Agriculture Committee on Feb. 28th, 2013

[Gerry Ritz, Conservative, Battlefords—Lloydminster, SK]

I'm not sure what expert you were talking to, but industry will tell you that we're well ahead of most other countries around the world in the quality and scope of our traceability system. We continue to make investments in that under the biosecurity agreements that we'll be signing with provinces and territories. There will be more moneys added to those files.

We continue to build the robustness of that traceability. We have other countries coming to assess what we're doing and how we're doing it. It's one of the reasons we have expanded access to the Japanese market. It's based on the validity and veracity of our traceability system.

A lot of the discussions around the European free trade agreement are embroiled in the value of the traceability system we have in Canada. We continue to work on that.

We're well along. We're within the bounds, I would say, of being some 90% done at this point. The last 10% is always tough. There are people who don't like paperwork, who say they only have three of this, four of those, or 10 cows, and that they're not going to do it. But they put the rest of the system at risk when they don't. So we continue to work with the industries affected—all the livestock sectors, the poultry sectors, everyone where we can work a traceability system.

[The Chair, Conservative, Merv Tweed]

You have half a minute.

[Francine Raynault, NDP, Joliette, QC]

It is finished?

[Gerry Ritz, Conservative, Battlefords—Lloydminster, SK]

Now it's question period.

[Francine Raynault, NDP, Joliette, QC]

Okay. Excuse me, I did not hear you.

Are the traceability systems interconnected? Are companies sending information?

[Gerry Ritz, Conservative, Battlefords—Lloydminster, SK]

Yes, there is some of that, predominantly on the livestock side—it's called BIX—where the animal going into the slaughter facility is traced through the system. Then they start to look at the genetic makeup of the animal. They say it's well marbled and exactly what they want, and they can go back to that farmer and tell them that whatever they're feeding the animal, whatever they're doing, whatever genetics they're using, we want more of that. There are contracts starting to come out of that type of traceability. So there's a benefit back to the ranch or the farmer.

[The Chair, Conservative, Merv Tweed]

Mr. Calkins, you have the last few minutes.

[Blaine Calkins, Conservative, Wetaskiwin, AB]

Thank you, Chair.

Did you say three minutes?

[The Chair, Conservative, Merv Tweed]

Three and a half.

[Blaine Calkins, Conservative, Wetaskiwin, AB]

That's great.

Minister, thank you so much. As a visitor to this committee, I'll keep my questions within the chair's timeline. I want to thank you so much. You've been to my riding several times. I represent the rural area between Red Deer and Edmonton. There are a lot of farmers, a lot of great agricultural land, and great producers in that area, working hard to build our economy, grow our country, and feed Canadians and people around the world.

One of the most important things we've done as a government since coming to office was the changes to the Canadian Wheat Board and the removal of the monopoly. I know this was hotly contested and hotly debated. We know it was the right thing to do. It has unleashed a certain potential that's been held back for so long, in the Western economy in particular.

I see in the estimates here that we've got about $53 million for the Canadian Wheat Board in transition costs. Could you elaborate? I know you've alluded to that before. While the Wheat Board doesn't have the monopoly any more, it does have broadened powers, with the ability to market canola and so on. In your perspective as minister, why is it so important for farmers and producers across the prairies to have these funds for the Wheat Board? Could you reiterate why we've had the success, as you've seen as minister, in this transition to an open market?

[Gerry Ritz, Conservative, Battlefords—Lloydminster, SK]

We’ve said all along that there was value in the Canadian Wheat Board. The Rolodex they have of buyers around the world, and the capacity they have to do analysis, was worth keeping. We gave everybody the best of both worlds. We gave farmers the option to either market their own product at the time, place, and price of their choosing or to continue to use a pool or cash sales through the Canadian Wheat Board.

The Canadian Wheat Board has handling agreements with every elevator company in western Canada, that I'm aware of. They continue to sell outside of their original mandate. As I mentioned earlier, some two boatloads of canola have gone to a market in Japan that we hadn't had before. That's good news. That's the value of their Rolodex. They continue to be seen as providing a safe, secure product. They've got some markets in China and Japan that no one else will probably ever have access to. There's value in maintaining it. We've done that. They needed some help from a taxpayer perspective to maintain what they had while they downsized. There are workforce adjustments. They had a computer system that was no longer required that needed to be taken off the asset list, and so on. Things needed to be paid out.

There was a misconception somewhere out there that there was this huge asset value that farmers were somehow missing, that the building, the rail cars, and those types of things, were worth a lot of money. At the end of the day, they weren't. There were liens against every one of them that more than stripped their value. That had to be cleaned up. That's what we did as a government. We put forward a package of dollars that the Wheat Board will be working through over the next two to three years as it builds a plan to take themselves into the private sector. They've had a number of suitors, as I said. They're working on some strategic partnerships right now. They're looking at how best to continue to serve farmers across Canada now, not just in western Canada, and the role they can play in the exciting new opportunities.

