Thank you very much.
Good afternoon, committee members. I would like to thank you for the invitation to speak with you today.
My name is Brian Matheson. I'm the deputy minister of the Prince Edward Island Department of Agriculture and Land. I'm joined today by Dr. Carolyn Sanford, our policy and regulatory ADM within the province.
My comments today will provide you with information on the value of the potato industry to P.E.I.; the current potato wart situation and the associated impact this has had on the economy and on the mental health of farmers in the province; programs implemented by the province that offer financial assistance to respond and adapt to the trade restrictions; and key points to consider in the future.
The closure of U.S. borders to Prince Edward Island potatoes has had negative consequences for the province, its economy and potato farmers. P.E.I.'s potato sector is extremely important to the province's economy and culture. Its impacts extend beyond this jurisdiction's borders. The P.E.I. potato sector has an economic impact of $1.3 billion on P.E.I.'s economy, with over 5,000 jobs supported in Prince Edward Island. In addition, the sector contributes $544.7 million to other Canadian provinces, adds $784.6 million to the national GDP, creates over 2,000 jobs outside of P.E.I., and contributes over $24 million in taxes outside of our jurisdiction. The sector, therefore, contributes to economies across Canada.
The vast majority of P.E.I.'s potatoes and potato products are exported to other provinces or abroad. In 2019, international exports of P.E.I. potatoes, which include fresh, seed and processed potatoes, totalled $406 million. The United States represents 84% of P.E.I.'s total international potato exports. It is therefore an extremely important market for Prince Edward Island.
On October 1 and October 14, 2021, the Canadian Food Inspection Agency confirmed that potato wart was identified in two separate processing potato fields in P.E.I. As a result, on November 2, exports of P.E.I. seed potatoes to the United States were put under suspension. On November 21, the Agriculture and Agri-Food Canada minister announced that CFIA would voluntarily suspend trade of fresh potatoes—both table stock potatoes and fresh potatoes for processing—from P.E.I. to the U.S., in addition to the seed ban. A ministerial order was also introduced that announced new risk mitigation measures for fresh potatoes moving across Canada, which included a ban on the domestic movement of P.E.I. seed potatoes. These decisions have had negative consequences for P.E.I. producers.
I would like to underscore that P.E.I.'s potatoes are safe, nutritious and of the highest quality. The potato wart domestic long-term management plan, put in place following detection in 2000, outlines the mandatory minimum survey, testing and surveillance activities required, with the objective to mitigate the risk of spread of potato wart outside of the restricted areas in P.E.I. We are confident that the management plan is working. P.E.I. potatoes continue to be safe and of the highest quality, and continue to be shipped safely and consumed safely across Canada.
There are several additional long-standing processes in place that provide assurances that P.E.I. potatoes are safe. When shipping P.E.I. potatoes across Canada, it is standard practice for fresh potatoes to be washed or dry-brushed and/or treated with a sprout inhibitor prior to being shipped. Additionally, potatoes are regularly subjected to visual inspections through our post-harvest virus testing program, our agriculture insurance corporation, local processors and local packers. These measures add additional mitigation to the risk of introduction of disease and result in the high quality and outstanding reputation of the P.E.I. potato.
P.E.I. farmers have experienced tremendous loss due to the trade suspension. The closure of the U.S. market has not only had a direct economic impact for P.E.I.'s potato producers—about $100 million to $120 million per year in sales—but also created unease among other markets, both domestic and international, that receive P.E.I. potatoes. The province and industry are actively working to provide reassurance to other markets that P.E.I. potatoes are safe and maintain the highest standards of quality.
Furthermore, it is important that I highlight the negative impact this situation is having on farmers' mental health. Such situations as the closure of the U.S. border compound existing mental health stressors for farmers. The department has heard from industry that there have been increases in farmers seeking counselling support. To support the mental health of farmers during this difficult time, the province has increased funding to the farmer assistance program to allow farmers to access counselling support. To provide short-term financial support, the province has also launched a $10-million potato wart emergency fund to assist industry with responding to immediate impacts.
Other initiatives under way include a wage support program for potato exporters. This program will provide a wage subsidy for—