Agriculture Committee on May 28th, 2018

[The Chair, Liberal, Pat Finnigan]

Welcome, everyone. We will now commence our study of the main estimates for 2018-19 with the Honourable Lawrence MacAulay, Minister of Agriculture and Agri-Food.

Thank you so much, Minister MacAulay, for appearing in front of our committee today. We're certainly delighted to have you with us.

On Monday, April 16, 2018, five votes under your ministry were referred to the committee, namely, vote 1 under the Canadian Dairy Commission, vote 1 under the Canadian Grain Commission, and votes 1, 5, and 10 under the Department of Agriculture and Agri-Food.

Also, we have the pleasure of having with us, from the Department of Agriculture and Agri-Food, Mr. Chris Forbes. Welcome to our committee, Mr. Forbes. As well, we have Monsieur Pierre Corriveau, assistant deputy minister, corporate management branch.

We can start the discussion. Go ahead for up to 10 minutes, Mr. Minister.

[Lawrence MacAulay, Liberal, Minister of Agriculture and Agri-Food]

Thank you very much, Chair.

Good afternoon, everyone.

I'm pleased to be back before the committee. Of course, I have my wingers here, which will be very helpful for information.

I want to thank the committee for its outstanding support for the Canadian agriculture and agri-food sector. The members of the committee are working together and across party lines to address some pressing priorities for Canadian farmers, and I want to thank the committee for its work on climate change issues in agriculture, advancements of technology and research in the agricultural industry to support Canadian exports, and the grain transportation backlog.

In particular, I want to thank the committee for its upcoming study on the mental health challenges faced by our farmers. This is a very serious issue, both on and off the farm. Mental health is a high priority for our government. My deputy minister has made it a high priority for the department, and our colleague, Mr. Jean-Claude Poissant, has been a champion for mental health on the farm, both in his riding and across the country.

My message to you today is that our government will continue to work with you to grow the Canadian agriculture and agri-food sector. I would like to touch on three areas: the main estimates, progress and priorities, and challenges and opportunities for the sector.

As you can see, the main estimates show a total budget of over $2.5 billion for 2018-19. That represents an increase of $260 million compared with last year. The two main reasons for this increase are the forecast increase of $150 million in business risk management spending based on market conditions, and $96 million for new programs to help dairy producers and processors stay on the cutting edge.

Across Canada we're rolling out our investments under the $350-million program for dairy processors and producers. These dollars are helping the industry boost production and efficiency through investments in equipment and systems for milking robots and processing technologies.

The main estimates also reflect great work done with the Canadian agricultural partnership. That includes grants and contributions of $105 million for the coming year for federal programs supporting research and innovation, market development, public trust, business risk, and diversity. The estimates also include over $200 million in cost-shared programs with the provinces and territories. It all adds up to a major investment in the agriculture and agri-food industry.

We've reached a couple of milestones since we last met. On May 23, Bill C-49 received royal assent. This is tremendous news for the grain industry. We proposed key amendments that responded to the needs of the industry. Demand for our great Canadian wheat and interest in grains continue to grow. The legislation will help to ensure our farmers can meet these demands with an efficient and reliable rail service. We want a world-class transportation system, not just for this year or next year but for many years down the road.

April 1 marked the launch of the new $3-billion, five-year Canadian agricultural partnership. The industry was very clear on the need for a smooth transition from the previous framework, and we were able to do that. We have completed almost all the bilateral agreements with the provinces and territories, covering shared funding of $2 billion over five years. The Canadian agricultural partnership also includes $1 billion over five years for federal activities and programs.

In February, as I mentioned earlier, we launched six federal programs to help the sector reach new heights. We also continue to support the great work of our agricultural scientists across the country. Agricultural and agri-food scientists continue to make groundbreaking discoveries that help our farmers increase production, cut costs, and boost the bottom line.

Over the next five years, the Canadian agricultural partnership will help Canadian farmers and processors grow their markets, innovate, and protect our environment. It will also help farmers manage their business risk while strengthening public trust in their products. The partnership will help bring more young farmers, women, and indigenous people into leadership roles in the sector.

