Evidence of meeting #6 for Agriculture and Agri-Food in the 43rd Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was capacity.
A recording is available from Parliament.
5:10 p.m.
Liberal
The Chair Liberal Pat Finnigan
Thank you, Mr. Gascon. You don't have any time left.
Mr. Perron, you have six minutes.
5:10 p.m.
Bloc
Yves Perron Bloc Berthier—Maskinongé, QC
I'll let Mr. Gascon take the floor again. I find his comments very interesting.
Have you finished what you had to say, Mr. Gascon?
5:10 p.m.
Director General, Boeuf Québec - Société des parcs d'engraissement du Québec
No, I hadn't finished.
Getting people to work together is the key. Since this is my sector, I'll use the example what one of the Canadian Beef representatives said last year. They can probably be applied elsewhere, too. He said that the beef industry had never been more unstructured, that getting people to work together was a challenge, but it's the key.
5:10 p.m.
Bloc
Yves Perron Bloc Berthier—Maskinongé, QC
You seem to have several solutions in mind. You're an enthusiastic person, and the development of your business shows it well.
What specific, concrete measures could the federal government take to help you? What would you need to remove barriers?
5:10 p.m.
Director General, Boeuf Québec - Société des parcs d'engraissement du Québec
I'm thinking about regulations, labour, and so on, but I think the most urgent thing is to get the technology shift right. If we don't invest massively and take the necessary steps to do so, I think it will be dramatic, and we'll see the results in five years. That's my main fear. In addition, from a regulatory standpoint, there's definitely a lot of clean-up to do, that's for sure.
5:15 p.m.
Bloc
Yves Perron Bloc Berthier—Maskinongé, QC
Basically, you're saying that there isn't enough investment in research and development in this country and that, in terms of regulation, there are things that need to be done.
What would be the first regulation you'd like to see abolished and what would be the first thing you'd like to see relaxed?
5:15 p.m.
Director General, Boeuf Québec - Société des parcs d'engraissement du Québec
There's certainly the issue of specified risk material, or SRM. The carcass value in Canada is a legacy of the situation related to what is commonly referred to as “mad cow disease”. I'm guessing everyone remembers it. Right now, we're getting a value that's close to what Americans can get. On the other side of the border, their costs are lower, and they're able to get more value for their product. We urgently need to do the same thing here.
5:15 p.m.
Bloc
Yves Perron Bloc Berthier—Maskinongé, QC
You're basically asking for a reciprocity of standards. Is that correct?
5:15 p.m.
Director General, Boeuf Québec - Société des parcs d'engraissement du Québec
That's right.
5:15 p.m.
Bloc
Yves Perron Bloc Berthier—Maskinongé, QC
Ms. Theoret, I would like to hear your reaction to what Mr. Gascon said about research and development.
Do you feel the federal government is doing enough in that area? Do we need a massive investment program?
The audio is not working. So let me ask Mr. Scanlon to answer the question.
5:15 p.m.
Dean, Faculty of Agricultural and Food Sciences, University of Manitoba, Deans Council - Agriculture, Food and Veterinary Medicine
I will answer in English if it's okay with you.
5:15 p.m.
Bloc
5:15 p.m.
Dean, Faculty of Agricultural and Food Sciences, University of Manitoba, Deans Council - Agriculture, Food and Veterinary Medicine
Certainly, there is a need for investment. Mr. Graydon made the case that there need to be better margins on manufactured foods for this investment to occur. We would say that there needs to be this investment not only in the food processing innovation—some of the technologies that Mr. Gascon has mentioned—but also in area of investment in people.
If people do not have an appreciation of the massive strides that have been made in technology, then they're not going to be the innovation leaders in that sector in five, 10, or 15 years ahead. It's at two levels: right in the plant itself, to make them more efficient and more food safe, but also to actually help out with the personnel and their capacity to deliver on innovation.
5:15 p.m.
Bloc
Yves Perron Bloc Berthier—Maskinongé, QC
Thank you.
I will address Mr. Gascon again.
Mr. Gascon, you mentioned the standard for specified risk materials, which is not the same. What changes need to be made? Is it the asking price? What's the difference?
5:15 p.m.
Director General, Boeuf Québec - Société des parcs d'engraissement du Québec
It's about how you dispose of the carcass. In Canada, you can't add value to certain parts. There are even costs associated with the disposal of certain parts of the carcass, which has a negative impact on yield. So there's a very fine line between making money and losing money.
When you want to be competitive, every third of a percent counts with a carcass. That is one thing we know for sure. I could draw up a list of solutions and send it to you, but this one is really easy, because this situation makes no sense.
5:15 p.m.
Bloc
Yves Perron Bloc Berthier—Maskinongé, QC
You could indeed provide us with some concrete solutions. This is part of the committee's work and we would appreciate it.
You said that technology poses a challenge. As you saw, I asked Mr. Scanlon, from the University of Manitoba, about investment in that area.
