Agriculture Committee on May 7th, 2024

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

You and I intersect, and I'm going to take a little licence here. We both grew for the same processor. I grew green beans in Ontario and you grew them in Quebec for the same multinational processor. We were competing with green beans from New York and Minnesota. We had many discussions about this.

Again, does that same dynamic apply on the processed side that you just articulated for the fresh side?

[The Chair, Liberal, Kody Blois]

You have 20 seconds, unfortunately.

[Pascal Forest]

If we don't have the same regulations, we'll definitely lose out to that competition.

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

Thank you, Mr. Chair.

For the record, we were both very young 30 years ago.

[The Chair, Liberal, Kody Blois]

Thank you very much, Mr. Epp and Mr. Forest.

Now Mr. Drouin has the floor for six minutes.

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

Thanks very much, Mr. Chair.

Just quickly, Mr. Tregunno, on your exchange with Mr. Epp, I'd be happy to follow up on your behalf, if we can get in touch after this committee, on the issue you've raised. I'd be happy to help you.

My first question is for Mr. Gervais.

The agriculture sector is facing a lot of climate-change-related challenges. I don't want to name them all, but has your Crown corporation noticed any specific lending trends in this context?

How does FCC help farmers facing certain situations that aren't really predictable, such as weather phenomena?

[Jean-Philippe Gervais]

To answer that question, I'd say that the key for us is to take a proactive approach to the businesses we work with. We're familiar with climate change, of course, and all the production challenges it entails. Consequently, our primary approach is really to be proactive. We've also adopted the same approach to other challenges, such as rising interest rates. We took proactive action when we saw interest rates were rising and worked with clients to come up with more appropriate solutions for their businesses.

I think you have to understand that the challenge is to identify the specific characteristics of each business. They obviously aren't all at the same place in their growth, transition and volume strategy. There are a lot of factors to consider.

However, the main point is that they have to be proactive. We see that when we set up clientele assistance programs based on production challenges. We recently implemented one for producers in British Columbia. Another one has been in place for a year dealing with the extreme heat and drought they've experienced since 2023. In addition to agricultural producers, it also targets the entire chain, all production sectors.

We therefore take an individual and proactive approach. This enables us to secure as much assistance as possible for clients and to work with them toward the best solutions for their businesses.

Going forward, I would add that we need to help producers and assist them in introducing production and management practices that help them increase their resilience and the sustainability of their businesses as they cope with climate change. For example, we have a financial incentives program. We've worked with partners, but really in partnership, not alone. We currently offer six programs and others are being developed.

Another aspect of our work, for example, is setting up sustainable funding programs. We're currently developing a framework and establishing principles that will govern the way we work so we can offer financial products that enable entrepreneurs to make changes to their businesses.

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

I understand how producers can endure an occasional crisis in a given year, but now they're being forced to deal with many consecutive crises from year to year. If they have cash problems, that unfortunately undermines their ability to overcome those crises.

How do you work with them when they're facing consecutive crises? The architecture of those programs was never designed to cope with crises that disrupt production from year to year as a result of uncontrollable factors.

[Jean-Philippe Gervais]

That's a good way to put it. I think the main challenge arises when many factors come into play. For example, consecutive factors or problems of a similar nature may be associated with unexpected production variations. Some production variations may also be associated with unfavourable weather conditions combined with interest rate hikes.

From what I've seen over the years, I'd say that businesses in this industry are generally well equipped to weather a crisis or a one-off event. It's when numerous disruptive factors occur that things get complicated. In a way, I think that has complicated the business environment of all farms in the sector. That's definitely the case of horticulture production, given the significant production challenges in recent years.

The current approach is to come up with more long-term solutions. The benefit that a corporation like FCC offers is that we can work continuously with the agriculture and agri-food sector because it's the only sector we serve. You could say that ours is truly a lasting commitment, one that makes it possible to adopt a more long-term perspective.

As I mentioned in my remarks, there may be an increase in the number of loans that are granted on demanding conditions. However, we know we can adjust those loans over time so those businesses can return to profitability by making changes to their financial practices, or their production practices in particular.

I think you have to take a longer-term approach.

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

I see. Thank you.

Mr. Forest, I know that you mentioned risk management programs in your remarks and that you discuss them with the producers you represent. I also explained why those programs aren't always able to resolve current issues. What suggestions do you have for us on that subject?

[Pascal Forest]

Prompt action by the programs is definitely a decisive factor. For example, the new season is starting, but so far we've received no compensation or assistance for the year just completed, even though we should have it by now. We did the preparation and the necessary work, but it has simply taken too long. I know there's red tape, but food is an everyday need. We can't afford to wait a year or two for the programs to react, saying they're going to discuss and think about it. We're well past that now. Most producers are complaining about how long they have to wait from claim to settlement.

[The Chair, Liberal, Kody Blois]

Thank you very much.

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

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

Thank you, Mr. Chair.

Thanks to all the witnesses for being with us today.

Mr. Forest, I'm going to continue with you since you're on a roll.

You're telling us that what's important is quick execution. The government was asked to activate the AgriRecovery program last November, and it's May 7 now. Would you like to comment on that?

[Pascal Forest]

As I just said, it's really taking a very long time. I don't know how you could say it otherwise. There are deadlines that have to be met in this process, and I think everything's been done right. I'm more or less here because I'm waiting for answers.

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

We're in the month of May, but it's important that the people who do calculations in the offices understand that your season didn't just start. In fact, it started a long time ago.

We're talking about cash flow. When did you file your claims? When do you need money to prepare for next season?

[Pascal Forest]

We need it now. We have to buy seeds, fertilizer, airline tickets for the workers and so on. We started requesting foreign workers last October. We constantly need cash.

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

Are there any businesses among your members that are considering skipping their turn this year or switching crop productions?

[Pascal Forest]

I don't think it's possible to do that at the last minute, but some members are definitely thinking about it. I hear them discussing it. Some people have been in the business for many years and are questioning things, somewhat as they're doing back home. I don't think we'll be able to go on for very long competing against foreign producers that export their products here and enjoy greater assistance measures than we have in Canada.

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

You mentioned standard reciprocity. That's a major problem that we often discuss in committee, but one where we aren't seeing a lot of movement.

Do you have any specific recommendations about that? If you do, you can also send them to us in writing at a later date.

If we don't require that the same standards be applied to foreign products, then perhaps we should provide more support for our producers. Otherwise we'll eventually have no domestic production. We realized during the COVID-19 crisis that we wanted to have local vegetables.

[Pascal Forest]

That's sad because it's definitely very important.

If we go to war, we need to be able to do so on equal terms. If our competitors are permitted to use products to which we no longer have access or that we're no longer allowed to use, we simply won't be able to compete. That's obvious. We definitely need prompt execution. The Pest Management Regulatory Agency, or PMRA, does an extraordinary job of examining products, but it takes five years.

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

We see roughly the same phenomenon with product approvals. I'm thinking of linuron, in particular.

[Pascal Forest]

That's right.

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

That's the most recent example of a major problem that arose. We almost wound up in a situation where we were importing a product that contained that molecule when we weren't yet allowed to use it here.

In short, prompt execution is one of your recommendations.

[Pascal Forest]

Yes.

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

Previous witnesses have also told us that we need a faster program than AgriRecovery, a kind of “AgriDisaster”, that can release funding promptly.

Would you like to comment on that?