Agriculture Committee on Nov. 24th, 2016

[Pierre Breton, Liberal, Shefford, QC]

Thank you, Mr. Chair.

Thank you to Mr. Lefebvre and Mr. Kuhl for being here with us today. My first question is for Mr. Lefebvre.

I am very proud that you are here, especially since my riding, in the Granby area, has are three large companies. They are Aliments Ultima, which also has operations in Vancouver; the dairy cooperative Agropur, the cradle of dairy cooperatives in Canada; and Laiterie Chagnon, a dairy company in Waterloo.

I wonder if this last company is one of your members.

[Jacques Lefebvre]

Not yet.

[Pierre Breton, Liberal, Shefford, QC]

Not yet; you are working on it.

We have made some announcements recently, including $350 million for the dairy and cheese industry. This is a big step forward. It is good news for the industry. I would like you to explain how this money will be invested. The amount specifically earmarked for the dairy industry is $250 million.

How will that amount be invested?

[Jacques Lefebvre]

Thank you for your question, Mr. Breton. I am very familiar with your riding since I come from that region. So I am very familiar with the place.

[Pierre Breton, Liberal, Shefford, QC]

I am glad to know that.

[Jacques Lefebvre]

I will answer your question about how this amount will be invested. We are currently taking part in government consultations to determine how the criteria will be applied.

It is clear to us that the criteria will determine how we access the funds announced and what form the investments will take.

So the next step is to determine the criteria for how the funding will be used. Then we will see how we can access that funding to be even more innovative than we are right now.

[Pierre Breton, Liberal, Shefford, QC]

I understand that you'll certainly have some say in the matter. Obviously, we want your industry to reach its full potential and to be more competitive. I would think and hope that these amounts will be partly allocated to technology and innovation for your industry.

Do you have any comments?

[Jacques Lefebvre]

Absolutely. You understand that investment decisions are made by corporations on an individual basis. Even though, like you, I've heard about future project ideas, it would be inappropriate for me to make announcements on their behalf.

However, I can tell you that Canada's dairy processors certainly want to take full advantage of the opportunity. I'm talking not only about the funding that has just been announced, but also about the agreement in principle established with the producers. The people in the field describe the agreement as historic.

I'm very optimistic about our future as a result of the funding and the way we plan to encourage innovation and expand the production and processing sectors of Canada's dairy industry, and also given all the potential ahead.

[Pierre Breton, Liberal, Shefford, QC]

Before moving on to Mr. Kuhl, I can tell you that the businesses back home, such as Agropur, Ultima Foods and Laiterie Chagnon, are excellent employers. They are major employers that pay very good wages to the employees on site. They also create a great deal of wealth because they support most of the agricultural producers in my constituency. They purchase all their milk in the region. This is good news. Thank you for your responses.

Mr. Kuhl, I have questions regarding fruits and vegetables. Obviously, growth depends on exports.

Are you having problems with your earpiece? Do you hear me? Is the translation okay?

[Pierre Breton, Liberal, Shefford, QC]

Thank you.

You mentioned in your presentation that your industry's growth depends on exports. You already export 50% or 52% of the fruit and vegetable production. Your growth is more and more dependent on exports because global demand is increasing. How can the government provide further support for this increase?

[Keith Kuhl]

Thank you very much for your question.

First of all, while we really work to increase export trade, we also feel that we need to concentrate more on health and nutrition with Canadians. We need Canadians to eat more fruits and vegetables.

One of the campaigns that we're working on with the Canadian Produce Marketing Association is to encourage Canadians to use half of their plate for fresh fruits or vegetables. If we can convince Canadians to increase their consumption of fresh fruits and vegetables by one serving a day, it will have a very significant impact on the Canadian economy, on Canadian health, and also on the cost of our medical system.

We work with the Canadian government on trade missions, and we continue to work with the government on trade agreements with different countries.

[The Chair, Liberal, Pat Finnigan]

Thank you, Mr. Kuhl.

[Pierre Breton, Liberal, Shefford, QC]

Thank you.

[The Chair, Liberal, Pat Finnigan]

Thank you.

I adjusted the time a bit.

[Pierre Breton, Liberal, Shefford, QC]

No problem.

[The Chair, Liberal, Pat Finnigan]

Ms. Brosseau, you have the floor for six minutes.

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

Thank you, Mr. Chair.

I want to thank the witnesses for their important and very interesting presentations.

Mr. Lefebvre, I'm a strong supporter of our supply management system. When we talk about transition plans, we're talking about assistance for the dairy and processing industries.

Last week, I had the honour of participating in a wine and cheese party in my constituency, in Berthierville. The cheese came from the Domaine Féodal cheese factory, which is known around the world. It wins awards everywhere and it's still beating European cheeses.

In the past two to three years, the cheese factory has invested about $1 million in improving its facilities. Its investments are extraordinary.

