Agriculture Committee on Feb. 16th, 2021

[The Chair, Liberal, Pat Finnigan]

Thank you, Mr. Davies and Mr. MacGregor.

We'll start our second round.

Mr. Lehoux, you have the floor for five minutes.

[Richard Lehoux, Conservative, Beauce, QC]

Thank you, Mr. Chair. I’ll be sharing my time with Mr. Epp.

I want to thank the witnesses for being here.

My first question is for you, Mr. Davies. Thank you for coming back to the committee today.

You said that you need to hire between 3,000 and 4,000 people. You also spoke about modernization and automation.

If you further automated and modernized the company, could you reduce the number of employees needed? If warranted, could the government introduce programs to help companies, yours in particular, with this robotics process?

[Richard Davies]

In some cases, automation and robotics will certainly eliminate work stations. However, our industry still involves a great deal of customer-specific and product-specific work. We don’t work with equal components. Birds and pigs come in different forms. We shouldn’t lose sight of effectiveness and competitiveness either. Sometimes, new technology will make it possible to better meet the requirements of certain customers. The whole picture must be considered. It isn’t just a matter of reducing dependence on labour.

[Richard Lehoux, Conservative, Beauce, QC]

Okay.

Could the federal government introduce a specific program to support equipment modernization? Earlier, one of my colleagues spoke about investment tax credits or measures of that nature. Would these be good measures?

[Richard Davies]

Yes, that's right. Whether it's tax credits or any other form of support, it would help us speed up the process. It's not just the equipment that needs to be considered, but also the reconfiguraton of production sites. There are major investments involved in moving walls and erecting new ones. Any assistance program would allow us to accelerate this process.

[Richard Lehoux, Conservative, Beauce, QC]

Thank you, Mr. Davies.

I'm going to yield the floor to my colleague Mr. Epp.

[Dave Epp, Conservative, Chatham-Kent—Leamington, ON]

Thank you, Monsieur Lehoux.

Through you, Mr. Chair, I'll direct some questions to Mr. Davies.

By the way, I'm having all kinds of Internet issues here in the Confederation Building, so if I'm not coming through, I'll kick it back to Mr. Lehoux.

Mr. Davies, you mentioned the 10% cap on temporary foreign workers relative to your workforce, and certainly labour shortages are found in other industries as well. Have you had to resort, in any of your plants in Canada, to the use of labour contractors to find enough labour to supply yourself so that you can run your operations?

[Richard Davies]

Yes, we've obviously.... We don't have many operations, for instance, in Montreal directly, but we do have a couple of plants that are within, say, an hour's drive of Montreal. We've used those contractors to support some of our needs for labour.

[Dave Epp, Conservative, Chatham-Kent—Leamington, ON]

I'm sorry; I only heard a little bit of that, but I can maybe follow up. Have you had, from the use of labour contractors...? Is there any potential that that has become a source of infection?

My question is this: Why do meat-packing plants seem to have more outbreaks? I have some similar issues in the greenhouse sector in my own riding. I'm wondering if the intersection of workforces through labour contractors and into the bunkhouses in our area or perhaps into your working settings could be one of the dynamics leading to an increased number of outbreaks in the meat-packing sector.

[Richard Davies]

The sites that we have that rely on these contractors have not been exposed to any surge of infections or anything. They've been relatively under control for the past 10 to 11 months, so I can't relate it to that.

[Dave Epp, Conservative, Chatham-Kent—Leamington, ON]

Thank you.

If I can have one last question, I'll direct it to Mr. Sands.

In the 2018 Canadian Grocer interview, Kevin Grier describes the grocery sector as being somewhat divided—that was at that time—regarding a grocery code of conduct. Has the recent series of imposed fees and/or supply shortages worked to unite the sector for a cause or a more united front in calling for either a retail or a grocery code of conduct?

[The Chair, Liberal, Pat Finnigan]

Unfortunately Mr. Epp, we've run out of time. Perhaps Mr. Sands will have a chance in another question.

We'll go to Mr. Louis for five minutes.

Go ahead.

[Tim Louis, Liberal, Kitchener—Conestoga, ON]

Thank you, Mr. Chair.

Thank you to both of the witnesses for appearing today. I appreciate your time and your advocacy.

Maybe I'll start off the questions with Mr. Davies.

In my riding of Kitchener-Conestoga, we have one of the largest pork processors in Ontario, Conestoga Meats. I've been in contact with them, and I'm familiar with some of the challenges that you're facing. I know that the emergency processing fund was something that we wanted to do because we wanted to make sure that we were keeping workers safe.

