Agriculture Committee on Feb. 24th, 2016

[Paul Mayers, Vice-President, Policy and Programs, Canadian Food Inspection Agency]

Thank you, Mr. Chair.

We will start with the video, which gives an overview of what the Canadian Food Inspection Agency does.

[Audiovisual presentation]

[The Chair, Liberal, Pat Finnigan]

Do you have anything to add or have you finished your presentation?

[Paul Mayers]

We would be delighted to take any questions.

[The Chair, Liberal, Pat Finnigan]

We will now move on to questions, starting with Mr. Warkentin.

You have six minutes.

[Chris Warkentin, Conservative, Grande Prairie—Mackenzie, AB]

Thank you very much.

We certainly appreciate that you have come today and given us an overview with regard to agriculture in Canada. It's obviously disappointing that we don't have the minister here to question with regard to the direction in which he intends to take the department. Within the mandate letter we got a little bit of information as to what the Prime Minister's mandate was for the minister to undertake; unfortunately, we didn't get a sense of.... It's very vague, the letter to the minister.

I have one question that I might be able to ask. The department must be undertaking a discussion with the provinces with regard to the Growing Forward program. Are you aware of, or can anybody give us a sense of, where the negotiations or the talks with the respective provinces are in terms of the renewal and the funding of that renewal?

[Greg Meredith]

Yes. I'm the assistant deputy minister in charge of those frameworks, and you're absolutely right that we are deeply involved in the process of renewing the framework.

For those of you who aren't familiar with this program, I mentioned at the outset that our engagement with provinces is very intense because we both have jurisdiction. It's one of the unusual areas where there is concurrent jurisdiction under the Constitution. This means that for farmers and the agri-food sector achieve the greatest benefit, government policy and programming have to be aligned.

This is a long-standing agreement that we've had with provinces since 2003. We've had three frameworks. We're in the third now, called Growing Forward 2, but it expires on March 31, 2018. Currently that's an arrangement whereby there's $2 billion in cost-shared programming, delivered by provinces and cost-shared 60% by the federal government and 40% by provinces. There's an additional $1 billion over five years devoted by the federal government to types of programming largely oriented toward science, research and development, innovation, and competitiveness. Some of it is directed at producers and some of it is directed at agri-food processors. Some of it is in collaboration with science being carried out in industry and in the private sector.

The process of coming up for a renewal involves ministers agreeing on the scope of what the agreement will be for the next five years—that is to say, what's important and what the priorities are within the policy framework—and then agreeing, on an increasingly granular level of detail, about what kinds of programming and what kinds of policy thrusts are required to meet agreed-upon outcomes. We have a significantly detailed road map to guide us, and a discussion among ministers is likely to take place in the next month or two; based on that direction, we'll have some significant advancement of the framework at the July 2016 ministerial meeting. That will include ministers of federal, provincial, and territorial governments. They'll set us in the direction of establishing their priorities.

By late 2017 we hope to have an agreement in place, at least as regards our understanding of what our program priorities can be, so that we can implement it for 2018.

[Chris Warkentin, Conservative, Grande Prairie—Mackenzie, AB]

Do you know if the minister has reviewed the Emerson report, or if he's been briefed on that report?

[Greg Meredith]

The minister, I would have to say, is very, very preoccupied with the state of grain transportation in the country.

For those of you who are not familiar with the Emerson report, it's the report of the Canada Transportation Act review that was led by David Emerson and involved a panel of eminent persons such as Marie-Lucie Morin, former deputy minister of trade, and Murad Al-Katib, who is a pulse entrepreneur and one of the biggest pulse producers in Canada, if not the biggest, and who has a global reach in that business. The panel members were very attuned to the importance of transportation and the linkages of transportation to Canada's economic competitiveness.

A significant part of the CTA review was driven by the needs of grain transportation, hence the member's quite important question about the engagement of our minister. In the minister's mandate letter, his direction from the Prime Minister is that he will undertake, with the Minister of Transport, a full grain-supply-chain examination of the CTA review report and what it means for grain supply.

I would have to say by way of context that Canadian grain travels further to tidewater than that of any competitor country in the world. On average, a bushel of wheat will travel 1,200 to 1,500 kilometres to get to tidewater. By way of comparison, an American equivalent would be probably in the 400- to 500-kilometre range, and likewise in Australia, just because there are more outlets in those countries.

