Agriculture Committee on Feb. 16th, 2021

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

Thank you, Mr. Chair.

I want to thank the witnesses for joining us, especially Mr. Davies, who agreed to set aside more time for us. We really appreciate it.

Since I had many questions for you, I’m very pleased to see you again. You may recall that, when we spoke the first time before the interpretation issues arose, we were talking about temporary foreign workers. You wanted the cap on the number of foreign workers that plants could hire increased to 20%. I don’t know whether I had time to ask you the question, but I’m putting it to you today.

Shouldn’t you be asking for 30% instead, as was the case in the past? Will a 20% cap be enough in the long run?

[Richard Davies]

In the long run, we may consider this. However, given the need to make progress, we’re asking for 20%. Will we need to ask for 30% at some point? It may be necessary over the longer term, perhaps in the next three to five years, depending on the demographic and economic changes in the coming years.

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

Given that your workforce is the first issue that you identified, and it’s a key issue, you’re probably aware of the pilot project created to speed up applications for permanent residence. The project didn’t take place in Quebec, but elsewhere. Last week, I was very pleased to meet with a group of workers from Mauritius who are coming to our area, to Yamachiche.

How can we help you welcome these people? We spoke a great deal about red tape. Could the Canadian government take very concrete steps to make life easier for you in this respect?

[Richard Davies]

Human resources matters aren’t necessarily my area of expertise. Once we’ve found workers who want to join our company, there are still some challenges in terms of the integration and welcome process. It’s simply a matter of giving them all the support that they need to properly integrate into their new community, finding accommodation for them and welcoming their families afterwards, if necessary. Comprehensive support is required. A number of discussions have already taken place with our human resources teams, who have already established this need.

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

I know about the housing situation as well. Thank you.

I’ll now talk to you about the emergency processing fund, which was implemented during the crisis last spring to help processors make emergency changes, as the name implies. We’ve heard from several companies that were denied funding because the money had run out.

Do you think that this type of program should be reinstated? At the very least, should funding be made available again so that companies whose applications couldn’t be processed can now receive money? Do you think that there was an imbalance in this respect and that the major processors, since they were better organized, could submit their applications more quickly, at the expense of smaller processors? I want to hear your thoughts on this.

[Richard Davies]

In my opinion, all companies, regardless of their size, should be treated fairly. If some companies were unable to receive the assistance requested, for whatever reason, the situation should be looked at again and efforts should be made to ensure that they get the help needed. For the same reason that I gave earlier regarding access to government support for investment, it’s necessary to ensure that everyone is treated fairly.

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

Olymel is quite an important company, a source of local pride even. If I understand you correctly, Mr. Davies, you still think that it would be worthwhile to have small processors round out your offering. The committee is looking at ways to improve regional processing.

Do you think that new small and medium-sized processors or slaughterhouses could round out your network?

[Richard Davies]

Some processing activities could nicely round out our primary activities so that we can better serve our Canadian or even foreign customers. This could certainly be done on a regional basis. For example, this could involve more specialized activities that we, as a company, could support.

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

Previous witnesses told us about a traceability issue when the processor is too large. It becomes difficult for a customer to ensure traceability. We understand that difficulties may arise in this respect. I gather that this could round out the offering.

[Richard Davies]

Regarding traceability, the CFIA oversees our pork, poultry and further processed product operations. Canada’s traceability program is fairly rigorous, regardless of the company’s size. It ensures that, when necessary, products that shouldn’t be on the market are subject to a targeted recall. Canada is second to none in the world when it comes to traceability systems. It’s very rigorous.

[The Chair, Liberal, Pat Finnigan]

Thank you, Mr. Davies and Mr. Perron.

Mr. MacGregor, you have up to six minutes.

[Alistair MacGregor, NDP, Cowichan—Malahat—Langford, BC]

Thank you, Mr. Chair.

Mr. Davies, you mentioned the outbreak that has happened at your Red Deer processing facility, and you talked about the issues that your company and many companies are going through in the supply of labour.