[The Chair, Conservative, Merv Tweed]

Thank you.

With that, I'll thank our minister and members of his staff for being here. I know that others are going to stay on for the next hour. I will advise the committee members that we're going to set aside the last 10 minutes to deal with the motion and a little bit more information on previous discussions.

Thank you, Minister. We'll take a five-minute recess to let our new guests join.

[The Chair, Conservative, Merv Tweed]

Welcome back, everyone, to part two. We're going to continue with questions for the department.

Mr. Allen.

[Malcolm Allen, NDP, Welland, ON]

Thank you very much, Chair.

Thanks, folks, for staying with us. I appreciate it.

I think the first part of the question is pretty simple. I'm just looking to identify the person who's most responsible for putting the main estimates together, if that person would just say “aye” or put their hand up.

Thank you, Mr. Corriveau.

I say this with the greatest of respect. I don't suggest that one can't count, because I recognize these are estimates and that one does one's best based on circumstances, and circumstances can change. But here is why I say this. The expenditures of 2011-12, which were actual expenditures, were $737.6 million, according to the documents you provided—an amount that was of course higher than the estimates. The 2012-13 estimates were $685 million and a half million—we'll round it off. But our estimates today, which actually means not the real estimates to date but actual expenditures plus the present estimates, are $728.3 million, give or take. So the estimate is out by about $42 million to $43 million.

Is that correct? Is my math right?

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

Thank you, Mr. Chair.

Could you refer me to the page of the document? Is this for CFIA?

[Malcolm Allen, NDP, Welland, ON]

It's the CFIA piece.

[Pierre Corriveau]

Oh, I'm sorry.

[Malcolm Allen, NDP, Welland, ON]

You want to go down the table; that's no problem.

Thank you, Mr. Corriveau, for pointing out the right guy, who put his hand up. But thanks for volunteering your hand first.

[Some hon. members]

Oh, oh!

[Peter Everson, Vice-President, Corporate Management, Canadian Food Inspection Agency]

Thank you very much, Mr. Chair.

The estimates today reflect the supplementary estimates (A), (B), and (C), and that's the reason for the increase from the $685 million to $728 million.

[Malcolm Allen, NDP, Welland, ON]

I got that.

[Peter Everson]

Okay.

[Malcolm Allen, NDP, Welland, ON]

What I'm really saying is that not only was this estimate out by a scope of $42 million, but the previous one, for which we now know the actual expenditures—the previous budget year, beyond this one—is also different from the estimates.

I understand that it changes. I'm not holding people to fault, in the sense that this is our best estimate—that's why these are called “estimates”, of course. The issue becomes that we're now saying that we need to spend $728 million this fiscal year based on what we've already done through supplements (A), (B), and (C). But next year, you're saying, we're going to spend $687.8 million—give or take, without rounding it off nicely—which is $2 million more than you did in this budget estimate year, but the reality is that it's actually $40 million less than we're estimating that we're going to spend.

So since we were off by such a piece last time we estimated, how do we have any sense of confidence that we're not literally off by the same scope on this particular estimate? And if we are, if we needed $728-plus million this fiscal year—because inflation is inflation, and I recognize that there's been somewhat of a leveling out of wages and some reductions, albeit at CFIA there have been increases in the number of people, and I've acknowledged that and have done so in the past.... That being the case, how do you intend to manage with about $40-odd million less next year than you did this year, considering that you actually needed to get an additional $42 million more than you needed when you estimated at the beginning of last year?

I guess I'm not saying that you're not good at arithmetic; I'm just not so sure you're good at forecasting. What gives us confidence that the forecast for next year through the main estimates is any better than last year's forecast?

There are two parts to help me with this. One is giving me a sense of confidence that you forecasted correctly—because it is a forecast, and I admit that. And if it is a forecast, have you built in some sort of contingency fund, because that's normally what I used to do as a corporate chair when I was in municipal governance. Is there one inside that estimate?

Second, where do you intend to find the $40-odd million that you actually have to take out of what you just spent?

Could you help me with that? And if we run out of time, if you could supply it in writing, that would be wonderful—if you run out of time.

Thank you, Mr. Everson.

[Peter Everson]

Thank you very much, Mr. Chair. I'd be happy to respond to the question, and if we don't complete it, then we'll respond in writing as well.

The first point of clarification is that the estimate process is not a forecast; it's an approval by Parliament of authorities to spend up to a certain amount. Hence, the supplementary estimates (A), (B), and (C) in the future are not included in the main estimates because Parliament has not provided that authority. It is not a forecast of our total expenditures.

You can see that in the supplementary estimates (C), where it is actually $790 million, which reflects cash inflows to the CFIA from Treasury Board votes that have been approved. So it's a difference between a forecast, as the member points out, and the estimates process itself.

[The Chair, Conservative, Merv Tweed]

Thank you.

Mr. Richards.