Evidence of meeting #15 for Agriculture and Agri-Food in the 43rd Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was local.

A recording is available from Parliament.

On the agenda

MPs speaking

Also speaking

Richard Mongeau  Acting Executive Director, Cheval Québec, Equestrian Canada
Kristy House  Manager, Welfare and Industry, Equestrian Canada
Marilyn Braun-Pollon  Vice-President, Western Canada and Agri-Business, Canadian Federation of Independent Business
Clerk of the Committee  Mr. Marc-Olivier Girard
Andrew Bishop  Owner, Noggins Corner Farm II Ltd
Catherine St-Georges  Consultant, Marketing, Union des producteurs agricoles
Catherine Lefebvre  Vice-President, Maraîchers L&L Inc.
Ted Hutten  Owner, Hutten Family Farm
Corentin Bialais  Committee Researcher

2:05 p.m.

Liberal

The Chair Liberal Pat Finnigan

I call this meeting to order. Before we move on, I just want to say that we'll save some time at the end. Mr. Barlow has a motion, so we agreed that he would move it at the end. Also, we have a little bit of business to go through. I'll try to rush through my opening notes so we can give as much time to the witnesses as we can.

Welcome, Mr. MacGregor. I'm glad you were able to join us. As an MP, you never know what's going to happen, so I'm glad to see you here today.

2:05 p.m.

NDP

Alistair MacGregor NDP Cowichan—Malahat—Langford, BC

I have a firm handle on my keys today.

2:05 p.m.

Liberal

The Chair Liberal Pat Finnigan

There you go.

I'd like to outline a few rules to follow. Interpretation in this video conference will work very much as it does in a regular committee meeting. You have the choice at the bottom of your screen of "Floor”, “English” or “French”. When you intervene, please make sure that your language channel is set to the language you intend to speak, not the floor. This is very important. It will reduce the number of times we need to stop because the interpretation is inaudible for our participants. It will maximize the time we spend exchanging with each other.

Usually as a test I ask all the witnesses to acknowledge by nodding if they understand. I see a few nods. I think we're good.

Also, please wait until I recognize you by name before speaking. When you are ready to speak, click on the microphone icon to activate your mike.

Please make sure your microphone is on mute when you're not speaking.

We are now ready to get going.

I would like to welcome the witnesses participating in today's meeting.

Today, for the first panel, we have, from Noggins Corner Farm II Limited, Mr. Andrew Bishop, owner; from Equestrian Canada, Richard Mongeau, acting executive director, Cheval Québec; and Kristy House, manager, welfare and industry; and also, from the Canadian Federation of Independent Business, Marilyn Braun-Pollon, vice-president, western Canada and agribusiness.

Welcome to all of you. We shall start with your seven-minute opening statements.

If Noggins Corner Farm is ready, you have the floor for seven minutes.

June 5th, 2020 / 2:05 p.m.

Liberal

Kody Blois Liberal Kings—Hants, NS

Mr. Chair, I don't think Andrew Bishop has arrived yet, so the clerk has suggested that perhaps we can move him to third.

2:05 p.m.

Liberal

The Chair Liberal Pat Finnigan

Absolutely. We'll ask Equestrian Canada, Richard Mongeau to start.

Mr. Mongeau, you may go ahead for seven minutes.

2:05 p.m.

Richard Mongeau Acting Executive Director, Cheval Québec, Equestrian Canada

I'd like my colleague Kristy House to start and then we will change roles during the presentation.

2:05 p.m.

Liberal

The Chair Liberal Pat Finnigan

That's fine. Please go ahead.

2:05 p.m.

Kristy House Manager, Welfare and Industry, Equestrian Canada

Thank you, Mr. Chair, and thank you to the committee members for the opportunity today. My name is Kristy House and I'm the manager of welfare and industry at Equestrian Canada. With me, as you know, is Richard Mongeau, executive director of Cheval Québec.

Today we are here representing tens of thousands of working horses and thousands of equine businesses currently facing severe animal welfare issues and economic devastation due to the impact of COVID-19.

I'll pass it to Richard to make some opening remarks on the impacts to the industry.

2:05 p.m.

Acting Executive Director, Cheval Québec, Equestrian Canada

Richard Mongeau

Thank you, Kristy.