Mr. Davies, are you and your companies working with other producers in Canada to share best practices with each other, particularly to keep workers safe? If so, what lessons can you and all processors take away from these measures to keep employees safe, which, of course, would lead to productivity and help us increase our processing?

[Richard Davies]

As members of the Canadian Meat Council.... Obviously, there are different committees in place where a lot of common challenges are tabled and where common practices and learning are shared so that we can better ourselves as an industry, whether it's from a hygiene perspective or whether it's safety for our workers. There are a lot of common issues that we're facing. This is ongoing.

I know for a fact that the pork committee, for example, does that, and even on the poultry side there are different initiatives and committees in place that do that on an ongoing basis.

[Tim Louis, Liberal, Kitchener—Conestoga, ON]

Thank you for that.

We're talking short-term now to keep people safe, to keep production and processing moving, but moving forward in the future, can you see practices that are in place now staying to a degree, again, to increase processing by keeping workers themselves safe?

[Richard Davies]

Obviously, as I mentioned, as a company we put up about $40 million of different equipment to improve worker safety, more so in the context of COVID. However, I would suspect that some of these measures that we put in place will become permanent and will be there, and that we put ourselves in a situation where worker safety is enhanced. If it is enhanced and remains enhanced in the future, we'll maintain them.

[Tim Louis, Liberal, Kitchener—Conestoga, ON]

I appreciate it.

You mentioned in your opening statement the automation and innovation methods that are working in other countries. My colleague, Monsieur Lehoux, also talked about whether there would be specific programs.

Can you point out how we can find that balance between labour—which is the human capital—and technology? Are there other countries or programs that are successful, so we can adopt some of those techniques?

[Richard Davies]

Being in the industry for over 30 years, I've seen some countries develop a lot more quickly than other countries. When I think of pork, I think of Denmark, which has included and implemented a lot of automation and robotics into their operations at all levels, in the context of efficiency and safety. There are examples around the world where that has been applied a lot more quickly than in others. Often, it was a limited amount of labour and other constraints that forced these countries to move in that direction.

Moving forward, I think we just need to be on top of our game to be able to remain competitive if we are going to remain relevant into the future. This is why we're focusing on that as well.

[Tim Louis, Liberal, Kitchener—Conestoga, ON]

Thank you, sir.

With the remaining time, I'm going to pivot over to Mr. Sands. As far as the support for independent grocers is concerned, I imagine everyone here...most people come from small towns and that's where we have the best conversations. You can't go to a local grocery store.... In my case, it's Pym's in Wellesley. You go there and you'll have better conversations. We all miss that. You have our support.

You mentioned that the code of conduct would put independent grocers in a better position. We want that to happen and we certainly support that, but we're talking about processing capacity on this study right now, how to process.... The bottleneck right now is the processing between production and retail.

With the time I have left here, can you help by explaining what you're proposing and how that would lead to improved outcomes at the processing level?

[Gary Sands]

I'm trying to get across here that this is related to increasing capacity. I think we've actually now convinced most of the provinces of this. If you keep the independent grocers on the playing field, that is going to have a downstream impact on the entire chain.

The small and medium-sized producers and processors in this country will tell you what the independent grocer means to their businesses. That's what we're all about. It's in our DNA. I'm not trying to hammer the chains or suppliers. I gave the example of a company that wouldn't supply independents. All we need is a framework that will provide fair dealing. That will increase capacity. We'll have a downstream impact.

[The Chair, Liberal, Pat Finnigan]

Thank you, Mr. Sands and Mr. Louis.

Now, we'll move on to Monsieur Perron.

Mr. Perron, you have two and a half minutes.

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

Thank you, Mr. Chair.

Mr. Davies, you answered me well earlier. You talked about vaccination priority, and we can understand your concern.

I would like you to tell us more about China. You mentioned it quickly, and we haven't talked about it much.

Do you consider that the government should support an industry in the midst of such a conflict, about which the industry can do nothing, given that that conflict compromises its production?

[Richard Davies]

We don't necessarily want...

We expect tangible solutions from the government so that the trade relationship can resume as soon as possible.

In some cases, when conflicts last weeks or months, it becomes very heavy financially, not only for Olymel, but for the rest of the company. So government support is not necessarily what we want. We want solutions instead, which we can include in our business plans.

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

I understand you. Basically, you're talking about a quicker diplomatic solution.

[Richard Davies]

Yes.