Agriculture Committee on June 5th, 2020

[Martin Champoux, Bloc, Drummond, QC]

Thank you, Mr. Mongeau.

[The Chair, Liberal, Pat Finnigan]

Thank you, Mr. Champoux and Mr. Mongeau.

Mr. MacGregor, it is now your turn. You have six minutes.

[Alistair MacGregor, NDP, Cowichan—Malahat—Langford, BC]

Thank you very much, Chair.

Thank you to our witnesses for contributing to our study on how COVID-19 has impacted agriculture and agri-food. We really appreciate your time today.

I'll start with the Canadian Federation of Independent Business. I note the section you gave in your presentation regarding the carbon tax. This has certainly been a topic that has occupied the committee's attention for a couple of years. However, I'm interested in getting beyond the carbon tax conversation. I'd like to hear some of your feedback. Have any of your members, especially in agriculture and agri-food, given you any feedback in particular about some of the innovative things that farmers are doing to reduce greenhouse gas emissions from their work?

As we move into the recovery phase, maybe you can illustrate some of them, and ways in which the federal government can encourage those new innovations without getting bogged down in the conversation we're having about the carbon tax.

[Marilyn Braun-Pollon]

As you say, the important part is recognizing what farmers are already doing. They are great stewards of the land.

We did a report back in February and sent it to the minister about not only the impact but what farmers are doing already and how government could encourage them to do more.

I do think when we're on a competitive world stage and our competitors are not looking at these types of increases, it does make us less competitive. When you look at the thousands of dollars, on average $14,000 that farmers paid in carbon tax in the last year, certainly there are better ways to take care of the environment than a tax that's going to continue to increase every year.

[Alistair MacGregor, NDP, Cowichan—Malahat—Langford, BC]

Sure. In my home province of British Columbia, we're exempt from the federal pricing scheme because we have our own system. Propane is exempt from the motor fuel tax but not yet the carbon tax provincially. That's certainly something that can be looked at. I think if it's quite demonstrable that propane or liquefied natural gas is being used exclusively for farming operations, then it's a worthwhile thing to look at, especially as we're helping farmers through this transition period.

I want to move on. You talked a bit about the federal benefits that have been announced, but I want to drill down a little more on some of the financial help that's been put out there to help businesses obtain personal protective equipment and to reorganize their workspaces, as well as the amount of funding that's been given to make temporary foreign workers comply with the Quarantine Act, and so on.

Can you give us some feedback on how those specific financial measures are or are not working and whether there's room for improvement, i.e., whether more money is needed for those specific things?

[Marilyn Braun-Pollon]

Certainly, in my comments I did talk about the enormous challenges to designing support programs and getting them out quickly, so we have appreciated the government's willingness to change and improve certain programs like CEBA and the wage subsidy.

To your point, with the temporary foreign worker issue and the ongoing labour shortages, shortly after that announcement was made with respect to the $1,500 for helping them with isolation requirements, a strong majority of our members, 73%, supported that.

I think the other part, though, is that it's interesting that 84% of our members say it's going to be difficult to find Canadians with the skills needed to work in their agricultural business. These are skilled workers, when you look at planting and harvesting quickly. If the weather is against you, you have to get your product in quickly and efficiently. We have recognized the hard work to ensure that those temporary foreign workers can come during the critical planting season and can help farmers offset the cost of quarantined workers.

The three-year agri-food pilot is really innovative and is going to fill ongoing labour needs, but what I like most about it is that it's going to provide a pathway to permanent residency, which for a number of years we have called and advocated for. I think the work done there has been very good, but let's not forget that we have thousands of jobs going vacant. We will have many in the horticulture and vegetable sectors that are going to need workers sooner rather than later, and we still don't have all that we need.

Thank you.

[Alistair MacGregor, NDP, Cowichan—Malahat—Langford, BC]

I'll just get one last question in. In your final slide, on your list of recommendations, on the theme of how we're going to get the recovery up and going, you mention the interprovincial trade barriers. Can you maybe expand on that?

It's certainly a topic that's come up before Parliament. It's certainly something the federal government can act upon, so I'd like to hear you expand a bit more on that so our committee can be informed to make the appropriate recommendations.

[Marilyn Braun-Pollon]

We talked a lot about unnecessary red tape. We understand there are regulations to protect health and safety and the environment, but there are unnecessary red tape and barriers, specifically on interprovincial trade with agri-food products. There's duplication in federal and provincial regulations. If meat is safe enough to eat in one province, it should be safe enough to transport to another province. I know there have been some temporary measures there—

[The Chair, Liberal, Pat Finnigan]

Thank you, Ms. Braun-Pollon. Unfortunately, that's all the time we have for you and for the whole panel.

We're done with this first hour. It's never long enough. There has been a very interesting conversation and testimony, and I really appreciate hearing from all of you.

