Agriculture Committee on May 28th, 2019

[The Chair, Liberal, Pat Finnigan]

Good morning, everyone. Welcome to our committee.

Pursuant to Standing Order 108, we are undertaking a study of African swine fever.

Welcome to our guests this morning.

From the Éleveurs de porc du Québec, we have the President, David Duval, and the Director, Martin Pelletier, of the Équipe québécoise de santé porcine.

Thank you for being with us this morning.

Also, from the Manitoba Pork Council we have Mr. Andrew Dickson, General Manager. By video conference, from Ontario Pork, we have John de Bruyn, Board Vice-Chair.

We'll start with opening statements.

Mr. Pelletier and Mr. Duval, you have six minutes for your opening remarks.

[Martin Pelletier, Director, Équipe québécoise de santé porcine, Les Éleveurs de porcs du Québec]

Good morning, everyone.

I am accompanied by the president of the Éleveurs de porcs du Québec and of the Équipe québécoise de santé porcine, or EQSP.

The Quebec swine sector provinces 26,500 jobs and generates $2.55 billion in economic benefits. It's the first agri-food industry export in Quebec. We export the equivalent of $1.68 billion, more than hydroelectricity. Seventy percent of the production is exported in more than 80 countries, which represents about 7% of the world trade of pork.

The main partners in the Quebec pork industry have come together around a common non-profit organization, the EQSP, to address swine health issues. This team was created in June 2013 and includes Les éleveurs de porcs du Québec, the Association québécoise des industries de nutrition animale et céréalière—the AQINAC—as well as the slaughterhouses that are signatories of the Convention de mise en marché des porcs du Québec, which account for approximately 99% of hog slaughter in Quebec.

The organization's mission is to work in concert with government authorities and all swine industry partners on prevention, preparation and intervention against targeted swine diseases in order to minimize their potential impacts on Quebec's swine industry. We are talking about targeted diseases in general because they are constantly evolving and spreading in various countries around the world.

Our mandate includes the 12 reportable diseases under the federal Health of Animals Act, including African swine fever. There are also emerging diseases, such as porcine epidemic diarrhea, or PED, that are not under the control of government authorities, but that the industry doesn't want to see spread among its livestock. There are also endemic diseases that have been around for several years, such as porcine reproductive and respiratory syndrome, against which the industry is working to reduce the harmful effects and eventually eradicate it.

Since 2008, the Quebec swine sector has been working on an emergency management plan. The first development phase was initiated at that time. Next, the EQSP was created. We have focused our efforts on PED and other emerging diseases. Now, given the threat of African swine fever, we are returning full force with an update and a new phase of development of our emergency management plan.

The illegal importation of contaminated pork products is one of the main issues linked to African swine fever. In this regard, we welcome the government's commitments on additional detector dogs, but implementation must be accelerated. It is important to increase surveillance activities, not only at airports, given the large volume of visitors who could import illegal products, but also at ports and in relation to international parcels. E-commerce is expanding rapidly, and there are risks to manage in this respect as well. We want to see significant penalties imposed on individuals who try to import potentially contaminated illegal products.

Concerning backyard and wild pigs, we expect the government to tighten controls on the ban on food waste and meat products. The regulations contain such a ban, but the controls in place must ensure that this ban is respected. Compliance with identification and traceability requirements must be ensured within these small herds. There must also be comprehensive Canadian collaboration in the management of backyard swine and wild pigs.

To maintain international trade, the government must accelerate negotiations with as many trading partners as possible to quickly reach agreements for recognition on zoning and compartmentalization. This would allow us to continue to export livestock from disease-free areas, based on the concept of compartmentalization.

As for the immediate investments needed, we believe it would be important to increase human and financial resources so that government authorities, be it the Canadian Food Inspection Agency or other agencies, can prepare for and manage a possible crisis; to have the resources to effectively manage public communications in crisis situations to maintain a positive image of the swine industry and pork products—especially in a situation where information flows widely on social media; to support financially and logistically industry efforts to prepare emergency management plans—we are already investing heavily here, but there are major issues for which we don't have sufficient resources; and to increase investments in the PigTrace traceability system to make it more efficient. But I must say that we already have a good basis in that regard.

In terms of necessary investments in crisis situations, it is important to immediately prepare a financial support plan for the sector to be deployed quickly in the event of a health crisis in order to avoid the collapse of the sector; to avoid catastrophic socio-economic impacts leading to animal welfare issues and human tragedies; and to support the industry in the orderly management of the impacts of a temporary closure of export markets.

