Agriculture Committee on Feb. 27th, 2020

[Paul Samson]

We at Agriculture and Agri-Food Canada are not working on it. I can't speak for the other departments.

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

Okay. Thank you.

In terms of the environment, are you planning to take any very specific action on flooding of the land, for example? I talked about that with the previous witnesses. Right now, many producers are facing the impossibility of farming their land for many months. In Quebec, in particular, they are even reviewing the flood zones. Some producers are at risk of seeing areas that used to be arable become non-cultivable.

Are you currently considering compensation measures for these people? In some cases, it's a matter of rescuing them. Floods can jeopardize their businesses.

[Paul Samson]

Mr. Chair, in answer to the member's question, the most appropriate program is AgriRecovery. The provinces apply, and the needs and cost analyses are done in conjunction with the federal government. Of course, these extraordinary costs can be covered in the case of a flood, for example.

For its part, the AgriInsurance program insures products against flooding.

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

If I understand correctly, you're not doing any particular study on this right now.

Are you just going to change the AgriRecovery and AgriInsurance programs?

[Paul Samson]

To my knowledge, there are no studies about specific programs. We are not doing a study on that specific subject.

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

I have a question about specific productions that have experienced difficulties on the international scene. I am thinking, among others, of the pork and canola industries, which have suffered greatly this year.

Has your department ever considered the creation of an emergency fund that could be used by governments of the day?

[Paul Samson]

I have no comment on this, as discussions are ongoing at this time.

[The Chair, Liberal, Pat Finnigan]

Thank you, Mr. Perron.

We have Mr. MacGregor for six minutes.

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

Thank you, Chair. Thank you to the witnesses for coming today.

I received correspondence from the AGgrowth Coalition. They noted in their correspondence with me that participation in the program, specifically AgriStability, declined precipitously since cuts were made back in 2013. They say that approximately two-thirds of farmers are opting out of the program. I've even had farmers say to me directly that the program serves their accountant better than it does them.

This is not new news. I think this committee issued a report in 2017 that made some recommendations. How has the department been handling these complaints that have been building up over the years? I guess my question is, why have we been a little slow to react to them?

[Paul Samson]

The first thing I would note is that last decade or so has been a good period for farmers and commodity prices, so there's been less reliance on AgriStability and some of the other programs, according to the analysis we have done. As I mentioned earlier, there have been issues raised about the timeliness and simplicity of the program, and other comments. We've been trying to improve there. We agree that it is still a work in progress. We're looking on, as I mentioned, the ministerial mandate from last December.

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

When the ministers met in December, and then looking ahead to when they'll be meeting again in July, are the provinces generally on the same page here? Can you maybe itemize some of the asks that the provinces have of the federal government right now? Are we responding to those requests?

[Paul Samson]

Mr. Chair, I think the best comment on this is that it is a federally, provincially, territorially managed program. As I mentioned, many of the programs are cost-shared sixty-forty. We're looking at it as an integrated set of things. There aren't any specific provincial requests per se in that context. I think there might be some preferences, but for the time being it's really an integrated conversation and analysis that we're having right now.

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

Is it your sense that they're still generally happy with the sixty-forty split? Have there been any asks that the federal government maybe chip in more money?

[Paul Samson]

Chair, no one has flagged any concerns with me about the sixty-forty split, but I'm not sure this is the place to really get into that. There may be conversations, but certainly nothing has been raised.

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

Okay. Thank you.

You said that AgriStability, first of all, is a demand-driven program. When a farmer is trying to access it, it's based on their total production. If they have mixed production, it's based on a decline over everything. Am I correct?

Say, a farmer were growing peas, lentils, canola and wheat, but only one of those crops had a catastrophic loss. If you were to look at just that farmer's canola growth, you'd see that maybe they experienced a 90% decline in their canola stock, but overall, because they were in other sectors, it wouldn't equal much of a loss. Has the department ever considered looking at different ways to apply AgriStability in that respect?