During the pandemic, agricultural sectors have continued operations as they were deemed essential. However, the majority of equine operations do not fall under the federal definition of farms and have had no choice but to suspend all business activities.

Since business closures were mandated in March, equine farms have continued to bear the costs to care for their horses with no money coming in. Whether these horses are working or not, horse care costs remain the same and an increasing number of equine operators are facing unimaginable hardships. Without some immediate relief, many more animals will be destroyed and multi-generational rural Canadian businesses will close their doors for good.

Equine businesses are diverse and located in every region of this country. More than 26,000 equine businesses use farmland, have purpose-built structures and have active equines to generate revenue. These businesses support regional economic development, including sport and competition, youth and adult development and wellness, therapeutic use, horse racing and agri-tourism. Canadian equine operations purchase between $910 million and $1.3 billion in hay, grain and bedding each year. They spend approximately $350 million annually on veterinary and farrier services.

We should be reminded that equine businesses follow virtually the same government regulations as livestock farmers. Whether it be with respect to animal welfare, for example, or transportation regulations, they are all part of the agricultural equipment economy of this country.

The equine businesses in jeopardy are significant economic contributors to the Canadian agriculture sector and long-standing fixtures in rural Canada.

2:05 p.m.

Manager, Welfare and Industry, Equestrian Canada

Kristy House

Since early March, Equestrian Canada, our national affiliates and provincial counterparts have been lobbying the federal government for help. We've been repeatedly pushed between ministries of agriculture and heritage, with still no confirmation of where we fit. The ministry of heritage and sport representatives have made it clear that on-farm businesses do not fall within their jurisdiction, and we understand that.

Agriculture and Agri-Food Canada has spent the past weeks engaging with us in trying to find solutions, with no tangible outcomes as yet. We have demonstrated to the representatives within AAFC that our sector cannot meet eligibility requirements and prerequisites for AAFC and agriculture-specific programs or relief dollars. This is because very few equine operations can demonstrate farm income on their income taxes as per the definitions within Canada's Income Tax Act.

Currently there is not one emergency relief program that addresses the costs of maintaining the care and welfare of working horses. These animals have a unique set of skills that take years to develop, and they contribute to a business for many years after.

We know, based on a survey we released at the end of March, that 60% of our businesses were out of resources to maintain the horses' care and welfare a month ago and even more are affected now. Owners are now being forced to cull and euthanize their perfectly healthy and capable working horses. This is not a worst-case scenario; it is already happening. To make things worse, this is the time of year when these businesses earn the bulk of their revenue which covers them for the rest of the year. If this issue is not immediately addressed, owners will continue to offload their horses because they cannot afford to care for them and they will not be able to reopen their businesses again.

We've requested from AAFC a modest amount that would have a paramount impact on the sector and the animals. This ask is based on the projected number of equine farms in Canada that are at risk right now and the median cost of care for these working horses. We estimate the cost to support at-risk working horses in Canada for one month to be $17.2 million. If AAFC were to provide a fund that covered 75%, we project the total cost to AAFC to be $12.9 million per month. This coverage would be a huge help in offsetting the challenges these farms are facing right now.

Our sector has come together to support each other through this crisis, including multiple fundraisers, fostering and adoption programs and supply sharing. We've also developed sector-specific guidelines to prepare for reopening. Some provinces and regions are allowing equine businesses to resume some activity, but this comes with additional costs to meet new biosecurity protocols and the new reality of COVID-19. We're continually monitoring what current programs are and are not working for our sector and provide this feedback to government regularly.

I would like to thank the government for what it has done to help Canadians through this challenging time. I would also like to thank the members of this committee who have met previously with Equestrian Canada and our members and expressed their sympathy and a desire to help us.

We are aware that COVID-19 has been devastating for many Canadian sectors, but our horses and our livelihoods are at stake.

2:10 p.m.

Acting Executive Director, Cheval Québec, Equestrian Canada

Richard Mongeau

Please remember that the horse has been an important contributor to the building of our economy on every level, in agriculture, transportation, security and, nowadays, as a very successful representative in sport, all for our country. Horses have always served Canada. Now is the time for Canada to be there for them and their caretakers.

Thank you.

2:10 p.m.

Liberal

The Chair Liberal Pat Finnigan

Thank you, Mr. Mongeau and Ms. Kristy House.

Now we will go to the Canadian Federation of Independent Business for up to seven minutes.

