Thank you, Mr. Chair.
I thank the members of the committee for inviting me to testify today.
My remarks will focus on two points, namely the labour shortage and the fluctuating cost of inputs.
On the labour front, temporary foreign workers, or TFWs, are essential workers in the agri-food sector and they are critical to the food security of Canadians. The pandemic has shown just how important they are.
The unemployment rate is 5.5% in Canada, and 4.5% in Quebec. Farm production, however, is increasing by 8% per year. In some areas such as the Chaudière-Appalaches region, the unemployment rate is 4%. The labour shortage is expected to last another 10 years. This explains the 10% per year increase in the number of temporary foreign workers. As this number will continue to grow, it's essential that the program's administrative requirements be reviewed.
Employers prefer to hire the same workers every year, for the same period and the same duties. Applications for labour market impact assessments, or LMIAs, should therefore be valid for three years. This would be a quick and practical way to reduce the administrative burden. It would reduce delays and time wasted at each of the many steps in the process. Every setback in the process can potentially delay the arrival of workers, and even increase the risk that they won't arrive at all.
At this point we have to deal with three different programs. We recommend reducing the number of programs and simplifying the paperwork. On several occasions we have tabled a sample form that is six pages long instead of the current twelve.
We also recommend that you do away with the National Commodity List for the seasonal agricultural workers program. Simply refer to the definition of "primary agriculture" set out in the Immigration and Refugee Protection Regulations. It took 10 years for maple syrup production to be added to the list, and several other industries are still missing, including rabbit breeding and forage production.
There is another issue to consider. Small farms are not able to offer TFWs a 40- to 50‑hour work week. The rules should be changed to allow producers to share a worker's hours. Workers could split their time between two farms, depending on their needs and priorities. They could, for example, milk cows on one farm in the morning and on the other in the evening.
With regard to the second point, fluctuating input costs, if you go back a few years you'll realize that we can't count on the certainties of the past in the future. The U.S.–China trade war has made it clear that the world's major agricultural powers are interdependent. These countries all have a role to play in the global agri-food supply chain, including Canada's. The pandemic and the war in Ukraine have confirmed this. The idea that all links in the global supply chain will be dependable in the future has been put to rest.
The impact of this new reality can best be described in one word: volatility. Current agricultural commodity prices were the first to experience volatility and it has now spread to inputs. Fertilizer prices have doubled and fuel prices, including diesel, have risen by 24% in 12 months. The prices of plant protection products, packaging and plastics have also risen faster than inflation over the past year. Add to this the impending rise in interest-related expenses due to the recovery announced by the Bank of Canada. All of these items account for 25% of farm operating expenses. If you include food-related expenses, such as grains and feed, you have 35% of expenses rising faster than inflation.
The solution to this problem may seem complex, but in reality it's very simple and already almost within reach. You need to enhance the AgriStability program. The program was designed to handle exactly this type of situation. It's designed to deal with fluctuations in operating margins. In the past, these fluctuations were generally caused by price volatility in the markets. The volatility of input prices in recent years, and even in recent months, may generate margin declines that will require AgriStability. However, in its current form, the program is unable to adequately support farms experiencing margin declines due to rising input costs.
In order for this program to step in, the margin has to be 30% lower than the historical margin.