Agriculture Committee on March 7th, 2016

[Tina Namiesniowski]

One of my colleagues is an expert in the field. Let me invite her to join us at the table to answer your question.

[Élise Legendre, Acting Director, Strategic Analysis and Program Development, Department of Agriculture and Agri-Food]

I am Élise Legendre. I work for the risk management programs.

If the information that you have is from Quebec, I must say that a large part of the production costs depend on the provincial programs only, such as the farm income stabilization insurance program, ASRA. Unfortunately, I cannot comment on those programs, because I am not familiar with them.

In terms of the risk management programs, we use the reference margins to create an Olympic average. In other words, we eliminate the best and the worst of the last five years, and we calculate the average of the remaining three years. That is how we use the production costs. We work with the eligible revenues and the eligible expenses for those three years.

[Jacques Gourde, Conservative, Lévis—Lotbinière, QC]

So my concern is legitimate. If a farmer has five bad years in a row, the program will not work.

[Élise Legendre]

Their reference margin will decrease, but the program may still work.

[Jacques Gourde, Conservative, Lévis—Lotbinière, QC]

What is that based on? There is no longer a reference margin. There is no longer a high and a low. Would the reference still be based on the best of the three years?

[Élise Legendre]

The three years in the middle will be taken into account.

If there are three bad years, the level of support to producers will actually be adjusted. One of the important principles of the program is to not hide the market signals, so that producers can adjust their production. That is one of the reasons why those programs use that reference margin.

[Jacques Gourde, Conservative, Lévis—Lotbinière, QC]

Yes, but in reality, grain farmers will not stop producing corn. They will continue to produce corn, soybeans, wheat. It is utopian to think that farmers will change their production completely. Grain producers with 1,000 hectares can change a segment of 100 hectares or so to produce soybeans, but ultimately, corn represents 60% of their production, while the remaining 40% is used for soybeans, wheat or barley. They will still produce those types of grains.

Beef producers will not change their production to pork. They will still produce beef. They may adapt to the ups and downs of the market, but when you are established in a production, you either stay or go. If everyone leaves, things are no further ahead.

[Tina Namiesniowski]

Let me add that it is important to remember that risk management programs are not income support programs. They are programs based on the concept of risk management. AgriStability is not the only program. There are also other tools, such as insurance. All those programs give producers many opportunities to use the various tools in the pool. It is not just one program; it is possible to use all the programs. It is important to keep that in mind when we talk about risk management programs.

[Jacques Gourde, Conservative, Lévis—Lotbinière, QC]

Does a payment under the federal risk management program counterbalance a provincial payment or does it become debt? In Quebec, a federal payment can be made under the farm income stabilization insurance program, ASRA.

Take, for example, a producer with two crops, one covered by ASRA and one that is not stabilized and has received federal support for one of seven years. That year, the money was deducted from a provincial program for another crop, given that the provincial government had advanced funds to that federal program.

I personally had that experience in 2003-04. From two different crops, the province of Quebec held back one-third of the amount that the federal government had paid. That's crazy.

[Élise Legendre]

I would have to check and see how the Quebec program dovetails with the federal-provincial program. The two are actually aligned.

[Jacques Gourde, Conservative, Lévis—Lotbinière, QC]

For producers, that debt appears on no statement. They figure it out if there is a payment. If there is no payment, they don't know whether that money will be claimed back by the province until the federal government advances the funds. The federal government does not make payments. It advances money to producers, money that is owed to another provincial program.

Is that possible?

[Élise Legendre]

It is difficult for me to comment on a situation like that. Generally speaking, payments from provincial programs come first. The calculations are made, but I cannot comment on that specific situation.

[The Chair, Liberal, Pat Finnigan]

Thank you.

Thank you, Mr. Gourde.

Mr. Drouin, go ahead.

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

Thank you, Mr. Chair.

I have a question with regard to the lapsed funding with Growing Forward 2, and where, if the funding lapses, the provinces can apply up to 25%. I just want a bit of an explanation so that I understand correctly. Are the programs normally spent in upwards of 75% if they can apply for up to 25%, or is that maximized each and every year?

