Agriculture Committee on Feb. 23rd, 2021

[Richard Lehoux, Conservative, Beauce, QC]

Thank you, Mr. Chair.

I thank the witnesses for being with us this afternoon.

Ms. Gosselin, you said that you are working very hard on the development of new products related to non-fat solids. Are these products that you're trying to develop—and I'm sure you're going to get there—consumer products here in Canada?

We know that because of the new agreement with our U.S. neighbours, we have to obtain certain authorizations to export supply-managed products.

[Élise Gosselin]

Indeed, this is one of the issues we need to address. As our ability to export these coproducts is limited, we need to find solutions. In fact, we are looking for solutions to access high value-added markets, and more realistically, high value-added domestic markets or export markets where we may still have export product lines. As a result, this eliminates skim milk powder, but still leaves room for niche products, such as milk protein concentrates or whey protein concentrates, for example. This still allows certain products with a higher added value to be preserved.

[Richard Lehoux, Conservative, Beauce, QC]

With regard to these higher value-added products, would it still be possible to develop these markets abroad?

[Élise Gosselin]

There are still a few export product lines left, and this is part of the uncertainty for processors, since they are high-risk investment solutions. They want to make sure that if they develop a product that will be used in five years, the export capacity will still exist. This is part of the important discussions.

[Richard Lehoux, Conservative, Beauce, QC]

In its negotiations, the federal government left these compensations and parts of very important articles on the table.

What compensation could the government provide in this context?

It isn't easy to guarantee markets for the next five or ten years.

[Élise Gosselin]

Actually, stability is critical in the sense that the things in place now must be kept in place. That is a major step already.

I feel that the Canadian Dairy Processors Association would be in a better position to talk to you about that.

What I want you to know is that we have solutions and we are proactive in finding innovative solutions. Support in that sense is always important.

[Richard Lehoux, Conservative, Beauce, QC]

Thank you, Ms. Gosselin.

My next question goes to Ms. Theodore.

You talked about the problems caused by the immigration programs and that they should be adjusted for the better. Do you have any suggestions for us in terms of adjusting those programs? They certainly are quite onerous, as we clearly saw during the pandemic.

In your opinion, how could we improve that situation?

[Nadia Theodore]

In our opinion, at Maple Leaf Foods, the biggest problem, particularly with the temporary foreign worker program, is the complexity of the application process from start to finish, the complexity and the time commitment, because, as we were saying, we are dealing with acute shortages.

Then there's the cost. As we said, at Maple Leaf Foods we are looking for the most efficient way to attract long-term labour to our plants. That's what we want to do first, and then if we need to move to a temporary foreign worker program, in order for it to make sense for us, the cost and the time factor need to make sense. What we have found is that for us it does not. It takes way too long, and the cost for the company is too heavy.

[Richard Lehoux, Conservative, Beauce, QC]

Thank you.

Could you give some details about the flexibility of the regulations?

[Nadia Theodore]

I could go on forever, so I will try not to.

I can't remember if the point was made by Mr. Laycraft or Mr. Lowe that oftentimes with regulation it's not the particular regulation. For us, what we find is that it's the inflexibility in what we are required to do.

As you rightly said, it is a lack of flexibility.

[Richard Lehoux, Conservative, Beauce, QC]

It really is about interpreting the regulations.

[Nadia Theodore]

That's right.

It's too focused right now on the process, whereas it needs to be focused on the outcome and on providing the company with the flexibility to get to a predetermined outcome that, with the regulators, we have agreed on.

In 2018, there was a suggestion to form a little bit of a code of conduct, when we're talking about regulation, between the regulator and the industry. We think that's a good idea because it puts in place certain things that we are all going to agree to when we're talking about building regulation between us to ensure that it makes sense for both the regulator and the company.

[The Chair, Liberal, Pat Finnigan]

Thank you, Ms. Theodore.

Thank you, Monsieur Lehoux.

[Richard Lehoux, Conservative, Beauce, QC]

Thank you, Mr. Chair.

Thank you, Ms. Theodore.

[The Chair, Liberal, Pat Finnigan]

We will now to go Mr. Blois for up to six minutes.

Go ahead, Mr. Blois.

[Kody Blois, Liberal, Kings—Hants, NS]

Thank you, Mr. Chair.

Thank you to all our witnesses, who have provided some great testimony here this afternoon.

I'm going to start with the Canadian Cattlemen's Association. You certainly, in your opening remarks, were talking about capacity in eastern Canada. Specifically in my neck of the woods, in Nova Scotia and the maritime provinces, our livestock producing and processing capability is largely at the provincial level, 100%. We heard from our Margie Lamb from the pork council of Nova Scotia earlier in this study about some of the challenges they have. We have Atlantic Beef in Prince Edward Island, a federally regulated slaughterhouse.

