Agriculture Committee on Oct. 29th, 2024

[The Chair, Liberal, Kody Blois]

I call this meeting to order.

Welcome to meeting number 115 of the House of Commons Standing Committee on Agriculture and Agri-Food.

Colleagues, you've been through this song and dance before, so I don't need to go through the reminders, but I will say, for the health of our translators, let's make sure our earpieces are away from our microphones, please and thank you.

To all my colleagues, especially Mr. Perron, I would like to mention that we have done all the sound tests for the witnesses and our colleagues who are present in virtual mode. I would also like to welcome Ms. Brière, Mr. MacGregor and Mr. Epp, who are substitutes. Some of them may be attending a meeting of our committee for the first time.

I just want to recognize that we're going to move quickly. We're a little bit behind because of the votes, so I will be trying to move quickly. I think we'll probably try to do one round of questions and maybe a bit of a half process on the second one, if we could.

Without further ado, pursuant to Standing Order 108(2) and the motion adopted by the committee on Thursday, October 24, the committee is commencing essentially a one-session study on the priorities for the agriculture sector in relation to the fall economic statement.

With us today, we have, from the Canadian Canola Growers Association, Dave Carey and Gayle McLaughlin. You are no strangers to this committee. Welcome back.

Before us, from the Canadian Cattle Association, are Tyler Fulton, vice-president, and Jennifer Babcock, senior director of government and public affairs. Welcome back to you both.

From CropLife Canada, we welcome Gregory Kolz, vice-president of government affairs, and Émilie Bergeron, vice-president of chemistry. Welcome back, and thank you for your work.

Last but not least, from Fruit and Vegetable Growers of Canada, we have Massimo Bergamini, who is the executive director. Welcome.

You are all here in the room, so it's great to have everyone back before us.

You have five minutes, at most, for opening statements. I'm normally quite liberal, but today I'll be a little conservative. I know my Tory colleagues will like that. Anyway, you have five minutes.

I'm going to start with the Canadian Canola Growers Association. It's over to you.

[Dave Carey, Vice-President, Government and Industry Relations, Canadian Canola Growers Association]

Thank you for the invitation to appear today. I'll be sharing my time with my colleague, Gayle.

CCGA represents Canada's 40,000 canola farmers on any issues that impact their on-farm profitability. With offices in Winnipeg and Ottawa, CCGA is also the largest administrator of the advance payments program.

The canola sector contributes $43.7 billion a year to the Canadian economy and provides for 206,000 jobs. Exports were valued at $15.8 billion in 2023. Canola was also one of the top-earning commodities for farmers in 2023, with $13.7 billion in farm cash receipts.

Canola farmers face both opportunities and challenges. We've broken down our opening remarks into five recommendations.

One is about transportation and labour. Of canola grown in Canada, 90% is destined for export. Rail is the only practical means to move canola from areas of production to export position. In Canada, we have two class I railways, which operate effectively as geographic monopolies.

In the short term, we ask that the extended interswitching pilot, introduced in budget 2023, be expanded to a 500-kilometre radial distance and extended a further 30 months with a path to permanency. This is to account for the grain industry's seasonality and contracting timelines, giving more businesses a chance to participate in providing an accurate dataset for the pilot's evaluation. Taking this action will cost the federal government no money.

In the longer term, we do need to address the frequent and now perennial labour disruptions we see at Canada's ports and with our railways. According to the Canadian Chamber of Commerce, 2023 saw the most days lost due to labour disruptions since 1986.

Our second ask would be to pass Bill C-234.

As co-chair of the Agriculture Carbon Alliance, a coalition of 16 national farm groups, I was disappointed to see the Senate amend Bill C-234. That being said, the amended bill does provide relief to farmers and ranchers through exemptions for grain drying, irrigation and feed preparation, for which there are no viable alternatives. CCGA would like to see Bill C-234 passed at the next opportunity.

It's over to you, Gayle.

[Gayle McLaughlin, Senior Manager, Government and Industry Relations, Canadian Canola Growers Association]

Thanks, Dave.

In regard to trade, the 2026 review of CUSMA looms large for our farmers. The U.S. is our largest export market, and Mexico is our third-largest export market, with exports valued at $8.6 billion for the former and $1 billion for the latter in 2023.

We have now heard clearly from both U.S. presidential candidates that they view 2026 as a renegotiation, not a review. Given this context and a new administration in Mexico, Canada should be prioritizing this agreement and ensuring that we do nothing domestically to antagonize this critical relationship. CCGA was in Washington, D.C., last week for the 33rd Tri-National Agricultural Accord and heard loudly that Bill C-282 will cause damage to our trading relationships and the CUSMA review, in particular with the U.S.

