Agriculture Committee on Feb. 25th, 2021

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

Thank you very much, Mr. Chair.

When I hear the comment that we use everything of the duck, I won't even ask what we do with the quack. You can make your own comments with that.

Let me start on a far more serious nature. I do appreciate both the testimony and the thoroughness of the briefs. Mr. Falk, your brief to me is very disconcerting, so let me start with some questions there.

In the brief, I understood that you had not received an adequate response from the CFIA. The CFIB has also put a brief in support of your case to us.

Are you aware if the CFIA and the CFIB had any sort of interaction on your particular case with regard to a response from CFIA?

[Ken Falk]

Yes, we have. The CFIB asked for and was successful in having a conference call attended by the president of CFIA. That was the first time I was allowed to really present my case fully to the president of the CFIA.

The outcome was essentially what I've written in the brief, which is that I'm now supposed to just move on with a positive attitude. We've been told that this is just one story from our side, and that she could tell many stories of how operators have disrespected inspectors. That may be true. I understand that, but that wasn't my case. I'm not sure why they would be vindictive like that, or how it would justify their actions against me. It makes no sense.

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

Would it be safe to assume that unless the CFIB hadn't become involved, the CFIA would not have given you further attention?

[Ken Falk]

That is very likely. Yes, it's very safe to say that.

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

It leads into my next question. We often hear about small business being the engine of growth for our economy across all sectors in Canada. We're talking here specifically about expanding processing capacity. I'm looking for comments from both of you.

I [Technical difficulty—Editor] it would be smaller to medium-sized processing facilities to drive growth. Should that come from the large processors or large processing entities? What other sectors of the economy would be more advantaged to concentrate on the smaller, more regionally based processors? Then, of course, the question remains of what you do with CFIA.

[Ken Falk]

From my perspective—and obviously I'm a small-to-medium enterprise—I see the backbone of the Canadian economy as these family-owned, family-operated farms and processing plants and so on.

I absolutely value the largest processors. There's absolutely a place for that product. There's also a huge market for that small to medium-sized processor. There's lots of innovation that happens in our plants. There's lots of employment. There are so many plants all across Canada.

What do we do with CFIA? In my mind, without being able to rebuild trust or to build trust, the acrimonious relationship, that “gotcha” style, as I explained it, is going to continue, and that has to change.

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

Mr. O'Shaughnessy, you referred to standards. We're looking to standardize the standards of global back-and-forth, so I'm going ask you to answer the previous question as well. Can you talk about whether there is a certain standard, or are they just spelled out in the trade agreements?

I'm familiar with Codex in other sectors. Is that the best way to get at some standards that are beyond the purview of CFIA—through a third party that lays them out in a more enforceable way?

[Philip O'Shaughnessy]

We were talking about large or small companies, so I think it's extremely difficult to answer that question. We see ourselves as a medium-sized company. In fact, a company like ours, in our market, has a lot of potential. We follow all the major trends. So we are a good choice for an investor.

The only comment I could make with respect to standards is that one person can greatly influence relations with the Canadian Food Inspection Agency. Perhaps it is at that level that we should be thinking about standards that would take the human side out of the equation, because the human side of the equation is a source of inconsistency and can make the relationship extremely strained or unfair in some respects.

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

Thank you.

[The Chair, Liberal, Pat Finnigan]

We're out of time now. Thank you, Mr. Epp and Mr. O'Shaughnessy.

Now we'll have Mr. Blois for five minutes.

Go ahead, Mr. Blois.

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

Thank you, Mr. Chair.

I'm going to start with Mr. Falk.

As I understand it, you are provincially inspected, and certainly we've heard some of the challenges you've gone through.

In terms of looking at whether or not you would go to a federally inspected abattoir facility or processing facility, what are some of the considerations that come into play for you in terms of whether or not that goes ahead or whether you would consider moving in that direction?

[Ken Falk]

Yes, we're provincially inspected at this point, and we have looked a number of times at becoming federally inspected.

