Agriculture Committee on March 24th, 2022

[The Chair, Liberal, Kody Blois]

Mr. Hemmes, I apologize, but we're at five minutes, and I know members are eager to ask questions of you and the other witnesses.

Mr. Barlow, it's over to you for six minutes.

[John Barlow, Conservative, Foothills, AB]

Thanks, Mr. Chair. I'm going to try to move through this quite quickly.

First, to the National Cattle Feeders' Association, certainly I understand that we dodged a bit of a bullet with the CP Rail strike, which could have been worse, but certainly, we were feeling that already, as suppliers did not want cars abandoned or stranded in Canada.

We see the potential of another rail strike by 3,000 CN workers in July. There could be another potential strike with CN and CP at the end of December this year.

How critical is it to come up with some solution—perhaps by making it an essential service—so that you will not continue to have these kinds of impediments to your supply of corn and DDG from the United States in the next several months?

[James Bekkering]

It is very important. One thing we've discussed here is that all over the world there are supply chain issues. It's unfortunate that such a small number of people, a small part of the population—be they unionized workers or those in the recent blockades—can bring cause a detriment to this economy by slowing down the supply chains in an unnecessary fashion.

Our supply chains are stretched to the limit as it is, and we cannot afford to have our own Canadians causing any further issues.

[John Barlow, Conservative, Foothills, AB]

Thanks, James. I'm sorry but I have to really zip through this as quickly as I can.

You talked about the blockades, but I would assume that the trucking mandates have also had an impact on your ability to move grain and cattle. Now there's some potential for an interprovincial trucking mandate.

What kind of an impact has the international trucking mandate had on your industry, and what implications could an interprovincial mandate have on the cattle feeders and the cattle industry?

[James Bekkering]

The international mandate has definitely had an effect. It has taken another portion of the workforce out of what is already an industry with a short supply of truckers. I can't even imagine what an interprovincial mandate would do. So much cattle flows between provinces. To my mind, that would just be catastrophic.

[John Barlow, Conservative, Foothills, AB]

Thanks, James.

[Janice Tranberg]

Maybe I can quickly add to that. In the cattle industry and other industries, an open border between Canada and the U.S. is critical. We bring up feed or cattle from the U.S. We take live cattle down there. In this particular case, as was mentioned, dried distillers grain was not able to come up by truck. We need to have an open border, and with the trucker shortage, that really slowed things down. It's critical, and interprovincial mandates would be just catastrophic.

[John Barlow, Conservative, Foothills, AB]

Thanks. I'm going to move to Mr. Hemmes.

We had a witness earlier—and I know you would know Murad Al-Katib well—who chairs the Agri-Food Economic Strategy Table. He said we need to get products that belong in pipes into pipes and we need to get products that belong on rail on rail to try to address the shortage of railcars and access.

Would you agree with that statement?

[Mark Hemmes]

Yes, I would, to a degree. The thing that people have to keep in mind is that the dominant direction of the flow of grain in Canada is to the west coast. There's not a lot of competition between that and oil. I think what Murad was referring to is getting oil back into pipelines as opposed to railcars. The dominant direction for oil is into the United States, so there is some competition between the two products in the middle of the Prairies, though not a lot. Doing that would certainly help in the allocation of the rail resources that are necessary to move it.

[John Barlow, Conservative, Foothills, AB]

Thank you. I'm going to give the rest of my time to my colleague from Ontario here.

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

Mr. Mussell, much has happened since you testified here. We have only a little time, but can you quickly address how the world food flows and the World Food Programme have changed or been impacted by Russia's invasion of Ukraine? I'll give you the rest of the time.

[Dr. Al Mussell, Research Director, Canadian Agri-Food Policy Institute, As an Individual]

Thanks very much.

Coming into this year, we were already in a position of having very low stocks of cereal grains. Many of those stocks are held in places where they're not really available to offset shortages in other places. For example, China is currently sitting on an estimated 70% of the corn stock globally. Some countries have national stockholding programs in an attempt to hoard to feed their own populations, while others have invoked embargoes.

There's a lot written about Ukraine. As a country, it exports a lot of grain and oil seeds. It exports wheat, corn and barley. For corn, it exports over half as much as does the U.S., which is the leading corn exporter.