From Noggins Corner Farm, I'm glad you could make it, Mr. Bishop.

From Equestrian Canada, Richard Mongeau and Kristy House, I'm really happy to have you on board.

Also, from the Canadian Federation of Independent Business, Ms. Braun-Pollon, thank you so much.

We will take five minutes to change the set and we'll be back, so set your clocks.

We will now suspend the meeting. Thank you.

[The Chair, Liberal, Pat Finnigan]

The meeting is resumed.

We will now call the second panel.

Joining us are Catherine St-Georges, marketing consultant with the Union des producteurs agricoles, as well as Catherine Lefebvre, vice-president of Maraîchers L&L.

We also have from Hutten Family Farm, Ted Hutten, the owner.

Ms. St-Georges, you have seven minutes for your opening statement. Please go ahead.

[Catherine St-Georges, Consultant, Marketing, Union des producteurs agricoles]

Good afternoon.

My name is Catherine St-Georges, and I am a marketing consultant for the Union des producteurs agricoles, or UPA. I am also the secretary for the Table pour le développement des marchés de proximité, a local market development issue table established by the UPA in June 2019 and chaired by Mr. Groleau, the UPA's president.

The issue table is a forum that brings together some 30 organizations to discuss developing local markets. In my speaking notes, which were provided to you, I refer to information from the 2016 census. That was the first time the questionnaire included a question about direct marketing.

It's positive to see a question like that on the census form, but so far, the data are very preliminary. We are hoping for more detailed data on local markets in the next few years.

According to respondents, 19% of farms reported engaging in direct marketing. That doesn't mean that they only sell products directly to consumers; it simply means that they have. For instance, it might be a dairy farmer who has a sugar bush and sells maple syrup directly to consumers. Direct marketing encompasses farm stands, farmer's baskets and farmers' markets.

We don't have any data on how those sales impact farm income, jobs or acreage, but we do know that these farms need more temporary and seasonal workers to support local markets. What's more, these farms usually devote more hours to the business, meaning, that the owner spends more time working in the business than a traditional business owner. In many cases, the owner has a job outside the farm.

A total of 57% of businesses that reported using direct marketing had less than $50,000 in sales. Generally speaking, they are small farms.

I should point out that all of these figures relate to Quebec farms.

Quebec's ministry of agriculture, fisheries and food is examining the sales of all the traditional channels, including grocery stores, restaurants and hotels. By extracting the remaining portion, the ministry arrived at the sales of non-traditional channels. It estimates that, for 2018, some $800 million in sales is attributable to local marketing.

In Quebec, local marketing brings the farmer and consumer closer together. That can mean geographically, so, in the same administrative region—the distance between the farmer and consumer can't exceed 150 kilometres—or in terms of the middleman. The idea is to reduce the number of middlemen between the farmer and the consumer.

We set up the local market development issue table with our partners during the COVID-19 pandemic to help us better understand the resulting issues. In the short term, insecurity and the loss of markets and immediate income were the biggest concerns, as you can well imagine. For example, ornamental horticulture wasn't considered an essential service since it wasn't part of the food service sector. I'm referring to the sale of flowers and potted plants, which, very often, are sold directly to consumers. There was definitely a feeling of insecurity.

Quebec gave U-pick businesses the go-ahead to resume on May 28, which is late in the season. A wave of insecurity swept business owners, because U-pick accounts for a significant share of their sales. What's more, they don't know whether consumers will actually show up to pick their own produce. That's one of the challenges.

The closure of bars, restaurants and similar establishments resulted in a drop in income for farms involved in those markets. Certain municipalities opted not to open farmers' markets, which are the main source of sales income for some farmers. New farms, for instance, often rely on farmers' markets. The fact that markets aren't open on Sundays has also had an impact, given that consumers tend to go there on the weekend, which is when they would interact with the farmer and build those ties. If consumers can't go to Sunday farmers' markets, it will clearly affect sales.

The entire agri-tourism sector is stalled. Businesses aren't allowed to let consumers sample their products, so sales are far from guaranteed. On top of that, special events and festivals—normally a significant revenue stream for these kinds of businesses—aren't being held.

Obviously, like traditional business owners, farmers have access to labour. Workers are recruited through programs, so worker availability and the arrival of foreign workers also factor into the mix.

As I said earlier, these businesses hire a lot of workers, so if they can't rely on foreign workers for help, it affects activities on the farm. Financially, as far as cash positions go, supplier payments have been deferred. With fewer sales, income is down. This has created some financial insecurity. If no changes are made, some business owners have told us that they won't be able to keep things going for many more months.

Nevertheless, the situation does provide some opportunities, as you can see in my opening statement.

