Agriculture Committee on Nov. 17th, 2016

[Lloyd Longfield, Liberal, Guelph, ON]

Thanks, Mr. Chair.

Thanks to both of you for being here.

I want to focus on where the new agricultural policy framework could help on a specific issue.

We're going to be hearing from the Cattlemen's Association in the next round. Guelph has Cargill as a processing plant, and there's a big potential for growing our beef market. Soy is used in beef feed. Could you comment on how the policy framework could help us to build the herd if we invested in the right way through soy? What do we need to do from a trade aspect to be able to move product to market using a new framework?

I'd love to see Cargill go to....

[Jim Everson]

I've talked about the development of varieties that suit specific agronomic conditions in Canada and specific end user requirements in our markets. The same is true on the feed side, where you're looking for digging deeper into how a protein product like soybean performs in different species. What can you do with that product to improve its performance in cattle or in poultry? Those things are different. How can you extract components of the product and make it part of a feed compound?

There is research going on in this area in the United States and some in Canada, but the quality of the feed component in our product is an area where we can definitely improve.

When I look at the food processing component of the agricultural policy framework, my recommendation would also include feed processing, because we are a leading industry in compounding feed, and we can develop more value added and more sales by using science in that area as well.

[Lloyd Longfield, Liberal, Guelph, ON]

Right. Thank you.

Go ahead, Madame Citeau.

[Claire Citeau]

From a trade perspective, I will echo the comments made earlier on having Canada take a leadership role in ensuring there is international recognition of standards and science-based decision-making at the international level. This is critical to ensuring that our negotiators and those working on market access issues have the resources to address these issues and negotiate free trade agreements in a timely manner and help us go after the markets that our competitors are also going after.

[Lloyd Longfield, Liberal, Guelph, ON]

Thank you.

You mentioned CFIA, and there's been a concern, without my having a lot of evidence, with CFIA's role in helping us to develop export markets. Maybe to a point Mr. Anderson made, training CFIA people and possibly increasing staff all come at a cost.

Could you give us any further input on CFIA and its role in the new policy framework? How might we be able to enhance its role?

[Jim Everson]

Mr. Anderson is right about costing things out and making priorities clear. I understand that point, and I don't know the CFIA environment really well in terms of how resources are allocated within it. We see there is a very important issue around domestic safety and so on, and CFIA largely does that, but with these new.... It's not tariffs that are the big issue in trade now; it's these SPS issues.

Tariff is really simple. You either pay it or you don't. You get rid of it or you don't. SPS issues occur when one country says this pest is coming from Canada and it's a danger to their market. Canada disagrees, and then there's all this discussion about who's right and how you do the science around that. It is critically important that we have scientists who are credible and also attached to our national organization responsible for that.

Agriculture Canada is going to be out there trying to sell Canadian products, and we expect that, but our regulator has a different role there, and that's science-based. We find there are so many of these circumstances coming up these days. The whole canola thing we have heard about in the media recently is a great example. That's just one out of hundreds and hundreds of those situations that we have these days.

[Lloyd Longfield, Liberal, Guelph, ON]

Thank you.

The Ontario Agri-Food Technologies group is bringing a lot of these issues forward as well. I think we were both at a round table in Guelph. We talked about sectors and sector councils. Could you comment on sector councils in terms of developing a new framework or new trade?

[Jim Everson]

We have the round tables that Agriculture Canada supports. Canada is part of the grains round table, and it's an excellent organization, again because it's a collaborative thing. You have government and industry there and you can talk through all the common issues we have, such as sustainability, labelling, and a whole variety of different issues. It works extremely well, and it's important, I think, in designing the agriculture policy framework to keep in mind that you can fund organizations to do something, but those organizations also have to work with the Government of Canada in implementing them. There's an alignment issue there, and those councils work well to generate that collaboration.

[Lloyd Longfield, Liberal, Guelph, ON]

They multiply investment.

[Jim Everson]

Yes, absolutely.

[Lloyd Longfield, Liberal, Guelph, ON]

Great. Thank you.

Unfortunately, it looks like we're out of time. Thank you so much to both of you.

[The Chair, Liberal, Pat Finnigan]

It's just about time, and I think that we will wrap up. Unfortunately, we're getting close to the hour.

