Agriculture Committee on March 12th, 2012

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

So this is a positive.

[Greg Meredith]

This is very positive.

[The Chair, Conservative, Larry Miller]

You are out of time, Mr. Forseth.

Now we'll move to Mr. Easter, please, for five minutes.

[Wayne Easter, Liberal, Malpeque, PE]

Thank you, Mr. Chair.

Mr. Meredith, actually the Interlake area has flooded for about five years now running. It's a serious situation there.

My question is really on the severe economic hardship advanced payments program. One of the concerns we had at the time the program came in was that it would end up adding a lot more debt on primary producers, and it certainly has. But it has been deferred twice, and that's to the government's credit.

However, there are regions of the country.... I mean, we are a big country. We're not all Alberta, in terms of the beef industry. I know in the Atlantic region we didn't have the price recovery you saw across the rest of the country. In fact we're always at about a 7¢-a-pound disadvantage because of the way pricing works. Even though we're a deficit area in cattle and hogs in Atlantic Canada, the pricing is Toronto less freight. It should be Toronto plus freight, when we're a deficit area. But that's not the way the system works.

So we're at a 7¢ disadvantage to begin with. And really, it's only in the last few months that producers in Atlantic Canada have seen the kind of price improvement that they might be able to pay these loans over time.

The March 31 deadline is approaching, and I've talked to a lot of producers. I think 32 hog producers owe $6.1 million; 50 beef producers still owe $4.6 million. We have to find another option for these producers. They are not going to be in a position....

There are some who can roll it over, depending on what other commodity they're in. The other difficulty is that when you default on your emergency advance, if you're a potato producer, or canola and soybeans, you lose your advance payment on your other commodity.

Can you see any other options for us?

I don't expect the government to defer the whole country for another year because of our situation in Atlantic Canada, but it is extremely serious. I know some producers are waking up at three o'clock in the morning worrying about this issue—almost suicidal.

Are there other options, or is there any way this program can be broken up somewhat regionally for different regions for some distance into the future?

[Rita Moritz, Assistant Deputy Minister, Farm Financial Programs Branch, Department of Agriculture and Agri-Food]

Mr. Easter, I'll start with generally where the program is at.

With the second stay of default—and you're absolutely right, there were two stays after the 2008 severe economic hardship advances that were offered to livestock producers—we did look at all the flexibilities within the legislation. We looked at what was within the minister's authorities to see how we could make that less onerous for the producer should we be in a position where some would not be able to have the repayment, especially in the hog sector, which is actually due for the final payment on March 31, 2013.

There are terms and conditions to this stay that are very different from what would normally be in the legislation under the advanced payments program.

What we have been doing with producers who have signalled there may be difficulties is explaining all of the terms and conditions and the different ways that repayment could be done using either BRM payments or payments from other commodities without penalties, the conditions around the penalty, and the fact that repayment could be renegotiated for an additional five years with the APP administrator as well, under much better conditions than would normally be in the legislation.

We have had some positive feedback that it's helpful for people to see all of the different possibilities.

Right now I can't speak to changes. It's the legislation, and we've exercised all of the flexibilities we have in that legislation.

[The Chair, Conservative, Larry Miller]

Thank you very much.

Mr. Lemieux, you have five minutes.

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

Thank you very much.

Thank you for being here to discuss the estimates. It was good to have the minister here--

[The Chair, Conservative, Larry Miller]

My apologies, Mr. Lemieux. I thought your name was there and got stroked out. It's actually Mr. Hoback.

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

Go ahead, Mr. Hoback.

[Randy Hoback, Conservative, Prince Albert, SK]

Well, it doesn't matter which one of us it is, we would say something intelligent, I'm sure.

I assume you're going to start my five minutes now, Mr. Chair. Is that a yes...? I assume you're going to start my five minutes now and you're not going to take away from it.

[The Chair, Conservative, Larry Miller]

Yes, of course.

[Randy Hoback, Conservative, Prince Albert, SK]

I appreciate that.

Ladies and gentlemen, it's nice to have you here today. One thing I want to commend you guys on is that you've been great for this committee. You've been willing to come and present to us. A couple of weeks ago, we had members of the agriculture department talking to the committee in camera about some of the programs, and you're here again today. We appreciate your time and your efforts and we thank you for all the work you've done in this last year.

There are a couple of places I want to go to on the research side of it, because I think we need to keep our eye on that ball. I think that ball is very important for our agriculture producers as we move forward. We've seen in the past.... I know that we've had Mr. Allen and Mr. Valeriote and the western producers talking about how we're not spending enough in agriculture money. I think they don't understand or they don't want to talk about DIAP, science clusters, and the agri-innovation program.

