Agriculture Committee on May 12th, 2020

[René Roy]

Yes, indeed. As has already been said, the AgriStability program is very ineffective in an emergency situation like the one we are currently experiencing. There are always delays. So it is very ineffective at helping producers in a crisis like the one we are currently experiencing.

[Richard Lehoux, Conservative, Beauce, QC]

Thank you, Mr. Roy.

Mr. Groleau, you described the situation with AgriStability to us very well. I hope that everyone will read the document you sent to us, so that we can analyze it.

My question is quite simple. Do the minister and senior federal officials understand the situation? From what you have explained, it is pretty clear that the program is not working. Why has it not been adjusted quickly to meet your needs?

I gather this is not the first time you have brought this issue to the attention of officials and the minister, is it?

[Marcel Groleau]

It isn't, of course. The program used to work well, but it was cut back for budgetary reasons in 2013. The cutbacks reduced Canadian agricultural producers' ability to compete more effectively with the American sector.

According to a current analysis by the Organization for Economic Cooperation and Development, or OECD, the value of Canada's agricultural support is half that of the United States. This is based on the value of Canadian production. If federal support for agriculture does not rebound in the medium term, Canadian agriculture will clearly suffer.

[Richard Lehoux, Conservative, Beauce, QC]

Thank you, Mr. Groleau.

Mr. Soroka, I yield the floor to you.

[Gerald Soroka, Conservative, Yellowhead, AB]

My question is for the the National Cattle Feeders' Association.

I know that the set-aside program only covers pay for the feed and doesn't cover the cost of the loss of the calf, but how long will the dollars last to pay for this feed anyway?

[Janice Tranberg]

I'll take this, Michel.

It's very hard to say exactly how long this will last, because the situation is adapting and changing. In terms of the program we put together, I think we're now in what I would consider a worst-case scenario, with less than 50% production occurring. It's obviously going to take quite a bit of time to get production up to normal levels. Also, even for normal levels, right now I think I would say that 100% post-COVID production is probably going to be equivalent to 80% to 85% pre-COVID production, so the absolute best—

[The Chair, Liberal, Pat Finnigan]

Thank you, Ms. Tranberg. We're unfortunately out of time, and we're running very tight.

Mr. Neil Ellis, please, for four minutes.

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

I'm going to be splitting my time with Mr. Drouin.

Ms. Tranberg, you mentioned that the backup was at around 130,000 cattle right now. What about the backup in January and February? What kinds of numbers were we at before COVID hit?

[Janice Tranberg]

There wasn't a backup. I mean, everything—

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

There wasn't a backup at all.

[Janice Tranberg]

Well, that's not true. I'm not sure if Michel can answer, but there certainly was some production backup in the eastern part of the country.

Michel, are you able to answer that question?

[Michel Daigle]

Thank you, Ms. Tranberg.

In January in eastern Canada, we were a little behind in slaughter, which was not the case in the west. You have to realize that the situation is often a little different across the country. Right now, the opposite is true. The big meat packing plants out west are doing far less slaughter. The backlog of cattle is very high in the west and less so in the east, because to date, no meat packing plants have been shut down in Quebec and Ontario due to COVID-19.

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

Thank you.

Also, you mentioned the loss per head. Was it around $600? I think that was what you quoted.

[Janice Tranberg]

That's an average, yes.

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

On average, and profit-wise, do you have an amount before COVID-19 hit?

[Janice Tranberg]

I don't have an exact amount, but I can tell you that some of my members have told me that they've actually hit losses closer to $800. This is a loss that they've never seen before, even in times of BSE. These are pretty phenomenal losses.

Again, Michel, maybe you can back me up on this. To see losses in the range of $300 is significant, but it's manageable. When you start getting into losses that are $500, $600 and more, it's drastic.

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

Okay. Thank you.

I'll share my time with Mr. Drouin now.

[Francis Drouin, Liberal, Glengarry—Prescott—Russell, ON]

Thank you very much, Mr. Chair.

I would like to thank my colleague, Mr. Ellis. It is very nice to see some familiar faces on our committee.

Mr. Groleau, you mentioned the 85% reference margin. I am not a member from Quebec, but I live very close to the province. I know that Quebec has supplemented the AgriStability program. Does that mean more farmers are participating in the program? The Canadian Federation of Agriculture is asking that the same be done nationally. With 85% reference margins, is the program being used even more?

[Marcel Groleau]

In our province, we are required to enrol in AgriStability because there is a group insurance program for several sectors. In Quebec, the enrolment rate for AgriStability is over 70%. That is what brings the national average up to 31%. Were it not for Quebec, the national average would be under 30%.

The Agri-Québec Plus program is the main tool helping to rectify the situation in Quebec. The program comes in at an 85% reference margin, but it is capped when an operation is profitable so as not to give undue compensation. So, there is a way to adjust the program at the national level as well.

[The Chair, Liberal, Pat Finnigan]

Thank you, Mr. Groleau.

Mr. Perron, you have the floor for four minutes.

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

Thank you very much, Mr. Chair.

I would like to thank the witnesses for being here.

Mr. Groleau, I was very pleased to hear someone other than me say that AgriStability is not working. I also note, further to the answers to Mr. Drouin's questions, that this is another area where Quebec is somewhat making up for what the federal government has bungled in the past.

If I understood you correctly, there was a program that worked in 2013 and it does not work today. Is that correct?

[Marcel Groleau]

Yes.

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

All right.

Mr. Groleau, here is what I wanted to discuss with you. When they say that you have to use existing programs and they tell you about a new magic calculator that has appeared on a website, do you feel that really helps producers?

[Marcel Groleau]

I doubt it. As the example I gave you shows, a farm has to be technically bankrupt to receive anything significant through AgriStability. It's as simple as that. I gave you the example of a farm with a $150,000 reference margin that lost $80,000. Even in that extreme case, the program offers no help. I can't make it any clearer than that.

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

That means people are paying taxes and receiving no support from the government.

We often compare ourselves to the U.S., since they are our closest neighbour, but we could also look to countries in Europe. What medium- and long-term consequences are you anticipating? Agriculture has been receiving less support in Canada than it has in other countries for quite a while now. What's going to happen in the next few years?

Correct me if I'm wrong, but I suspect we're at risk of becoming reliant on other countries and experiencing food shortages. The scarcity of food would likely lead to an increase in food imports. Can you confirm whether that's true?