Investments over the past three budgets are building on a strong agricultural agenda.

Agri-food has been selected as one of the five groups to receive funding under the $950-million supercluster initiative, budgeted in 2017. Protein Industries Canada will make our country a global leader in sustainable plant protein. It will help to open new markets for our pulse growers.

Budget 2018 builds on this work with the single largest investment in fundamental research in Canadian history. That's an investment of nearly $4 billion in Canada's research system to support the next generation of researchers, while upgrading the tools they need to do the job.

We're also investing $75 million to grow our trade in China and across key Asian markets for Canadian farmers. Trade continues to be a strong focus for our government.

We're aiming to increase our agricultural exports to $75 billion by 2025. On March 8, Canada signed the CPTPP. For the agricultural sector, that means tariffs will be eliminated on Canadian meat, grains, and horticultural and processed foods. The access could mean $1 billion per year of new sales for beef and pork producers.

When you combine these benefits with the benefits under our trade agreement with the EU and other trade agreements, Canadian farmers will have a competitive edge in about two-thirds of the global economy. That's good news because it helps us diversify our trade.

Asia is a new frontier for our farmers and food processors. In March, I led a trade mission to Japan and Korea, and earlier this month I was in China, which has a growing middle-class population that's looking for the food that our farmers and ranchers can produce. The mission was a great opportunity to showcase Canada's high-quality food and seafood, and to strengthen our ties.

We're also working with our partners in North America to update, modernize, and improve NAFTA. Right across North America, farmers are united in their support of NAFTA. On Thursday, I will be in Dallas to address the World Meat Congress, and I will deliver Canada's message for a strong, modern, and progressive NAFTA.

The bottom line is that Canada's farmers are ready to feed the world, and the Government of Canada stands ready to support them in these efforts. Of course, challenges remain and always will. We're working to resolve the situation in India affecting our pulse exports.

There will always be challenges in agriculture, whether it's tough competition on the global stage, protectionism, or changing consumer demands.

When I look ahead at the prospects for our great industry, I see a great promise. Canada's agriculture and agri-food industry continues to grow. Last year, the industry generated $111 billion of our GDP, according to our recent financial outlook. The average farm net worth will hit a new record in 2018, and Canada's net farm income will be the second highest on record. Last year, our agriculture food and seafood exports hit an all-time record of over $64 billion, moving us closer to that $75 billion target.

Demand for our food continues to grow, and Canada has a competitive edge to meet that demand. We are blessed with an abundance of farmland and water, the best farmers and ranchers in the world, and a government that's reinvesting in agriculture.

The time is right for the Canadian agriculture and food industry to increase its presence on the global stage. Through smart investment and continued collaboration, I'm confident that we can meet the challenges that lie ahead.

I want to thank you again for your attention.

Thank you, everyone.

[The Chair, Liberal, Pat Finnigan]

Thank you so much, Mr. Minister, for updating us on the agricultural industry, both here and abroad.

Now we'll start our round of questions with Mr. Berthold for six minutes.

[Luc Berthold, Conservative, Mégantic—L'Érable, QC]

Thank you very much, Mr. Chair.

Mr. Minister, thank you for joining us today. We miss you. We would like to see you more often in committee. You are welcome to come any time you want to meet with us. At any rate, I am pleased to receive you here in committee, because your minister colleagues won't be rising to answer the questions, the way they do in the House. I hope you will seize every opportunity to answer our questions today.

In a request to information that I submitted to the government, I asked whether Agriculture and Agri-Food Canada had carried out studies on the impact of the new food guide on the various sectors of the agriculture industry. To my great surprise, I was told that the department had conducted no such studies.

Why did you transfer the responsibility of protecting farmers to the Minister of Health?

[Lawrence MacAulay, Liberal, Cardigan, PE]

Did I hear you correctly? You asked me why I'm abdicating my responsibilities to the agricultural—

[Luc Berthold, Conservative, Mégantic—L'Érable, QC]

Yes, about the food guide.