Lastly, with regard to the financial tool for mid- and long-term funding, the Pork Promotion and Research Agency should be put in place as soon as possible so that this tool can be used more effectively in the coming years.

[The Chair, Liberal, Pat Finnigan]

Thank you, Mr. Pelletier.

Now we'll go to the Manitoba Pork Council.

Andrew Dickson, you have six minutes.

[Andrew Dickson, General Manager, Manitoba Pork Council]

Good morning. Thank you for giving Manitoba Pork Council the opportunity to share some views on the challenges presented by African swine fever to the pork sector in Manitoba. You’ll have already heard from industry experts, including the Canadian Pork Council, on the national perspective, so I will provide some more local comments.

Manitoba Pork Council was created in legislation and regulation over 20 years ago to represent the interests of pork producers and to deliver programs and services of benefit to build the sector. Our 600-plus producers have over $2 billion invested in buildings and equipment—based on replacement cost—produce over eight million pigs annually, create employment for about 13,000 Manitobans, sell over three million weanlings into Iowa and Minnesota, and export about $1 billion in meat products globally. We ship about $500 million of pork to Japan alone. At any moment in time, we have about 3.4 million pigs on farm.

In terms of the impact of ASF, to put it bluntly, if we get a case of ASF in Manitoba, our industry could potentially be worthless overnight. We depend almost entirely on exporting pork to Japan, the United States, Mexico and China. If these markets deny entry of our products, we have no other markets of similar size to switch product destination.

A nightmare scenario is that all shipments will cease overnight. Our processing plants can only operate for a couple of weeks before they run out of cold storage capacity. The plants would have to stop taking delivery of live animals. They currently process about 100,000 per week of market hogs; some come from Saskatchewan. Our farms are currently operating with two to three days of feed on hand. Feed companies will start to demand payment in cash or cheque before delivery. Financial institutions will be unwilling to extend further operating funds as their security will now be worthless. Our U.S. contracts for weanling supply will be terminated at the border. Over 75,000 weanling pigs per week will no longer have a home as there is no spare finishing barn capacity in Canada. Within a week, our barns will no longer have the capacity to hold an expanding inventory as sows continue to farrow each day and our market hogs continue to grow in size and weight.

Our producers will have to start to drastically reduce the current inventory within seven to 10 days of the first case, involving at least 200,000 to 400,000 animals per week. With no foreseeable cash flow, producers will start staff layoffs for the 2,500 employees on farm, and the processing and service sectors will have to consider their staffing levels depending on their financial reserves.

I'll now address steps to deal with disaster and recovery.

Manitoba Pork Council believes the industry can recover to full production and economic activity within a reasonable period of time if certain key steps are followed. One is prevention. We need to create a mentality and system with our neighbours to the south of a “fortress North America” approach to disease management, to prevent diseases like ASF from getting onto our farms. On-farm biosecurity must be a real focus by all parts of the industry, not just the producer. In Manitoba, we have worked hard at this since 2012 with some innovative programs and regulations. More needs to be done to harden our on-farm biosecurity. Some financial incentives to encourage more investment would be appreciated.

Two is preparation. We need an agreement with Japan and South Korea that would allow a smaller primary control zone within a matter of a couple of weeks. Cash is king in the pork business. Cash is critical on hog farms and far more important than in most other farm enterprises. If pork shipments cannot restart for two to three months and we must start an orderly herd reduction program in Manitoba, producers will need access to cash by day three. Rough estimates, based on costs of production for 2019, show that we would need $40 million to $50 million per month to buy feed and $10 million to $15 million per month to pay wages. This is excluding any cash for other costs such as energy, transportation, borrowing costs and so on. It is fundamental to business recovery that we preserve the sow herd. This alone would require $10 million per month.

Funds will also need to be in place in order to proceed with a planned and orderly humane herd reduction. We are looking at a combination of centralized euthanasia sites and some on-farm herd reductions. This will be a very difficult program to administer and staff, let alone deal with the actual cash costs of implementation. As an aside, we don't want to see the scenario where producers want to be declared infected because the CFIA compensation is the only financial assistance out there.

Three is response. ASF is a relatively slow-moving disease, which should allow our production systems to isolate and eradicate any outbreak without it spreading as it has done in China. Europe has the disease and has been able to contain and control the disease.

Still regarding response, CFIA will play a key role in the control and eradication of the disease on the infected farm. The big one is that the provincial government will be the lead partner in dealing with the animal welfare issues on the vast bulk of the farms outside the CFIA eradication area. Manitoba Pork Council is working closely with officials to try to develop an emergency disease management plan for the worst-case scenario and then other options, depending on the extent of the market collapse. It is essential that government and industry work closely together and not in silos.

