He's back.
Evidence of meeting #15 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 plants.
A recording is available from Parliament.
Evidence of meeting #15 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 plants.
A recording is available from Parliament.
4:05 p.m.
The Clerk
He's back.
4:05 p.m.
Chief Executive Officer, Agri-Food Innovation Council
I'm back. I live in Mr. Drouin's riding. He's going to have to work on getting us better Internet in Alexandria.
4:05 p.m.
NDP
Alistair MacGregor NDP Cowichan—Malahat—Langford, BC
The question I was asking you is, apart from any specific success stories, is there a common thread that weaves through them that you can allude to for our committee to examine when we make our recommendations to the government?
4:05 p.m.
Chief Executive Officer, Agri-Food Innovation Council
Yes, absolutely.
I think the common thread is the fact that a lot of those companies are not having their own the capacity to do this. Therefore, the joining of efforts, the ability to benefit from this incubator type, has enabled them to move forward.
In the stories we are going to assemble for you, you are going to see through those three organizations that are mentioned and others the fact that it is the same story on a regular basis. We are hearing regularly that they need to pool their resources, that they need to get some support initially and move forward.
4:10 p.m.
NDP
Alistair MacGregor NDP Cowichan—Malahat—Langford, BC
Mr. Buy, can you also for the committee's benefit talk about the relationship between local processing capacity and our primary producers and just how important that relationship is?
I know when I talk to farmers in my riding of Cowichan—Malahat—Langford, if they had that ability to add value to their products, maybe it would encourage them to expand their operations. It might actually encourage more people to get into the farming business.
If you could expand a bit more on that for our committee's benefit, that would be great.
4:10 p.m.
Chief Executive Officer, Agri-Food Innovation Council
I think you have touched on an interesting point. There needs to be a bit more of the link between the farmers and ranchers and the processing side. There needs to even be a better link between the processing side and the value-added side.
We are seeing the same thing where some farmers are looking at processing plants and wanting to get a stake in there, or wanting to better see their products moving and getting some more benefit out of that as well.
There needs to be a better correlation of the effort between the producers and the processing plants, and then the value-added process as well. We've noticed that a number of times in various consultations that we did.
4:10 p.m.
NDP
Alistair MacGregor NDP Cowichan—Malahat—Langford, BC
Thank you.
Mr. Chair, could I have a time check?
4:10 p.m.
Liberal
4:10 p.m.
NDP
Alistair MacGregor NDP Cowichan—Malahat—Langford, BC
No worries.
Maybe I will get both of our witnesses to comment. You both referred to the fact that we need to engage in this process of automation.
Maybe I will start with you, Dr. Mussell.
What can the federal government be doing about encouraging the education of our homegrown talent to help foster that automation? What more could we actively be doing in seeking recruits from abroad?
4:10 p.m.
Research Lead, Agri-Food Economic Systems, As an Individual
The difficulty we have is that we're short people who want to work in food processing and who want to work in agriculture. As I said, the trend is more people wanting to pursue professional careers. I think our challenge is to increase the value of people's jobs so that some of those people who are pursuing a professional career want to come and work in agriculture and food and in food processing. The way you do that is to make the jobs more technically challenging. You change the workplace environment and make it more amenable to a professional workplace.
I think there's reason to believe that we can do that pretty well. You can look at the bases we have in parts of the country, certainly. For example, in southern Ontario in automotive, there is a lot of engineering expertise there and a lot of electronics, AI, etc. All of these things can be deployed into this area.
4:10 p.m.
Liberal
The Chair Liberal Pat Finnigan
Thank you, Dr. Mussell and Mr. MacGregor.
Now we will go to our five-minute round.
Mr. Steinley, go ahead, please.
4:10 p.m.
Conservative
Warren Steinley Conservative Regina—Lewvan, SK
Thank you very much, Mr. Chair.
It's a pleasure to have these two witnesses before us today.
Serge, thank you very much for mentioning FCC and PIC, Protein Industries Canada, which we have right here in Regina. I also grew up near southwest Saskatchewan, and have family who worked at the Canadian agriculture research station in Swift Current. There is a lot of great things going on.
Dr. Mussell, thank you very much for your testimony.
My first question is for you, Serge.
What are some of the reasons that Canadian agriculture businesses and manufacturers are facing liquidity issues? We heard it from a couple of the witnesses, especially from Qu'Appelle Beef and Jason Aitken. In terms of meat processing plants, they face a big liquidity issue. They have to ramp up and have a lot of product on hand, but then when they send that out, sometimes it takes a while to get paid for the products they're delivering. If they have to wait for those paycheques, they're really having an issue bridging that gap. How do we fix that?
Second, do you know if their counterparts in the United States are facing that same issue?
4:15 p.m.
Chief Executive Officer, Agri-Food Innovation Council
That's a very good question. Part of my presentation that I wanted to make today included a note on the whole food system. We're talking about processing today, so I removed it, because I didn't want to go through the whole food system. However, the fact of the matter is that we need to look at the whole food system. The whole food system is what Mr. MacGregor mentioned—from the producer to the consumer, the whole.... Even the waste coming out of the food, we need to look at that. We need to look at how things are going.
