Evidence of meeting #134 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 quality.
A recording is available from Parliament.
11:55 a.m.
Conservative
11:55 a.m.
Liberal
Pierre Breton Liberal Shefford, QC
Okay.
I thank all of the witnesses for being here today for this important study.
All of you spoke about scientific approaches, among others. I think there was a consensus all around.
Could the people from Richardson International and Viterra explain to us how a scientific approach will allow us to resolve this?
Also, how would that approach work with export processes?
Finally, could you explain how you see the risk with regard to all of this?
The representatives of Viterra could answer first, and then we will hear Mr. Vossen.
11:55 a.m.
President and Chief Executive Officer, Viterra
The importance of the science-based approach is that there are clear rules that we are buying against and selling against and measuring against. The issue is that if you don't have sound, backed science, you're potentially dealing with perception and judgment. For us there is much more certainty, predictability and reliability. Our whole system is based on a science-backed approach in terms of how we buy from the Canadian farmer and how we sell to markets all over the world. That's a fundamental cornerstone of the agricultural market in which we operate, and I think it's what makes Canada such a reliable supplier. It's because of our predictability and our consistency in terms of what we deliver.
For us, science is absolutely critical in terms of how we deal with parties such as China. The claims that are coming back from China today are based on quality. For us, it's important to take a scientific approach to understanding and refuting those claims. We believe 100% that we're delivering a very high-quality product and have met all contractual obligations in China.
We believe that any science tests from our experts will confirm that that is in fact true. The Canadian Food Inspection Agency has tested every cargo that has left Canada. They have retested cargos that were in question from the Chinese and reconfirmed that we have, in fact, as an industry and as a company, delivered against that quality, again using scientific methods.
They're proven, reliable, consistent methods, and I think that's absolutely key. It's not that we're creating new tests that aren't backed by sound history and sound science. We have a very rigorous system in Canada. It's a system we should be proud of and a system we should use to defend ourselves when defending is required, such as this circumstance.
Noon
Liberal
Noon
President and Chief Executive Officer, Richardson International Limited
The international trade in agricultural commodities is governed by very clear rules of engagement by both the buyer and the seller. Those are internationally recognized contracts. Quality is part of that, as are other execution terms. Issues related to cargo, freight, time, credit, credit terms and payment terms are all outlined in those contracts. It's what allows this very high-value industry to work as seamlessly as it does on an ongoing basis over time and distance in the international marketplace.
The cargo of a reasonably sized canola vessel—what we'd call a Panamax-sized vessel—going to China has a value of in excess of $20 million Canadian. The underwriting of the risk is that contractual understanding, that mutual understanding by the buyer and the seller, that these contractual terms will rule and govern the execution of that contract. If that is in any way, shape or form put in disrepute, you have a real problem in the international marketplace in terms of being able to have certainty.
As Kyle said, this issue has been claimed to be about quality. Our strong advice to the government is first to deal with what it isn't. Let's get that issue out of the way and then let's start determining what it might in fact be. We believe it isn't quality. We're very certain, as has been stated by Mr. Jeworski, that our system has been solid. Our willingness to engage on science and on the quality issue is unreserved. We're happy to deal with it. Let's deal with it via the normal protocols for doing so.
Noon
Conservative
Luc Berthold Conservative Mégantic—L'Érable, QC
Mr. Chair, I have a point of order.
I think that given how things are going it would be logical to ask for the unanimous consent of committee members so that we can ask a last question before Mr. Weir asks his. This is a really important issue. We could get the unanimous consent of the committee to add two minutes at the end, as we mentioned, to give Mr. Weir some time.
Noon
Liberal
The Chair Liberal Pat Finnigan
We are either going to have to extend the session or cut some time from the next one.
Noon
Conservative
Luc Berthold Conservative Mégantic—L'Érable, QC
Yes.
I must repeat that it would be really important.
Noon
Liberal
Noon
Liberal
The Chair Liberal Pat Finnigan
Mr. Weir, we'll just do another round, and then you'll have your chance.
Mr. Dreeshen, you have six minutes.
Noon
Conservative
Earl Dreeshen Conservative Red Deer—Mountain View, AB
Thank you very much.
I appreciate this opportunity to talk about the canola industry and how significant it is as a canola producer. We've seen so many folks back home who are upset and frustrated by the things that are taking place.
