK

No, under that cap...you have to have a name on certain things. But certainly we have the ability within that name—the Innovation Fund—to take good ideas to commercialization. We can do it within that. So we'll look at every aspect, every case-by-case situation, and assess it on which is the best road forward. If it looks like a really good idea, we'll be there, and then help them leverage other groups that are around there. You need someone to quarterback. As you know, there are often good ideas all across the country, and some are done in silos and they don't know.

Researchers are great at research, but as soon as they find what they are looking for, it goes over there. This piece needs to be put with that piece from B.C., and that's what we're hoping and striving to do with all of this, from an agricultural perspective, with that $50 million in Budget 2011. We've had similar programs, DIAP and others, that sought to do those things, and they were very successful. Very often it doesn't take a lot of money to move things to the next step and push them beyond. So we're looking forward to getting that in place. As you know, that budget bill passed a short time ago, so now we'll be working out the program spending on that. Some $11 million will go out this fiscal year, and then the next will come out in year two. It's a two-year program.

On the $200 million cap, that's a number; it's a cap. I can assure you there isn't that kind of money in that account. That account is sitting in Winnipeg at the Canadian Wheat Board. It's not my money; it's not farmers' money. It's money that is in the contingency fund and has always been held separately from the pools. The contingency moneys have always been made up from profits the Wheat Board has generated on hedging, on contracts, even on making money on money, and all the different things they do from their business standpoint. Then it's used to promote the business of the Canadian Wheat Board within the Canadian Wheat Board. There will be some lab settings and different things like that out of those fundings.

The board approached us last spring just before the election to ask us to raise the cap to $100 million. We looked at what they were proposing to do with it. We agreed, but it took until this fall to get it done, with the election in the way, and so on. It was already in play, but we just had to go through the legalities of Treasury Board and so on.

5 p.m.

Liberal

Frank Valeriote Liberal Guelph, ON

You raised it to $200 million.

5 p.m.

Conservative

Gerry Ritz Conservative Battlefords—Lloydminster, SK

Yes, at the direction of people in the industry, and so on, looking at what was happening with moneys out of the pools. There was going to be another bit of money coming at the year-end books, and on that direction, we decided to raise the cap to capture that. I can assure you it's nowhere near $200 million.

As you know, given the process, it's easier to pick another number than to do it in $10 million increments. Having said that, that money will be used after discussions with industry, with the board and, with us as the government, backstopping a lot of this to make sure it is used in the best interest of western Canadian farmers.

We as a government have pledged and have said we will be there for the extraordinary costs, the severance packages, any changes to pension, and those types of things. We'll be there. Backstopping the new board for up to five years will mitigate a lot of the liabilities that we saw in contracts, in storage, and all of those things identified by the accounting firm that the board hired. A lot of that will be mitigated in taking it out to five years. That's why we set up the five years, to mitigate those liabilities.

5 p.m.

Conservative

The Chair Conservative Larry Miller

Thank you.

Now we move to Mr. Hoback for five minutes.

December 1st, 2011 / 5 p.m.

Conservative

Randy Hoback Conservative Prince Albert, SK

Thank you, Chair, and thank you, Minister, for taking the time out on short notice to be here. You've always been great when we've asked you to come before our committee. Your time is very valuable. You've made time for us, and we really appreciate your doing it.

5 p.m.

Conservative

Gerry Ritz Conservative Battlefords—Lloydminster, SK

I've had good days with the chair.

5 p.m.

Conservative

Randy Hoback Conservative Prince Albert, SK

You understand how the committee works. There's no question about that.

Minister, we've been talking in our study about BRM programs and looking at our Growing Forward 2 program. I was wondering if you could just give us an overview of how you see those negotiations with the provinces going forward. It's an interesting environment that we're actually working in, especially in the grains and oil seeds sector. When we did the last set of Growing Forward programs, they were under severe financial pressures to get cash out fairly quickly.

Now we're in a kind of envious position where the cashflow pressures aren't there. But in the same breath, now we need to be more responsible to think forward on what we need for proper programming. Can you offer any insight on that?

5:05 p.m.

Conservative

Gerry Ritz Conservative Battlefords—Lloydminster, SK

Sure. As you well know, the BRM programs and the whole suite of programs are shared between the federal government, at 60%, and the provinces and territories at 40%, so we work together. As we're developing the new programs, we include industry as well to ask what worked and what didn't work and what it is that industry sees changing. As you well know, Mr. Hoback, agriculture has changed drastically in the last decade, in the last five years, and it's doing that as we roll forward, so we want to make sure we're capturing the potential of change as well.

The provinces and territories are always asking for more flexibility. We understand that. The vast majority of the programs are now delivered at the provincial or territorial level. Right now, only the Manitoba and Atlantic region programs are delivered by a federal government entity. The other provinces have taken up the challenge to deliver their own programs, and if Manitoba should want to take over its own, we would certainly consider that to try to shorten the time lag and make sure that farmers have the bankability, predictability, and timeliness they require.

