Agriculture Committee on March 12th, 2020

[Chris Forbes]

For the most part, these are amounts that provincial programs did not spend in 2018 and have been carried forward to 2019. That is in the supplementary estimates.

[The Chair, Liberal, Pat Finnigan]

Thank you, Mr. Perron. I apologize.

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

Don't worry about it, especially since you gave me an extra 25 seconds.

[The Chair, Liberal, Pat Finnigan]

Mr. MacGregor.

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

Thank you, Chair.

Mr. Forbes and Ms. Walker, thanks for coming before the committee.

I just wanted to refer to the minister's mandate letter again. One of the other asks is that the Prime Minister wants the minister to lead a consolidation of existing federal financial and advisory services. I guess they are scattered across several agencies. The new entity is going to be called farm and food development Canada.

Can you tell me which agencies you're looking to consolidate? Where are we with the new entity? I guess it will require a legislative change.

[Chris Forbes]

Quite honestly, we're still in the stage of scoping out what that could include.

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

Okay.

[Chris Forbes]

The advisory services and that kind of work does come to organizations like the Business Development Canada. I think the regional development agencies are also sometimes involved in the food processing sector in particular.

We are going through a bit of a scoping phase to look at the range of issues that might be on the table, what some of the challenges are around doing that, and trying to figure out what would be the way forward.

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

I'm curious about what provided the impetus for this to begin in the first place. Are you looking for more efficiency? Were you getting feedback from people who use the financial services and they thought it might be better to have it under one umbrella?

[Chris Forbes]

I can't speak to the impetus, because obviously it came from the Prime Minister or the minister. I guess what I would say is that I understand that the context would be around how we better align our efforts to help the sector grow. Maybe that would be the simplest way for me to put it.

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

Okay. Thank you.

The minister is also tasked with supporting the Minister of Small Business, Export Promotion and International Trade in identifying additional tools to help Canada's agriculture and agri-food businesses export their products and diversify into global markets. Can you talk about some of those additional tools and what's being considered?

[Chris Forbes]

We have existing tools, obviously, through our own programming, through the trade commissioner service, so I think we're looking at some of the challenges we face and whether there are aspects of those existing tools or other things that we can bring to the table that might help. At this stage, again, it's probably too early to comment in any detail.

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

I guess it was brought on by China having closed off its border.

[Chris Forbes]

Maybe more broadly, obviously, as an export-oriented sector; the agriculture and agri-food sector has very export-oriented, very diverse markets across the world. I think that has a lot of benefits and lots of opportunities. Obviously it brings some challenges too, in terms of working with other countries and importers in other countries and developing markets in those countries, and then dealing with challenges as they arise. I think there's a range of reasons that you might want to look at, for sure.

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

Yes.

I want to talk about the food policy. As a country we produce far more food than our population can ever use, but we still have so many communities that are food insecure. Can you elaborate a little on some of the details as to how we are linking those food insecure communities throughout Canada with our producers and establishing those much needed food hubs and so on?

[Chris Forbes]

I think the main point would be the local food infrastructure fund that the minister mentioned of $50 million. I think there are aspects of that in terms of creating a bit more capacity in communities to, in many cases, just ensure there is food, whether local or from elsewhere, that can be accessed by food insecure groups. There is a specific northern program, run through the Northern Economic Development Agency, that kind of does the same in the north.

I don't want to talk too long, but we also are working through our research centres on some work in terms of vertical agriculture. Can you grow products in northern climates in containers? It's that kind of work, trying to figure out and use technology to tackle some of the food security issues that might exist in remote communities. There's a range of programs and activities going on.

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

With regard to the ask for the exemption from the carbon tax on fuels like natural gas and propane, in British Columbia I'm thinking of marked diesel as a model that already exists. I'm trying to remember what the minister said on that. Could you give an update on where we are with that?

I'm also wondering if there are ways in which we can identify how we can support farmers and recognize their carbon sequestration efforts. Is the department looking at any policy tools that can give credit to farmers in the carbon sequestration that they're doing? I'm just trying to find a way of getting out of the carbon tax debate and actually recognizing some of the positive work that farmers are already doing.