I want to thank both Madame Citeau and Mr. Everson for appearing and providing interesting input. We will certainly take it into consideration for our report. Of course, as Mr. Anderson said, it's always about the dollar sign, but we hope to invest it at the best place, and I know you're right at the top of that list.

Thank you. We'll break for a couple of minutes and come back with the other group.

[The Chair, Liberal, Pat Finnigan]

I want to welcome Mr. Norm Beal, from Food and Beverage Ontario. Thank you for appearing this morning.

Also, from the Canadian Cattlemen's Association, we have Dan Darling, the president, and Andrea Brocklebank, executive director. Welcome to both of you.

We will get started.

You can start, Mr. Beal, for up to 10 minutes.

[Norm Beal, Chief Executive Officer, Food and Beverage Ontario]

Thank you, Mr. Chair, and thank you to the members of the committee for inviting us to appear here today.

My name is Norm Beal. I am the CEO of Food and Beverage Ontario.

Today I want to talk to you about FBO's mandate and provide some information and perspective to contribute to the development of the next agricultural policy framework. Then I look forward to answering any questions you may have.

Food and Beverage Ontario represents the food and beverage processors in Canada's largest province. Our mandate is to promote and support our industry in Ontario, across Canada, and increasingly around the world.

For decades, our members have contributed to local economies and communities across Ontario by building companies, creating jobs, and supporting primary agricultural industries, but even more exciting is our ambitious plan to grow even further. By 2020, we want to increase our relative importance to Ontario's economy and hire many more people. Our target is 60,000 jobs. We want to continue to be the number one customer of Ontario's primary agricultural industries. We want to be on the cutting edge of innovation, not just in the agricultural sector but in Canada's economy. We want to play a leading role in ensuring that the food Canadians eat is healthy and safe.

It is in this context, proud of our accomplishments and motivated by providing a more prosperous future, that we find ourselves here today. We believe FBO can play an important part as you chart the path forward for Canada's agrifood industry, not only in Ontario but in every province and territory.

The food and beverage processing industry in Ontario and Canada is a very large and, frankly, undervalued industry. I know that members of this committee are strong supporters of the agriculture and agrifood industries in their ridings and across Canada, but many Canadians and policy-makers at every level of government do not understand the scale of the contributions food and beverage processors make. An ambitious agricultural policy framework that strengthens our vitally important sector will support and create middle-class jobs in your ridings and all across Canada.

Before I talk a little bit about the policy direction Food and Beverage Ontario believes would most strengthen agriculture and agrifood in Canada, I want to touch on a few pieces of data that I think tell an impressive and surprising story.

More than 130,000 Ontarians work for Ontario's food and beverage processors. This is more than the entire population of Guelph. It's the largest manufacturing employer in Canada, bigger even than aerospace or automobiles. In fact, more than 250,000 Canadians are employed by the food and beverage processing sector. That is more people than all the voters in the ridings of the chair and the two vice-chairs here today.

Food and beverage processors export their products to more than 190 countries and have for decades had one of the most favourable balances of trade of any sector in the Canadian economy. There are 6,500 businesses in Canada in our industry, ranging from large global firms to small entrepreneurs just getting started.

While the numbers are compelling, the stories of the people and organizations in our industry tell even a better story. Let me share just two with you.

Almost 20 years ago, Mr. and Mrs. Hans immigrated to Canada from India. Together they founded Hans Dairy, which specializes in South Asian dairy products. They sought to create authentic Indian products and seized upon the opportunity to do just that. Though they started by serving the growing Asian communities in the greater Toronto area who had welcomed them so warmly, Hans Dairy has grown tremendously. Now they provide their unique selection of products all across Canada and are looking for major export opportunities. For example, they were the first to sell dahi in Canada, an Indian style of yogourt, and now they offer a full line of flavoured yogourts that appeal to a variety of palates.

Now I'll talk a little bit about corn-fed beef. It's timely that we're here today with the Canadian Cattlemen's Association. The Ontario Corn Fed Beef label has become one of the most well-respected and recognized beef certification marks in the marketplace.

Ontario's beef producer and processing sector is growing inside Canada and in markets all over the world. Most recently, the sector has made enormous gains in Asia and the Middle East. This success is founded in product excellence; collaboration among producers, processors, retailers, consumers, and governments; and a bias towards exporting our products.

The term “value-added” often has a general meaning of making something better, but Ontario's corn-fed beef processors add value in the strictest economic sense. They take a product and through their efforts produce a new product that is sold at a higher value, thereby increasing incomes for everyone involved.