[Lawrence MacAulay, Liberal, Cardigan, PE]

Without question, the food guide has been established. It's under the Minister of Health, as you're fully aware.

[Luc Berthold, Conservative, Mégantic—L'Érable, QC]

But why?

I know how the food guide works. Instead, I want to know why your department has not done any studies on the impact the new food guide may have on Canadian industries and producers.

[Lawrence MacAulay, Liberal, Cardigan, PE]

My deputy can certainly answer anything about what the department would do, but of course the food guide itself goes out for consultation. Of course, consultations will come back, and we want to—

[Luc Berthold, Conservative, Mégantic—L'Érable, QC]

So your department has not done a study.

Mr. Minister, do you believe that yogurt, cheese and fruit juice are harmful to our health?

[Lawrence MacAulay, Liberal, Cardigan, PE]

This is under discussion. What will or will not be in the food guide has not been fully decided.

[Luc Berthold, Conservative, Mégantic—L'Érable, QC]

It's not about the food guide. It's about the front-of-package labelling.

It's about labelling. Yogurt, fruit juice and cheese will be labelled as products containing too much fat and too much salt. Do you believe that those products are dangerous to the health of Canadians?

[Lawrence MacAulay, Liberal, Cardigan, PE]

As you know with the consultations, we have a lot of input from the sector. It will be evaluated, and the food guide will be put together. I'm sure you want people to understand what is in the product, not to criticize the product. You're not against labelling on food products, I don't believe.

[Luc Berthold, Conservative, Mégantic—L'Érable, QC]

So you agree that those products should be labelled as products that Canadians should be wary of. Is that it?

You are agreed that those products are not dangerous, but people must be warned against them.

[Lawrence MacAulay, Liberal, Cardigan, PE]

No. I would agree it's only right that Canadians are informed of what's in the product. I am not opposed to that.

[Luc Berthold, Conservative, Mégantic—L'Érable, QC]

So we understand that you agree with the position of the Department of Health.

Mr. Minister, on a number of occasions, you said that you were defending the supply management system.

[Lawrence MacAulay, Liberal, Cardigan, PE]

With the Department of Health's decision on what?

[Luc Berthold, Conservative, Mégantic—L'Érable, QC]

You've often said you agree to defend supply management.

[Lawrence MacAulay, Liberal, Cardigan, PE]

Of course, we—

[Luc Berthold, Conservative, Mégantic—L'Érable, QC]

The question is not that.

[Lawrence MacAulay, Liberal, Cardigan, PE]

No, but you've made a statement. Consultation processes are taking place. We have the information. The information will be evaluated. There will be discussions among ministers, and then the decision will be made as to what takes place. It's not that I agree or disagree. I'm a part of the government but I'm not all of the government. What takes place with labelling will be decided by cabinet.

[Luc Berthold, Conservative, Mégantic—L'Érable, QC]

Will you defend the cheese producers, the yogourt producers, and the juice producers in cabinet?

[Lawrence MacAulay, Liberal, Cardigan, PE]

I always defend farmers anywhere I go. I promote agriculture and the agri-food sector, and I will continue to do so.

[Luc Berthold, Conservative, Mégantic—L'Érable, QC]

We'll see the results.

Mr. Minister, on a number of occasions, you said that you were defending the supply management system. Are you formally promising today that Canada will not make any new concessions to the U.S. in the North American Free Trade Agreement (NAFTA) negotiations?

[Lawrence MacAulay, Liberal, Cardigan, PE]

I appreciate your question on supply management, and I have responded to the supply management question many times in the House and in public. We're the party that fought to implement it, and we're the government that will defend it.

As you know, there are negotiations on NAFTA to improve the total package. I don't believe it would be fair for me to publicly indicate what I would do. I have fully committed to supporting supply management from the day I became minister and long before, because I milk cows myself and I know the importance of the supply management system.