Agriculture Committee on Nov. 26th, 2020

[Colleen Barnes]

We're always trying to make sure we have the capacity we need, especially in terms of veterinarians. Those are really key resources that we need access to, so we're working hard to make sure we can keep a good supply of the key scientists and inspectors we need in the plants.

[Francis Drouin, Liberal, Glengarry—Prescott—Russell, ON]

Okay. Thank you.

I'll move my questions to Mr. Forbes.

It's great to see you again in front of our committee virtually. I have some questions with regard to trade.

I have heard some explanation of how normally when trade gets going, countries look at all the tariffs each country has and then negotiations start. Is my understanding of this correct, that it depends on each country's objectives, what they want to achieve in terms of trade negotiations?

[Chris Forbes]

Certainly, at our end, we would look at the opportunities of a partner, and I think they would do the same with us. We would also look at the areas we would like to protect and maybe not provide access to.

That's where it starts. These could be tariff rate quotas, or there could be tariff-free quota access on certain products, and that's the way we would start to develop a mandate.

[Francis Drouin, Liberal, Glengarry—Prescott—Russell, ON]

Hypothetically, when each country looks at the other to try to gain access to potential markets—regardless of status quo or their own laws based on the tariffs they have—obviously once these negotiations were over and that agreement was brought back to the country, then they would need enabling legislation to change those tariffs. That enabling legislation would be presented to Parliament, and then Parliament would vote on it and we would reduce those tariffs. Is that correct?

[Chris Forbes]

We would have enabling legislation to put the agreement in place. Some of the changes could be legislative, regulatory changes, and some of them could be policy changes. It would depend on exactly what is being done, but, grosso modo, that's the approach.

We'd come back with an agreement, which would have to be ratified, and then there would be a series of changes, which, again, could be legislative, regulatory or potentially just policy changes, depending on the nature of those changes.

[Francis Drouin, Liberal, Glengarry—Prescott—Russell, ON]

Okay, so I think it's safe to say that whatever laws a country has adopted regarding trade can be changed by any future governments depending on their own trade objectives.

[Chris Forbes]

Certainly I don't want to predict the future, but obviously anytime we enter into an agreement, if it requires modification....

You would have seen that certainly with the recent CUSMA signing as well. There was a ratification process, and then there were changes that had to be made subsequent to that, and we had to go through that process.

[Francis Drouin, Liberal, Glengarry—Prescott—Russell, ON]

That's great. Thank you.

I think I have three seconds, so I thank you for taking the time. I appreciate it.

[The Chair, Liberal, Pat Finnigan]

Thank you very much, Mr. Forbes.

Thank you, Monsieur Drouin.

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

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

Thank you very much, Mr. Chair.

Thanks to the witnesses for being with us once again; we're almost getting to get to know each other.

Mr. Forbes, I'm going to continue along the same lines as my colleague Mr. Drouin.

Any government can of course change all its laws, but that doesn't mean the government should pass no legislation. The government would make no progress if that were the case. It's important to bear that in mind.

Earlier you heard us discussing compensation amounts with the minister. You're probably familiar with all the figures we don't have.

What would be the consequences for the department of paying out compensation by December 31, rather than by March 31?

[Chris Forbes]

With your permission, I could tell you about the previous year's compensation for the dairy producer sector, for example.

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

Yes. In fact, we looked at the sectors under supply management during our earlier discussion with the minister.

[Chris Forbes]

Last year, as you probably know, the Canadian Dairy Commission paid benefits to producers by direct deposit. It takes a little time to organize all that.

We had to create a computer delivery system at the time. We also didn't have in hand all the details on every producer, concerning their quotas, for example. We had to contact the provinces and marketing agencies to ensure we had the right information. Then we had to test the systems to make sure they worked. Lastly, we had to ensure that, if producers requested payment by cheque or direct deposit to their bank accounts, they were able to receive it.

In short, we had to go through all those steps.

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

I understand your answer. Thank you very much, Mr. Forbes.

From what I understand, since the first step was taken last year, the process could move much more quickly this year. So there shouldn't be any time constraints.

My question was more about the financial consequences for the department. This is essentially happening in the same fiscal year. A few months wouldn't change much for the Canadian government, but it might have a considerable impact on small businesses. I'm thinking, for example, of a dairy producer with 40 head of cattle or so who, considering the financial impact, decided to take the first compensation payment in 2019 instead of 2020.

