Evidence of meeting #13 for Agriculture and Agri-Food in the 43rd Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was processing.
A recording is available from Parliament.
5:05 p.m.
Retired Business Executive and Farmer, As an Individual
And making sure the supply is the right supply....
Right now, the way the system is in chicken, the more the producers produce, the more they make. They have no consequence to the reality of whether or not the processor can sell it.
5:05 p.m.
Liberal
Kody Blois Liberal Kings—Hants, NS
You said you do think there's plenty of private capital that is willing to invest in this sector if the landscape is right. That is a remarkably rare quote, from what we hear from individuals who join this committee. There is often some request to government.
Why do you think it's important that it come from the private sector? Is there a time and a place where government should be involved, or is that very rare?
5:05 p.m.
Retired Business Executive and Farmer, As an Individual
I think it's very rare. As I said in my comments, government needs to focus on creating the right landscape and then let business do business.
There are lots of entrepreneurs and lots of money out there. If there is profit to be made, they will find it, but they need to know they're welcome in the country. They need to know the country wants them to be in business. We can't keep putting up roadblocks. Every time we strengthen our environmental regulations, occupational health and safety regulations or unemployment regulations, we're promoting more and more socialist lifestyles and less entrepreneurial business. It's getting to the point where it's extremely frustrating to do business in Canada as an entrepreneurial business.
5:05 p.m.
Liberal
Kody Blois Liberal Kings—Hants, NS
I want to go to the point you made about supply management. A lot of your comments, of course, were through the lens of the poultry industry in terms of transportation to other provinces and other facilities. We have Eden Valley in my neck of the woods, in the Annapolis Valley.
Can you speak a little about how that plays out and some of the impacts it creates?
5:05 p.m.
Retired Business Executive and Farmer, As an Individual
Can you just rephrase your question?
5:05 p.m.
Liberal
Kody Blois Liberal Kings—Hants, NS
You mentioned that sometimes the chickens are travelling a long distance to their facility, 10 or 12 hours, as opposed to going to one that might be local because there's no requirement for those animals to be processed within their provincial boundary, so to speak.
Can you lay out how that creates an impact for processors in terms of potential reinvestment?
5:05 p.m.
Retired Business Executive and Farmer, As an Individual
Take Eden Valley Poultry, a plant that cost $50 million. It doesn't have any government money in it. The producers put in $10 million; a major processor in Canada put in $10 million, and the bank put in $30 million. There's no government money. It's been a very successful plant, but in order to get enough volume, it had to go to P.E.I.
A third of the Nova Scotia producers refused to ship there because they could get a few pennies more by shipping all the way to northern New Brunswick. So there are birds that are driven right past the processing plant in the valley of Nova Scotia and go all the way to northern New Brunswick to be processed just for a few extra pennies.
The cost of production and live price the producers are paid already covers their costs and a reasonable profit margin, but there are greedy producers who want an extra few pennies, and there's a processor who wants to pay a few extra pennies because they want the chickens in order to expand or to make their plant more viable. It really jeopardizes.... It took us a long time to get that Eden Valley plant built because we had to get enough volume, and we had to struggle to get the volume.
5:10 p.m.
Liberal
Kody Blois Liberal Kings—Hants, NS
I want to go to Ms. Sullivan quickly. The question was around vaccines, and obviously health is in the provincial domain. How are those conversations going with the provincial governments in terms of prioritizing vaccinations that are being received from the federal government at the provincial level?
5:10 p.m.
Chief Executive Officer, Food and Beverage Canada
All provinces right now are on phase one of their vaccine rollouts, so they're just starting to think about what phase two will look like.
I'm very pleased to say that from Ontario east, all the provinces have indicated that essential workers, including our workers, would be included in phase two. Unfortunately—
5:10 p.m.
Liberal
5:10 p.m.
Liberal
The Chair Liberal Pat Finnigan
Thank you, Mr. Blois.
Mr. Perron, you have the floor for six minutes.
5:10 p.m.
Bloc
Yves Perron Bloc Berthier—Maskinongé, QC
Good afternoon, everyone. I want to thank the witnesses for joining us today.
Ms. Sullivan, can you finish what you were saying?
5:10 p.m.
Chief Executive Officer, Food and Beverage Canada
Manitoba, Saskatchewan and Alberta have not indicated what their phase two will look like, so we don't know.
As I said, unfortunately B.C. has not included or singled out essential workers as a specific category for vaccine prioritization. Once they're finished with residents of long-term care homes and medical people—understandably—it just goes to the general public.
5:10 p.m.
Bloc
Yves Perron Bloc Berthier—Maskinongé, QC
Have you been in touch with the provincial governments, particularly the Quebec government?
5:10 p.m.
Chief Executive Officer, Food and Beverage Canada
Yes, it's our understanding that.... First of all, the Quebec government has indicated—and it's on the website so it's visible—that essential workers and food processors will be included in vaccine prioritization, so we're clearly very pleased about that. Quebec is a very large province when it comes to food processing, and I have to say one that is generally very good about responding to the needs of the sector.