[Pierre Corriveau]

They can spend 100% in a year. Usually, if we look at general trends, in the first year of the framework it takes time for the program to set up its new parameters or new programming, so sometimes the money will lapse. There are some provinces that will be close to 100% or 90%, so they will only be entitled to that 10% carry-forward.

Look at it as a bell curve. Usually there are going to be lapses in the first two years. I'd say that this year, the current year, we've only brought in 15%. In general, it provides a signal that in fact provinces are spending the money they've been entitled to, because there's only been a 15% lapse. We expect as we go forward there will be even fewer lapses.

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

I'll go off on another tangent. With regard to the sale of real properties, I notice you've had $5.5 million in revenues. How does Agriculture Canada determine whether or not to deem a property in surplus? Is that mostly agricultural land? I'm thinking that in Ottawa we have the Experimental Farm. What was sold in those properties?

[Pierre Corriveau]

I can give you a few examples, and they are pretty much across the country.

There was the announcement that was part of the deficit reduction action plan. A number of our properties were identified for disposal. Sometimes the land doesn't belong to the department; it technically belongs to us as long as we use it for the purpose for which it was made.

I'll use a research example. We had a research centre in Winnipeg on the campus of the university. The land is owned by the department, but as soon as we stop our operation, the land reverts back to the university. In this case, there would be no money generated.

I'll use one in Alberta, for example. We had a little research centre in Fort Vermilion. In this case, the local county or the regional government purchased that property from the department.

There's a pecking order when we are going to sell it. Usually we verify whether there are other federal departments that would have an interest in that property. Then we want to make sure whether there were any aboriginal rights. That varies quite substantially from province to province. Some provinces have treaty land entitlement, where basically the local aboriginal group can purchase, at market, the value of surplus property. Then it goes in a pecking order: the province; the municipality; and then, if nobody has an interest, it's put on the open market for purchase.

I have a case, for example, in Glenfields, Manitoba. We had a small farm. There was no interest by either the province or the.... So it was sold on the market, and a private producer bought the property from us.

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

If Agriculture Canada is doing research on properties, how do you determine whether one is more valuable than the other? Are there criteria that you follow?

[Pierre Corriveau]

The first thing is the Treasury Board policy says that in general, and this applies to every department, the departments are to hold lands only for program purposes. Basically, if you no longer have a requirement, you should be disposing of it.

My colleagues in science would be in a much better position to explain the process. For example, there used to be research at a number of sites, now it's only in Sherbrooke, Quebec. That provided us with an opportunity to consolidate our entire research and build a world-class facility, which I encourage members of this committee to go and visit. These science facilities are very expensive to build and operate. We did this, for example, in Brandon, Manitoba, when our research centre closed in Winnipeg. We're in the process of doing this right now in Swift Current, Saskatchewan. Usually we are present in every province. There is at least one research centre in every province. Obviously as a reflection of time, priorities change and all that.

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

I just want to understand a bit more about how the federal government sets priorities with regard to innovation and agriculture. I know my colleague from Guelph likes to hear about this too. Can you explain to me how you work with provinces to determine what is deemed innovation within the agricultural sector? What programs are currently out there to help, yes, universities, but also directly work with farmers for that?

[Tina Namiesniowski]

In terms of how we determine priorities, innovation is a fairly broad priority, and what we really do is work with industry in terms of the establishment of those priorities. With respect to the federal innovation programming that's supported through the Growing Forward 2 framework, we have two streams of programming that provide funding to industry. The first stream is what we refer to as industry-led research and development. It's through that stream of programming that we support pre-commercialization research and development, and knowledge transfer leading to innovative agriculture, agrifood, and agri-based processes, practices, and products. We provide through that stream non-repayable contribution funding in support of our industry, and that can also implicate federal scientists.

We have a number of projects at the cluster level. We have 14 research clusters, and most of them are commodity-based, on beef, pork, dairy, grains, special crops, horticulture. Bioproducts, for example, are some of the clusters that we're supporting that implicate our scientists. Through that support, our scientists are working with industry and academia in helping to drive innovation in the sector. That can include everything from variety development, for example, to more effective use of water, nutrients, fertilizer, in an effort to drive down input costs, in an effort to reduce the footprint or the impact that the agriculture industry has on the environment.