The CUSMA region will be even more important for our farmers given the significant trade challenges we will face with canola seed going to China, given our government's action on EVs and other imports. We exported five billion dollars' worth of canola to China in 2023.

In regard to Bill C-59, our sector needs clarity around this bill. Canadian farmers are among the most sustainable in the world, and part of our global competitiveness is being able to tell our story to a global audience. The intended and unintended consequences of the greenwashing provisions and the very low threshold for bringing forth a complaint raise serious concerns among farmers.

Finally, regarding business risk management, these tools are important to farmers and provide them with support when they face significant production or income losses. The risk profiles and priorities of today's farmers have changed compared to 20 years ago, when the basic design of these programs began. Closer collaboration with farmers and their associations is needed to ensure that these programs meet the needs of farmers now and into the future.

Thank you.

[The Chair, Liberal, Kody Blois]

I like the efficiency. Thank you very much.

We'll now turn it over to the Canadian Cattle Association.

[Tyler Fulton, Vice-President, Canadian Cattle Association]

Good afternoon, Chair and members of Parliament.

I'm Tyler Fulton, and I'm a beef producer from Manitoba. I currently serve as the vice-president of the Canadian Cattle Association, or CCA.

We're pleased to join you today to discuss our top priorities, particularly in advance of the fall economic statement. CCA's recommendations come with either low or no cost to government. However, they have a high impact for Canada's beef sector and are key to our global competitiveness, growth and continued environmental stewardship.

The focus of my remarks will be on livestock price insurance, or LPI for short. For those who aren't familiar with it, LPI offers price, currency and basis risk protection for all classes of cattle and market hogs. Cattle producers, regardless of the size of their farm or ranch, can insure a forward price for their cattle. LPI is the only program that allows producers to proactively manage their price risk, and it is particularly important for the cow-calf sector. Given the volatility of livestock markets, managing risk is critically important to producers’ long-term sustainability.

This past year, the maritime provinces came on board to offer LPI to their provincial producers. This is critical if we're going to grow the herd across Canada. Now that LPI is offered in seven provinces, we're recommending that the government introduce cost-shared premiums. This includes a sixty-forty cost-shared premium that is equal to the crop insurance program. Given a 60% premium support level and assuming a fivefold increase in producer participation, the federal and provincial governments' combined annual cost would be approximately $70 million. That's $42 million for the federal portion. This amount would offset AgriStability payments, because more producers would have been proactively managing this risk, and reduce the need for AgriRecovery dollars in addressing market disruptions.

Cattle producers face significant inequities compared to other agricultural commodities, jeopardizing both our economic viability and our capacity to deliver environmental benefits unique to cattle production.

For example, guaranteed returns through crop insurance with cost-shared premiums incentivize producers to convert valuable pasture land into cropland, directly impacting grassland ecosystems and the vital environmental services they provide. Without a more balanced approach, Canada risks losing valuable pasture land and the long-term sustainability of our beef sector. Between 2011 and 2021, 2.7 million acres of grassland and tame pasture were converted to crop production, resulting in significant declines in biodiversity, carbon sequestration and water management offered through grazing.

Federal and provincial governments, while remaining supportive, have expressed concern about LPI's long-term viability given limited uptake. In the United States, the USDA faced a similar challenge with its livestock risk protection program. However, participation rates grew substantially when premium subsidies were introduced in 2020. Now a substantial percentage of U.S. cattle production is insured and protected under their program. Providing equitable support to offset costs would place the program on a strong foundation and level the playing field.

In addition to LPI, we continue to face regulatory burdens due to bovine spongiform encephalopathy, even though Canada obtained its BSE negligible risk status in 2021. To fully capitalize on this status, the beef industry, in close collaboration with the CFIA, commissioned a quantitative risk assessment to evaluate the harmonization of Canada's specified risk material, or SRM, requirements with those of the United States.

The CCA recommends that government utilize the robust scientific and economic study to expediently align SRM removal requirements in Canada with the U.S. regulations. Differences between Canada and the U.S. on SRM regulations cost the industry approximately $24 million annually, making our industry less competitive. It should be noted that recent studies have shown that our current SRM policy is the most significant barrier to investment in new small and medium-sized cattle-processing facilities.

