Agriculture Committee on Jan. 31st, 2022

[The Chair, Liberal, Kody Blois]

I call this meeting to order.

Welcome to the third meeting of the House of Commons Standing Committee on Agriculture and Agri-Food. I would like to make a few comments for the benefit of our witnesses who are here today. Before speaking, please wait until I recognize you by name. When you are ready to speak, you can click on the microphone icon to activate your mike. Interpretation is available at the bottom of your screen. You can certainly toggle between French and English as your language of choice. When speaking, please speak slowly and clearly for the benefit of our translators. When you are not speaking, your mike should be on mute.

If interpretation is lost, please inform me immediately, and we will do our best to address the issue with the clerk and the team here. With regard to a speaking list, for the benefit of the members, the clerk will advise the chair, to the best of her ability, as to whose hands are up first, and we will do our best to maintain a consolidated speaking list and order accordingly.

Pursuant to Standing Order 108(2) and the motion adopted by the committee earlier this morning, Monday, January 31, 2022, the committee will now proceed with the briefing on the status of the British Columbia flood recovery effort. I would now like to take the opportunity to welcome our witnesses, who are joining us today by video conference.

From the Department of Agriculture and Agri-Food, I know we're still waiting on Mr. Del Bianco, director general, business risk management programs directorate, programs branch. We also have Nathalie Gour, director general, regional operations directorate; Scott Pellow, executive director, planning, coordination and disaster assessment division, business risk management programs directorate; and Aaron Fowler, chief agriculture negotiator and director general, trade agreements and negotiations.

From Farm Credit Canada, we have Michael Hoffort, president and chief executive officer, and Don Anderson, senior vice-president, western operations.

Let me just take a moment, Mr. Hoffort, to congratulate you. I know you're retiring in June 2022. Congratulations for all of your service, and thank you for being here with us today.

From Public Safety Canada, which will not be providing any opening remarks but is available to take questions from members, we have Stéphanie Durand, who is the director general of the emergency management and policy branch.

Welcome to all of you. Thank you for being here for this important conversation today. I'm going to propose that we start with five minutes of opening remarks from Farm Credit Canada, which may allow Mr. Del Bianco to get in. We understand he was having some technical problems.

Mr. Hoffort, if you're okay with that, I would ask that you start with your five minutes, and then we will proceed to the Department of Agriculture and Agri-Food.

[Michael Hoffort, President and Chief Executive Officer, Farm Credit Canada]

Good morning.

Thank you for giving me this opportunity to address you today.

Thank you for the opportunity to provide a briefing on the status of B.C.'s flood recovery efforts. I'm joined today by FCC senior vice-president Don Anderson, who is responsible for our customer-facing teams in B.C. and Alberta.

FCC is a self-sustaining federal Crown corporation that provides financing, software and advisory services designed for the Canadian agriculture and food industry. We are Canada's leading agriculture and food lender, with a loan portfolio of more than $44 billion. FCC serves all agriculture and food-processing sectors, and we have more than 2,100 employees working out of our 101 offices across the country.

In B.C., FCC has $2.9 billion in loans outstanding to primary producers, and another $876 million to agribusiness and agri-food operators. Prior to the flooding in question, our teams located in Abbotsford, Surrey, Kelowna and Duncan were actively reaching out to our customers, as many producers in B.C. were impacted by extreme heat and drought conditions during the 2021 growing season.

In the days and weeks following the devastating November flooding and erosion in parts of the B.C. interior, the Lower Mainland and on Vancouver Island, FCC has worked with customers facing significant losses and financial hardship. Examples of losses include buildings, equipment, livestock, feed and productive land for crops. The personal and business property damage has been extensive. For some, the cleanup and recovery may have impacted their operations for days or weeks. For others, the production disruption may be felt for months to come. And for others yet, such as those in blueberry operations, the impact could last for years. It is safe to say that the circumstances will vary significantly and will not be fully understood for several months.

The public infrastructure damage and the impacts to highways and rail transportation have been extensive as well. For local producers, this has curtailed their ability to obtain supplies, like feed, to sustain their operations, materials to rebuild and access to area processors. For food processors and logistics companies that move perishable food products to grocery stores across Canada, the supply chain disruption contributed to an already challenging situation.