Can you elaborate, in terms of your membership in that area, on the need to grow processing and what it could mean to driving that industry in our part of the country?

[Dennis Laycraft]

Bob, maybe I'll step in on that one.

There are two parts. First of all, we're trying to make some risk management tools available to producers in the maritime region. We've been funding the eastern price index to try to make price insurance available to them.

[Kody Blois, Liberal, Kings—Hants, NS]

Obviously, we're focused on processing, notwithstanding the fact that you need a feedstock to be able to drive some of that, and right now we're importing.

As I understand it, then, perhaps Atlantic Beef, which is still importing from Quebec, could benefit from having a more local feedstock, but we need to have the tools in place to drive producers to get us to that fuller capacity. Is that correct?

[Dennis Laycraft]

That's one piece of it. We did actually interview them on this export diversification fund, and they are doing some expansion in the Atlantic Beef operation. They would look at more expansion if more matching money was available. Again, it's back to risk tolerance as you move forward.

One thing we don't talk about much, but which is always kind of behind the scenes on these smaller-selling local operations, is rural Internet. Those kinds of things are really important. It doesn't help when your front door goes down once or twice a day when you're trying to sell something. You need a sound, reliable infrastructure there for those businesses to really operate efficiently.

[Kody Blois, Liberal, Kings—Hants, NS]

We'll pass that off to Minister Monsef.

Ms. Theodore, obviously, Maple Leaf, as you mentioned, is the largest agri-food processor in the country. You reach across the country, but particularly in the maritime provinces there has been some centralization of facilities. For example, some of the ones that existed in my riding in the Annapolis Valley have since centralized to other places.

Can you speak to the evolution for Maple Leaf in terms of why those decisions were made? I assume it was probably to get to a cost-competitive level. How can we work with industry to build capacity in the regions without hurting, I guess I would say, the economic case? Is there a middle ground there to keep that regional capacity without compromising you in an international marketplace?

[Nadia Theodore]

That is the million-dollar question, right? I think the answer is yes. Of course, there is that sweet spot somewhere, but I think the difficulty in finding that sweet spot goes back to the principles we have all been talking about here.

When we, as a company, are looking at either building a plant or maintaining a plant, and then looking over the long term at the economic viability of that—let's say, we're talking about building a plant—for us, it's a combination of the cost, both monetary and time to build it. So that goes into the regulation question—the regulation from the federal level right down to the municipal level—and the risk tolerance we're comfortable with, especially when we look at what the long-term viability is going to be for the sector.

I will give you an example. It's not a Maritime example, but I think it's relevant here. We are making a significant investment in a London poultry plant, taking into consideration the importance of building a sustainable plant that's looking into the future. In so doing, we obviously took into account the landscape of the poultry industry. However, what COVID-19 has demonstrated to us, and what makes us nervous—I will be very frank—is the way that our supply management system is set up for poultry right now. With that investment we made in that London poultry plant, and knowing what we know and how the system moved through COVID-19 for us, we face significant losses and significant pressure to the business, which is troubling for us.

[Kody Blois, Liberal, Kings—Hants, NS]

I'm sorry, but I have to intervene because I only have 40 seconds. I wish I had more time.

The final point is on anything you could submit to the committee. We hear a lot about regulatory reform. It's music to my ears. I think there are important things government can do without spending that help drive economic growth. Beyond trying to create that innovative culture within the regulatory framework, if you have any choke-point areas, I think we would love to hear about them as a committee.

I probably have only about 20 seconds.

Ms. Gosselin, you mentioned the importance of research. Can you speak about the research? For example, in my riding it's the Kemptville research station. In your area in Quebec, is it the Agriculture and Agri-Food Canada research stations that are helping drive some of that innovation?

[The Chair, Liberal, Pat Finnigan]

Unfortunately, we're out of time.

As Mr. Blois suggested, if there's anything you want to submit to the committee, by all means, send it to the chair.

We now move on to Mr. Perron.

Mr. Perron, you have six minutes.

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

Thank you very much, Mr. Chair.

I didn't have the opportunity to speak to Ms. Theodore, because we had some interpretation problems.

Ms. Theodore, you talk a lot about your need for labour. Some witnesses have asked us to increase the percentage allowed in processing plants from 10% to 20%.

In your opinion, is that a good step? Is it enough? Should we increase the percentage to 30%?

Are the pilot projects working?

[Nadia Theodore]

Yes, they are working, but we can do more.

It's going to take us doing the actual research to understand where our gaps are so that we're not just going from 20% to 30% haphazardly.

Yes, I think that it's good. Yes, I think we can do more. We really need to dig in and take the time to understand where our gaps are in order to think about what the solutions are, and I don't think we have done that adequately to date.