2:10 p.m.

Marilyn Braun-Pollon Vice-President, Western Canada and Agri-Business, Canadian Federation of Independent Business

Thank you, Chair, co-chair and members of the Standing Committee on Agriculture and Agri-Food, for the invitation and the opportunity for CFIB to share our members' views today.

Slide 2 shows you that CFIB is a non-partisan organization with 110,000 small and medium-sized firms, of which 7,200 are agribusiness members, and a majority of those are primary producers. We take direction from our members through surveys on an ongoing basis. What our survey shows is that the COVID pandemic has had a devastating impact on Canada's ag sector.

Slide 3 shows our monthly business barometer. An index range of 65 to 70 shows an economy where a sector is growing at its potential. As you can see, the ag sector's index trails the average by about nine points.

Since the announcement of the $252 million in emergency funding on May 5, we continue to hear heartbreaking stories from our agribusiness members in many sectors and across the country about the challenges they're facing as a result of the pandemic.

A lot of our economic activity has been frozen during the pandemic response. Farmers aren't able to freeze their operations; they can't turn a light switch on and off. Their animals still need to be fed and cared for, and they have tight windows in which to plant, harvest and get their products to market. Unfortunately, they've also had to make many tough decisions, such as having to plow down crops, destroy produce or contemplate putting down their livestock due to reduced capacity at processing facilities or changes in the market demand.

Since the beginning of the pandemic, CFIB has been serving our members on a weekly basis, with about 12,000 responses by each weekend from across every sector. We have presented those findings to the federal government and to provincial governments across the country to assist in decision-making.

What we have found is that agriculture is not immune to the devastating impacts of this pandemic. As shown on slide 4, almost 70% are worried about the economic repercussions on the provincial, national and global economies. These are extremely stressful and uncertain times for the ag sector, as the supply chain problems have cascaded right down through the sector all the way to the primary producer. The chart also shows that almost 40% of farmers are worried about debt, business cash flow and overwhelming stress. We know that farmers are already highly leveraged. A recent StatsCan indication is that, collectively, nationwide farm debt rose by about 8.7% in 2019.

Slide 5 shows that temporary foreign workers and labour shortages continue to be issues for farmers. We know that prior to the pandemic 60,000 temporary foreign workers came to work in Canada's agriculture, food and fish processing industries every year. Despite this, 15,000 job vacancies were reported in the ag sector. This committee is well aware of the challenges there.

A long-term strategy is needed to address those labour shortages in the future. However, we do recognize that there are initiatives, such as the agri-food pilot, which is providing a pathway to residency, and the $1,500 per temporary foreign worker to help with isolation requirements. As shown on our chart, though, 84% of those who hire temporary foreign workers say that it's difficult to find Canadian workers with the skills needed to work in their agribusiness.

Slide 6 really does show the impact of the carbon tax. We continue to hear about the impact of the federal carbon tax. I should say that in addition to the pandemic, the grain sector is really trying to recover from a difficult harvest, transportation issues and trade and market access issues. We know that just a couple of weeks ago some farmers were still trying to harvest last year's crop and were incurring costly carbon taxes to dry their grain.

Slide 7 really shows the impact. We did a survey which showed the average impact to the farmers' bottom line is about $14,000 for the carbon tax in the last year. What we also need to do is recognize that farmers have already taken many steps to protect the environment. One practical way to help the farmers' bottom line is to exempt natural gas, propane, fertilizer and shipping costs.

With slide 8, I want to show you that we did survey our members following the announcement a couple of weeks ago. We understand the enormous challenges in designing support programs and getting them out quickly, and we appreciate the government's willingness to approve emergency programs, such as CEBA and the wage subsidy program.

Unfortunately, we're finding that even though the funding is a good step, these survey results show that only 29% of farmers say that it will be helpful. In public comments, the federal government has said that these measures are an initial investment, and if they do need to, they will do more.

The time to do more is now. One of our members said it well: “Investing in our food industry has never been more important than now. We cannot rely on other countries to feed us.” I did send to the committee a few weeks ago a letter and a report that provided hundreds of comments from farmers about the challenges they're facing and the measures the government needs to look at to address those challenges.