Both of these stories show how Canada's entrepreneurs in the food and beverage processing industry generate economic activity and middle-class jobs by meeting the increasingly complex demands of Canadian and global consumers. They are Canadian success stories enabled, in part, through partnership with government.

Rather than outlining specific policy, at this point I want to spend my last few minutes underscoring FBO's support for the Calgary Statement. Each of the principles in the statement is laudable, and FBO not only supports them rhetorically but in practice as well. Our organization and our members all have important initiatives under way to help achieve the goals we all share.

Of particular importance are the following three principles from the Calgary Statement: markets and trade; science, research and innovation; and public trust. Canada's food and beverage processors are exporters and innovators, but like you, our ambition for our industry and the men and women who work in it is not to maintain the successful status quo, but to grow it. Trade and innovation are surely two keys to accomplishing our shared future success, as the corn-fed beef sector has shown.

I want to spend a moment discussing public trust.

You were all duly elected by the voters in your ridings, ridings that touch every corner of our country. You, more than anyone, know that our government and our democracy are founded on a very simple concept—trust. Similarly, FBO's members help to feed Canadians and, in fact, people all over the world. There are few parts of our economy where trust is more important than in producing the food that feeds our families.

While both government and food production rely on the public's trust to operate effectively, both are also under threat. There are more voices, many of which are critical, challenging how and why we produce food. Though some criticisms are harmful and wrong-headed, many are reasonable and well founded.

Food and Beverage Ontario strongly supports strengthening the public's trust in food and beverage processing and expanding the way in which stakeholders and the public are engaged, as proposed in the Calgary Statement.

Last, and perhaps unsurprisingly, we strongly support the inclusion of food and beverage processing as a priority area, as outlined in the Calgary Statement.

Like us, Canada's government is committed to supporting our industry, because the benefits to Canadians run so broadly and so deep. We believe—and the Calgary Statement supports the belief—that processors are indeed a strategic asset and a vital and dynamic driver to the future prosperity of Canada's agricultural sectors. We hope to see this support reflected in the next agricultural policy framework.

I began by saying that FBO believes our industry is a strategic asset to Canada's economic prosperity. Our success must be shared between government and industry, and even more importantly, between our industry and Canadians. We are employers, innovators, producers, and consumers. We look forward to working closely with the members of this committee and indeed with government decision-makers all across the country.

Food and Beverage Ontario believes that together we can chart an ambitious course for our industry and the millions of Canadians who depend on it for their livelihoods and the food they serve their families every day.

Thank you. I look forward to your questions.

[The Chair, Liberal, Pat Finnigan]

Thank you so much, Mr. Beal.

Now, Mr. Darling, you have up to 10 minutes.

[Dan Darling, President, Canadian Cattlemen's Association]

Thank you for the invitation to speak to you today.

My name is Dan Darling. My family and I farm and raise cattle near Castleton, Ontario. I am currently president of the Canadian Cattlemen's Association.

On behalf of Canada's 68,500 beef producers, we are pleased to share our priorities for the next agricultural policy framework. With me today is Andrea Brocklebank, executive director of the Beef Cattle Research Council division.

The beef cattle sector is one of the largest generators of farm cash receipts in Canada. In 2015, the cattle industry generated $10.5 billion in farm cash receipts, up 7% from 2014. Global demand for high-quality beef is increasing, and we produce the best beef in the world right here in Canada. We are also leading the world in our sustainability efforts.

The CCA has been actively engaged in the national APF consultations and will continue to collaborate in this policy-making process. Our overarching recommendations are that the programs under the next APF be finalized for a seamless rollout on April 1, 2018, and that the program delivery be simplified and approval processes be more transparent and consistent.

A high priority for the beef cattle sector is to ensure that the next APF enhances our competitiveness in both international markets and here in Canada. This will require a strong emphasis on research, science, and innovation. Industry and government have a shared responsibility for research that contributes to the competitiveness, innovation, and sustainability of the beef cattle industry. Research is integral to providing science-based information to support consumer confidence and to ensure Canada's beef industry is globally competitive and able to take advantage of the current and emerging trade opportunities.

One of the most successful programs under Growing Forward 2 is the beef science cluster, and we feel strongly that it should be retained and expanded. It has encouraged increased industry investment in research and allowed the beef industry to fund a more comprehensive research portfolio that goes beyond focusing on producers' bottom line, including significant investments in areas like animal health and care, environmental sustainability, and antimicrobial resistance.

