Evidence of meeting #121 for Agriculture and Agri-Food in the 42nd Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was you're.

A video is available from Parliament.

On the agenda

MPs speaking

Also speaking

Chris Forbes  Deputy Minister, Department of Agriculture and Agri-Food
Bev Shipley  Lambton—Kent—Middlesex, CPC
Jaspinder Komal  Vice-President, Science Branch, Chief Veterinary Officer and World Organisation for Animal Health Delegate for Canada, Canadian Food Inspection Agency
Christine Walker  Assistant Deputy Minister, Corporate Management Branch, Department of Agriculture and Agri-Food

8:45 a.m.

Liberal

The Chair Liberal Pat Finnigan

I shall open this meeting.

I want to welcome the Minister of Agriculture and his staff, Ms. Christine Walker, Mr. Chris Forbes, and Mr. Jaspinder Komal, here this morning.

We will now commence our study of the supplementary estimates (A), 2018-19, for the fiscal year ending March 31, 2019, with the Honourable Lawrence MacAulay, Minister of Agriculture and Agri-Food.

Thank you for appearing. We are delighted to have you with us today, Minister MacAulay.

On Wednesday, October 24, 2018, five votes were referred to the committee: namely, vote 1a under Canadian Dairy Commission, vote 1a under Canadian Grain Commission, and votes 1a, 5a and 10a under Department of Agriculture and Agri-Food.

I've already introduced the staff accompanying the minister.

Welcome to our committee, and thanks for coming.

I shall start the discussion by calling vote 1a under the Canadian Dairy Commission.

Minister MacAulay, the floor is yours for up to 10 minutes.

Thank you.

8:45 a.m.

Cardigan P.E.I.

Liberal

Lawrence MacAulay LiberalMinister of Agriculture and Agri-Food

Thank you very much, Mr. Chair.

It's a pleasure to be here again.

Good day, everyone.

I am pleased to be here with my deputy minister; Jaspinder Komal; and Christine Walker, assistant deputy minister of the corporate management branch.

I want to thank the committee for its excellent work on supporting the agriculture and food sector. The members of the committee are working together to address some of the pressing priorities for Canadian farmers.

In particular, I want to thank the committee for its study on mental health, focusing on farmers, ranchers and producers. You heard some very interesting testimony, and I'm pleased that this committee has brought this issue into the spotlight for Canadian agriculture. I know that it's also an issue that is very close to the heart of my parliamentary secretary, Jean-Claude Poissant. I am pleased that we are partnering with a number of organizations that have launched some great initiatives on mental health.

Mr. Chair, my message to you today is that our government will continue to work with you to grow the Canadian agriculture and food sector.

Today, I would like to touch on four key points: the fall economic statement, supplementary estimates (A), progress and priorities, and challenges and opportunities for the sector.

Last week, the government released its fall economic statement. It shows that our plan for strengthening the middle class and growing the economy is working. Our government knows that Canadian farmers and food processors are key drivers for the Canadian economy.

That is why the fall economic statement includes many measures to support continued growth. We will invest $25 million to remove non-tariff barriers to agricultural trade and hire more agricultural trade commissioners. We will improve our tax system so that farmers can grow their businesses. Food processors and manufacturers will be able to immediately write off the cost of capital investments like machinery or equipment. Farmers will be able to write off a larger portion of the depreciation in the year an investment is made for purchase of buildings, machinery and equipment. This has been a major ask by the farm community, and we have delivered.

As the president of the Canadian Federation of Agriculture said, “This fiscal update shows that the Federal Government is taking the right steps to increase the competitiveness and efficiency of Canada's agricultural sector.... It is very heartening to see the government is listening to farmers and, more importantly, acting on what they hear. These initiatives are an [important] step towards harnessing the potential of Canadian agriculture.”

As you can see, the supplementary estimates (A) are just over $30 million. That's on top of the main estimates for 2018-19 of just over $2.5 billion.

The supplementary estimates (A) include an investment to advance agricultural discovery science and innovation. It's part of the government's investment of $70 million to help farmers manage climate change and conserve our soil, air and water, and to hire 75 new agricultural scientists to keep our industry on the cutting edge.

Mr. Chair, since we last met, we have marked a couple of major milestones in the industry.