[Paul Samson]

I would first confirm that, yes, it is a whole farm program, so it looks at all the commodities that would be on the farm.

In the example that was mentioned, that could be a production issue that would make AgriInsurance applicable, or if there were some other extreme weather event or a flood, or something for a certain commodity, AgriRecovery would also be applicable. They all work in parallel.

AgriStability itself, which I mentioned earlier, evolved away from commodity-specific coverage for a variety of reasons, including fairness, it was felt, and trade challenges, to be this more integrated model. The debates still continue a bit on these issues, but that's how it evolved.

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

The main reason we're doing this study is to see if these programs can adequately meet the challenges of farming in the 21st century.

Given that AgriStability is a demand-driven program, and there are a few storm clouds on the horizon for farmers, can you inform the committee how you're looking ahead, particularly with respect to climate change and maybe how the economic impacts of that on our agricultural market are going to affect AgriStability's cost, but sustainability, going into the decades ahead?

[Paul Samson]

It's a good general question. I don't think I can give it justice in a few seconds here, but the programs, and not just AgriStability, are designed to factor in changes that will increase costs for producers: more frequent extreme weather events, market instability, price drops, and so on. It is intended to evolve with the changing circumstances.

As you know, it's a statutory program that allows the level of funding to fluctuate based on demand and need. We think there is space to respond.

[The Chair, Liberal, Pat Finnigan]

Thank you, Mr. Samson.

Now Mr. Soroka will be splitting time with Mr. Lawrence. Go ahead.

[Gerald Soroka, Conservative, Yellowhead, AB]

We were given some data here before the department came before us, which indicates that over the last 50 years, the number of farms has halved. They've doubled in size, they're producing twice the amount, and the value per acre has quadrupled. That sounds very impressive, but when you go back to page 3 in your overview, the debt load has continually increased. Despite more production and better yield per acre, people are deeper in debt. You can understand that we need to have these programs working, but obviously they're not.

One of my questions is from the 2018-19 departmental results report that was just released. Under the changes to BRM programs, it says:

Future enhancements are also being considered as a result of a review of business risk management programming undertaken in 2018-19.

Have all of those enhancements already been announced? If not, can we get a list of the remaining enhancements the department is considering?

[Paul Samson]

On the first issue of debt load, we certainly are very attentive to this issue. Household debt in Canada is at very high levels, so it's certainly not just in the agriculture sector that the government is paying close attention to this issue.

In the agriculture sector, we do have several programs that help bridge financing across the needs. There was a question earlier about the advance payments program, which I'll probably get to in a minute. We have several mechanisms that help farmers bridge the financing they need.

In regard to the question of enhancements, we are looking at that right now in the context of the mandate that the ministers gave us to prepare for the July meeting. There's nothing else to announce at this time.

[Philip Lawrence, Conservative, Northumberland—Peterborough South, ON]

Thank you for appearing today, and for your obviously serious approach to the testimony. I appreciate it.

One of the things I've heard across my riding, and really across the country, is the impact the carbon tax is having on farmers. Of course, we had a wet harvest that will force many people to rely on some of the programs you provide, which are great and are helpful.

Was the carbon tax taken into consideration when calculating your programs and working on the new programs, particularly if, in fact, the carbon tax does double over the next couple of years?

[Paul Samson]

We did not look specifically at pollution pricing impacting the programs, simply because that's captured in the input costs, which are part of the calculations in the program. For example, if energy costs are increased for whatever reason, that is automatically captured in the calculations for the program benefits.

[Philip Lawrence, Conservative, Northumberland—Peterborough South, ON]

On a different topic, we've had some discussion about getting young people involved in farming and the challenge that will be. As farms grow bigger and more expensive to invest in, are there programs designed or considered that will allow young people to enter farming?

[Paul Samson]

Here is where I would point to programs outside the business risk management suite, which we've been focusing on here. We have a large number of innovation-focused programs that are focused on promoting new technology use and the kind of thing that would not only improve productivity, but also attract new entrants to farming.