As you know, agricultural producers are business managers. Farming is often viewed in a somewhat romantic light, but bear in mind that these are entrepreneurs who need predictability, who have expenses they must incur, who try to lower their income tax assessments, as any good citizen does, and so on. They try to spread out their incomes intelligently, as any normal citizen would do by means of an RRSP.

Producers who received the first instalment in 2019 may suffer significant consequences if they don't get the second instalment until 2021 because they'd probably receive two payments in the same year unless the government intended to spread them over time, but that would surprise me. I didn't think that was the government's intention.

We now understand the instalment process. I'm talking more about the financial consequences. What are the financial consequences for the government if those amounts are paid out by December 31 instead of by March 31?

[Chris Forbes]

Disregarding the technical and administrative issues, and if all necessary authorizations have been granted, it's all the same to me, as deputy minister, whether funds are paid out in April, May, December or March, provided it's done during the fiscal year. Today, for example, we're requesting money from Parliament.

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

Thanks very much. That's the answer I was expecting. Thank you for making it clear. So there's no major obstacle to this.

Now getting back to the other types of production under supply management, let's consider, for example, turkey producers, for whom this has major consequences. There are a lot more turkey imports now than there used to be, and producers have to prepare. They have to apply for a marketing licence and so on.

Does the department have an equivalent job to do? Do you grant funds to those organizations, or have you already created programs? Since this has been going on for some time, I imagine you've already done a lot of work on it.

[Chris Forbes]

We've received a lot of applications from other sectors under supply management. I'm talking about GO-4 producers, as they're called. It's true that new programs have to be created. If they are investment programs, their terms and conditions have to be established. It takes time to create those kinds of programs, even for producers. You have to make investment decisions without knowing exactly what producers' timelines are. Consequently, we plan to introduce these kinds of measures over several years to ensure it all suits the producers.

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

Is the answer the same for processors?

[The Chair, Liberal, Pat Finnigan]

Thank you, Mr. Perron

Mr. MacGregor, you have the floor for six minutes.

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

Thank you so much, Chair.

Mr. Forbes, I will continue along the same line of questioning and ask about the compensation. Can you let the committee know, out of the funds that were previously approved by Parliament for compensation, roughly how much we have left to work with?

[Chris Forbes]

The government announced a payment over eight years of, as the minister said, $1.7 billion, and $345 million was paid out. It was a statutory payment. We have to have that money allocated to our budget. If it's a statutory payment, that can happen at more or less any time. We would have another supplementary estimates (C), if we had voted estimates for some reason. On the remainder of those funds, we will have to get those allocated by the government to our department.

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

In response to Monsieur Perron, you did talk about some of the technical details that are required, such as getting payment information from individual producers and an assessment of what their quota is. Is there anything else that's still holding the department back? Are you still doing an analysis of what the impacts are on the various sectors of supply management? Are you still working out the full impacts? I guess that's my main question.

[Chris Forbes]

In terms of our work with the sector, as you will recall, a couple of years ago we did some working groups, one with the dairy sector and one with the poultry and eggs sector. We finished that work, so I wouldn't say there's a lot to do. Obviously, we do evaluate the trade agreements as they come into force to see how they're going, but there aren't a lot of additional questions we're asking ourselves beyond watching the implementation, I would say.

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

Great.

In the main estimates, when they were initially tabled, we had just over $2.5 billion for the department. Then with the supplementary estimates, it climbed to almost $3 billion. That's understandable, given the stress we have all seen from COVID-19. However, you know that we as legislators do have an important role to play in providing or authorizing the funds for the executive to spend.

Between now and the end of this fiscal year, when we reach the end in 2021, what kind of projection is the department making? Do you foresee the need for additional funds to make it through this fiscal year, given how severe the second wave is showing itself to be?

[Chris Forbes]

It's a tough question to answer. I guess I would say a couple of things. The government has certainly shown us, I think, over the six months a willingness, if there's demonstrated need, to give us additional funds or create new programs or build on existing programs. I think the minister made some reference to that in her remarks.

I think it will depend a little bit on how things evolve. Certainly, we're keeping a close eye, as you suggested, on how the virus is moving along. It is quite worrying right now in terms of where it's at across the country. We will keep an eye on that. Certainly, we will work with colleagues and with the minister and, if we feel there are more funds that need to go out, seek those.