On September 30, Canada reached a trade agreement with the United States and Mexico. With this agreement, we have maintained the tariff-free access to the American market for Canadian exports that we enjoyed under NAFTA. That's good news for the 1.9 million Canadians whose jobs depend on trade with the U.S. For our farmers and food processors, we have protected our $30 billion in agri-food exports to the United States. Throughout the negotiations, the government worked extremely hard to advance the interests of Canadian farmers and food processors.

At the same time, we fully recognize that the agreement will impact farmers and processors under the supply management system. It is important to remember that this U.S. administration was calling for a complete dismantlement of the supply management system. Our government defended and preserved our system from these very strong American attempts to see it dismantled. I can assure the committee that our dairy, poultry and egg producers will be fully and fairly supported for any market losses.

Before we do that, we will sit down with processors and producers. That is why we are forming working groups to develop strategies for the short term and the long term. Our common goal is to help our dairy, poultry and egg sectors innovate and drive our economy for future generations.

The second major milestone occurred on October 25, when Bill C-79 to implement the CPTPP received royal assent. This landmark agreement is part of the government's strategy to diversify our trade. With Canada being one of the first six countries to ratify it, our farmers would be among the first to benefit. Tariffs will be eliminated on a wide range of Canadian exports, including meat, grains, pulses, maple syrup, wines and spirits, seafood and agri-food products. There are estimates that this agreement will put an additional $2 billion in the pockets of farmers. In Japan alone, our pork producers are looking at new sales of over $600 million.

In October, I led a trade mission to Europe, where we worked to maximize our opportunities under CETA. At the same time, we continue to defend our interests abroad. While in Italy and Brussels, I expressed Canada's concern with Italy's mandatory country-of-origin labelling required on durum wheat pasta. I took every opportunity to promote and defend Canada's farmers, their quality products, and free trade based on a science-based system.

Our government has signed the biggest trade agreement in Canadian history with the world's largest trading blocs in Europe, North America and the Pacific. We have firmly maintained the three pillars of our supply management system, and at the same time we've given farmers and processors access to a full two-thirds of the global economy.

We're not stopping there. Earlier this month, I was proud to lead a delegation of over 300 on a trade mission to China. I am proud to report that our agri-food exporters signed 18 agreements with Chinese partners. We expect to generate about $640 million in new sales as a result of this mission. We successfully promoted our world-class Canadian food and beverages, and we worked with industry to grow their sales in this vital market for our farmers and food processors.

As members are aware, we have set a target of $75 billion for agriculture and agri-food exports by 2025, and I am confident we will meet and exceed that target.

Of course, none of this can happen without investment. Over the past seven months, investments have been rolled out under the Canadian agricultural partnership. As well as trade, science and sustainability are key priorities for the partnership. Science is keeping our industry on the cutting edge. Over the past several months, we have announced investments of over $75 million in science clusters for a wide range of sectors.

I am proud to be a member of Parliament and a farmer. Those were the two things I did in my life. It was just over 30 years ago, on November 21, that the people of Cardigan elected me for the first time. I have always been extremely proud to represent the people of Prince Edward Island. I am extremely proud to represent Canadian farmers, whether in the House of Commons, travelling across our country, or around the world. We have the best farmers and ranchers in the world, and it truly is a source of pride to represent them.

When I look ahead at the prospects for the industry, I see a great future. This past summer, I had the privilege of visiting some of our outstanding farmers and food processors on a tour across the country. It's truly amazing. Our farmers and processors are innovators. They are passionate about agriculture, and they are driving our economy. Truly, the future of our industry is in good hands.

Thank you, Mr. Chair.

8:55 a.m.

Liberal

The Chair Liberal Pat Finnigan

Thank you, Minister MacAulay, for updating us on the programs.

We will start our questions now. I want to welcome Mr. Dean Allison to our committee, in replacement of Mr. Earl Dreeshen.

M. Berthold, you have six minutes to put your questions to the minister.

8:55 a.m.

Conservative

Luc Berthold Conservative Mégantic—L'Érable, QC

Thank you, Mr. Chair.

First of all, I want to congratulate you, Mr. MacAulay, for your 30 years of being an MP. It's a long time to serve, and I appreciate someone like you doing this job for so long.

You talked about the fall economic statement. Just between you and me, did the finance minister tell you when the budget will balance itself?

8:55 a.m.

Liberal

Lawrence MacAulay Liberal Cardigan, PE

Thank you very much, my friend. I appreciate your question.

What we canvassed on was to improve the economy—

8:55 a.m.