5:10 p.m.
Bloc
Yves Perron Bloc Berthier—Maskinongé, QC
Thank you.
You spoke about the importance of local processing for food sovereignty. I think that everyone agrees on this matter.
I asked a stakeholder earlier about labour. He told me that the cap on foreign workers should be increased from 10% to 20%.
Do you think that this would be enough? Should the cap be set at around 30%, so that we don't need to adjust it in the future? After all, the percentage used to be set at that level.
5:10 p.m.
Chief Executive Officer, Food and Beverage Canada
I think we absolutely need to adjust it to 20%, and I think we need to consider whether it should just be open-ended. There are other safeguards in the program, which require, for example, that employers look to local markets first to make sure they are, as a first effort, trying to identify domestic people here in Canada who are available for the jobs. There are also safeguards embedded in the program to ensure that temporary foreign workers are not paid less than domestic or Canadian workers. So I do think there are sufficient safeguards built into the program to ensure that there isn't overuse and a neglect of the domestic labour markets, but the truth is that what we have found over many years is that there isn't a sufficient domestic market to fill the jobs.
I was quite disappointed last fall when I requested of the federal government whether there had been any analysis of what in fact the needs of industry are. Rather than talk about the TFW program specifically, what is industry's need for labour, and has the government actually matched that up against what structurally we have from the labour market?
Canada's demographics.... As we all know, we're not producing children the way we would have generations before. We're not going to be able to domestically ensure that we have a future supply of labour in this country unless we look to foreign workers. There are lots of other things we can do domestically as well to enhance the pool of labour that we might have here, but foreign workers are essential.
5:10 p.m.
Bloc
Yves Perron Bloc Berthier—Maskinongé, QC
Thank you.
Automation could help address the labour shortage. However, it's difficult, since this requires private investment. There's currently under-investment.
What do processors need to do to attract more investment? You spoke about the power to influence the government. What are your recommendations in this area?
January 26th, 2021 / 5:15 p.m.
Chief Executive Officer, Food and Beverage Canada
The federal government does offer programs to help industries and businesses in adopting automation and robotics, but to a large extent those programs are not applicable to our sector. I think it would be helpful for the federal government to re-examine the programs they have and understand what is specific about our industry.
Remember, a lot of the businesses in food and beverage manufacturing are small to mid-size, so when it comes to automation, you're looking at adding capital, getting over that growth spurt that you need.
Ian pointed out that Eden Valley Poultry is a $50-million poultry plant. You need $50 million to build even a small to mid-size processing plant in this country. Any business is going to require some sort of support, so I would strongly encourage the federal government to take a look at their suite of programs offered through ISED and understand whether they are really appropriate and accessible to companies in our sector.
5:15 p.m.
Bloc
Yves Perron Bloc Berthier—Maskinongé, QC
Programs such as the emergency processing fund haven't been sufficient. A number of companies and processors need these programs. Do you think that this program should be renewed and given more funding?
5:15 p.m.
Chief Executive Officer, Food and Beverage Canada
The processor fund was $77.5 million. We estimate the cost of adjusting to COVID-19 to be close to a billion dollars, so obviously the fund was not sufficient. We certainly recognize that many sectors, and every individual in Canada, have been affected by the pandemic, which is why, rather than top up that fund, we are suggesting that the government look at a refundable tax credit for essential businesses.
5:15 p.m.
Liberal
5:15 p.m.
NDP
Alistair MacGregor NDP Cowichan—Malahat—Langford, BC
Thank you so much, Mr. Chair.
Ms. Sullivan, a lot of the comments that you've given to us today certainly echo what we also heard from the Food Processors of Canada. It's great to see multiple witnesses confirming the same kinds of issues.
When it comes to the arbitrary fees that are being levied by retailers, there is that concentration that we've seen in the marketplace. Through Canada's marketplace, we see a few retailers that have a huge amount of power. You indicated that you're pleased with the steps the federal government has been taking with the provinces, and that you hope to see that code of conduct in place by 2021.
I'm curious, though. Has your association, and maybe the Food Processors of Canada, used the combined weight of your membership to try to force any action with the retailers? Can you inform the committee about your efforts on that front?
5:15 p.m.
Chief Executive Officer, Food and Beverage Canada
In the fall, about 33 different associations and producer groups co-signed a policy document asking for a code of conduct, so there's quite a family or suite of associations and producer groups involved in this. In that collective, I would say that different groups have reached out to the retail sector in different ways, sometimes to individual companies, sometimes to their association, the Retail Council.
There are five large retailers. We saw Sobeys in the fall make some comments that were quite, I think, heartening for others in the food supply chain, saying that they agreed that some of the practices that were going on were “repugnant”—I think that was the word—and that a code of conduct would be beneficial. We have not heard that level of support from other retailers.
It is absolutely my hope that as the working group set up by the ministers proceeds, the retailers will come to the table. I think any kind of product we produce—a code of conduct, for example—is always enhanced if all of the parties create it together. I would certainly want the retailers at the table, and I do think that sentiment is shared by other associations that I've been working closely with.