[Chris Forbes]

My simple answer to the question is, yes, I think that's of interest. I think we need to more generally think about how we can, as you pointed out, recognize all the good environmental stewardship that producers undertake. They obviously have a vested interest in the sustainability of our lands and waters. We are working on the research side, but we will also look at other tools as available.

[The Chair, Liberal, Pat Finnigan]

Thank you, Mr. MacGregor.

We'll move to the five-minute round.

Mr. Barlow, you have five minutes.

[John Barlow, Conservative, Foothills, AB]

Thank you very much, Mr. Chair.

Thanks, Mr. Forbes and Ms. Walker, for sticking around.

The minister did comment in her presentation that there has been data collected to make the business case for the carbon tax. I have two quick questions on that.

Does the data collected include, outside of the direct carbon tax, costs to farmers, i.e., what they see on their energy bill? As I mentioned, CN and CP have released some numbers. Right now they're transferring $17 million in carbon tax onto farmers. In a couple of years, it'll be $28 million. Those are significant costs. Cattle liners, guys hauling fuel—those are all passed on to agriculture. Are those numbers included in that data?

As well, can you table the data that the minister was talking about with regard to making the business case?

[Chris Forbes]

I'll try to answer this quickly and efficiently, but tell me if I get it wrong.

We do have data on fuel usage and on energy usage on farms from Statistics Canada, which we've used as a way of modelling impacts. We could go into all the challenges and imprecisions of that. Certainly indirect pass-ons would be an area that would be hard, quite honestly, to get accurately because it's static data that you're trying to model over time.

For the data that we've received from governments and producer groups in Alberta, Saskatchewan, Manitoba and Ontario for December through to February, which the minister spoke to recently, I don't think that kind of cost would be captured in there. Quite honestly, how you'd look at modelling that would be a difficult one for me to tackle right here. I think I can share with you what we have.

[John Barlow, Conservative, Foothills, AB]

My argument would be that I think those numbers are important to try to calculate. I know it's not easy, but when you are passing on substantial costs to an industry, I think the business case is there to ensure that you have the most accurate numbers you possibly can, especially if you are giving a rebate that doesn't come close to actually meeting their costs. You can't say that the carbon tax is revenue neutral.

I want to make sure that if the government is making that argument, they're close. We've heard from agriculture that the rebate is actually closer to 10% of their actual carbon tax costs. I won't belabour that, but if you do have the business case that the minister was talking about, I'd like to see that submitted to the committee.

My colleague, Mr. Calkins, mentioned it and we've seen some substantial loss in trade markets from canola, soybeans and wheat that is now, since 2015, depending on the commodity, a loss of revenue of $5.6 billion for Canadian agriculture.

Mr. Forbes, you and I have been on a couple of trips before, but there hasn't been a challenge on many of these things to the WTO. There hasn't been a strategy outlined. Why not? What's being done to try to regain access to some of these markets? I would argue that, for the most case, this isn't a quality issue. These are mistakes of government policy or government initiatives that need to be addressed.

[Chris Forbes]

There are a few points. I'll try to be concise.

There is a wide range of challenges that we've faced. You've identified a few and your colleague did earlier. We try to look at the whole set of tools that we have to try to advance addressing them. In the case of market access for our two shippers that have been shut out of China for canola seed, we have ended up with a WTO dispute resolution discussion.

With respect to other countries, we've tried a range of tools. With Italy, they do have the European Union coming in with replacement voluntary labelling rules that the Europeans assure us will replace the Italian measure in April of this year.

We've also seen the quality of our durum wheat reflected in the fact that Canada now has a number one import share of the durum wheat market in Italy again, so we are back into that market. I admit the levels are maybe not where they were three years ago, but we're the number one import source there.

We've worked with the sector in the case of pulses in India for a variety of tools to try to—

[John Barlow, Conservative, Foothills, AB]

I'm not trying to get you to go to Italy right now.

[Chris Forbes]

I don't think they'd let me in.