Agriculture Committee on Oct. 20th, 2016

[The Chair, Liberal, Pat Finnigan]

I call the meeting to order.

Welcome, everyone, to the Standing Committee on Agriculture and Agri-Food. We're starting our study on the APF, the agriculture policy framework.

Before we start, I would like to inform the committee that we have a new clerk, Mr. Paul Cardegna. I'd like to welcome him. He's going to be our new clerk. We're happy. He'll give you his contact information in case there's anything you need to talk to him about. The names are on there. This is our committee.

Welcome everyone.

We'll start our meeting.

Some of us have met him in the fisheries committee. I didn't know he was the same clerk as in the fisheries committee.

This morning, from the Department of Agriculture, relating to the new agricultural policy framework study, we have Mr. Andrew Goldstein, director general of the policy, planning and integration directorate in the strategic policy branch. Welcome, Mr. Goldstein.

We also have Mr. Rosser Lloyd, director general, business risk management programs directorate, programs branch. Welcome, Mr. Lloyd.

You will have up to 10 minutes for introductory remarks to cover your topic this morning. After that, we'll proceed with a round of questions.

Does anyone want to go first? Okay, go ahead, Mr. Goldstein.

[Andrew Goldstein, Director General, Policy, Planning and Integration Directorate, Strategic Policy Branch, Department of Agriculture and Agri-Food]

Good morning.

I'd like to thank the committee once again for offering Agriculture and Agri-Food Canada the opportunity to come to discuss the next policy framework.

We've achieved a number of significant things since the assistant deputy minister, Greg Meredith, spoke with you in June.

One of the first key milestones reached in developing the next framework was the endorsement of the Calgary Statement.

During their annual conference in July, Canada's agriculture ministers unanimously agreed to release the Calgary Statement. This statement highlights the overarching objectives, principles, and priority areas, and really provides direction to federal-provincial officials to ensure that the next policy framework focuses on six key areas, those being markets and trade; science, research, and innovation; risk management; environment, sustainability, and climate change; value-added agriculture and agrifood processing; and public trust.

I think it's also important to note that the Calgary Statement also highlights the federal-provincial ministers' commitment to focus on results and demonstrate the value of the investments made in the agriculture sector to all Canadians.

Our policy development has been informed by significant engagement with stakeholders.

To date, Minister MacAulay has hosted a number of round tables to hear first-hand about specific regional issues and learn from stakeholders about their thoughts on how the current framework is working as well as what they'd like to see in the next policy framework.

In that regard, he's met with young farmers; industry stakeholders, to discuss the role of innovation in the sector; the Canadian Federation of Agriculture; and leaders of the value chain round tables, to name just a few.

To complement the minister's engagement efforts, Agriculture and Agri-Food Canada has developed a comprehensive engagement plan that includes face-to-face meetings, online engagement, and direct mail consultations.

In advance of the Calgary Statement in June, we held a national engagement session with producers and industry groups to get their feedback on what's working well with the existing policy framework as well as where the challenges are, and to start to get a sense of what they'd like to see in the next policy framework. That informed the content of the Calgary Statement.

Following the Calgary Statement, we've been engaging more in depth with stakeholders. Just last week, on October 13 and 14, we had an engagement session where national stakeholder organizations provided their perspectives on public trust; science and innovation; environment, sustainability, and climate change; and the role that regulations, labour, and business development initiatives have in the competitiveness of the sector.

We will be holding a second two-day session on November 1 and 2 to hear stakeholders' views on risk management, markets and trade, and agrifood processing. We're really spending a lot of time with the industry and delving in depth into their views on those six priority areas.

The department is also surveying Canadians to hear their perspectives on priorities identified in the Calgary Statement, and to date nearly 5,000 people have participated in our online survey in looking at those issues.

In addition to that, we've also directly mailed 180,000 households to request that they provide their views on what the next policy framework should look like.

Throughout all those consultations, we've heard a number of interesting comments from all parties. I'm going to give you a quick snapshot of some of the highlights.

The first thing is that stakeholders really want to have clarity on how new and emerging priorities outlined in the Calgary Statement will fit within the existing programming and funding.

There are concerns that stakeholders have raised around the timeliness, predictability, and coverage levels of our business risk management programs.

While stakeholders are appreciative of a lot of the programming that we provide under the current Growing Forward 2 framework, they do highlight some program delivery issues that could be improved on, including improved transparency in decision-making and streamlining the application process to ensure program continuity among frameworks.