The markets for those products have been heavily regional—North Africa and the Middle East. In the case of wheat, of which Ukraine is a major exporter and supplier to those countries, those countries are heavily dependent on wheat flour as a source of calories in their diets, and they spend a very high proportion of their incomes on food. This means—

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

How does that affect Canada? Where does Canada come in, as a supplier?

[Dr. Al Mussell]

Another aspect of this impact is that we have input, particularly fertilizer, and particularly nitrogen fertilizer that is of Black Sea origin—Russian urea, specifically.

The latest data I've seen is in excess of 500,000 tonnes imported into eastern—

[The Chair, Liberal, Kody Blois]

Mr. Mussell, I apologize. I should have cut Mr. Epp off before he set you up for that.

Many of the committee members would like to hear your thoughts, but I gave you a few extra seconds.

We're going to go to Ms. Valdez for six minutes.

We will move over to you, and maybe we can carry that on.

[Rechie Valdez, Liberal, Mississauga—Streetsville, ON]

Good afternoon, Chair and colleagues.

Thank you to all the witnesses who are here today. I am going to split my time with my colleague from Whitby. My questions are for Mr. Hemmes.

Thank you for sharing your reporting trends regarding prairie grain handling and the transportation systems.

You mentioned that there is an extreme lack of short-term data on container movement and performance. Can you describe what insight you'd be able to gain from that short-term data?

[Mark Hemmes]

First of all, we would be able to tell where the problems are occurring. Right now, we have a difficult time trying to discern what commodities are moving in the short term. We have to wait about six months to try to quantify some of the effects of the delays that are occurring right now. It has to wait until six months after the fact.

Certainly, if we were able to get greater detail on any of that movement, we would be in a better position to be able to analyze it and identify any of the causal relationships, much the same as we do with the bulk movement.

[Rechie Valdez, Liberal, Mississauga—Streetsville, ON]

Thank you.

What sorts of decisions or recommendations would Quorum be able to put forward when you have that type of data?

[Mark Hemmes]

If we had that kind of data, we would be able to identify where the problems are occurring and possibly offer solutions as to how they could be addressed. If we were able to give it to both the stakeholder community and the government policy-makers, they would be better informed.

Today, I can't say the same, because of the lack of data.

[Rechie Valdez, Liberal, Mississauga—Streetsville, ON]

Thank you.

A witness from Keystone Agricultural Producers in the last committee said that to achieve future sales or output grain goals, it is important to have a very time-effective transportation system.

What recommendations would you feel give the greatest opportunity to assist in these issues that we're having today?

[Mark Hemmes]

That's a really good question, and I don't have a quick answer to it.

It probably centres around a greater level of accountability for the performance that the railways are putting forward today, which really is somewhat lacking. I think that would be the place to start.

It would be a combination of policy and commercial types of penalties and incentives that would need to be in place to make sure the railways have adequate resources and assets to offer up the kind of resilience that the shippers of grain and other products need, and that really isn't there today.

[Rechie Valdez, Liberal, Mississauga—Streetsville, ON]

Thank you, Mr. Hemmes.

I will pass it over to you, Ryan.

[Ryan Turnbull, Liberal, Whitby, ON]

Thanks, Rechie. I appreciate that.

Dr. Mussell, I'm going to try to be a quick as possible here.

Recently, on Canada's website Swine News, I understand that you expressed concerns around the loss of small farms across Canada.

I wonder if I could ask you a point-blank question. If you had your way, would you choose more small farms in Canada, or fewer farms?

[Dr. Al Mussell]

That's a bit of a complex question.

The worry we have is that farms get larger for a reason, and it has to do with efficiencies and a whole range of things. However, there are things that get left behind as a consequence of that, particularly the aspect of agriculture that ties the enterprise to a household, as it always has been. It is the rationale for a lot of the instruments we have that provide agriculture with special status. In large part, it's the reason we have a Department of Agriculture federally, in provinces, etc.

We have to be very careful that some of the aspects of that community don't begin to erode. Agriculture is not going to succeed on a uniquely industrial model. There's part of it that has industrial aspects to it, but that's not a future—

[Ryan Turnbull, Liberal, Whitby, ON]

Thank you. Let me jump in there, because that was a great answer.

I wanted to ask you about another point in my question.

Do small farms struggle to get their product to market because of a lack of capacity within distribution and processing at a regional food systems scale or a community-based scale? Is that the gap or one of the big problems they experience at the smaller-scale distribution and capacity at the community level?