With your current workforce, it was reported.... The UFCW did a survey of their current workers at the plant in Red Deer. Approximately 80% of them reported feeling unsafe at work. Can you tell the committee what steps Olymel is taking to try to address those concerns? Eighty per cent is a pretty high number.

[Richard Davies]

It's a big number. I'm not privy to that information. Is this in the context of COVID, or generally speaking?

[Alistair MacGregor, NDP, Cowichan—Malahat—Langford, BC]

It didn't go into that much detail, but it is in relation to the outbreak, I believe.

[Richard Davies]

Yes, I would say it would be the outbreak.

There are tremendous measures that were put in place basically in all the facilities. Since March of last year, we've spent close to $40 million implementing a whole bunch of equipment that would optimize and secure, in the context of the nature of our operations, the safety of the workers as best as possible. This we have done.

Up until this recent outbreak in Red Deer, over the course of 10 months, I think we only had, from memory, 30 or 37 cases at the Red Deer facility. Now we've had this unfortunate outbreak. I would say the environment, all in all.... Basically, we've implemented the same measures in all the facilities, dealing with the physical aspects of these facilities. We've had a pretty good record in containing and limiting the spread of the virus whenever it occurred. The environment has been in the best of conditions, with the best measures taken to try to optimize and maximize the safety of the workers.

[Alistair MacGregor, NDP, Cowichan—Malahat—Langford, BC]

With your Red Deer facility, how much of the company's total processing capacity does that one plant represent?

[Richard Davies]

It's close to 30%.

[Alistair MacGregor, NDP, Cowichan—Malahat—Langford, BC]

Is that 30% of your company's total operations in Canada?

[Richard Davies]

That's right—on the hog side, on the pork side.

[Alistair MacGregor, NDP, Cowichan—Malahat—Langford, BC]

Do you know how long this shutdown is expected to last?

[Richard Davies]

As I mentioned earlier in my comments, if everything goes well with the workers and the number of infected going down—and we expect it's going to go down very rapidly—we have an opening window of getting back to normal, at least back to operation, sometime in the course of next week. But we're going to have to see how the coming days develop for the infected workers, how this is contained and how we can track this down. A lot of people are involved there.

[Alistair MacGregor, NDP, Cowichan—Malahat—Langford, BC]

I know Ms. Rood asked a little about this, but what's your anticipation of the domino effect this will have on hog producers?

When COVID struck a lot of our beef-processing capacity over 2020, that created a huge rolling backlog. Will the same happen with our hog producers?

[Richard Davies]

As I mentioned, we have important hog operations in Saskatchewan that supply over 50% of the Red Deer facility volume. We're confronted with that. A few days will be tough, but it will be manageable. It's when you start getting into 10 days to two weeks that it starts to become a little more critical, depending on the different sites.

We went through this here. We're still trying to dig ourselves out of the hole here in Quebec and also with our Ontario producer-suppliers and finding solutions for them, obviously sometimes with significant financial loss to be able to support that. We are taking all the proper measures to try to alleviate that as best we can.

That's one of the reasons we're asking to put the workers in the plants on a priority list as far as COVID-19 vaccinations are concerned, so we don't get into this type of situation, knowing that the market can wait for the meat because there are other sources for meat, but from the farm-to-plant perspective, that is critical and that's a huge problem.

[Alistair MacGregor, NDP, Cowichan—Malahat—Langford, BC]

I have one final question. You have 30% hog-processing capacity going through this one plant. What lessons are you going to learn for the future? If we have this plant shut down again in the future, for an even longer period, what's the answer?

Do we need to somehow decentralize operations? Is that even possible to do in this very competitive market that we have?

[Richard Davies]

As you say, it's very competitive.

As I mentioned, we have been handling this and operating, basically, quite free of any disruption since March in Red Deer. We had a couple of close calls, but obviously we've put in all the proper measures within the plant. Obviously, we try to educate our employees as best we can—because they're not living in the plant; they're also out there as members of society—and try to make sure they apply the best practices.

This is under investigation to understand where it came from and to try to learn from that.