Grain transportation, particularly by rail, is a critically competitive issue for our Canadian grain farmers, and the minister is very focused on it.

[Chris Warkentin, Conservative, Grande Prairie—Mackenzie, AB]

I appreciate that you didn't answer the question—

[Some hon. members]

Oh, oh!

[Chris Warkentin, Conservative, Grande Prairie—Mackenzie, AB]

—and I don't want to put you in an awkward position, but I guess this demonstrates why we need to speak to the minister.

Thanks.

[The Chair, Liberal, Pat Finnigan]

Thank you very much, Mr. Warkentin.

Mr. Breton, you're next.

[Pierre Breton, Liberal, Shefford, QC]

Thank you, Mr. Chair.

Thank you very much for your very instructive presentation on the market for the agriculture and agri-food sector. I think that the future is bright.

I do have one concern about the future, though. I am talking about population growth here in Canada and around the world. We know that demand for food products will grow as well. I don't have any figures to illustrate the population increase, but we know that it will be very high in the next 10, 20 and 30 years.

Can the departmental representative give the committee an idea of the support it plans to give to productivity, innovation, sectors, producers and processors? I think this will become an important issue.

[Greg Meredith]

Thank you for the question.

The challenge of meeting a population growth that is expected to reach nine billion by 2050 is significant. Canada is in a unique position right now. Because we have leading-edge agronomic practices, we're making the maximum use of our inputs now, compared to many countries in the world. I mentioned the Kazakhstan-Russia-Ukraine competitors. There's an opportunity for them to increase productivity by just using current leading-edge practices. Canada has to rely on innovation and productivity growth, because our access to further resources just isn't there.

From the primary production point of view, on-farm innovation is going to be incredibly important. That means innovation in terms of agronomic strategies and cropping systems. It means making sure that our farmers have access to the best possible seed technologies, the best possible fertilizers and strategies for fertilizers, and the best possible pesticides that can be applied when required, where required, and in the amounts required, saving the farmer money and protecting the environment.

I think you alluded to the processing sector. In the minister's mandate letter is a commitment by the government to invest in value-added processing in recognition of the fact that I mentioned earlier, which is that the processing sector is an important driver of opportunity and growth for the primary producers. For farmers, the processing sector and its economic health are extremely important, but the processing side is a globally competitive business. We face competitive pressures from our American colleagues in terms of economies of scale, and we face very large-scale competitors globally. The opportunity for investments in value-added processing is significant, and the opportunity for processors to benefit from that will be significant.

[Pierre Breton, Liberal, Shefford, QC]

Mr. Chair, do I have a little time to ask another question?

[The Chair, Liberal, Pat Finnigan]

Yes, you have two and a half minutes.

[Pierre Breton, Liberal, Shefford, QC]

Perfect.

I will continue on the topic of productivity and innovation. We produce many food products. According to the department and the studies you have, what should the priorities be? In which sectors should we be focusing more on productivity and innovation? There must be some food sectors where we are doing better and others where we are less productive. In which sectors should the government invest more?

[Greg Meredith]

I hesitate somewhat to set the government's priorities going forward. As much as I think I might have a view, I'm sure others in the government do as well.

More to the point, Canada is globally competitive in areas where we have a significant research and development advantage. For example, in canola, a collaboration among universities, industry, and government led to the development of this new crop, which is now, depending on the year, the single biggest or second-biggest crop in Canada and a significant income source for Canadian producers. We're likewise leaders in dairy genetics through our involvement with the private sector and industry.

I hesitate to talk about priorities, though, because the department spends a great deal of time talking with researchers in industry, in not-for-profit research organizations, and in academia about what the priorities should be going forward. I believe we have 13 clusters, 11 of which are focused on specific commodities and two of which are horizontal. The clusters are a combination of government, industry, and academia getting together to determine where they are going to invest public and private dollars and what the priorities are going forward.

We're in the process, as part of Growing Forward 3, of rethinking where we are and where we should be going for the future. There's no doubt that in virtually every commodity group, Canada's success will depend on research and development innovation.

[Pierre Breton, Liberal, Shefford, QC]

Thank you very much.

[The Chair, Liberal, Pat Finnigan]

Mr. Breton, your time is up.

