I will be fairly brief, because I want to take a few minutes at the end of my presentation to explain to the members of the Standing Committee on Agriculture and Agri-Food how the AgriStability program works. A lot was said about the program during the minister's presentation. There are a number of different opinions.
First of all, I feel there is a general misunderstanding of how the program works. We are going to try to do an exercise with you to explain how it works.
In Canada, agriculture accounts for $112 billion in revenue, $60 billion in exports and $68 billion in farm gate revenue. It is one of the biggest economic sectors in our regions.
This sector has been hit by the COVID-19 crisis. Meat packing plants have been shut down, the consequences of which have just been explained to us, and there is a labour shortage. A number of things have been done to address this. Markets have been lost and disrupted. In addition, producers have had to dispose of products, resulting in net losses for them.
We are starting to be able to quantify the losses. In poultry alone, nationally, the losses are $115 million, and in beef, according to the Canadian Cattlemen's Association, it is $500 million. Quebec grain producers have estimated losses in value, taking into account the advances on the American market, to the tune of $86 million in Canada for two grains alone, corn and soy.
The processing sector, especially meat packing plants, has sustained heavy losses. The sector has also had to put in place the safety measures required to protect employees. In Quebec alone, losses amount to $100 million or more.
The assistance measures announced last week fall far short of our expectations. However, the program to support temporary foreign workers when they arrive is a substantial effort that I would like to highlight.
As for the other programs, the aid is insufficient compared to the $19 billion provided by the United States to address the COVID-19 crisis. That is 10 to 12 times more than was announced last week here in Canada.
The future remains very uncertain and market fluctuations are highly unpredictable. The AgriStability program, which should be helping us cope with the situation, is not working. That is why only 31% of producers in Canada are participating in it. Producers are not fools. If the program worked, they would enrol. The reason producers are not enrolling is not because they do not understand it, but because it is not working.
I find it hard to hear the minister tell us that we should use the $2.2 billion in the AgriInvest program that we have in our accounts. That money is not necessarily in the accounts of the producers who are struggling right now. Quebec pork producers only have $40 million in their AgriInvest accounts, with a production value of $1.4 billion. We are being asked to use that $2.2 billion, but it is not available directly. It is like asking people to make sure they empty their bank accounts before applying for employment insurance. It is like telling the students who have just been offered $9.5 billion that only those with nothing in their accounts are entitled to it. That argument does not hold water.
With regard to the $1.6 billion theoretically available to producers that Ms. Bibeau is urging us to use, let me point out that last year more than $1.1 billion of that $1.6 billion was paid out in crop insurance in Canada. So it has nothing to do with AgriInvest or AgriStability.
So, naturally, we are asking for emergency funding to meet the current needs of businesses in the meat sector, for example, which are experiencing particular difficulties. This is mainly to improve risk management programs. The repercussions of the crisis are more than just immediate. They will be felt this year, but undoubtedly next year as well. If our risk management programs in Canada are inadequate, producers are going to be in trouble now and even more so in the coming years.
Now, I would like us to look at the AgriStability table. I don't know if you have had a chance to look at it, but I am going to do a little exercise with you. Ms. Bouffard will be able to help me if I need it. As an example, we took an average farm in Quebec with $250,000 in annual revenue and $100,000 per year in historical allowable expenses. Under the current program, allowable expenses are capped and family labour is not an allowable expense. Therefore, small operations in particular are penalized.
This operation has a historical reference margin of $150,000, that is, $250,000 less allowable expenses. This year, due to COVID-19, it will have a reference margin of $70,000. So, this operation lost $80,000 this year on a gross income of $250,000. That is huge. This year, because this operation has a reference margin of $70,000 and compensation starts at 70% of $100,000, or $70,000, AgriStability will pay it nothing at all. So, even if the operation wanted access to 75% of what the AgriStability program would pay it, it would not receive a penny. Yet this operation lost $80,000 compared to a reference margin of $150,000. That's more than half.
We have proposed enhancements to some of the AgriStability program criteria. For example, the historical margin should no longer be capped. In the second column, the historical margin is not capped at $100,000; it is $150,000. If we do the calculation, 70% of $150,000 is $105,000. That is $35,000 more than the $70,000 reference margin. If we multiply it by 70%, this operation would get $24,500. If we increase reference margin coverage to 85%, the operation would get $40,250.
The third column represents how the program was before the 2013 budget cuts. In 2013, when the program was said to be working, an operation whose margin declined by $80,000 would have been compensated with an amount equivalent to 50% of its reference margin. As Mr. Blois was saying earlier, to get 50% loss coverage, we would have to go back to the program as it was before 2013.
We may send you a more detailed table, but what we are trying to tell you is that, no matter what party you represent, AgriStability is not working. That is why producers are not participating. AgriStability works even less for small farming operations because it does not cover participant opt-out and family wages as allowable expenses.
So, I ask you all to work in a non-partisan manner to improve this program. If you really want to support Canadian agriculture, it is essential that you do.