Agriculture Committee on Feb. 23rd, 2021

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

But do you still support the request to increase the percentage to 20%?

[Nadia Theodore]

On its face, yes.

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

Okay, thank you very much.

You said earlier that the poultry sector is losing a lot of money and that you are living in uncertainty. Is that because of the recent trade agreements? Can you tell us a little about that?

[Nadia Theodore]

Absolutely, I'm happy to, and I'll try to be brief. It's complicated, but in brief, the issue is that when we do our allocations for the poultry sector, what happens is that the processors take on all of the risks but have none of the power in the allocation.

What we saw during COVID-19 is that, first of all, at the beginning, we were able to fix that allocation and take a regional approach so that it kind of measured out okay, but as we got further into COVID-19, there was an unwillingness for us to do that again and again. What we saw in this last allocation is that it was really only Ontario, through the goodness of its heart, that decided to work with us to make the allocation such that we took into account the reduced need for poultry and adjusted the allocation appropriately.

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

Could starting the promised compensation programs give you some breathing room right now?

[Nadia Theodore]

You know, it's two different issues, but, absolutely, we wait very patiently to hear about what processors are going to be getting. We're happy that producers got their compensation, and we wait very patiently to hear about the compensation for processors.

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

Great, thank you very much.

Ms. Gosselin, you talked about the uncertainties resulting from the trade agreements. Of course, I am pleased to hear you say that you still have export markets and you are conducting research and development to come up with new products. But that comes with a financial risk and some uncertainty. If you take five years to develop a project, you wonder whether the market will still be there.

Currently, are the uncertainties that result from the trade agreements blocking innovation?

[Élise Gosselin]

That's a very good question and it's difficult—

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

I can frame it differently. There have been concessions, but if you were told that there would be no more in the future, would that help you?

[Élise Gosselin]

Yes, certainly. There is some discomfort. We are still not seeing the full impact of the agreements reached in recent years. There will be restrictions in market share and export capacity and the dairy industry is preparing for that. It's already very complex.

The dairy industry's message is very clear: it can't sustain those kinds of changes anymore. Otherwise, it will create an environment that will have adverse effects on business as whole, not just on innovation.

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

If that was enshrined in legislation, it would help you, if I understand correctly.

Let's go back to your students, whom we left at the end of our first conversation. A number of speakers are testifying about the need for promotion in order to recruit labour in the agri-food sector.

Could your students not be a source of labour? Could you tell me what you think?

[Élise Gosselin]

Recruitment is very difficult at all levels, even with graduates. Measures have to be put in place to attract people to our sector to work. We have research themes, such as natural foods for young “foodies”, food manufacturing processes, animal welfare and the environment. People have a kind of stereotypical vision of the agri-food sector, but when we send out the message that our industry wants to reduce its environmental footprint and improve animal welfare, we have a lot of success in those projects.

[The Chair, Liberal, Pat Finnigan]

Thank you, Ms. Gosselin and Mr. Perron.

Now we'll go to Mr. MacGregor for six minutes.

Go ahead, Mr. MacGregor.

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

Thank you, Chair.

Ms. Theodore, I think in a previous question my colleague Mr. Epp was asking you about the grocery code of conduct. Is there anything you want to add on that from Maple Leaf Foods' perspective?

[Nadia Theodore]

On the code, what I will say is this. I think that promoting and supporting good-faith dealings and responsible commercial conduct is important. Does Maple Leaf Foods think that is a good idea? We do, 100%. What I would say is that, for us as an industry player, it is 100% clear, especially from speaking with the smaller parties, that it is a struggle. The margins just aren't there. The margins aren't there to give up to 6% to grocers randomly, at any given time, when requested.

Is that an issue longer-term, especially when we're talking about innovation, when we're talking about growing the sector, when we're talking about getting new players, smaller players involved? We have to connect the dots, absolutely. Do I think, speaking on behalf of Maple Leaf Foods, that it is going to be easy to get all provinces and territories across the country to come up with a code of conduct that is going to work for everybody, which is what would be needed in order for it to really be effective, if we're going to be honest with ourselves? I think that might be difficult.