The SRM report is very near completion, and we urge the government to commence policy and regulatory changes swiftly and ensure they are included in the government's regulatory priorities.

Thank you for your time. I look forward to your questions.

[The Chair, Liberal, Kody Blois]

Thank you, Mr. Fulton.

Just as a note of clarification, you mentioned the SRM report. Did I hear you say in your testimony that it's being conducted by CFIA?

[Tyler Fulton]

No. As a matter of fact, it was commissioned by contractors but in line with CFIA requirements, understanding that there's a big science component to the risk analysis. We had to make sure that the report was going to be meaningful.

[The Chair, Liberal, Kody Blois]

Okay. Thank you.

I think it's a really important recommendation and one that this committee should urge and push the government to do.

We will now hear from CropLife Canada, perhaps from Mr. Gregory Kolz.

[Gregory Kolz, Vice-President, Government Affairs, CropLife Canada]

Yes. Thank you very much.

Good afternoon, Mr. Chair and honourable members. My name is Greg Kolz. I am the vice-president of government affairs at CropLife Canada. Joining me today is Émilie Bergeron, the vice-president of chemistry. Thank you very much for inviting us to discuss the priorities of Canada's agriculture sector.

CropLife Canada is the national trade association representing the manufacturers, developers and distributors of pesticides and plant-breeding innovations. We advocate for a predictable, science-based regulatory environment for plant science innovations in Canada. Furthermore, we champion a regulatory environment that both protects human and environmental safety and encourages innovation and competitiveness.

In a recent report, the United Nations Food and Agriculture Organization, or FAO, warns that global hunger and food insecurity are at critical levels. Hundreds of millions of people lack access to nutritious, safe and sufficient food amid world conflicts, climate change, supply chain disruptions and economic shocks, which have all contributed to high food inflation. That said, feeding Canadians and the world will require plant science innovations. Whether it's higher-yielding crops, varieties that are more resilient in the face of environmental stressors, or new crop protection tools, these are all innovations that will support Canadian farmers in their important quest to address food insecurity.

Using less land and fewer resources while achieving higher yields, which is enabled by these innovations, also makes food more affordable, reducing the average Canadian household's grocery bill by about $4,500 a year. This is why we are urging the Government of Canada to take bold action to enable the Canadian agriculture sector to help address the food security crisis, both domestically and abroad.

How can we unleash the full potential of Canada's ag sector and conquer food insecurity? Well, it begins by cutting red tape and creating a high-efficiency regulatory environment in Canada that will enable our agriculture sector to thrive. The OECD currently has Canada ranked 35th out of 38 member countries in terms of regulatory burden. This is unacceptable. This massive gap is a fundamental roadblock to agriculture innovation, sustainability and production.

In recent years, Canadian farmers have seen considerable delays in the introduction of agriculture technologies and access to safe and effective crop protection products due to a lack of predictability and timeliness in the domestic regulatory system. These barriers to innovation are hindering Canadian growers' productivity and competitiveness. Simply put, the Government of Canada must ensure that our growers have access to the tools and technologies they need, when they need them.

Let's focus specifically on Canada's pesticide management regulatory agency, the PMRA. Over the last several years, we've witnessed the PMRA being seized by a so-called transformation agenda—bureaucratic processes and initiatives that continue to add red tape to the regulatory process and dissuade investment and innovation in Canada.

[Émilie Bergeron, Vice-President, Chemistry, CropLife Canada]

Since 2021, product approval timelines have slipped and Canada's reputation as a place with timely and predictable decision-making has dropped, largely due to this politically motivated transformation process. We believe the time has come to redirect transformation agenda funding to core scientific activities and revisit Health Canada's proposed cost recovery scheme—a 256% increase on fees—for a more effective, efficient and accountable approach.

Let's be clear: We're not here today questioning the scientific capability or integrity of PMRA scientists or PMRA as a regulator. We're advocating for an approach that recognizes the key role PMRA can play, and should play, in helping farmers cope with real and significant challenges that can affect food production and the overall sustainability of the Canadian ag sector while maintaining strong health and environmental protections.

Therefore, we recommend that a comprehensive review of the PMRA program and activities be undertaken with a view to eliminating all activities that are not directly linked to meeting their health and environmental safety mandate and supporting the competitiveness of the agricultural sector.

In conclusion, CropLife Canada asserts that the Government of Canada has an opportunity, and in fact a responsibility, to recognize the critical role agriculture plays as an economic engine in this country and provide the support needed to unleash the sector's fullest potential. At a time when Canada's overall productivity continues to decline, we are urging the federal government to identify agriculture and agri-food as a key economic growth sector and take a whole-of-government approach to implementing policies that promote long-term growth for the industry.