Four, regarding recovery, the ability of the pork sector in Manitoba to recover will depend on the following: (a) exports to Japan, the United States and China is reopened in two to three months; (b) the basic sow herd in Manitoba of 350,000 sows is retained and breeding is restarted; and (c) the workforce is retained through an agreement with the national employment insurance program. If these can be set in place, the pork sector in Manitoba could be in full production within 12 months.

Producers will have suffered significant financial losses that are not covered by the existing business risk management programs. New programs to encourage reinvestment will be needed to stabilize cash flows and loan guarantees to rebuild stock until they can get returns from the sale of animals. Export markets should be very attractive in terms of market prices, as the drop in total world production caused by the losses in China will have a knock-on effect. World pork demand and consumption will not have changed much because of the lack of spare production capacity in chicken and beef to fill this void.

Five, our key asks are to invest in some programs to create a “fortress North America” and harden our on-farm biosecurity. Create in advance the programs that will address the immediate financial crisis and the animal welfare challenges, protect the basic sow herd numbers to keep the critical mass of numbers to rebuild the industry, and then assist the industry to recover as an important sector of the economy. Finally, it is critical to get trade flowing normally within six to eight weeks.

Thank you for letting me sharing these.

[The Chair, Liberal, Pat Finnigan]

Via video conference, we have Mr. John de Bruyn for six minutes.

Go ahead, please, Mr. de Bruyn.

[John de Bruyn, Board Vice-Chair, Ontario Pork]

Good morning. My name is John de Bruyn. I'm a pork producer with my family in Oxford County and somewhat saturated southwestern Ontario.

I'm happy to be here today to present to this committee on the activities to prevent and respond to the threat of ASF for the Canadian swine industry. I'm going to share some perspectives from Ontario's pork sector. Where possible I will also highlight the elements of the recent work by the Canadian Pork Council and Swine Health Ontario.

The Ontario pork sector represents a significant share of Canada's agri-food sector. We're talking about $950 million in GDP, $2.8 billion in economic output, and, we believe, 14,000 full-time equivalent jobs in Ontario.

Ontario pork is sought after for its high quality and is exported all over the world. Over the last several years, Ontario-produced pork has reached over 60 international markets.

As we are an industry that exports roughly two-thirds of our domestic production, international market access is a cornerstone of economic success. An ASF outbreak would result in the immediate closure of our export markets to the international world. Ontario Pork is encouraged by and strongly supportive of the federal government's continued commitment to promoting market access. We have been active in reiterating our support for these important initiatives including the CPTPP, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, and the Canada-United States-Mexico agreement, or NAFTA 2.0 as I call it.

African swine fever is very contagious and highly deadly to pigs and wild boars in Africa, Asia and parts of Europe, as you've already heard. Humans cannot catch ASF from infected pigs. They cannot contract the disease by eating meat from infected pigs, but humans can spread the disease and affect the pigs in many ways.

We are very thankful for the government's efforts to prevent African swine fever from impacting the industry and for the investment to increase the number of detector dogs at major ports of entry. Work still needs to be done to increase awareness among global travellers and industry with regard to foreign animal diseases and to identify the paths for the most efficient recovery of the industry should ASF be found in Canada.

Pork producers care about the health of their animals. Ontario Pork and industry stakeholders are founding members of what we call Swine Health Ontario, a leadership team committed to improving and coordinating the industry's ability to prevent, prepare for and respond to serious swine health threats in Ontario, working closely with our provincial government. The Canadian Food Inspection Agency, the Ontario Ministry of Agriculture, Food and Rural Affairs, and Swine Health Ontario have been partially activating their incident command structures to allow them to proceed with ASF planning and preparedness in an organized and collaborative fashion.

The incident command system allows for organizations to embed personnel into the other organizations' structures so that all are simultaneously in the know regarding which items are being worked on. Areas of key concern include the ability to rapidly establish disease control zones in Canada and to have those zones recognized by international partners. Traceability will play a key role in disease eradication. The PigTrace system, reporting tools, biosecurity and surveillance systems must be strengthened to ensure they support rapid zoning and the reopening of our export markets. Ontario Pork continues to promote PigTrace and the education of producers about the systems to ensure producers' buy-in in order to take advantage of the zoning agreements.

Ontario Pork has also developed AgManifest software that replaces the physical paperwork of the industry hog movement. This software has been developed to feed movement information into the PigTrace database via electronic means to assist producers and processors in being compliant with federal regulations related to the traceability of swine in this country.

