Agriculture Committee on June 12th, 2020

[Richard Lehoux, Conservative, Beauce, QC]

Thank you, Mr. Legault. That's exactly what I wanted to hear you say.

At the end of the day, the agriculture and agri-food sector receives a lot more support in the U.S. than it does in Canada. We're talking double.

The AgriStability program has been called into question repeatedly. We recommend bringing the coverage level back up to 85% as quickly as possible. I recognize that the government reduced it to 70% at a certain point in time, but that has to be kept in perspective, given what was happening then. The rub is that it's now five, six, seven or eight years later, so the government should realize that the level needs to be restored to 85%, and fast.

Would you say that's correct?

[Benoit Legault]

That's correct. Our organization never supported the reduction, strictly speaking. We voiced our opposition to the changes. Fortunately, though, prices were high at the time, so farmers didn't feel the effects of the drop in coverage, as I said earlier. However, as market conditions normalize and with the added pressures of the current situation, it's becoming clear that the programs are inadequate. Unfortunately, the smart thing is to have adequate programs in place before problems arise.

I agree with the previous witness about now not necessarily being the right time to rebuild. Actually, it's not about rebuilding; it's about returning to a better level of coverage—an idea everyone had already agreed upon in 2009.

[Richard Lehoux, Conservative, Beauce, QC]

Thank you, Mr. Legault.

Mr. Lewis, my next question has to do with the reference margin limit. We do understand—and I would like you to confirm this again—the importance of lowering that reference margin limit. You are even talking about bringing it down to zero.

Did I understand correctly?

[Todd Lewis]

Yes. The change to the reference margin limitation really does affect producers' ability to trigger payment. Yes, that's what we're asking for: that the reference margin limitation be changed.

[Richard Lehoux, Conservative, Beauce, QC]

Along the same lines....

[Todd Lewis]

I didn't get the translation.

[Richard Lehoux, Conservative, Beauce, QC]

Is it okay now?

[Todd Lewis]

Okay.

[Richard Lehoux, Conservative, Beauce, QC]

Thank you.

Do you think the pandemic should have been classified as a natural disaster or, at the very least, should a special program have been created to support your sector?

[Todd Lewis]

I think that under the current business risk management programming, if we stuck with that and did the changes that we've asked.... In a province like Saskatchewan, it has a huge impact on provincial revenue when you make changes to the BRM programming. I believe the provinces have put forward a cost-sharing that changes the sixty-forty split to ten-ninety. I think that was one thing that was put forward by the provinces, and it wasn't accepted by the federal government.

In a situation like a pandemic, I think it's worthwhile that the federal government look at putting in more money. They've put 100% of programming towards programs like the CERB, for instance. I think that at this point with the pandemic, the federal government needs to step up and provide more support under our current BRM programs to enhance them and make them more usable for producers.

[Richard Lehoux, Conservative, Beauce, QC]

Concerning programs available in Canada compared with those in the United States or other countries around the world, I also heard you say that some changes should be made to them for Canada to be able to compete on international markets.

Is that correct?

[Todd Lewis]

I think what we see with the U.S. farm bill is that in western Canada we're on the North American market when it comes to machinery, for instance, and the price of new and used machinery has been artificially supported by the payments that American farmers are getting. They have money in their pockets and they're spending on equipment. We haven't seen a decrease in equipment values. Typically in western Canada when there's a large machinery auction, a lot of that machinery goes to the United States. They have money in their pockets to spend on equipment.

The same can be said for—

[The Chair, Liberal, Pat Finnigan]

Thank you, Mr. Lewis.

[Richard Lehoux, Conservative, Beauce, QC]

Thank you, Mr. Lewis.

[The Chair, Liberal, Pat Finnigan]

Thank you, Mr. Lehoux.

Now we'll go to Mr. Tim Louis for up to six minutes.

Go ahead, Mr. Louis.

[Tim Louis, Liberal, Kitchener—Conestoga, ON]

Thank you, Mr. Chair, and thank you to the witnesses for being here. This is quite helpful.

I'm going to address my remarks to Professor Ker. l feel a bit kindred, I have to say. I'm down the road from Guelph, in Kitchener—Conestoga, and my son is a student at the University of Guelph.