We aren't coming to you cap in hand, asking for more money. Instead, we believe the Government of Canada must seize the opportunity to rebuild Canada's reputation as a top destination for investment in innovation by reducing red tape and creating a high-efficiency regulatory environment while maintaining strong health and environmental protection.

Thank you once again for inviting us today. We look forward to answering any questions you have.

[The Chair, Liberal, Kody Blois]

Thank you so much.

It's over to Mr. Bergamini.

[Massimo Bergamini, Executive Director, Fruit and Vegetable Growers of Canada]

Thank you.

Good afternoon, Mr. Chair and members of the committee.

My name is Massimo Bergamini. I'm the executive director of Fruit and Vegetable Growers of Canada.

Our organization represents growers across the country, and our members are involved in the production of over 120 different types of crops in more than 14,000 farm operations.

I would like to thank the committee for the opportunity to discuss the major challenges facing our sector with you.

Having been in this role for fewer than six weeks, I may not yet have a detailed sense of every issue or policy framework affecting our sector, but six weeks in, I do have a sense of what keeps our members up at night. Climate change and extreme weather, chronic labour shortages, the threat of growing protectionism and a widening competitive divide immediately come to mind.

Last August, our organization provided two comprehensive briefs to the government in the context of its pre-budget consultations. Copies, in both official languages, have been provided to the clerk of the committee as a complement to this presentation. These two submissions, which include a sector-specific look at Canada's greenhouse industry and the challenges it faces, contain some 42 specific recommendations covering everything from business risk management to crop protection, energy and climate change, labour and trade. I will not repeat them here.

What I will do, however, is take a moment to focus on this committee's important report, “Improving the Resilience of Canada's Horticultural Sector”.

Would I say your report addresses every issue and every concern? Probably not. What it does do, however, is provide a realistic policy road map to sustainability for Canada's diverse horticultural sector. This is why we view your report's recommendations as nothing less than the necessary starting point for any effort to improve the resiliency of Canada's horticultural sector.

Let's look at some of the top-line examples. First, your report correctly identifies problems with the current suite of business risk management programs and recommends an urgent review before they expire in four years. Second, it proposes simple and pragmatic measures to address the most glaring issues with Canada's temporary foreign worker program. Third, it recognizes the unique risk profile and competitive imbalance faced by Canadian horticultural producers, notably by recommending the adoption of Bill C-280, which would finally mainstream bankruptcy protection for our sector.

If your work, collectively in this committee and individually as champions within your respective caucuses, resulted in real movement on just those three policy areas, it would go a long way toward bolstering our sector and improving food security for all Canadians. I say this because, too often, the good and important work done in committees of the House and the Senate remains a dead letter. We want your report to inspire and inform urgent government action, and we will work with you to ensure that a light continues to shine on it.

Having said that, I do want to leave you with an additional thought. While some may dismiss this as being too technical, too processy or too inside baseball, we believe it must be given serious consideration. I'm talking here about adopting a food lens for all policy development in Canada.

As you know, from gender-based analysis to equity and climate change, the Government of Canada is no stranger to the development of public policy through dedicated policy prisms. While each of these lenses speaks to important policy considerations, few things are more fundamental to the well-being of individuals, of families, of communities and of nations than food security.

Applying a food lens to policy development would mean having the Government of Canada elevate food security to a national priority. In its simplest form, as we see it, it would mean recognizing that all key policy initiatives should answer a very straightforward question: Will this policy enhance or reduce the quantity, quality and diversity of domestic food production? We believe adopting a food lens to policy development, if done in a transparent manner and with clear accountabilities, would change everything.

Thank you.

[The Chair, Liberal, Kody Blois]

Thank you very much.

Colleagues, while I have the floor, there are two budgets that we need to pass quickly. I know you've reviewed them and they will have your support. Those are for our upcoming meeting and study on intergenerational transfer, and also for the priorities of agriculture that we're studying right now. Do we have agreement?

[Some hon. members]

Agreed.

[The Chair, Liberal, Kody Blois]

The other piece was mentioned by Mr. Bergamini in relation to Bill C-280.

I understand, Mr. Barlow, that when you were in the chair last week, this came up around the letters. With your approval, I'm going to send the letter on Bill C-280 right away. I think we need to have a more in-depth conversation on some of the correspondence I've received. We'll do that another time, but the letter on Bill C-280 is going out the door today, unless I see any strong opposition.