In addition, we support specific projects that are focused on research and development.

Another stream is our enabling commercialization and adoption stream. That is focused on the acceleration and demonstration and/or adoption of innovative products and technologies. That is a stream that is very focused on the not-for-profit sector. It enables companies that have an innovative product or process that they would like to commercialize and put into place to have the ability to come in and seek financial support, but because they're for-profit companies, we provide that support as a repayable contribution. They are required over time to actually repay the money that we would provide through that program. That's consistent with the government's transfer payment policy.

[The Chair, Liberal, Pat Finnigan]

Thank you. We're out of time.

Mr. Warkentin, you have five minutes.

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

I do appreciate both of you coming, and certainly you've given us a broad overview in the last number of minutes.

I'm going to go in a slightly different direction and talk about partnerships. Obviously the Growing Forward programs are important partnerships between provinces and the federal government, but Ag Canada is involved in other partnerships, including those with universities and colleges across the country.

One I'm very proud of and would like to highlight is a project happening at the Beaverlodge Research centre in Beaverlodge, Alberta, my constituency, in which the local college has partnered with WED to build a facility. Now we have the National Bee Diagnostic Centre, which has been an incredible partnership. In the region of the Peace Country there was an absolute necessity for local beekeepers to have a centre where they could send specimens when they saw bee deaths within their hives, and bee colony collapses.

Now people from around the world are utilizing the centre, so a local need in a local community, for which there was expertise at the local research centre, was able to then be a catalyst for the building of this not-for-profit organization, which has really transitioned and grown over the last number of years.

First I'd ask if you're familiar with the centre. The centre is going to be asking for a little bit more money. Right now they are doing five times the work they were expected to do, which is really a good-news story. We've seen the death rate of bees across the country actually drop in the last number of years, partly because farmers now have access to a diagnostic centre.

It's interesting to note that in Beaverlodge, a significant number of the specimens they're studying actually come from other provinces, so it's not just regional but truly national.

This may be a policy question and it may be unfair to ask you, but are there going to be opportunities in programs in the future? Can you foresee an opportunity for partnerships to continue to develop not only with the provincial governments but also with universities and colleges, in collaboration with pre-existing research centres within the department? Is there a push in that direction? Are there opportunities to see those projects continue to expand and grow?

[Pierre Corriveau]

Mr. Chair, I've been at Beaverlodge. I had a tour of the entire facility, inside and out. I spent a whole day there. It's an amazing facility.

Obviously I don't have a crystal ball showing the future and I'm not a policy-maker, but I want to see a trend in this department. Partnership is the way to go. There is nothing we can do on our own. Those types of infrastructure cost too much. I can use lots of examples. UPEI is one. If you look at the history of the department, we are on campus at Laval University, in Winnipeg, and in Saskatoon.

That facility is supported by not only the Department of Agriculture. We had the land and we had some facilities, but that is also a partnership within the federal government. We continue to partner with organizations like WED, ACOA, and the regions of Quebec DEV.

Every time there is an opportunity in the sector, we'll link with the department and also with the private sector which, in this case, would mean the community college in Grande Prairie. We've always been very supportive, and I think the trend across this department of research infrastructure is to build partnerships.

Somebody mentioned Guelph. If you go into our facility, one part is provincial; one part is the university; and one part is federal, but you wouldn't notice that if you came through the front doors. I think that's the theme in this department. More and more you'll see those kinds of partnerships, whether in Beaverlodge or anywhere else in the country. I think, however, it is obvious that with the price of technology there definitely need to be partnerships with provinces, other federal departments, colleges, and the private sector.

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

On behalf of Peace Country beekeepers as well as beekeepers across the country, I want to thank the department for its proactive partnership in this.

There is a technical aspect to this in terms of expanding the current facility. I believe Ag Canada has a policy that any structure not owned by it but placed on its land needs to be considered a temporary building.

I think right now discussions regarding when a facility is no longer considered temporary are getting locked down. To actually address the growing demand on the facility, it would probably require an expansion to double or quadruple its size, so we're sensing that some technical aspects might need to be worked out. We look to you and encourage you to maybe find a technical solution.