As you mentioned earlier, the plan announced by the government does not necessarily cover the industry's losses. The annual losses are much higher than the losses predicted in the plan. The government announced $100 million in financial assistance for the processing industry, but we don't yet know the details of the assistance. I know that you're part of the group that will be consulted and that will work on implementing criteria. Do you think the small producers of fine cheeses in Quebec, such as the Domaine Féodal cheese factory or the Ferme Vallée Verte in Saint-Jean-de-Matha, will have access to this compensation? Are you expecting the government to provide other forms of transition assistance?

[Jacques Lefebvre]

Ms. Brosseau, thank you for your question. I will provide a two-part answer.

All small and large dairy processors should have access to the funding announced. We will establish the access criteria. However, we think the funding must be available to everyone. You spoke of small and medium processors, but you must understand that large processors will also be significantly affected.

Suddenly, the fine cheese industry must deal with the tariff-free importation of 18,000 tonnes of fine cheeses from Europe. This will certainly affect both small and large processors. There's a growing myth that the large processors won't be as heavily affected. I think there's some confusion. The large processors will also be heavily affected.

If a Brie de Meaux enters Canada, there are strong chances it will take the place of a locally produced Brie cheese on the shelves. The consumer may also choose the imported product. In this case, what will a producer do with its production line? Will the producer continue to work at a loss? No. If the producer closes its production line, jobs and investments will be lost. It's a bit of a myth that only the small processors will be affected.

Of course, given the range of their products, large processors may decide to invest in other segments. If a large processor produces fine cheeses, the processor may decide to close that production line and invest more in yogurt production. Nevertheless, it's important to understand that larger processors will also suffer significant losses. All stakeholders in the industry will suffer losses.

That was the first part.

Now, to answer the question of how the amounts will be allocated, I would say the entire industry should be supported. This includes the small, medium and large processors.

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

Absolutely. I think everyone around the table knows it. I sincerely believe that the $100 million will not be enough to cover the losses resulting from the Canada-European Union Comprehensive Economic and Trade Agreement.

Mr. Kuhl, I want to talk to you about the importance of having access to workers. This is an issue that is brought up by many people before committee and by many people in groups across Canada, the importance of having access to workers, a strong, stable program, a vision.

Could you elaborate on some recommendations you would have for committee for workers and some problems you have in the sector presently?

Also, give us perhaps an update on PACA, the Perishable Agricultural Commodities Act. That is something that is brought up often at committee. I've been on the ag committee since 2012, and we have talked about it a lot. I know that some kind of study is going on, a proposal. Perhaps you could give the committee an update on what stage it has reached and on the importance of having it in place.

[Keith Kuhl]

First of all on the issue of labour, all of the programs fall under the temporary foreign worker program. We deal with the seasonal agricultural worker program, which has been a tremendous success—it just celebrated 50 years of success with Mexico and Caribbean countries—and then with the ag stream of the temporary foreign worker program.

We had a meeting with Minister McCallum in the spring. Many of our producers have been using the programs for many years, often bringing the same people in year after year. We suggested that the government look at developing a NEXUS program or trusted employer program that would allow the timeline needed from when you need the worker to when the worker arrives.

[The Chair, Liberal, Pat Finnigan]

Thank you, Mr. Kuhl. I have to cut it off there.

Mr. Drouin, you have the floor for six minutes.

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

Thank you, Mr. Chair.

I want to thank the witnesses for being here.

My first question is for Mr. Lefebvre. It concerns a matter that you discussed a bit with Ms. Brosseau.

I'm trying to understand how you measured the impact of this agreement. I'm not accusing anyone here. In Canada, we're always talking about our competitive advantage in relation to the U.S. exchange rate, for example. The euro is worth CAD1.40. I'm trying to understand. Have you taken into account the exchange rate in your calculations? I'm asking this question sincerely. I want to understand how the analysis for your sector was conducted.

[Jacques Lefebvre]

We'll be pleased to provide the specific details of the calculation.

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

Okay.

[Jacques Lefebvre]

We have an economist who will provide the details.

Mr. Drouin, one thing in particular must be mentioned. It must be understood that the commodity of milk, in a supply management system, is more expensive. It's more expensive here than in Europe. At this time, it's not quite double the price, but it's close to that. In terms of competitive advantages, we must deal with this reality. We operate in a supply management system. As I said earlier, we're working hard with the producers on modernizing the system so that it can operate in a framework in which international agreements such as CETA are established. However, the threat is real. As such, we're saying that the $100 million in funding is important, but that another step must follow. Tariff quotas must be imposed on cheeses. This step is important. It's how we can better prepare the industry, the two sectors, to face the competition.

Regarding your original question, it's a fact that milk is much more expensive in Canada than in Europe. It's one of the realities of the system.