AgManifest needs to be enhanced to allow the electronic creation, signing and storage of the annex 4, swine movement document, certifying our ractopamine-free status for our international markets. This is required to accompany all hog movement into federally inspected plants.

We continue to invest in traceability, biosecurity, extension and research; however, government support is needed. We would like funding to develop a PigTrace 2.0 and to enhance the AgManifest tool to allow for electronic record-keeping for hog movements. Focus, please, on developing a response and recovery strategy for our industry. We are certainly encouraging the signing of bilateral zoning agreements with key pork markets like Japan and South Korea. We are very appreciative that the agreement was signed last week with the U.S.

As part of Ontario pork industry actions to address risks, ongoing collaboration efforts by producers, industry stakeholders and the provincial government include partial activation of the Swine Health Ontario incident command centre, developing roles and responsibilities for the incident command centre team, and confirming planning subgroups, team leaders and memberships. We are currently having biweekly telephone conferences to share status reports from all subgroups and team leads. We've encouraged IMS 100 and IMS 200 training, and sessions were held in order to get everybody up to speed.

The development of a market interruption response plan will address the economic impacts of a foreign animal disease.

Ontario Pork has been consulting with the chief veterinarian for Ontario to discuss potential market interruption priorities and activities in three key areas, which are engaging federal processors and, potentially, provincial abattoirs in planning for a large-scale market interruption for Ontario; developing a communications plan; and developing an on-farm emergency plan for producers.

The Ontario hog industry advisory committee will be discussing the market interruption strategy at a meeting in June 2019.

In communications, several steps have been taken to raise awareness of the disease and prevention strategies, including the importance of traceability and strong biosecurity. A multi-faceted communications campaign was launched in the late fall of 2018, with an information package on ASF prevention and education being mailed to all registered producers. A follow-up mailing with more detailed prevention and preparedness resources was sent out to producers and processors in April. Through social media, Ontario Pork continues to share updates and information provided by the Canadian Pork Council, the Canadian Food Inspection Agency and the Canada Border Services Agency.

For our audiences beyond agriculture, Ontario Pork developed and shared information for the food service and restaurant industry about the dangers of providing food waste to pigs—

[The Chair, Liberal, Pat Finnigan]

Please conclude because we're a little bit past the six minutes.

[John de Bruyn]

All right.

In conclusion, African swine fever could have catastrophic consequences for our producers. These risks underscore the importance of farm stabilization programs including AgriStability and AgriInvest, which help Ontario producers weather the volatility and uncertainty of the global markets. If an outbreak of ASF happens, how do we ensure business continuity, avoid an immediate liquidation crisis and prevent the widespread downsizing in the industry?

Lastly, one of the things I'd like you to consider is that quick and easy access to mental health resources will also be required. The loss of a producer's livelihood and economic uncertainty in the case of an outbreak like this would have catastrophic implications for farm families across this country.

[The Chair, Liberal, Pat Finnigan]

Mr. de Bruyn, we're going to have to conclude here. You'll have a chance to answer questions.

[John de Bruyn]

Thank you.

[The Chair, Liberal, Pat Finnigan]

We'll go right to the question round.

I want to welcome Dr. Doug Eyolfson to our committee today.

[Doug Eyolfson, Liberal, Charleswood—St. James—Assiniboia—Headingley, MB]

Thank you.

[The Chair, Liberal, Pat Finnigan]

We'll start with Mr. Berthold for six minutes.

[Luc Berthold, Conservative, Mégantic—L'Érable, QC]

Thank you very much, Mr. Chair.

I'd like to thank the witnesses for being here today.

This is a fairly important issue, and I have a question that I have wanted to ask since we started talking about this disease, which could affect us at any time. It's been around for a number of years.

Have you known about this disease for a long time, Mr. Pelletier?

[Martin Pelletier]

In fact, the disease was recognized in Africa in the 1910s and 1920s. It came to Europe in the 1970s and 1980s, but was successfully eradicated there, as well as in Brazil and some Caribbean countries.

The current spread began in Georgia in 2007, and the disease has spread to several countries in eastern Europe since then. However, what caught everyone's attention was the appearance of the disease in China and Belgium in August and September last year.

[Luc Berthold, Conservative, Mégantic—L'Érable, QC]

I listened to all the witnesses from Manitoba, Ontario and Quebec.

You have an outstanding plan to deal with the disease. Why is it not yet in place? If the disease has existed for such a long time, why are governments not taking the time to prepare response plans and are waiting until the disease is on our doorstep before taking action?