We do have to, at the end of the day, figure out how we are going to work together—all parties, all stakeholders—to make sure that we are, in our dealings with each other, moving towards the greater good of the sector. That's not to sound too Pollyanna about it, but I think that's actually what it's going to come down to. Whether that's a code of conduct or whether that's something else, we can talk about that ad nauseam, but to me that's really the core question.

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

Thank you so much.

Madame Gosselin from Novalait, you've certainly had a lot of questions, but is there anything you want to expand on in the three minutes I have left, anything you want our committee to really focus on, anything you felt may have been cut off by a previous question round or anything like that?

[Élise Gosselin]

Thank you very much for giving me this opportunity.

I am sure you have gathered that one of the unique features with Novalait is that producers and processors work together. That's one of the company's strengths.

People know us throughout the province, but we are very pleased to be able to make a name for ourselves nationally. Being able to work in a continuum, from production to processing, gives us an additional voice with which to solve problems. That's really the approach we wanted to be able to present. Often, producers and processors find themselves in negotiating roles. At Novalait, we are showing that it is possible to also work on common issues, and that allows us to go a lot further.

Once again, innovation is central to everything we are going to do subsequently in terms of food processing. So it's really important to continue the financial effort of supporting innovation. We are seeing the results, not only in knowledge and data, but also in the science that is helping companies to make sound decisions.

We have not talked a lot about animal welfare, but it is also one of the issues on which we have done a lot of work. We wants to continue having that important discussion, based on facts, not on perceptions. The producers and the processors are in agreement to do so together, which is important.

So we need to support that quest for innovation in the future, because it is intimately linked to the economy. It is important to consider research in terms of the solutions it can find for industry.

Thank you.

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

Thank you so much.

Mr. Chair, I think I'll leave it at that. Thank you.

[The Chair, Liberal, Pat Finnigan]

Thank you, Mr. MacGregor.

Thank you, Ms. Gosselin.

That's the end of the question round, but if the committee will indulge me, I will use my chair privilege to ask a question. My question will go to Ms. Theodore. I may not like the answer, but I think it's a question that has to be asked.

Why is it that Maple Leaf, a Canadian icon with its maple leaf logo, would choose Shelbyville, Indiana, for a $310-million protein plant, when we have here, of course, the supply, the raw material, and the quality? Why is it that you chose to do that? Why is it that we're not getting the private sector investment into these plants?

We'll hear your answer. Thanks.

[Nadia Theodore]

Thank you, Mr. Finnigan, for the question.

My response was in my opening remarks. I will preface it by saying that it is complicated. It's not ever one thing, but surely, in terms of what I said in my opening remarks about the cumulative impact and the cumulative burden of regulation, from both a cost perspective and a time perspective—and also from a predictability perspective—all of us around this virtual table understand the business and understand that the number one thing for business is predictability and cost efficiency. That really is what it's about.

What I will say is that for all its good—and there's a lot of good—the not-so-good in our regulatory system is that it stymies investment. It creates barriers to predictability, barriers to innovation and barriers to cost efficiency that oftentimes far outweigh and even stymie the health and environmental positives that we are trying to gain.

While I won't speak to the specifics with regard to a specific decision of putting one plant in X instead of Y, I do think we should look to these types of examples, study them carefully and be very serious about thinking through our regulatory framework going forward, especially when we're talking about recovery, and especially when we're talking about scaling up our agriculture and agri-food sector going forward.

[The Chair, Liberal, Pat Finnigan]

Thank you very much, Ms. Theodore. I didn't think I'd like the answer, but I think it's a question that has to be asked, and it should be part of our plan to increase our processing sector. I thank you very much.

With that, I shall thank the Canadian Cattlemen's Association. Mr. Lowe, thank you so much for being here today with us. Mr. Laycraft, thank you for your presence and your comments.

Thank you for joining us today, Ms. Gosselin.

Also, to Maple Leaf Foods, of course, and Ms. Theodore, thanks so much for being here today.

That concludes our committee work for today. We shall see all of you on Thursday.

Thanks, all of you. The meeting is adjourned.