Finally, it's very clear from the hundreds of comments from farmers across the country that the agriculture sector is not immune from the many short-term business challenges and long-lasting effects of COVID-19. The livestock sector alone has seen mounting costs and losses in the past several weeks. The Canadian Cattlemen's Association estimates that the industry will lose about half a billion dollars by the end of June. The Canadian Pork Council also gives an estimate of losses north of $600 million.

We've outlined some very specific recommendations. We do need additional emergency funding. These are unprecedented times, and certainly we need to look at protecting the Canadian food supply. We need to improve our business risk management programs to make them timely, responsive, effective and transparent. Restoring AgriStability's reference margin to 85% would be a start.

We have a recommendation with respect to reducing red tape in interprovincial trade, and a common-sense recommendation on the carbon tax. We also cannot—

2:20 p.m.

Liberal

The Chair Liberal Pat Finnigan

Thank you, Ms. Braun-Pollon. Unfortunately, we are out of time.

2:20 p.m.

Vice-President, Western Canada and Agri-Business, Canadian Federation of Independent Business

Marilyn Braun-Pollon

Okay. Thank you.

2:20 p.m.

Liberal

The Chair Liberal Pat Finnigan

Has Noggins Corner Farm been able to connect? Do we know? I don't think they have.

2:20 p.m.

Liberal

Kody Blois Liberal Kings—Hants, NS

What's the status, Mr. Clerk? Have you had any update from IT?

2:20 p.m.

The Clerk of the Committee Mr. Marc-Olivier Girard

They are currently looking into trying to get the testimony through the phone, but even then it's far from a secure option right now. From what I understand, even if it's a cellphone, the sound could still be very bad, which would be disruptive to the proceedings.

That's the status of it right now.

2:20 p.m.

Liberal

Kody Blois Liberal Kings—Hants, NS

From a security perspective, there wouldn't be a problem, would there? This is a public meeting.

2:20 p.m.

The Clerk

There's no security issue. I'm talking about sound quality issues.

2:20 p.m.

Liberal

The Chair Liberal Pat Finnigan

Let's start with the question round. If they should come in, we'll let them do their statement, if we can do it before the end. We'll see how the rest of the timing goes.

We'll start the question round with six minutes to the Conservatives.

Go ahead, Mr. Barlow.

2:20 p.m.

Conservative

John Barlow Conservative Foothills, AB

Thank you very much, Mr. Chair.

I appreciate the testimony of all our witnesses here today.

Ms. House, I would like to start with you. I appreciated your impassioned presentation about the crisis within the equine industry. It wasn't in your testimony, but from some of the letters you sent, the equine industry is asking for an exemption to section 30, I believe, of the Income Tax Act. Is that correct? Can you explain how that would benefit the equine industry?

2:20 p.m.

Manager, Welfare and Industry, Equestrian Canada

Kristy House

Yes, absolutely.

Within the farming portion of the Income Tax Act and how farming income is defined, the description is limited to maintaining racehorses. It specifically exempts most other activities for on-farm equine businesses. It specifically mentions certain disciplines versus another and riding schools. Because of that, it's very [Technical difficulty—Editor] in terms of even demonstrating farm income to access farm registration numbers. You have to be able to demonstrate a minimum number on your income tax return. Any facility that's not breeding or maintaining racehorses cannot demonstrate that, and therefore can't access certain farm-specific programs. Farm registration numbers, and demonstrating a minimum number with regard to farm income, are prerequisites to pretty much all agriculture and AAFC-specific programs. That includes the business risk management programs and even accessing on-farm cost-share programs through the CAP program.

We have been looking to address this issue. It's a long-standing issue. From our conversations with Agriculture and Agri-Food Canada over the coming weeks, even if they were to adapt some of the pre-existing AAFC programs, we know through our survey that only 35% of our members would be able to access it because of the access to farm registration numbers.

2:20 p.m.

Conservative

John Barlow Conservative Foothills, AB

Great. Thanks.

Have you had a response at all from, say, Finance, on willingness to look at this as a potential tool to resolve some of the issues you've been facing? Have you had a response from Finance on this at all?

2:20 p.m.

Manager, Welfare and Industry, Equestrian Canada

Kristy House

We have not had a response from Finance on this at all.

We have had expression from the representatives we've been working with in Madam Bibeau's office to support us on that endeavour. We know it's not going to be an overnight endeavour, but we are looking to continue to move that conversation forward. It would be both a short-term help and a long-term help.