Agriculture Committee on Feb. 23rd, 2021

[Lyne Bessette, Liberal, Brome—Missisquoi, QC]

Thank you very much.

In committee, we heard a lot about the labour shortage in the food processing sector, and that automation could be a solution. What do you see as the future of mechanization and automation in the dairy processing sector? Is this part of your research?

[Élise Gosselin]

In fact, it is mainly the equipment manufacturers who will be the leaders in this sector. This is indeed very important. What goes hand in hand with automation—we see it on farms—is the fact that dairy farmers who use milking robots can spend more time on business management.

It's the same for processing. We can reduce the operational work, but we will still need people to manage and analyze the business. That's where we come in.

[The Chair, Liberal, Pat Finnigan]

Thank you, Ms. Gosselin. Thank you, Mrs. Bessette.

Mr. Perron, you have the floor for the next six minutes.

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

Thank you, Mr. Chair.

I thank the witnesses for being with us today.

Ms. Gosselin, I am happy to see you again. You were headed in a good direction and we will continue in this vein.

We heard a lot of testimony about labour issues and the need for technological innovation and process improvements. We also heard from several witnesses about the lack of investment in agri-food processing in this country. Your organization, having now been in existence for 25 years, seems to be the type of model we would like to see replicated elsewhere. I'd like to know what your challenges and needs are.

You are before a committee that could influence government decisions through its recommendations.

[Élise Gosselin]

One of Novalait's strengths is that when we say we want to invest in research and do it according to the needs of the industry, we put money on the table. However, it is also very important for us to use this money as a lever and to be surrounded by financial partners, whether at the provincial or federal level, so that they support our sector's approach to innovation.

We take care of the early stages of the process—research, knowledge development and proof of feasibility—but once that stage is complete, the company needs financial support. There are programs, but we've found that the wait time is longer. We can see that the continuation of this support from public finances is uncertain, but the message we are hearing is that in order to make a rapid economic recovery from the COVID-19 pandemic, we need to be able to support business. The dairy sector's willingness to invest in innovation must therefore be supported.

After part of the research is finished and knowledge and solutions have been found, the company still has to work a lot to develop processes or products. This is where business investment support is needed. It is not only about researchers in universities. A company may want to develop a good innovative idea, but it is on paper. It will then have to transform this idea into products or processes. This involves costs, equipment and changes within the plant. It's important that there be funding to support the company, especially when it comes to larger projects. Our shareholders include major players such as Agropur Cooperative, Saputo Group and Parmalat Canada. They tell us that there are gaps when it comes to larger investments in innovation.

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

What are we talking about concretely—tax credits, or something else?

[Élise Gosselin]

Of course, tax credits are important, but the risks have to be shared, especially when developing something for the first time. Tax credits are part of the solution, especially for SMEs. They can represent interesting amounts. They are more important for SMEs than for large companies. That said, in many cases, you have to make sure you have the necessary financing, a financial package, a loan or the ability to access financing.

If we limit ourselves to the market, making this kind of investment can become very expensive. Even if it is made in the form of a loan, it may be necessary to access larger amounts of capital without creating an imbalance.

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

I see.

You mentioned very long wait times. Is there anything that can be done about that?

[Élise Gosselin]

For our part, we work with granting agencies, including the Natural Sciences and Engineering Research Council of Canada, which funds research. We have been pleased to see that the council has implemented some very interesting programs. However, we have realized that from the time you submit a project to the time you receive a response, three months, six months or even more than a year may go by. The programs have been very popular, which is good news. It indicates that companies are innovating. However, I'm not sure the council has the capacity to absorb all of this demand. If the dairy industry is investing money in research, we can't wait years to go forward. It has to be done in a timely manner. This aspect is important to us.

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

So the support process should be speeded up.

I'd like you to tell me about the people you trained. This is a valuable element that you offer for free.

[Élise Gosselin]

Yes, absolutely.