I'd like to know what might help you invest further. Would federal government appropriations or a direct investment help?
5:15 p.m.
Director General, Boeuf Québec - Société des parcs d'engraissement du Québec
I feel the costs will be tremendous.
As we are seeing in many industries, a productivity gap is widening between businesses that are taking the plunge and those that are not. I can't predict the future, but the businesses that are succeeding right now are the ones bringing robotics into their factories. Automated meat portioners can produce 280-gram steaks at breakneck speed. Butchers certainly can't compete with those businesses.
Moreover, if you want to create well-paying jobs, you have to go for the technology. Things are moving fast in this area right now. I don't see who could adequately support factories in this, but they must be supported if they are to take that leap.
5:15 p.m.
Bloc
Yves Perron Bloc Berthier—Maskinongé, QC
I'd like you to speak briefly to your second point, the lack of slaughter capacity in the regions.
5:15 p.m.
Director General, Boeuf Québec - Société des parcs d'engraissement du Québec
A few big players decided that they were going to pay as little as possible for raw materials. Right now, everyone is investing to rebuild slaughter capacity in North America. However, the big players now have an incredible profit margin because—
5:20 p.m.
Liberal
5:20 p.m.
NDP
Alistair MacGregor NDP Cowichan—Malahat—Langford, BC
Thank you very much, Mr. Chair.
I would also like to follow my colleagues in thanking our witnesses for appearing before the committee. Your testimony is very helpful in the formulation of our report.
In previous meetings at this committee we've talked a lot about the powerhouse that Canada is when it comes to exports. However, I want to swing the pendulum back to our local food capacity.
I represent a riding on Vancouver Island, and it's estimated that here on Vancouver Island we probably have about a three-day supply of fresh food. If something catastrophic were to happen to supply chains, then we would be feeling quite the pinch. I know there are many communities across country that would feel the same kind of pressures. It's a bit of an irony that we are a huge food producer, but we still have many examples of food insecurity across Canada.
Maybe, Professor Scanlon, I'll start with you because I know you've written on this topic, and I really appreciated your remarks on resiliency. That's a theme I really identify with.
Do you have any thoughts for the committee on how we build up that kind of resiliency and establish conditions, such as through programs like the local food infrastructure fund, to improve or increase the capacity and resiliency of smaller communities to have that kind of food security?
5:20 p.m.
Dean, Faculty of Agricultural and Food Sciences, University of Manitoba, Deans Council - Agriculture, Food and Veterinary Medicine
Thank you, Mr. MacGregor.
I agree. As Dr. Yada from UBC and Dr. Van Acker from Ontario Agricultural College and I talked about, we do need to build in this resilience with small “boutique” food processing operations so that there is this ability. When you have fractured supply chains—and it didn't happen much, but it is a real potential in terms of the efficiencies driving these long supply chains—you certainly put urban populations at risk of food insecurity.
Certainly, there need to be both the element of people who are prepared to take the risk and also the support for them, both from a investment perspective from government support for their own investments, and also from a supportive environment and a supportive innovation ecosystem. It takes a number of players, colleges and universities, as well as investment opportunities and, of course, provincial and federal governments.
5:20 p.m.
NDP
Alistair MacGregor NDP Cowichan—Malahat—Langford, BC
Thank you.
Mr. Graydon, maybe I'll ask you to chime in.
I did make mention of that program, the local food infrastructure fund, because what I often hear at committees like mine is that there's a willingness to start up in the market, but they lack the capital to either purchase the infrastructure or build it. We have a lot of primary food producers who would love to set up a co-operative, but they need access to a commercial kitchen or a commercial canning facility.
Can you lend any thoughts to how important those targeted types of investments are? Do we need to see funding by the federal government put into programs like the local food infrastructure fund? Have any of your small-scale members expressed an interest? Do they see value in those types of programs to expand their operations?
5:20 p.m.
Chief Executive Officer, Food, Health and Consumer Products of Canada
Many do, and I think there's a lot of support for it. I don't know that it's all about government funding. The food manufacturing process, especially at the small to medium level, is seen as a very high risk within the banking community. It's very hard to get the capital they require to make the investments. It then requires government to step in and support them. Many of the larger organizations are looking, especially for unique products that are being developed in secondary markets, to make the capital investments to support them and take a capital position within the company, but not necessarily take it over. There are opportunities; I think we're looking for them where we can.
5:20 p.m.
NDP
Alistair MacGregor NDP Cowichan—Malahat—Langford, BC
Thank you very much for that.
Professor Scanlon, in the previous Parliament this committee did a study on technology and innovation and one of the things we heard repeatedly from witnesses when we were touring across Canada was the regulatory challenges. We do have a lot of appreciation from our worldwide customers for our extremely strict standards on our food supply and food safety, but sometimes you have producers complain about the onerous requirements by CFIA. Do you have anything that you can contribute to the committee about how we can strike that appropriate regulatory approach so that people both have confidence in our food supply and the high safety standards, but without our having as much red tape in place?