Good morning, Chairman and committee members. I wish to thank you for the opportunity to appear today to discuss the next agricultural policy framework.
The Canadian Horticultural Council is a national association that represents producers across Canada who are primarily involved in the production and packaging of more than 120 fruit and vegetable crops. Members include provincial and national horticultural commodity organizations as well as allied and service organizations, provincial governments, and individual producers. Since 1922 we have worked collaboratively with our members and government to advocate on issues and policies that are important to the Canadian horticultural sector. We represent members on such key issues as crop protection, access to a consistent supply of farm labour, food safety and traceability, fair access to markets, research and innovation, and government programming that ensures a more innovative, profitable, and sustainable industry for future generations.
The horticultural sector is one of Canada's largest agrifood industries. Today farm-gate sales with additional processing, supply chain, and induced impacts create an economic footprint of over $11.4 billion in real GDP. With over 27,500 horticultural crops in Canada covering close to one million acres of land and providing over $4 billion in annual direct farm cash receipts, horticulture farming is a valuable sector within Canadian agriculture. It has a direct positive impact on rural economies across the country and further positive impacts across industry as a whole.
Members from the horticultural sector have been in Ottawa this week having discussions with members of Parliament on some of the key issues facing the industry. We thank you for the meetings we've had with many of you. We are grateful for the support and interest shown in our meetings.
To allow time for discussion, I will focus my presentation on some of the key areas that will support our sector as we move forward.
The next policy framework must help position Canada's produce sector for success by ensuring that policies and programs are well informed, practical, and beneficial to the produce supply chain. Business risk management programs are very important to our producers, and need to be effective and responsive to help manage the impact of severe events on operations and incomes.
The AgriStability program is designed to provide support when experiencing a large margin decline. It has now been three years since funding was reduced for this program, and savings achieved by these cuts have exceeded targets. This is an important program for our sector. We need to see the level of coverage offered through AgriStability returned to the levels that preceded Growing Forward 2. We would like to see the AgriStability trigger threshold restored to 85% of the producer's reference margin, up from the 70% level under Growing Forward 2.
In the next policy framework, we would also like to see changes to the AgriInvest program, a self-managed producer-government savings account that allows producers to set aside money that can be used to recover during small income shortfalls. This is a simple and low-cost program to administer, with high uptake by producers. We are requesting an increase in the basic contribution rate for matching contributions to 4.5% of the allowable net sales on eligible commodities, and an elimination of caps on government payments. Producers also need more flexibility on removing their own funds first on pre-approved investments.
Innovation is critically important to producers. The next policy framework must include increased support for research and innovation with an enhanced commitment to the produce sector. This is vital to ensure that Canada maintains its reputation as an agricultural leader. This includes expanded research and financial support to biotechnology, paying particular attention to good pest management practices while reducing long and complex regulatory processes that negatively impact competitiveness.
The AgriInnovation program has provided the horticultural industry with nearly $7 million in support of industry-led research, with an additional $2.6 million in industry contributions. Under the next policy framework, there is strong industry support to continue cost-shared funding at the current 75% government and 25% industry levels.
The horticultural industry has had great success within the Canadian agri-science cluster for horticulture 2. Collaboration among industry, private research, universities, and Agriculture and Agri-Food Canada researchers has demonstrated successful partnerships and has helped move industry priorities forward. The shift to cost-shared research has resulted in researchers being more engaged with industry to find priority areas for research.
The CHC supports the broadening of the number of projects approved under the horticulture science cluster that receive support. We would also like to see open consultation with industry on the nature of funding and associated restrictions with respect to eligibility at the onset of the future agri-science cluster programs.
With regard to the environment, our sector understands that climate change is a global challenge facing industry and government. Climate change impacts many areas of production, such as access to water, pest management, and energy sources. The horticultural sector plays a significant role in ensuring a sustainable sector as well as a secure food supply. We recognize that the federal government has been taking steps to address the challenge.
The CHC asks that climate change measures not place the horticultural sector at a competitive disadvantage. In the next policy framework, we want to ensure that there is federal funding that will address adaptation programs and ensure adequate support towards the resilience and environmental sustainability of the industry.
Public trust is a collaborative effort between government and industry. We must continue to build trust and have programs that best support industry in meeting the increasing demands of consumers and retailers seeking quality assurance and access to markets. This will require continued financial support for innovation to ensure the integrity of domestic food safety and working with our trading partners to achieve food safety outcomes that are comparable to the Canadian level of quality. It will also require improved alignment and integration of federal and provincial food safety assurance systems to make them more scalable and sustainable.
I am pleased to let you know that I have been nominated to be part of the steering committee to work on public trust and social licence.
The horticultural sector benefits enormously from trade. In 2014, 52% of Canadian fruit and vegetable production was exported, representing a farm-gate value of over $2.1 billion. We continually look for opportunities to increase markets for our high-quality produce. The next policy framework must facilitate growth in exports, remove barriers to competitiveness, and work on improved integration regarding plant health, customs, and food safety systems.
I am again pleased to inform the committee that I've been asked to be part of the steering committee to develop the plant and animal health strategy.
I would like to briefly touch on the issue of labour. As committee members know, labour is an ongoing challenge in agriculture. The horticultural sector is significantly impacted when you consider that horticulture represents 50% of the labour gap in agriculture, which translates into a gap of 29,000 workers. Growers always seek to fill vacancies with Canadian workers first; however, with the increasing demand to meet production targets and avoid fruit and vegetable rot on farms, temporary foreign workers play a critically important role in our sector.
The federal government must continue to work with industry to ensure an accessible and reliable workforce. It is important to note that temporary foreign workers generally come for about six months. Most Canadians are looking for full-time employment. Also, our studies have shown that, for every foreign worker we bring in, two full-time Canadian jobs are created within the value chain.
These are some of the key areas that are at the forefront of the horticultural sector as the federal government develops their plan for the agriculture sector for 2018 and beyond. We look forward to continuing the dialogue on these important challenges and opportunities as we work towards a more innovative and sustainable industry.
Thank you very much.