On the whole, consumers are heeding the call to buy local. We're sensing enthusiasm for buying local products, so it's important to capitalize on that. Agri-tourism and culinary tourism also offer potential. Since Canadians will probably be spending more time in Canada this year, there is an opportunity to develop those markets and take advantage of those potential visitors. Now that people have discovered online shopping, that's another promising area to keep in mind. All of these prospects can help farm businesses sell their products.

Now, I will turn to our recommendations. A program specifically designed to help build local markets would certainly be opportune. In my speaking notes, I've listed some examples for building online sales. There are businesses that have been able to do it, but it requires a certain level of infrastructure. Some regions still don't have high-speed Internet service, which makes online sales a challenge for them.

Support for the development of local slaughterhouses requires that supply be coordinated. Reducing interprovincial trade barriers is something else we recommend. We heard one example of a farm that sells its products right around the Ontario–Quebec border, but the provincial requirements differ, so that hinders the farmer's ability to build the local market. Additional funding would also be welcome for the program to purchase surplus agri-food products for food banks. Local farmers could then take advantage of the program.

On June 2, we appeared before the Standing Senate Committee on National Finance, and we shared our recommendations for business risk management programming and the Canada emergency wage subsidy. Those measures could be better tailored to farmers' needs. Obviously, it's important to assess the repercussions of the COVID-19 pandemic now, because it's having an impact in the short term. It will also have an impact in the longer term, however, so revisiting these issues down the road is key, because our members are likely to raise new concerns over time.

[The Chair, Liberal, Pat Finnigan]

Thank you, Ms. St-Georges.

We now move on to the representative from Maraîchers L&L.

Ms. Lefebvre, you may go ahead. You have seven minutes.

[Catherine Lefebvre, Vice-President, Maraîchers L&L Inc.]

Good afternoon.

My name is Catherine Lefebvre and I am the vice-president of the Les Maraîchers L&L farm, which works in the market gardening production of beets and red cabbage, as well as in the production of transplants for other market gardeners in my region.

First, I would like to address the issue of labour, which is of great concern to us. We are a medium-sized farm that hires a total of about 20 workers, including 12 foreign workers. Currently, only seven foreign workers have arrived, and considering the time it takes to prepare the files in Mexico, we are not sure we will have the five foreign workers we need to complete our cohort.

I won't hide from you that the workers who were supposed to arrive in June are eagerly awaited for our harvests. There are still many missing. According to the Association des producteurs maraîchers du Québec, the Quebec Produce Growers Association, about 60% of the workers have arrived; that data is subject to verification.

I have to tell you that the programs announced to date encourage Canadians not to work or to limit their hours to 25 hours a week, which creates great obstacles for us. There is a huge cost involved to train each and every one of these employees, in addition to all the equipment needed to ensure everyone is protected.

I won't hide the fact that it currently takes us two or three Quebec employees to replace a foreign worker in terms of efficiency, but especially in terms of endurance, since they have to work between 10 and 12 hours a day. Enormous costs are generated in connection with labour, as we know full well that after a day or two of work on our farms, or a week at the most, they start looking for a less physical job. Then we have to start training other workers all over again, and everything else that entails. In addition, protective measures must be more rigorous for our Quebec workers since, given the relaxed restrictions, there are more and more outings and risks for our farms as well.

All of these measures, including the two-metre physical distancing, have a cost, as they have a direct impact on our performance and will also affect our profits during the season. Since there was no program adapted to our Quebec workers, we had to take the lead by increasing their wages to keep them on. When the COVID-19 crisis began in mid-March, we were packing beets from the previous crop, the 2019 harvest. Our work schedule at this time of year is between 35 and 40 hours a week. When the Canadian emergency response benefit, or CERB, was announced, we realized that if we wanted to motivate our troops, we would have to adapt. So we decided to round up the workers' pay so that they too would have a take-home pay of $500 a week.

We know very well that people who receive the CERB will have to pay taxes, but we had to find a way to motivate our troops to come to work rather than sit at home with their families and avoid the risks related to COVID-19. There should be a program to improve the wages of Quebec employees who get up every morning to feed people and earn more than minimum wage, in order to bridge the gap with the wages improved by all the other programs already in place.

We were also able to hire three 14-year-old students, who do not have access to any programs either, because they are not 15 years old, which is the age of eligibility for the majority of the programs in place. So I'm asking the government to change the age of eligibility, because at 14, young people are very capable of doing manual labour on a farm, whether it's weeding or tending crops. We need those who want to work, regardless of their age.

As for the 75% wage subsidy program that was announced, it does not apply to us, since we are in a production period and we will only feel the drop in income when we harvest, even though the costs related to COVID-19 and obtaining the necessary equipment are being incurred now.

Changes should also be made quickly to counter the losses caused by the measures we have had to put in place to promote the retention of our local workforce and to conduct the quarantine of our foreign workers.

