Evidence of meeting #14 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 lamb.
A recording is available from Parliament.
Liberal
Kody Blois Liberal Kings—Hants, NS
Certainly I've heard a lot of that at the provincial level, but even federally, we have the Kentville research station and others.
Is allowing the federal government to have a food policy that allows more local procurement something that can benefit?
Chair, Pork Nova Scotia
To get into those institutions, your hospitals, your prisons, and so on, it has to be federally inspected. Unless there's legislation that changes that, I think there needs to be a will at each province, not just here, to say to these institutions that they can buy a certain percentage locally. We see that our provincial government has said that, earmarked so much, but I think that percentage needs to increase.
Yes, there are things that can be done, and do you know what? I look at all you've done over COVID, and when there has been a will and a need, there has been a way.
Liberal
The Chair Liberal Pat Finnigan
On that, we'll move on.
Mr. Perron, you have the floor for six minutes.
Bloc
Yves Perron Bloc Berthier—Maskinongé, QC
Thank you, Mr. Chair.
My thanks to the witnesses for being with us.
I see that you are much of the same mind in terms of local processing.
Mr. Filiatrault, your business model is very interesting. You give priority not only to buying local, but also to selling local as much as possible.
You were talking about the concentration of processing and how it prevents you from having traceability and a certain level of quality control. That is certainly a major issue.
What barriers do you see for small and medium-sized abattoirs? What is preventing businesses like that from starting up?
What can the federal government do about it?
Vice-President, Finance and Administration, Benny & Co.
Currently, guaranteed supply is pretty much limited to the two big players in the market. So if you wanted to open an abattoir tomorrow morning, the guaranteed supply volumes would be so low that it would be absolutely impossible to make any profit at all. That is where the problem lies, a bit like Mrs. Lamb was saying. Yes, it is a different problem, but it is related.
I could not go to a chicken farmer and tell him I'm going to buy his output, because my supply would be so limited that it wouldn't be profitable. It takes far too long to legally increase production volume enough to make money. So the market is virtually closed in that respect.
Bloc
Yves Perron Bloc Berthier—Maskinongé, QC
No one wants to shut down the big abattoirs, but everyone understands that the concentration of animals can be problematic. We saw that during COVID-19, didn't we?
What can be done to limit the trend, in acquisitions, for example?
Vice-President, Finance and Administration, Benny & Co.
The solution is tough, because we didn't mind them getting too big. For example, a few years ago, I was dealing with an abattoir that allowed us to trace their products. It was very easy. The service and delivery were excellent. When the fact that the abattoir delivered traceable products became known, it was bought up two weeks later. Then it was shut down and production was moved to the current facility.
So what can be done? It starts with guaranteed supply volumes. If you remove them, some industry players are definitely going to want to build an abattoir.
Bloc
Yves Perron Bloc Berthier—Maskinongé, QC
Mrs. Lamb, you mentioned financial support. You say that you can't just look at the financial statements, because that doesn't give the full picture, and that you could have gone bankrupt seven or eight times, but you didn't because you are well organized.
Could the government step in to encourage small and medium-sized processing plant startups that would complement the supply and meet the very legitimate needs of businesses like Benny & Co. and probably yours as well?
Basically, it doesn't have to cost the government money. It could simply be a matter of guarantees.
Would that be possible, Mrs. Lamb?
Chair, Pork Nova Scotia
Thank you, Mr. Perron.
It is actually one of the things that, when we have gone to government to speak to them.... Being a grandmother, I do not want to see my grandchildren saddled with debt, and my thought was always that we need long-term, low-interest loans in order to personally take this on. You know what? I think out of need, out of crisis, sometimes is where the passion comes to try to solve these problems. It is with that crisis and passion that I went to look at this possibility. Everything that it's come to is, the unfortunate part about an abattoir—
Bloc
Bloc
Yves Perron Bloc Berthier—Maskinongé, QC
From what I understand, it would therefore meet a need, if a guarantee or some form of financial contribution from the government would make it possible to spread the debts over a longer period of time.
Mr. Filiatrault, how long have you had this issue? Is the change in the abattoir you dealt with a recent one?
Vice-President, Finance and Administration, Benny & Co.
It has been several years; it must be about five years ago. Since that time, we have been dealing mainly with the two major producers.
Bloc
Yves Perron Bloc Berthier—Maskinongé, QC
In those five years, have you discussed the matter with the various levels of government? Is this the first time you have brought up the issue?
Vice-President, Finance and Administration, Benny & Co.
I have had some discussions, but I believe this is the first time we have seen so much interest. I have regular discussions with Restaurants Canada, of which I am a director.
Bloc
Yves Perron Bloc Berthier—Maskinongé, QC
All right.
Of course, everyone around the table wants to see new players in the processing industry, but it doesn't happen overnight and it can be difficult.
To ensure your traceability, isn't there a way to get what you want from your current processors?
It seems to me that it's a legitimate request.
Vice-President, Finance and Administration, Benny & Co.
That is exactly what we tell them. I will let you put the question to them.
I believe that Mr. Davies appeared before the committee this week.
Liberal
The Chair Liberal Pat Finnigan
Thank you, Mr. Filiatrault.
Thank you, Mr. Perron.
Now we have Mr. MacGregor for six minutes.
NDP
Alistair MacGregor NDP Cowichan—Malahat—Langford, BC
Thank you very much, Chair.
Ms. Lamb, I'd like to echo Mr. Blois' comments.
Thank you for your testimony, your opening statement. I think you've certainly painted a pretty daunting picture for anyone who's considering becoming an entrepreneur in the pork industry: the variety of price swings you have to deal with as an industry. You've already outlined some of the big concerns you have.
You were talking a lot about the cash flow problem that you have, and while we don't have much influence that we can wield over private financial institutions, I wanted to talk about Farm Credit Canada. Are there any recommendations you have for what we could present to the government? You talked a little about the long-term loans. Are there any further details you wanted to add on that front?
Chair, Pork Nova Scotia
I don't think directly to farm loan. I know through Canadian Pork Council we have asked for government to work with agencies to have made-in-Canada pricing. It would look at pricing all across Canada for all pork producers regardless of province. Also, one of the other things is to look at zoning that may not affect pricing unless there was a crisis, but it would eliminate some of the concern with a shutdown in exports through a disease, like BSE did with cattle. Letting the federal government and certainly Farm Credit have a more open mind to.... For abattoirs, the first part is never going to be profitable, but the abattoir is a means to the added value. Without the abattoir, we can't get down the other side of the road.
NDP
Alistair MacGregor NDP Cowichan—Malahat—Langford, BC
Absolutely. Our previous witness was from Northern Natural Processing in Saskatchewan, and he listed the three barriers: funding, critical mass and market power. Yes, the upfront capital costs are quite significant, but they are that avenue to allow people to make more money farther down the road.
You mentioned something about the food supply in Nova Scotia. I come from the other part of the country. I'm on Vancouver Island. We're very aware of being on an island. We're dependent on BC Ferries for many of our supplies, and we have a similar outlook on food supply on Vancouver Island.
Part of our study is to also examine the goal of increasing local capacity to protect food security. You mentioned that. Is there anything you wanted to expand on on that particular point to aid us with that part of our study?