I have one thing that I do want to mention. When we're talking about it being science-based and how the CFIA is taking a look at all of the samples that are going into the ship and that are leaving the ship, people shouldn't forget that they're also being inspected every time a truck drives into one of the facilities. We know that the quality that we have is such, and it's not going up the leg unless it fits that. When people start to talk and say that it should be science-based and so on, that has happened right from the moment that the seed was produced and put into the ground in the farmers' fields. I think that's a critical point that people should recognize.
Again, this is where they have to start making these decisions: the seed, the chemical, the fertilizer, the added costs that are coming in and out. I'll point out that in Saskatchewan we've already had it, but now the carbon tax and all of these other things are added expenses that are really being pushed down onto the farmer.
My question is for Mr. White, and perhaps Mr. Vossen.
What are you hearing from the producers and the farmers, as far as their frustrations are concerned, about what is taking place?
12:05 p.m.
Chief Executive Officer, Canadian Canola Growers Association
That's a great question.
I hear directly from farmers. We actually have the cash advance operations in western Canada, for the most part, through our association. They call me directly. They call our staff directly, and they are very concerned. They're worried. They don't know what's happening. They don't know what's being done, but they do know that this is a risk that they cannot manage. It's hard enough managing the risks of Mother Nature, prices and everything else, but this is one that caught them off guard. They are very concerned because their livelihoods can be impacted.
You can feel from the tone over the phone that they are very much worried. I can't express how difficult that is for some of these farmers out there, not knowing, trying to run their business, but all of a sudden getting hit with this. They're wondering what to do, and they don't know.
12:05 p.m.
Conservative
12:05 p.m.
President and Chief Executive Officer, Richardson International Limited
Canola acres over the last number of years haven't grown to 22 million to 23 million acres for no reason at all. It has probably consistently been the most effective cash-generating crop for western Canadian farmers. The netback per acre—one of the key ingredients as to how a farmer determines his cropping rotation, as well as the agronomic issues and the sustainability issues—has been very favourable to canola.
Canola has been very favourable coming into this spring. It was a good crop to move in the past several years, and it continues to be a very good crop in terms of its overall prospects. However, this has really put a chill on. I think what's going to happen, and the feeling that we get from our people in the country, is that it will inevitably lead to a scaling back. That scaling back could be 5%, 10% or 15%, but I could see a scaling back of the acreage in western Canada this spring in light of these developments.
12:05 p.m.
Conservative
Earl Dreeshen Conservative Red Deer—Mountain View, AB
Mr. Jeworski, perhaps you could just tell us what you're hearing from your business.
12:05 p.m.
President and Chief Executive Officer, Viterra
I think there's a lot of confusion among the western Canadian farmers in terms of what this means.
It's so recent, really—in the past month. In trying to understand the full impact, there is confusion about the length of time that this could take. I think there are a lot who are, maybe, assuming the worst-case scenario and asking what happens if this extends for long periods of time. What does this do? As others have alluded, this has been such an important crop to western Canadian farmers. It's confusion to frustration to deep concern in terms of what this means. What will they do? How will they change their rotations? How will they manage their cash flow? How do they manage where, in some circumstances, there's still a product in fields and areas that need to be dealt with, and how do they deal with the risk associated with that?
There's a lot of concern at the farm level right now. I only see that continuing to grow as this thing continues to prolong.
12:05 p.m.
Conservative
Earl Dreeshen Conservative Red Deer—Mountain View, AB
On non-tariff trade barriers, we see this, as I mentioned, with the peas and the lentils as well as the durum that we have. These are things that if they can't come up with anything else, they are going to make this their issue. Unfortunately we have groups that will pile on and are sometimes against our agricultural industry to try to make their point. I think the important thing is wherever we've gone we have gone out as team Canada and we've talked about our food security, our food safety. It is the best in the world, but there are other actors that will try and poke holes in that narrative.
That's why I think it's so important to talk about the fact that we are giving the best product out there in the world, but we also have to talk about the fact that this is a political issue and that it has to be dealt with at the highest level.
April 2nd, 2019 / 12:10 p.m.
Independent
Erin Weir Independent Regina—Lewvan, SK
Thanks very much, Mr. Chair. I appreciate the time at this committee.
The closure of China's market to Canadian canola is a huge challenge for Saskatchewan's economy. As an aside, Viterra's head office is on the same block as my constituency office so it's nice to welcome a neighbour to committee.
I think we've heard loud and clear from all witnesses that the top priority needs to be reopening the Chinese market. What I want to ask is, what would be the single best thing the federal government could do to support our canola producers in the meantime? Would it be increasing the loan amounts under the advance payments program? Would it be waiving the interest on those loans, or might it be some other initiative?