I would also like to talk about the program that offers $1,500 per foreign worker. This program is intended to cover the cost of quarantine. That was changed along the way. Now it only covers the costs that have been charged to us by another company or the take-home pay of our foreign workers. It does not take into account the time spent by our staff on grocery shopping, taking temperatures, the extra needs of our workers, government deductions and renovating our facilities. The program would really have to be changed to take all that into consideration.

Aside from all the constraints we face in a normal year, whether it's the difficulty of competing on world markets or the whims of Mother Nature, we live with a sword of Damocles hanging over our heads at all times. If there's contamination on our farm, what consequences will follow?

Will we have to leave our fields for 14 days without irrigation and spraying? How can I deliver my transplants to other growers? I'd be putting their crops at risk. This would affect business and personal finances.

As market gardeners, I think we've listened to your requests. We have sown all of our fields as usual, despite the lack of labour. On the other hand, we are experiencing, day after day, a great deal of uncertainty in terms of managing the risks associated with our crops.

What about the programs that are supposed to be there to give us some respite from the turmoil we are experiencing? We have recently learned that we will have no crop insurance to cover labour shortages. When are we going to hear about the AgriStability program? I know there has been a request from the produce sector to have the AgriStability trigger set at 90% instead of 70%, and to have the payment made at 85%, but we haven't heard back from you on this.

We're constantly being asked to use the money we have in our AgriInvest accounts, but if we do, when will we get that money back to invest in our businesses at the right time? These are accounts designed to invest in our businesses, not to bail them out. If we use that money, our businesses will decline quickly or be bogged down when the time comes to buy new equipment.

The equipment needed to improve our packaging plans or harvesting equipment is very expensive. That's why we need to keep money in our AgriInvest accounts. We'll need that money the day we have to invest hundreds of thousands of dollars to change broken or obsolete equipment.

We can't use this money to make up the shortfall due to the pandemic. These amounts have been accumulated over the years. We are managing our businesses well. In many cases, it has been better to borrow money to buy equipment, since we had to pay taxes in connection with the AgriInvest account. Program changes should be considered.

[The Chair, Liberal, Pat Finnigan]

I'm sorry to interrupt you, Ms. Lefebvre, but your time is up.

We'll now move on to the next speaker.

From the Hutten Family Farm, we have the owner, Mr. Ted Hutten, owner.

You have up to seven minutes—

[Yves Perron, Bloc, Berthier—Maskinongé, QC]

Mr. Chair, I have a point of order.

I just want to mention to the technical team that while the witnesses were speaking in French, we were hearing the English translation in the background, which was quite difficult, but I could still understand. I didn't want to interrupt the witnesses, but I want to tell the technical team anyway.

[The Chair, Liberal, Pat Finnigan]

We're going to continue, but if it happens again, let me know.

[Yves Perron, Bloc, Berthier—Maskinongé, QC]

Very well.

[The Chair, Liberal, Pat Finnigan]

Go ahead, Mr. Hutten.

[Ted Hutten, Owner, Hutten Family Farm]

I would like to begin by thanking the chair and the committee for having this opportunity to speak.

My wife and I own a small mixed fruit and vegetable operation in Nova Scotia, which I have been farming for a little over three decades. We grow a mix of tree fruit and some berries, as well as many different types of vegetables. The bulk of our sales go to two separate public farmers' markets within the province. That has been the bulk of my business for my entire life.

When COVID hit a couple of months ago, both of the farmers' markets closed, and essentially I had to pivot and completely change my business model. What I did was I had a small community-supported agricultural online sales business, and I expanded that business substantially and moved the bulk of my business into online sales.

We noticed a massive increase in demand. It's been challenging, but we have been able to move all of our product. Although difficult, it has been, generally speaking, okay up until now at least. We have not yet entered the full season. It's only June. As we get into more production, we'll have to see what happens, but as it stands now, by pivoting the business and going to an online sales model, we essentially changed how we sell the products that we grow.

[The Chair, Liberal, Pat Finnigan]

Thank you, Mr. Hutten.

Now we'll go to our question round.

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

[Richard Lehoux, Conservative, Beauce, QC]

Thank you, Mr. Chair.

I thank the witnesses for being here with us this afternoon.

I'd like to put two brief questions to Ms. St-Georges and Ms. Lefebvre.

[Neil Ellis, Liberal, Bay of Quinte, ON]

Mr. Chair, on point of order, we're getting a muffled translation on this. I think he must be on the wrong channel.

[Richard Lehoux, Conservative, Beauce, QC]

My question is for Ms. St-Georges and Ms. Lefebvre.

We talked earlier about the Internet, and I think my colleague Mr. Blois alluded to it. You talked in particular about online sales.

[Neil Ellis, Liberal, Bay of Quinte, ON]

Mr. Chair, on a point of order, it's still the same.

[The Chair, Liberal, Pat Finnigan]

There seems to be a problem with the interpretation which is coming through as a background voice.

Could you look into that, Mr. Clerk?