Seeing none, let's turn it over to questions. There will probably be only one round, colleagues.

Mr. Barlow, you have six minutes.

[John Barlow, Conservative, Foothills, AB]

Thanks, Chair.

I'll try to ask for indulgence from the witnesses to answer the questions as quickly as possible. I do want to leave a little bit of time for one of my colleagues.

Mr. Bergamini, I think you said something that we're all thinking—that it's important that we elevate the importance of agriculture in Canada.

It's unfortunate. Even you, Ms. Bergeron, mentioned that we need to rebuild our reputation. I don't know why our reputation has been ruined over the last 10 years by, I would argue, very poor government policy that's painted agriculture in a poor light.

You also mentioned in your opening statement the concerns with PMRA's revitalization, let's say, or cost recovery policy. It's my understanding that Health Canada has increased registration fees on plant protection products. The increase is 256%.

Ms. Bergeron, can you quickly elaborate on the impact this will have on the industry in Canada?

[Émilie Bergeron]

Thank you very much for the question.

Yes, PMRA is proposing to increase by 256% the fees that registrants pay for maintaining their plant protection products in Canada. That will have a huge impact on access to innovation and the competitiveness of our agricultural sector.

First of all, this will place the fees in Canada at about seven to 10 times higher than the fees that my members in the U.S. are paying for the same type of products that they're maintaining in the market. This is for a Canadian market that is about 10 times smaller than the U.S. market. It would be a significant competitive disadvantage for Canada if that proposal were to go ahead.

The PMRA is planning to go to a CG1 process with this proposal later in the fall. We're quite concerned that they haven't really consulted the sector following the public consultation that took place back in the spring. We believe, and we agree with the PMRA, that the fee structure needs to be updated, and it has needed to be updated for a long time. We've made constructive proposals to the PMRA, and we've asked them to discuss them further. We believe that our proposal will let them achieve their financial goals by getting the money they need to ensure the long-term stability of their program and making sure we get innovations in the hands of growers, but without impacting the competitiveness of the sector. Unfortunately, we haven't been consulted further on this.

[John Barlow, Conservative, Foothills, AB]

Thank you for that.

Have they given you any assurances—with these massive increases in fees, which are going to have a pretty negative impact on our competitiveness and on farmers—that any better service or any economic lens is going to be applied to PMRA decisions? Give a yes or no, really quickly.

[Émilie Bergeron]

No, there are no assurances.

[John Barlow, Conservative, Foothills, AB]

A “no” is good enough. That's all I needed to know.

I want to turn to the Canadian Cattle Association.

You were talking about the importance of the livestock price protection program. We've seen the latest report that our herd numbers are lower than in 1987—pre-BSE, even. What would be the impact in terms of growing the herd in Canada if we were to implement this program nationally?

[Tyler Fulton]

It's our belief that this is probably the single biggest impact that we could have to reverse the trend of a shrinking herd and to encourage the young producers to come back. That's the critical issue there. You referenced the intergenerational farm transfer issue. We've gone a generation since BSE. Quite simply, we lost them, because the risk to profits was too high.

Risk management is critical in attracting those young producers back to our industry so that they can rationalize the huge investments that they need to make. We see this as being probably the top priority that would actually encourage the industry to grow again.

[John Barlow, Conservative, Foothills, AB]

Thank you.

I'm going to leave my remaining time to Ms. Rood.

[Lianne Rood, Conservative, Lambton—Kent—Middlesex, ON]

Thank you, Mr. Chair.

Mr. Bergamini, I'd like to start with you, please.

I've heard from many people in my own riding. I come from a produce farming background and am a third-generation farmer who's looking at the intergenerational transfers of land right now.

I'm just wondering if you could tell us how the increase to the capital gains tax is going to affect our produce farms specifically, because we know these land values are a lot more than the land values of some other commodities. What I'm hearing is that there are farms that are now in jeopardy and that this is going to shut down the family farm.

[Massimo Bergamini]

Unfortunately, your question falls under the rubric of those issues that I have not had a chance to deal with over the last six weeks, but I certainly understand the importance of it.

Having grown up on a fresh vegetable farm myself, I will discuss this with my membership, and I will get you an answer that we'll share with the entire committee.

[Lianne Rood, Conservative, Lambton—Kent—Middlesex, ON]

Thank you.

Mr. Carey, do you or Ms. McLaughlin have a quick comment on that?