With Novalait's projects, students at the bachelor, master's or doctorate level are trained. Some of them were initially headed towards careers in sectors such as chemistry or biology, but came to work in the food processing field because they found a stimulating research project. Later on, they can be found everywhere, whether in plant management, in companies, in management and director positions, in our organizations or even in the public service, such as at the Canadian Food Inspection Agency or at Agriculture and Agri-Food Canada. They are everywhere.

[The Chair, Liberal, Pat Finnigan]

Thank you, Ms. Gosselin.

Thank you, Mr. Perron.

Now we go to Mr. MacGregor for six minutes.

Go ahead, please.

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

Thank you, Mr. Chair.

Thank you to our witnesses for coming today and contributing to our study on processing capacity here in Canada.

I think I'll start my first question with the Canadian Cattlemen's Association.

Mr. Laycraft, you were talking about automation. I remember that in 2018, during the previous Parliament, our committee did a cross-country trip, and one of our stops was in Guelph, where we visited the major Cargill plant there. As you correctly noted, a lot of the jobs involved in that plant require a lot of talent and a lot of skill. There is a lot of stuff that you need human hands for, which a machine simply can't do.

For our committee's benefit, then, when you're talking about automation, can you list some specific examples of where you'd like to see that investment and what kinds of jobs you'd like to see automation move into?

[Dennis Laycraft]

Yes. There are a few interesting ones. Some people have put in automated box storage facilities. Normally, you'd be using forklifts and moving stuff around. It's all set up on conveyors, and they actually have the capacity to mix and match orders in a very sophisticated way, as you're selling around the world.

It isn't always on the processing line that the automation is going to occur; it's throughout the entire system.

We're also using some remote vision technology where there can be third party monitoring, for instance. We're working with the CFIA on the future of that as well.

There are many different ways that maybe just don't fit your traditional mindset of what automation should look like.

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

Thank you so much for that.

For my next question, I'll turn to Ms. Theodore of Maple Leaf Foods.

In one of our previous meetings, we had a representative from UFCW appear before the committee. He was talking about the sector council program that used to exist, which brought stakeholders together in a tripartite arrangement: industry, labour and government. That specific forum allowed those three groups to tackle issues such as labour availability.

You talked about the 30,000 workers we're short now and about the fact that the problem is going to get worse. From their perspective, UFCW would like to see more effort aimed at seeking home-grown talent to fill these sectors. Do you think that if we reinstated the sector council program or had some kind of forum where industry, labour and government could regularly meet to deal specifically with the labour issue, it would be helpful?

Do you have any thoughts on that?

[Nadia Theodore]

Yes.

I think that the point about collaboration across the different stakeholders invested in a solution is important. Will that help? Absolutely, it will help. What I would say—and not to be a Debby Downer, frankly and honestly—is that I do think collaboration across the stakeholders and looking for home-based talent are important.

Certainly, from a Maple Leaf Foods perspective, when we bring talent from other countries, we do it with a view to having permanent labour at our plants. I think that, from a Maple Leaf Foods perspective, bringing in talented soon-to-be Canadians is something that is kind of at the base of what we do when we're looking for talent, whether we're bringing them from outside of Canada or looking for people who are already here.

What is important to note, however, is that the temporary foreign worker program.... It was developed in the 1970s to respond to labour shortages. The issue has only gotten more pronounced in those years. That is the point I was trying to get across previously: that, yes, absolutely, we can do more to work together here in Canada across the different stakeholders to try to attract talent that is already here. I'm a firm believer that we need to be reaching out not just to those at elementary schools, high schools and technical schools to sort of make sure that people understand what types of jobs are available in the sector—that they're actually very cross-sectional, cross-functional types of jobs, that they're good-paying, stable jobs, 100%—but to their parents and their grandparents so that people around the dinner table are having conversations not just about being lawyers and doctors and dentists but about working in our agri-food sector.

Absolutely, those conversations and those collaborations are part of the long-term solution, but I would be remiss if I were to say that in order to, at least in the short term.... If we do it right, then longer-term, you know, we have it covered. We have a plan. We're coordinated. We have a national strategy. We're working at the federal level and across provinces and territories. You know, we're cooking with gas for sure.