The cluster has also enabled the industry to take a leadership role in technology transfer to ensure research results are turned into technologies and tools that are adopted by industry stakeholders.

We have a few key recommendations to improve the cluster under the next APF.

First, streamlining and enhancing the timeliness of approvals, reporting, and financial claims could ease administrative burden and improve the research environment. Second, allowing for reasonable funding flexibility would allow for more effective use of research dollars. I know Andrea would be happy to elaborate on those afterwards.

I would also like to stress that government/industry leverage in support of research programming needs to remain at three to one. The industry has shown significant leadership in investing in research that has broader benefits to the public good beyond our sector. As well, largely due to the progress seen through the beef science cluster, Canada's beef producers are in the process of tripling national check-off investments in research.

We are concerned that reducing the leverage from its current three to one would penalize industry, discourage growth in industry investment, and negatively impact other planned research programming. This would be a perverse outcome for sectors that have undertaken great efforts to invest in themselves.

We are an industry that depends on trade, exporting almost half of our production. The ability to sell beef and beef by-products into the global market is crucial to maximizing the value of each animal produced in Canada. We estimate that almost $500 per head of additional value is generated by selling a range of beef and beef offal products that are highly valued abroad.

It is paramount that the trans-Pacific partnership agreement be approved and implemented, or bilateral negotiations with Japan be completed as quickly as possible, so that we can reclaim Japanese consumers lost to Australian beef, which enjoys lower tariffs in that market due to their FTA with Japan.

We also want to see resolution of technical barriers to Canadian beef in Europe, and then have CETA come into effect. We request the beef sector be given equivalent consideration, as others have been provided, regarding transitional investments to compete under CETA.

Often issues arise once the various trade agreements are implemented. That is why we advocated for the creation of the agricultural market access secretariat. Under the next APF, we ask that the agricultural market access secretariat be fully funded to pave the way for Canadian agrifood exports.

We also ask that there be sufficient funding to support incoming missions of foreign government food inspectors. This is often a prerequisite to export approval.

The next area I would like to focus on is business risk management. CCA believes that there need to be sufficiently funded national agriculture risk management programs that are delivered consistently across all jurisdictions and do not create a competitive imbalance between agriculture sectors or regions. Programs should minimize the risk of adverse impacts on international and interprovincial trade, minimize the distortion of market signals, and minimize influence on business decisions.

CCA also supports some flexibility in government's contributing to regional and provincial livestock insurance programs, assuming the overall level of support is even across the country and the programs are market neutral.

AgriStability has helped to mitigate fallout from risks occurring, although well after the fact for many producers. The individual details and whole-farm aspects are important, but improving the transparency of calculations still needs work, and program payments need to be delivered in a more timely manner.

CCA believes program caps should be eliminated. Caps on AgriStability payments and all BRM programs discriminate against larger operations. These operations in most cases grew because of competitive operating practices. These large operations contribute significantly to rural employment and prosperity. Caps should be removed so that all farm business structures are treated equally and are on a level playing field.

The western livestock price insurance program pilot is a forward-looking, market-based, insurance-style program that allows producers to manage price risk. The WLPIP pilot should be made permanent under the next APF. Expanding this price insurance program beyond the western provinces would positively contribute to a national plan that would allow Canadian producers to better manage price risk.

Improved hay and forage insurance across the country is also needed, including a mechanism that helps producers account for increased feed prices during times of shortages. This could alleviate calls for an AgriRecovery response to weather events.

On the APF's environmental sustainability program, CCA encourages government to support ranchers' conservation actions through funding and further development of ecological services and agri-environmental programs. Programs such as these promote natural resource conservation, improve the environmental health of Canada's landscape, and build resiliency into the agriculture sector. These programs will be most successful if they are incentive-based, community-delivered, and voluntary.

The beef industry recognizes the importance of public trust, and it has launched its new Verified Beef Production Plus program that focuses on verifying the good practices farmers use in animal care, biosecurity, environmental stewardship, and on-farm food safety. The VBP+ provides Canadian and global beef consumers the confidence that Canadian beef products are safe, high quality, mindful of animal welfare and the environment, and truly sustainable. Under the next APF, we ask that the funding for the implementation of national industry on-farm verification programs be maintained.