We will have a report published on our website shortly that elaborates in more detail on what we've heard to date through our consultations.

With Growing Forward 2 set to expire in March 2018, we have a number of key milestones that need to be met before we can usher in the successor framework.

First, developing the agricultural policy framework is a multi-year process. It requires the negotiation of one multilateral agreement between the federal government and the provincial governments as well as of 13 bilateral agreements.

The multilateral framework agreement is a federal-provincial-territorial agreement that provides high-level policy directions and framework implementation guidance in areas such as the overall funding level, performance reporting, communication, and other administrative issues to manage the relationship. This is a document that is signed by all ministers of agriculture. We aim to have the negotiations completed in time so that ministers can sign the multilateral framework agreement at their annual conference in July of 2017.

In addition to the multilateral agreement, bilateral agreements between Canada and each of the provincial and territorial governments will need to be negotiated once this multilateral agreement is signed. We expect and hope that these will be completed later in 2017 or perhaps in early 2018. These bilateral agreements will clearly define the cost-sharing program and arrangements that the provincial governments will implement, as well as provide more detailed reporting and performance criteria. These allow for the federal government to transfer the funding under the framework to the provincial governments.

The final area I'd like to talk about in my opening remarks is our business risk management programming. The BRM programming is expected to be a significant component of the next policy framework, as governments will continue to support producers with a suite of programs that are comprehensive in scope and that assist in managing the impact of severe events that affect the profitability and income of farmers.

Under Growing Forward 2, the BRM suite was rebalanced to target financial support more towards greater losses in income and less towards the normal risk that producers face on a regular basis. It also promoted a more insurance-based type of programming. A reduction in the overall coverage level allowed for reinvestment into strategic initiatives that were priorities to the sector, such as innovation and market development.

Additionally, the AgriRisk program was created to provide financial assistance to help develop and implement tailored, industry-led insurance products and risk management tools that help meet the sector's needs beyond the government-administered business risk management suite.

Despite these changes, the programs have remained highly responsive and paid nearly $4 billion since 2013, during a period of record high income.

Federal and provincial governments continue to assess the BRM program performance to ensure that they are meeting producers' needs when faced with severe losses. For the next policy framework, governments will be considering potential options to improve the BRM suite, with a particular focus on participation but also addressing concerns around simplicity and predictability.

My colleague Rosser Lloyd has deep knowledge on the business risk management program and would be happy to answer any of your questions.

Again, thank you for the opportunity to discuss the next policy framework with you today. We look forward to your thoughts and questions.

[The Chair, Liberal, Pat Finnigan]

Thank you, Mr. Goldstein.

Now we go to Mr. Lloyd, for up to 10 minutes.

[Rosser Lloyd, Director General, Business Risk Management Programs Directorate, Programs Branch, Department of Agriculture and Agri-Food]

Mr. Goldstein covered our opening remarks; I'm just here to answer questions.

[The Chair, Liberal, Pat Finnigan]

Okay. Thank you so much.

Now we'll start the question round.

For six minutes, Mr. Shipley, you can open it up.

[Bev Shipley, Conservative, Lambton—Kent—Middlesex, ON]

Thank you very much, Mr. Chair.

Thank you to the witnesses for coming out as we start the discussions and the investigation about how we're going to move forward on what I'm going to call Growing Forward 3, until we get a different name. At least we understand where that might take us.

Thank you for your presentation, which we have in front of us. I really appreciate it.

In terms of the consultations that have been happening, is there a coordination between what Minister MacAulay is doing and the provincial ministers are doing?

[Andrew Goldstein]

Yes, there is. We've been coordinating with the provincial governments on the range of activities that the minister, as well as the department, is engaging with. The minister has been travelling across the country, and at some of the events he's been participating in round tables with his provincial colleagues. Certainly provincial officials are participating in the consultations we are holding here in Ottawa.

[Bev Shipley, Conservative, Lambton—Kent—Middlesex, ON]

Can you expand a little bit on the stakeholders and the leaders of the value chain round tables to give us a bit of an idea who they might be—not the whole list, but just an idea?

[Andrew Goldstein]

The value chain round tables are a mechanism we use in the department to engage with the industry. I believe there are 13 round tables right now. They cover a range of sectors, such as beef, pork, and grains, as well as some cross-cutting ones, such as industrial bioproducts.