Conservative

Luc Berthold Conservative Mégantic—L'Érable, QC

So the answer is no.

Thank you very much.

Minister, will you release the studies that were conducted by your department before you decided to sign the agreement with the United States on what repercussions opening up the Canadian market to the U.S. would have on supply managed producers?

8:55 a.m.

Liberal

Lawrence MacAulay Liberal Cardigan, PE

What did you say? I'm sorry.

8:55 a.m.

Conservative

Luc Berthold Conservative Mégantic—L'Érable, QC

I just want you to table the document your ministry made about the agreement with the United States before you signed it.

8:55 a.m.

Liberal

Lawrence MacAulay Liberal Cardigan, PE

I don't have any document with me.

8:55 a.m.

Chris Forbes Deputy Minister, Department of Agriculture and Agri-Food

What kind of studies are you talking about?

8:55 a.m.

Conservative

Luc Berthold Conservative Mégantic—L'Érable, QC

Did your department conduct studies on the repercussions for supply managed producers following concessions that were made under the terms of the agreement with the United States?

8:55 a.m.

Liberal

Lawrence MacAulay Liberal Cardigan, PE

Thank you very much.

We certainly understand how valuable the agreement is. We also understand that the supply management sector had to pay a price. They will be fully and fairly supported. We've indicated that quite clearly. We want to make sure that we keep the $2 billion moving.

8:55 a.m.

Conservative

Luc Berthold Conservative Mégantic—L'Érable, QC

Did you have any study about it before signing?

8:55 a.m.

Liberal

Lawrence MacAulay Liberal Cardigan, PE

I've had lots of studies at Agriculture. I'm going to have to turn it over to my deputy.

8:55 a.m.

Conservative

Luc Berthold Conservative Mégantic—L'Érable, QC

No, that's fine.

Minister, when did you learn about your colleague's decision to abandon milk, egg and poultry producers during the USMCA negotiations? Was it at the beginning of negotiations, was it on the night when it was decided that we would sign the agreement because you were in a bit of panic, or was it even before then?

8:55 a.m.

Liberal

Lawrence MacAulay Liberal Cardigan, PE

Thank you very much.

I was made aware of it long before anybody sat at the table to negotiate. I think my honourable colleague is well aware that the United States indicated quite clearly that their ambition was to destroy the supply management system. They indicated that quite clearly. The government of the United States said that before any negotiations started. I think it's fair to say—

8:55 a.m.

Conservative

Luc Berthold Conservative Mégantic—L'Érable, QC

Minister, we have...

8:55 a.m.

Liberal

Lawrence MacAulay Liberal Cardigan, PE

—you're a good friend, but I have to answer the question.

8:55 a.m.

Conservative

Luc Berthold Conservative Mégantic—L'Érable, QC

You keep on repeating the same thing, but Mr. Sonny Perdue made comments to the effect that the Americans never asked for a complete dismantling of the supply management system. We are getting two different versions.

I didn't ask you if you understood the American position or to define it. I'm asking you when you learned about the concessions and if you were consulted on how many concessions were given to the United States.

8:55 a.m.

Liberal

Lawrence MacAulay Liberal Cardigan, PE

As you're no doubt aware, my good friend, negotiations took place for a long period of time. I understood what the objectives were for the American government before the negotiations started. I understood it would be a problem for our supply management sector from the very start.

I also understood quite clearly—and I'm sure my good friend did, too—that the objective of the United States was to destroy the supply management system. We were quite able to make sure the three pillars of the supply management system survived, and we will make sure that they're fully and fairly supported.

8:55 a.m.

Conservative

Luc Berthold Conservative Mégantic—L'Érable, QC

When...

8:55 a.m.

Liberal

Lawrence MacAulay Liberal Cardigan, PE

They pay some price—

8:55 a.m.

Conservative

Luc Berthold Conservative Mégantic—L'Érable, QC

Did you approve this, Minister...

8:55 a.m.

Liberal

Lawrence MacAulay Liberal Cardigan, PE

—but we will make sure they're fully and fairly supported.

I think my honourable colleague is fully aware of the importance of United States-Canada trade. When you sit down at a table, you have to make sure that you have the best negotiators possible. Over the years in my time here in Ottawa, I have seen, no matter what government is in place—

9 a.m.

Conservative

Luc Berthold Conservative Mégantic—L'Érable, QC

Mr. MacAulay, on that we agree.