The barriers to that primarily would be financing, meaning access to capital. However, probably as great a barrier as that is the complexity of the system of CFIA's rules and regulations. It's burdensome. As a smaller processor, we have to comply with all of the standards that the largest processor would comply with.

I'll put my product up against anybody's product, be it federally or provincially inspected, but the process for a provincially inspected plant and a federally inspected plant is different. It's not better and not worse; it's just different.

We look at the provincial system as being truly much more outcomes-based. We know the federal system wants to be outcomes-based, but I'm not sure the CFIA understands what “outcomes-based” means.

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

In your brief, you mentioned that the Canadian Commercial Waterfowl Producers Association had produced a report, and you highlighted some of the summary. Is that something you can submit to the committee? I think it would be of interest to committee members. Do you have access to that, and can you provide it to us?

[Ken Falk]

I can submit the entire report to you for sure, yes.

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

Okay. Thank you very much.

I want to go to Mr. O'Shaughnessy.

What is the situation regarding ducks in Canada? How many processing plants are there? How many ducks are processed there each year?

[Philip O'Shaughnessy]

For broiler or lean duck, the Canadian market has three or four big players. We're the biggest, or almost the biggest. We're talking about 3 million birds a year.

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

Where do you send your by-products? To Canada, or elsewhere? Since this study is looking at opportunities to improve agricultural processing in Canada, there may be an opportunity here to process these by-products in Canada.

[Philip O'Shaughnessy]

Apart from feathers, which are exported, all other by-products are sold in the Canadian market, and there is a demand for them. Since we're not able to meet that demand, these by-products are currently being imported.

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

I'll ask this one in English just because I'll probably be better in clarity.

You mentioned some of the rules and regulations. I take notice that the European Union sometimes has what I'll call very good non-tariff trade barriers to create detriment and challenge in being able to get products to Europe. Can you outline for the committee what some of those differences are? Obviously, as you've mentioned, there's a larger consumer market in Europe. There are larger economies of scale, I would suspect, in Europe with their producers. What explicitly would we be looking at to try to close that gap and create that parity for Canadian producers?

[Philip O'Shaughnessy]

First of all, there are certainly differences from one country to another in the European market. One or two countries have particular concerns, which are also found throughout the European Union. There are big differences in relation to animal welfare. Secondly, there is a need to look at the quality of the product, which may involve its safety. These are elements that are raised in the report we discussed earlier.

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

Thank you, Mr. O'Shaughnessy.

[The Chair, Liberal, Pat Finnigan]

Thank you, Mr. O'Shaughnessy.

Thank you, Mr. Blois, as well as for your efforts in French.

Mr. Perron, you have six minutes.

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

Thank you, Mr. Chair.

Congratulations, Mr. Blois; you're getting better.

The government launched the Emergency Processing Fund. However, it ran out of money. We were contacted by companies that had applied and started to invest, but were ultimately unable to improve their processing activities.

Mr. O'Shaughnessy, I don't know if you needed it since your plant is relatively new.

However, Mr. Falk, perhaps you could talk to me about this and tell me, for example, whether there should be more money added to the fund and whether you have had any needs.

[Ken Falk]

If I recall, that fund was $252 million. I think that's the one you're referring to. I think that was taken up within days or within weeks at most. I think applications were made by probably all of our companies, and we didn't receive anything through that fund. It's unfortunate. That fund hasn't been replenished, from my understanding, and it would have been good had it been replenished.

Let's say it's more than a day late, and for sure a dollar short, and maybe a bunch of dollars short. It could have been many times that, and I think we might have actually accomplished what we set out to accomplish.

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

When it comes to innovation and facility improvements - which the committee heard a lot about—several witnesses told us that the main challenge was access to capital to upgrade their facilities, remain competitive and have flexibility.

Do either of you, Mr. O'Shaughnessy or Mr. Falk, have any specific recommendations for the committee to make to improve this aspect?