Those round tables are co-chaired by a member of Agriculture Canada and an industry leader. The minister had a round table call with each one of the industry co-chairs, and they presented their perspectives to him from each one of their value chains on the next policy framework.

[Bev Shipley, Conservative, Lambton—Kent—Middlesex, ON]

With regard to the online survey and the direct mail to 180,000 households that was sent out to across Canada, who received those?

[Andrew Goldstein]

Those are primarily targeted to farming households.

[Bev Shipley, Conservative, Lambton—Kent—Middlesex, ON]

Was it to commodity organization leader households or just to...? There are a lot more than 180,000 farmers across the country who are registered through organizations or commodity organizations. I'm just wondering how they picked the 180,000.

[Andrew Goldstein]

To be honest, I'm not exactly sure how they chose which households to send it to, but I think they covered off a large number of the participants in our various programs.

[Bev Shipley, Conservative, Lambton—Kent—Middlesex, ON]

We'll like to hear a little more about that. Stakeholders wanted clarity on new and emerging priorities. Could you identify what some of those are, please?

[Andrew Goldstein]

There were six priority areas that were covered in the Calgary Statement, and I think environment and climate change is one of the new priorities. Public trust is second and value-added food processing is a third one that's articulated in there.

When it comes to those things, under the current framework we do activities that support those areas, but those are highlighted, while they weren't highlighted in Growing Forward 2. There are questions of whether there is going to be additional funding to support those priorities, or whether it is going to be coming out of the existing framework and we'll have to rebalance the funding among them. Those are the kinds of questions we're being asked both by the industry and by provincial governments.

[Bev Shipley, Conservative, Lambton—Kent—Middlesex, ON]

With regard to the round tables that are happening, I'm interested in the environmental, sustainability, and climate change act. It's not actual money, but it's money that will come back to us for the benefit that agriculture already provides to our country with carbon sinks and the advancement that has been made by agriculture to the benefit to other organizations or industries. Has that been part of a discussion about the flow of money coming into the agriculture communities, rather than just having money for agriculture to improve something that we're already a leader in?

[Andrew Goldstein]

I think that's part of some of the things we're hearing from industry. They're asking those same kinds of questions. We'll have to see how the discussions around the pan-Canadian framework shape up and what the the implications will be for agriculture across the country.

[Bev Shipley, Conservative, Lambton—Kent—Middlesex, ON]

I'm not sure how much time I have, but until I'm told, I'll ask another one.

[The Chair, Liberal, Pat Finnigan]

You have a minute and 15 seconds.

[Bev Shipley, Conservative, Lambton—Kent—Middlesex, ON]

I understand the significance of the business risk management part of the Growing Forward 2 program. Quite honestly, it is one of the more important ones.

You talked about rebalancing to target financial support toward greater losses in income, and then those dollars being invested into innovation, science, and those types of areas. What are they hearing at the round tables for that part of it, and particularly the first part about support being aimed at the greater losses rather than the smaller ones.

It's like buying insurance on your barn. You normally don't take a $500 deductible on a $1 million investment. You will take something very much higher, because you can afford the small losses but you can't do the big one. What are you hearing from the stakeholders on that particular part about going into Growing Forward 3?

[The Chair, Liberal, Pat Finnigan]

Mr. Goldstein, I'll allow you a quick response.

[Rosser Lloyd]

The producer organizations recognize the frame we have and appreciate the frame we have. They have raised some concerns about coverage levels once you trigger the coverage that is provided by the programs.

[Bev Shipley, Conservative, Lambton—Kent—Middlesex, ON]

Thank you, Mr. Chairman.

[The Chair, Liberal, Pat Finnigan]

Thank you, Mr. Shipley.

Mr. Breton, you have six minutes.

[Pierre Breton, Liberal, Shefford, QC]

Thank you, Mr. Chair.

Thank you to the witnesses for being here today. It's very important to start this study, obviously, and we'll do so together.

I listened to your presentation. A few matters are of greater interest to me. Among other things, you spoke about research, science and innovation in the priority areas set out in the Calgary Statement. I'm particularly interested in the value of previous investments made with Growing Forward 2, through various programs.

Can you tell us today the return on those investments for our agricultural producers? We know that the productivity and efficiency of our agricultural businesses are very important. Every day, the businesses must not only ensure their profitability, they must also keep enhancing it and must meet the increasingly urgent needs of the population.

Can you shed a bit more light on the situation, in terms of productivity and efficiency?