We also stress a greater coordination and consistency of funding outcomes as necessary at a provincial level to ensure alignment with national programs.

In closing, I would like to say that agriculture is well positioned as a strategic growth sector in the Canadian economy. A forward-looking agricultural policy framework and a competitive business environment are key to the Canadian cattle industry to continue to be more innovative and sustainable and to capitalize on the marketing opportunities around the world.

Thank you for the opportunity to present, and we look forward to your questions.

[The Chair, Liberal, Pat Finnigan]

Thank you, Mr. Darling.

We will start our questioning round.

Go ahead, Mr. Shipley, for six minutes, please.

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

Thank you, Mr. Chair, and thank you to the witnesses.

I think it's so significant that we have had the processing industry and the food and beverage industry and those manufacturers that are in the value-added part of the agriculture industry, as Mr. Beal mentioned. I think we learned so much.

One of the things you touched on, sir, was public trust. I appreciate that, because it's one—

[The Chair, Liberal, Pat Finnigan]

Mr. Shipley, I think we have bells ringing now. If it's the consent of the committee, we're right in Centre Block, so we could take 15 minutes. Are we all okay with that? Is everybody agreed?

Okay. Thank you.

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

I think I just got cut.

It's the public trust issue, and part of that comes from a number of areas. Stats Canada will tell us that the agriculture industry, with its primary producers, is one of the most respected professions in Canada. What seems to be developing, though, is that the products we are producing are coming under higher scrutiny. That's being driven by extreme environmental groups and extreme animal rights groups saying that despite all the science and research we're funding and all the innovation the industry is bringing along, nobody trusts it.

We're seeing a bit of that maybe with CETA. The beef industry is having a little trouble with the technical barriers of getting it in. It's more than a little trouble. These sorts of things become a huge challenge.

Dan or Andrea, talk to me a bit about the concern of whether we have the same standards for the products that would be coming from Europe into Canada that we have with Canada's standards, which I think are likely higher, going into Europe and into the CETA agreement, and how we're being challenged on a technical barrier.

How do we overcome that, and what makes that right? That becomes a non-trade tariff barrier, to my mind.

[Dan Darling]

I agree 100%. That's exactly what it is.

Our Canadian products are overwhelmingly much safer than the European products. The technical issues that we are being stopped on in trying to gain access into Europe just make our product a lot safer.

It stems from the fact that in Europe their mentality is that consumers should make sure their products are safe. To make sure they don't get sick, they should cook their meat to the point where there are no bugs that would affect them. In Canada, we believe it's industry's responsibility to make sure that the products we put out there are safe for everybody.

Yes, I think it's completely a trade issue. It doesn't have anything to do with the safety of our product. While we're on the topic, though, I would like to say that since we deem our products to be so much safer, we do want to make sure that any product that is coming into Canada is fully tested so that none of our citizens gets sick from a product because of that.

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

Are resources a concern now?

[Dan Darling]

That would be a CFIA thing. They would have to answer that question. I don't know if they have the resources to test the beef and the veal that have now been approved to come in here or not. It's certainly a concern.

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

Can you talk a bit about one of the new ones, which is the discussion around the environment and climate change? One of the things I've always talked about is that the agriculture industry doesn't get the credit for what it has done. I get concerned when people say agriculture owes the environment. I think the environment owes agriculture for the improvements we do for the environment and in greenhouse gas emissions and all that.

Can you talk to us a bit about the changes the beef industry has done in improvement, because the consumer won't have any idea about that?

[Andrea Brocklebank, Executive Director, Beef Cattle Research Council, Canadian Cattlemen's Association]

I can answer that quickly.

We've done a lot of research, most recently to put science behind our environmental footprint. That work has shown that over a 20-year period we've reduced our environmental footprint by 15%. That's innovation. It's improved animal health, improved feed efficiency through using fewer resources and less water, and producing less manure. We're excited to know we can continue to reduce that environmental footprint.

The other part of the conversation you're speaking to is the fact that we use a land base that, in many cases across Canada, can't be used for any other production than forage. It can't be tilled up. We're converting that fairly low-quality feed into a high-quality product that consumers can consume. While we're doing that, we're contributing to biodiversity, carbon sequestration, all those other positive things. A lot of the research we're doing now is to quantify that. We've been saying it for a long time, but you have to put science behind it.