Ms. Brosseau, you have six minutes.

[Ruth Ellen Brosseau, NDP, Berthier—Maskinongé, QC]

Thank you, Mr. Chair.

I thank the witnesses for their presentations.

I want to say that I'm very happy to see that the Prime Minister has passed on his point of view to his ministers. That shows some transparency. We now know a bit more about the direction that the minister plans to take. That is quite different from what we saw when the Conservative government was in power.

I have several questions to ask and will do so quickly.

Dairy producers have expressed concern about milk proteins. A producer can lose about $1,000 a week because of milk proteins coming into Canada from the United States. Can you briefly explain how the government could fix the situation? During the election campaign, the Liberals promised to rectify the situation.

Can you also tell us whether it is difficult to change the composition standard for cheese? Why is it taking so long to address this problem?

[Greg Meredith]

Yes, unfortunately, I am familiar with those issues in both English and French, and the answers escape me in both official languages.

These are two significant issues from the point of view of supply management, and I apologize to members who have a greater depth of understanding. I think there are other members who probably don't have the same depth, so just for context, diafiltered milk is a way of bringing milk into the production of dairy products. Right now the concern among dairy producers could be characterized as acute, in that diafiltered milk is being used to circumvent tariffs on unfiltered or liquid milk coming into the country. That set of tariffs is part of the three pillars of supply management this government has indicated it wishes to uphold. Those three pillars are effective border controls, effective price controls, and effective production controls in the country.

Canadian dairy producers feel that using diafiltered milk is a way of circumventing that, and there's a very significant concern. They've made the concern known to the minister, and the government is taking it very seriously.

A related issue is the compositional standards for cheese. Canada has established what real cheese should be made of, and those compositional standards include how much fluid milk and non-fluid milk ingredients can be used. The government at this point supports the compositional standards and supports enforcement of compositional standards as a way of ensuring the quality, the veracity, and the reliability of cheese produced in Canada.

Paul, would you like to comment?

[Paul Mayers]

I don't think I can add further to your point, Greg. We have cheese compositional standards, and there is a commitment with respect to their enforcement. In the interest of time I won't add further to that.

[Ruth Ellen Brosseau, NDP, Berthier—Maskinongé, QC]

I know it's a complicated issue, and I think you are aware of the importance of moving forward on this. I talk to my constituents often, and this is something they're hoping can be taken care of as soon as possible.

I would also like to address the issue of agricultural workers.

Producers will always be required to hire Canadians first. However, for many reasons, it is not always easy for them to find Canadians who will work on their farms.

The Canadian Federation of Agriculture met today and passed a resolution about the importance of hiring foreign workers and expanding the temporary foreign worker program to make it easier to hire foreign workers. There have been problems in other fields, such as banking and the food service industry, but agriculture should be considered separately. We have to ensure that we have workers. A business cannot expand if it has no workers.

Can you comment on the importance of workers in the agriculture sector?

[Greg Meredith]

Again, by way of context, you're absolutely right. The question is very germane to the kinds of challenges that primary production and early processors face. The nature of the challenge is that it's very difficult to get Canadians to work at seasonal agriculture.

When you're in the business of horticulture production and your crop is coming to harvest, there's no stopping the growth of your crop. When it's ready to be taken off, it has to be taken off and it has to be done quickly. It's difficult to attract Canadians to that kind of seasonal work. It's intensive and often very difficult. Primary producers have access to a number of provisions that allow them to engage temporary foreign workers, and generally that system works very well.

There have been some challenges noted by processors. I'll give you an example in the meat industry. Early processing, the first processing steps in meat production, involve the slaughter and butchering of animals. It's a difficult job that is hard to attract Canadians to doing. Moreover, many of these businesses, not surprisingly, tend to be located in rural communities where meat production occurs, hog and beef production in particular. In small rural communities, there aren't enough people available for this kind of work.

A small town like Brandon may not be able to supply Maple Leaf Foods with all the workers that Maple Leaf Foods wants. The temporary foreign worker program brings in temporary workers, sometimes skilled and sometimes semi-skilled, for jobs that are relatively well-paying, even compared with Canadian jobs. It's a big challenge and a significant expense.

My minister is very interested in the access of processors and producers at the primary level to the temporary foreign worker program. He is engaging his colleagues to make sure that the needs of the sector are being met.