[Martin Pelletier]

I think it's a bigger issue than we think. In my opinion, it's related to the fact that there are many aspects to be addressed in the sector. At the moment, it's this issue that is becoming the most urgent and deserves the most attention.

Some plans have been prepared, but there are always major issues that are difficult to address, such as reducing livestock.

A few decades ago, it wasn't a problem, so the industry was developed to participate in economic activity. We are more dependent on exports these days, which is why, if we were to face a border closure, the magnitude of the problem would be greater than it was a few years ago. This is why more resources and strategies are needed to manage the situation.

[Luc Berthold, Conservative, Mégantic—L'Érable, QC]

If I understand correctly, the government has already implemented an increase in the number of detector dogs in an attempt to prevent the disease from arriving here, in Canada. However, it's clearly not enough. If anything ever happens, in Canada, we will need to take even stronger, more solid measures to protect the health of producers first and foremost.

We have just submitted a report on the mental health of farmers. Their psychological stability is the most important thing.

Mr. Dickson, you gave a lot of recommendations about what we will have to do if we are facing this African swine fever. How long do you think it will take to put in place all these measures? Will it take too long to be able to react correctly if something happens soon?

[Andrew Dickson]

I think one of the issues that we're facing is that.... In psychology, they call it cognitive dissonance. This is such a huge issue that people are having a hard time getting their heads around it. The disease has been around a long time, and it's in China and so on. What's happened, though....

There are two factors. One is that half the world's pigs live in China. They've lost more in their production than we produce in total in North America, so the Chinese travel now. There's a huge trade connection with China. The U.S. buys a lot of its ingredients for its swine business from China. The second is that we're very dependent on trade, as Martin pointed out. In Manitoba, 90% of our stuff is exported out. If one market alone.... If Japan does not accept our pork, we're done.

To me, we need to start the process of getting financial programs in place so that producers on day one know where they stand.

I was involved in flood disaster assistance programs for many, many years when I worked for the department of agriculture in Manitoba. If we have these plans in advance, people know what to do. We don't want to be sitting on day one having a discussion about whether negative margins are covered under the AgriStability program, while producers are trying to get a hold of their accountants to find out what their cash positions are. This would be an absolutely ridiculous situation.

We need to start thinking it out now. Our basic hope is that this disease will never happen. We've had foot-and-mouth disease in Paraguay. It's been endemic there for many, many years. The last case that we had was in Saskatchewan in 1952. We can keep this disease out, I think, but if we do get a case, we need to have programs in place to be able to handle it. That's what we're trying to get across.

[Luc Berthold, Conservative, Mégantic—L'Érable, QC]

What I'm just hearing is that we must act right now to do something, to plan something and to let all the pork producers know that the government is still here. The government is still pushing you to produce more and more, to export more and to have some gains for our economy. However, at the same time, we must face the unintended consequences of that. If we are hurt by this kind of disease, it will all be cut down, as you said, in the night.

[Andrew Dickson]

This is a good business for Canada. We're very good at producing pork. We export across the world, and we should play to our strength on this thing. We have a big threat of ASF, but if we were to get a case on a farm, I think we could contain it. We could manage it with our modern production systems in place.

The big issue is market failure. If we can't export our product, we're done. It really doesn't matter whether or not we've wiped out that one farm in terms of the disease. It's the issue of how to get our business back up and running again, exporting to places like Japan, South Korea, the United States, China and so on.

[The Chair, Liberal, Pat Finnigan]

Thank you, Mr. Dickson.

Thank you, Mr. Berthold.

Mr. Drouin, you have six minutes.

[Francis Drouin, Liberal, Glengarry—Prescott—Russell, ON]

Thank you very much, Mr. Chair.

I would like to thank the witnesses for being here today.

Mr. Pelletier, you talked about the organization that brings together several organizations to deal with swine health. You focused on prevention, preparation and intervention.

We understand that if we don't protect ourselves, we may suffer major consequences, such as African swine fever.

How do you educate producers to change their ways and get them onside?

[Martin Pelletier]

Producers are already aware of the significance of diseases. Work has been done in Quebec for several years. It's a key issue that Mr. Duval can speak to.

When a new issue like this arises, we, at the EQSP, will make many presentations to producers and stakeholders to communicate the situation. We then develop tools to help them to quickly detect the disease and establish protocols to enhance biosecurity to protect their herds, for instance.

[Francis Drouin, Liberal, Glengarry—Prescott—Russell, ON]

Okay.

You mentioned the PigTrace traceability system. How far does this system go in terms of traceability?