Can you just talk about page 38 in the main estimates? Under the line “Science, Innovation and Adoption”, we have $339 million budgeted for the upcoming fiscal year, which is an increase of $87 million. Can you tell us how you're going to use this money, or how this money is being used, and just what types of things our government is investing in?

[Greg Meredith]

Okay. Can you just point me to the figure you referenced?

[Randy Hoback, Conservative, Prince Albert, SK]

If you look at the $87 million, you see that it's an increase of $87 million, so basically what I'm looking for is for you to explain to us how the department is using the science and innovation money that our government is investing in. Just generally, then, can we hear from the department itself on how that money is being invested?

[Pierre Corriveau, Assistant Deputy Minister, Corporate Management, Department of Agriculture and Agri-Food]

Mr. Chair, I'll start with explaining the numbers. Then maybe my colleague Greg can talk in more detail about the programs.

Basically, the increase of $87 million that you see on page 38 looks at two main elements. One is the new agriculture innovation program that was announced in the last budget. My colleague Greg can explain the details of that program. Also, there is the extension of the ecoABC program that was announced recently. That money is being carried forward from past years.

[Rita Moritz]

As you can see, we have different chunks of the innovation pie that we're responsible for. Maybe I can start with the agri-innovation program. This is a two-year program. That would be part of the funding that you see in the main estimates, and it's up to $50 million.

This program is broken into what we're calling streams. There are two streams. The first part of it is really under knowledge creation, research, and knowledge transfer. We're looking at the innovation continuum almost from start to finish and at starting to harmonize programming so that the service is better for the client and we start to see the impacts of the front end, which is the research.

At the other end, the second stream of the agri-innovation program is on commercialization, as the minister mentioned, and that is really to see whether we can put what we learn in the knowledge transfer and the research into practice or commercialize it: it's either whether it is on the farms or in the industry that it's being used or is something that we can actually have as a Canadian invention and can commercialize. Those are the two bookends of that program right now.

Again, it's a two-year program for now. It was launched on November 10. As of February 10, we have already had 35 applications under the commercialization stream and 64 under the knowledge creation and transfer. We're in the process of evaluating those as quickly as we can to give responses back.

[Randy Hoback, Conservative, Prince Albert, SK]

Are they mainly from universities? Or are there innovation groups or...?

[Rita Moritz]

There are all shapes and sizes of proposals, so yes, there are some partnerships with universities, but there are others from industry as well. There seems to be quite a bit of innovation going on in the sector.

[Randy Hoback, Conservative, Prince Albert, SK]

Okay.

I'm down to my last minute. I'd like to stay in research, but in the same breath, I have to talk about the Canadian Wheat Board. I know a lot of farmers who are asking about transition and the process in the transition. If you have an update on how that transition is going, could you maybe provide that for us?

[Greg Meredith]

Yes. Thank you.

I would say it's going very smoothly. As the minister mentioned, the Wheat Board is building its network of partnerships for infrastructure, which was a concern when we went through the legislation. They've got to deal with Cargill, and if you read the paper you'll see that there are rumours or media reports about Viterra linking up with the board.

In terms of the process forward, as you know, by August 1 we've got a completely open market. In a very short period of time I think you'll see the regulations that support a check-off for our research-based organizations that were formally funded by producers through the Wheat Board. Shortly you'll also see an economic incentive for Churchill that will drive grain freight through that port.

There are a number of dimensions of advancement with the Wheat Board, and I would say they're all going very well.

[Randy Hoback, Conservative, Prince Albert, SK]

Okay.

Chair, I think I'll stay there; otherwise, I'll be another five minutes.

[The Chair, Conservative, Larry Miller]

You're out of time anyway.

Ms. Raynault, five minutes.

[Francine Raynault, NDP, Joliette, QC]

Thank you, Mr. Chair.

Right now, business risk management programs or BRM represent around 53% of the total departmental budget. The 2012-2013 fiscal year is the final year for programs under the Growing Forward policy framework. Next year, the estimates will be for the new Growing Forward 2 policy framework.

With Growing Forward 2, can we expect to see a shift in spending from BRM programs to programs that will not be BRM-related?

[Greg Meredith]

You are right. We are discussing with the provinces and negotiating another policy framework, including BRM programs. However, we cannot forecast the sums that will be earmarked for such and such an area under the policy framework.

As the minister said, programs are demand-driven. BRM programs will be able to meet the demand of sectors during the next year.

[Francine Raynault, NDP, Joliette, QC]

Still on the topic of main estimates 2011-2012, cuts of more than $216 million were applied to the whole portfolio. Could you tell me what portion of that amount comes from cuts in departmental and agency resources as opposed to cuts from scrapping programs and a decrease in the estimates for BRM programs?