[Alan Ker]

Oh good. I hope he's enjoying it.

[Tim Louis, Liberal, Kitchener—Conestoga, ON]

Well, he's upstairs taking online courses like so many students, but I've made the trip plenty of times with clean laundry and extra groceries for him, doing my part as a dad.

It sounds like we don't even have enough time to talk about all the things...making the changes that we're talking about with BRM. You said we need to be careful with policy changes. We've heard from many witnesses, including here, about the reference margin limits. Given your experience, can you tell me some other changes we can make that haven't been mentioned, let's say in this last panel, besides the reference margins?

[Alan Ker]

Not really. The suite of programs is good. There was a lot of satisfaction, and it worked very well, but the devil is in the details of those parameters, and those changes make the programs work very differently.

The programs themselves, I think, are fine. It's the fine tuning of the programs that makes a world of difference to the farmers up and down, as you're hearing from these gentlemen here, but I don't see any sort of suggestion that we bring it in this brand new program out here, and it's going to satisfy these things. I don't see that magic solution existing at all.

Bringing in private insurers is not a solution. In fact, I think that's been shown to have major issues in the U.S. as well, so I don't see that as a solution.

There is talk of some area programs and things like that, but again, I don't think they're going to satisfy any of the situations we're dealing with here today, or concerns that have been voiced over the last five or eight years with respect to the suite of BRM programs.

Structurally, the program is very good. The details are in the parameters, and those parameters matter greatly to how it serves farmers.

[Tim Louis, Liberal, Kitchener—Conestoga, ON]

I appreciate you saying that. I know some of the challenges also become, as you mentioned, equality among the programs, trying to make sure all the different sectors are represented.

One thing you mentioned in your opening statement, Professor, is something that intrigued me. Being from Kitchener-Conestoga, in the Waterloo region, we have the tech sector and agriculture at the same time. You mentioned artificial intelligence in business risk management. Could you expand on that? That's something I'd like to hear more about.

[Alan Ker]

Sure, what I argued in my brief is that this is a bit like precision agriculture from 15 years ago. We heard all about it, but it didn't solve all the world's problems. It's the same with AI. I mentioned that big data, machine learning and AI are going to have trivial impacts on anything to do with BRM programming and won't do anything to help a whole lot with risk management at the farm level. I don't think it will have much of an impact.

Again, they're probably about two to three years ahead of us in the United States. They've moved down that road and have actually backed away from that road in terms of what that could offer them and in terms of better products or better pricing of the products. They've backed away from that, and I point that out in my written brief.

[Tim Louis, Liberal, Kitchener—Conestoga, ON]

Perfect. Thank you. I appreciate that.

We can talk about climate change and how it's going to relate. Mr. Legault mentioned market volatility and how climate change can affect that. Mr. Lewis also mentioned the next generation of farmers. A lot of younger farmers I'm talking to are concerned about climate and how that's going to add to the issues they have as farmers.

Can you tell us about some of the innovative technologies you've been working with in Guelph, what you're hearing, and what we can do to help our producers and our farmers? How can we help mitigate these risks and help with upstream solutions?

[Alan Ker]

There's a lot going on at University of Guelph and, in fact, in many places, with seed technology and issues along that line, as well as farm management technology. I came from Arizona, where drip technology got introduced to deal with issues there. There are a lot of other things going on to deal with the effects of climate change.

Right now, in Ontario—I'm not sure if this is true in Saskatchewan—we're becoming a lot more sensitive to drought conditions. We weren't before. The reason is that there are a lot more seeds per acre, and the amount of rainfall isn't changing, so all of a sudden, we're seeing a lot more drop-off in yields with respect to a decrease in precipitation from where we were even 20 years ago. They're trying to deal with that right now.

These are all going to be ongoing challenges, especially with respect to new entrants who have 30 or 40 years ahead of them.

[Tim Louis, Liberal, Kitchener—Conestoga, ON]

That's fantastic.

I see I have 10 seconds left. I would need another two hours of your time, so I will stop there.

I appreciate your time today. Thank you.

[The Chair, Liberal, Pat Finnigan]

Thank you.

Now we'll go to Monsieur Perron.

Mr. Perron, go ahead for six minutes.