Our time on delivering the programs is getting better. The forms to fill out to come in are getting smaller, and farmers are getting better at doing that. Having said that, the best backstop is a good solid market, and we've been fortunate in the last little while to have had that, with the exception of the flooded areas and some crop insurance issues and so on. The programs have responded well. They are demand-based programs.

The AgriRecovery line item is $125 million. Last year, we were in the $450 million range. It's a demand-based program, so don't let it scare you when you see a bigger number. Or when you see the number smaller, it means it wasn't demanded that year. We'll see those fluctuations on a year-by-year basis.

We are working towards being less reactive and more proactive in the next round of programming discussions. We've had two rounds with industry and have multiple rounds with the provinces and territories working through. I've been meeting with some of my provincial colleagues. The ministers from Saskatchewan and Alberta were here the other day. As well as doing a great announcement on Bill C-18, we also talked about the new generation of programs. Yesterday, when I was in Winnipeg, I met Stan Struthers. We spent about an hour talking about the new programs and working our way forward to make sure we serve farmers in a more fulsome way.

It's an interesting exercise. Farmers want to make their money from the marketplace, not the mailbox. We get that. We're not going to send money out just to send money out. We're going to make sure that what we do is strategic. We're going to help commercialize and develop. We need new varieties of wheat. The Wheat Board has been sitting on a CPS utility wheat, a red, that will yield a hundred bushels an acre and is as valuable as most of the milling wheats.

Those are the types of transitions that we're working towards: making sure there's a lot more research and innovation, and making sure those types of things have the ability to get commercialized.

5:05 p.m.

Conservative

Randy Hoback Conservative Prince Albert, SK

One thing we heard about from one witness in our testimony was on research and innovation, so that was a good segue into what he said.

He talked about the speed to get the technology from research into the marketplace and what we can do for that, not only for technology developed here in Canada but also for technology being developed around the world that our farmers would like to adapt, grab, and run with. Have we been talking with the provinces on how we can streamline that process?

5:05 p.m.

Conservative

Gerry Ritz Conservative Battlefords—Lloydminster, SK

We've been talking with the provinces on that process. We've also been talking with some of our trading partners—the U.S., for example, in that North American perimeter—about harmonization of a lot of that work. What we're doing now when it comes to new chemicals and pesticides is we're starting with their science as a base, not starting back at zero. That should help us get new products, environmentally friendly products, into the marketplace a lot faster than we've seen. That just makes sense. It takes less money and it's a lot more timely.

The problem we have always faced is that the Canadian market is seen as a small percentage of overall sales, and it makes no sense at all to come in and spend years and hundreds of thousands of dollars to get the go-ahead for a product that may be out of date by the time you get it there. We have to start to work at the speed of commerce, and we're well on our way to doing that, in partnering with PMRA at Health Canada. It's not all mine; as I said, George and his team at CFIA have done a great job of catching up on the fertilizer side. We'll continue to work on that on a case-by-case basis as well.

5:05 p.m.

Conservative

Randy Hoback Conservative Prince Albert, SK

Thank you, Minister.

5:05 p.m.

Conservative

The Chair Conservative Larry Miller

Thank you.

We'll now move to Mr. Atamanenko.

I understand you're splitting your time with Ms. Raynault.

5:05 p.m.

NDP

Alex Atamanenko NDP British Columbia Southern Interior, BC

That's correct.

Thanks, Chair. I wouldn't mind if you gave us a signal at two and a half minutes.

Thanks, Minister, for being here.

Also, Mr. Knubley, it's good to see you again.

Mr. Da Pont, congratulations on your relatively new position. It's nice to see you here.

With regard to the very recent tariff reduction on apple juice concentrate, I'm wondering if you've analyzed the impact of that on our fruit growers. That's my first question.

Second is a follow up on my November 7 letter to you, Mr. Da Pont, on the subject of horse meat. There are some health concerns. Horses aren't raised for food production. They often have a significant degree of banned medication, such as phenylbutazone, which we do not allow in meat for human consumption. There have been studies, such as the one in the Irish Veterinary Journal, showing that this drug causes anaplastic anemia in children. The EU now stamps new equine passports issued to horses over the age of six months indicating that they are ineligible for its food supply. We import something like 50,000 horses for slaughter in this country, 85% of which have probably taken some drugs in their lifetime.

Specifically, I'm wondering what percentage of the drug testing we do is performed on equine organs. What is the methodology and specific testing mechanism that we use to ensure that this meat coming out of our horse slaughter plants is safe and that it doesn't contain phenylbutazone? Are the equine identity documents kept on record by slaughter plants, and are they being edited by CFIA for accuracy and possible fraud?

If you don't have the exact answers here, Mr. Da Pont, I certainly wouldn't mind it if you threw them into a response to me. I'll stop there.