Indeed what you're seeing with your distributors, Mr. Steinley, is that their payment methods are creating a liquidity issue for processing plants. We know that it is partially the same in some cases in the U.S. There are some other elements as well. There is more capacity for financing as well over there for short-term debt on occasion. That may be part of the solution. We know it is an issue.
The government can look at regulations as well. Is it normal for people to pay 90 days, or six months on occasion, as we've seen before, for products that they received? Probably not.
4:15 p.m.
Conservative
Warren Steinley Conservative Regina—Lewvan, SK
Thank you very much.
Dr. Mussell, I'd like to get your opinion on that. Is that something that government needs to be directly involved in, on the financial monetary side? Or are there ways they can fix regulations and help those businesses attract private investment and could create an atmosphere where we have more private capital coming in? Government wouldn't necessarily have to put the money into the financing. It could create a more competitive and attractive atmosphere for these processing facilities.
4:15 p.m.
Research Lead, Agri-Food Economic Systems, As an Individual
I think what you're primarily making reference to is working capital. The reason you need more working capital is that in a relatively short period of time, the environment has gotten more risky. That's the way you deal with that. You just add more cash in the system.
Now, there are a few things we can do here. Some of the risk comes from trade. It's product that we're exporting, that we think we're going to get paid for, that we think is going to be accepted by the customer, and then for whatever reason it's not. Government can take action on that and make sure that our trade agreements are complied with and we don't have frivolous and disguised protectionist actions taken against us. That decreases some of the risk.
The other aspect, of course, is what we were discussing a moment ago, which is retail relations. I think you or maybe Mr. Buy said that if it's taking 90 days for people to pay, or they pay when they want to because they can get away with it due to the leverage they have in the supply chain, that's incorrect. That needs to be corrected. Government can use some of its influence to do that.
4:15 p.m.
Conservative
Warren Steinley Conservative Regina—Lewvan, SK
Thank you very much.
This is going to be quick.
I'd be very sad if I couldn't mention PIC, so Mr. Buy, could you give a couple of examples, in 30 seconds or less, of ways in which the protein industry in Canada has had a few successes here in Regina?
4:15 p.m.
Chief Executive Officer, Agri-Food Innovation Council
Thirty seconds to go through all the examples with PIC would not be enough. I think you heard from PIC at the committee not long ago. I don't want to be accused of being their cheerleader, but they have done a great job and keep doing a great job. I am a fan. They certainly have done well.
I think the main issue, Mr. Steinley, is what's next for PIC. We think that the quicker the government can talk about the future and about future funding for an organization such as PIC, and extend the program to other—
4:15 p.m.
Liberal
The Chair Liberal Pat Finnigan
Thank you, Mr. Buy. Thank you, Mr. Steinley.
Now we go to Mr. Louis for five minutes.
4:15 p.m.
Liberal
Tim Louis Liberal Kitchener—Conestoga, ON
Thank you, Chair. Thank you to both witnesses for being here. This is extremely informative, and I very much appreciate it.
Dr. Mussell, I would start talking to you because, well, I'm down the road. You're in Guelph and I'm in Kitchener—Conestoga.
Monsieur Buy mentioned that many of the success stories are supported businesses. Mr. MacGregor rightly brought up the idea that young entrepreneurs should be an important part.
You also talked about our being short of labour, yet whether in Guelph or in Waterloo region, with the two universities and the community college, which also has a program for processing capacity, there's a quite skilled labour force.
Can you expand on your mention of how we can make jobs more technically challenging, or how we can support our young entrepreneurs and the next generation of processing workers and then agriculture sector workers?
4:20 p.m.
Research Lead, Agri-Food Economic Systems, As an Individual
Sure. We have capability around artificial intelligence, automotive engineering, chemical engineering, chemistry and other aspects of excellence. I don't think we've particularly been effective in deploying that capability in thinking about how we turn a $20-an-hour job into a position that perhaps could pay $70,000 or $80,000 a year and really be a professional occupation for somebody.
I'm not sure this is an issue of turning out people with undergraduate educations from universities as much as it could be a community college thing. It's almost more of a sub-engineering field.
4:20 p.m.
Liberal
Tim Louis Liberal Kitchener—Conestoga, ON
It could also be that these are the people who are designing the software, designing the programs that could very well do that.
Your mandate was very interesting reading. You talked about making processing more competitive, more sustainable and more profitable. So many times we hear words like that, “sustainable” versus “profitable”, as diametrically opposed words. You're saying that you're working with companies, that you can make them competitive and make them profitable while still being sustainable.
Can you tell me some of the ways in which you can help strike that balance so that we can use it in our processing?
4:20 p.m.
Research Lead, Agri-Food Economic Systems, As an Individual
Well, I think it builds on your last question.
One thing that Canada brings to the table is the natural resource base we have. It's a sustainable resource base. It's resilient. It's highly regarded internationally. Of course, it's totally out of scope relative to the domestic population, the people we have to feed.
That makes Canadian agri-food, I think, a fundamentally attractive proposition. I don't agree with the idea that we have to somehow trade off sustainability with profitability. I think the two support each other. We want to foster that support.