It doesn't stop the short-term problem that is immediate, that has been more pronounced with COVID-19 and that we will need to deal with in the shorter term if we are going to see our economic recovery post-COVID-19 really take root and really provide us, Canada, with the competitive advantage that we need to get ahead of recovery, to get out front in recovery.

[The Chair, Liberal, Pat Finnigan]

Thank you, Ms. Theodore.

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

Thank you.

[The Chair, Liberal, Pat Finnigan]

Thank you, Mr. MacGregor.

Now we'll go to five-minute rounds, starting with Mr. Steinley.

Mr. Steinley, you have the floor.

[Warren Steinley, Conservative, Regina—Lewvan, SK]

Thank you very much, Mr. Chair.

First off, I'd be remiss if I didn't wish everyone a happy Canada's Ag Day. We're proud of all our producers, so I want to start off by thanking everyone for being here and thanking agriculture producers across the country.

I'm going to start with the CCA. Bob and Dennis, it's good to see you again.

One thing you talked about is that the government did the best it could. I know that when I was a kid and my dad said that I did the best I could, it wasn't a ringing endorsement of the work I did, either fencing or on the farm. With that being said, this government generally doesn't act until it has to, until it reaches a crisis point.

You talked about the set-aside program. Have you had conversations with the minister about the set-aside program? Where is that at right about now?

[Dennis Laycraft]

I guess I'll step in, Bob.

We are having direct conversations about extending that. Sort of the message that we're hearing is that until the COVID crisis is over, that will continue forward. When that announcement was made last May, I think it was $252 million, and $125 million went towards the set-aside type of activities for the pork and beef sectors. It was indicated that if more money was needed when that was used up, it could be made available. Therefore, that has kind of left it open-ended, but that's the status of where we're at there.

The money that was spent on helping on the processing side was $77.5 million. Obviously, when you have a large processing industry and one company here today spent $50 million, that will give you an idea of the amount.

[Warren Steinley, Conservative, Regina—Lewvan, SK]

It goes pretty quickly.

I'm hoping that there is a sense that that money will be there for producers if we're still in the throes of COVID here in the summer and spring.

Another thing I hear about from producers across the country is burdensome regulations. One would be the SRM, specified risk material, and I think it's burdensome to producers and processors alike.

Have you had conversations with the government at this point in time, and are there options on the table to now review some of these archaic regulations that are left from the BSE days, making sure that we can remove them so that there's less red tape for our producers and processors?

[Dennis Laycraft]

That's a great question. To give you an idea of the disparity.... In the U.S. on over 30-month animals.... In Canada, we remove over 50 kilograms of this material. In the U.S., they remove one kilogram. That's just how wide a competitive disparity there is there.

We've set up and are working with the agency on an expert working group right now, so we're assembling that group and we're going to really dig into this issue, hopefully over the next four to five months. Hopefully by late summer we'll have some more recommendations ready on it.

[Warren Steinley, Conservative, Regina—Lewvan, SK]

Thank you very much.

My friend Mr. Blois or I usually ask this question. In your opinion, from the CCA, what would be a couple of the regulations that are still in place—regulations, taxes—that are hurting producers' and processors' bottom lines that we could get rid of and scrap to make livelihoods more productive for both producers and processors and to expand processing capacity in our country?

[Dennis Laycraft]

Sometimes I'm not even sure it's the regulation; it's the policy manual and the actual resources that are made available to do it. We've been working on trying to get improved certification procedures to get more cattle eligible to go to Europe. We've been having those conversations for between 24 and 30 months now, trying to get improved procedures in place.

If you look at countries like the U.S., where they have their agricultural marketing service, they had that ready in months. Being able to take a look at this variety of certification procedures.... We need to have, first of all, the resources available in government to be working with other governments. Second, we need to do it at the speed of commerce. We have competitors that aren't going to wait for us. They're going to take that lunch from us.