Upon hearing of the magnitude of the flooding in B.C., FCC sought immediate approval from our board of directors to launch a customer support program that mirrored FCC's response to industry disruptions caused by the COVID-19 pandemic. More specifically, we offered loan payment deferrals that could include both principal and interest for up to six months, or interest-only for a full year. To date, 28 customers on 53 loans representing $34.2 million have taken advantage of this offer. The volumes are concentrated in greenhouse, hay farming and blueberry operations. Livestock loan deferrals to poultry operations are $3.8 million. For dairy farms, loan deferrals total $2 million. Emergency credit lines of up to $500,000 are also available, and there has been some limited uptake so far on that offer.

Recognizing that the needs would stretch well beyond what FCC could do with financing, we also provided a $100,000 donation to the BC Agriculture Council, or BCAC, to help relief efforts for the industry. BCAC is a non-profit council of agriculture industry associations that advocates for the interests of the province's agriculture and food producers.

All FCC customers in affected areas have been contacted and invited to reach out to us to discuss their individual situations and options. Although the early uptake on customer support may be limited to date, we will continue to work with our customers as they develop a better understanding of their financial impacts.

To assist in the continued recovery effort, there are areas that we continue to monitor. We are keeping a close eye on the following: impacts to the livestock sector, including recovering feedstock and longer-term facility repair and rebuilds; impacts to the crop sector, where we're paying specific attention to blueberry and crop land productivity and possible soil contamination as a result of the flooding; impacts to the agribusiness and agri-food processors to monitor lingering supply chain disruptions; and the overall mental health of area producers and our FCC teams to understand the effects of the very stressful events of the past year.

The early days of this disaster were marked by images of the community pulling together to protect livestock and take care of their neighbours. Now, as the infrastructure heavy lifting begins, we continue to monitor the situation and look forward to more progress in the months ahead.

In closing, FCC remains committed to supporting our customers and the broader B.C. agriculture value chain through these challenging times.

Once again, thank you for this opportunity to speak with you today.

[The Chair, Liberal, Kody Blois]

Well done, Mr. Hoffort. Only a few seconds.... I gave you some extra time, but thank you for being within the five minutes.

I understand that Mr. Del Bianco is now on the line, so we'll head over to Agriculture and Agri-Food Canada.

[Francesco Del Bianco, Director General, Business Risk Management Directorate, Programs Branch, Department of Agriculture and Agri-Food]

Thank you, Mr. Chair.

I'd like to thank the committee for holding this special meeting on the impacts of the extreme weather event in British Columbia. As you know, the floods were significant, and dairy, poultry, swine, beef, horticulture and fruit and vegetable growers all incurred significant losses. Over 1,000 farms, 15,000 hectares and 2.5 million livestock were impacted by the floods.

I want to note that producers do have access to a suite of business risk management programs that will help them manage the significant risks that threaten the viability of their operations. These programs include, obviously, the AgriRecovery initiatives and AgriStability, AgriInsurance and AgriInvest. These programs are cost-shared 60:40 between the federal government and the provinces.

Last month, Minister Bibeau and Minister Popham visited with some of the farmers and ranchers in the region to see the full extent of the damage to the lands and livestock. They essentially struck a federal-provincial task team, which was quickly established, to understand the full impacts of the event and how AgriRecovery could respond to help producers with disaster recovery costs.

I should note that AAFC has experience in working with the provinces on AgriRecovery initiatives, most recently having rapidly deployed programs totalling $825 million in response to drought conditions across western Canada and northwestern Ontario.

Today, as we consider the impacts of the significant floods, we know that the agriculture sector will face a number of challenges related to productive assets, soil health, feed shortages, plant health, disease and contamination, and the impact of livestock losses.

I am joined by Scott Pellow, the executive director who leads AAFC's AgriRecovery team. By way of example, I thought I could share some of the extraordinary expenses that could be supported under the program. These include the cleanup, repair and restoration of land, barns and animal shelter, water and waste systems; work to return flood-impacted land and buildings to a safe environment for agricultural production; repair of on-farm structures such as livestock containment fences and drainage ditches; and measures related to animal welfare, such as the replacement of feed, livestock transportation, veterinary care and, unfortunately, mortality disposal.

In addition, federal and provincial officials are working with Public Safety Canada to better understand how AgriRecovery initiatives could best complement the support that will be provided through the disaster financial assistance arrangements, known as DFAA. I want to note that I'm also joined by my colleague Stéphanie Durand, who is the director general for the emergency management and policy branch of Public Safety Canada and who can also respond to some of your questions.

As noted earlier, producers also have access to other business risk management programs. We've encouraged producers to sign up for AgriStability, which can help farmers cover severe drops in their income. Initial payments, through interim payments, can be made available in a matter of weeks. We've also put in place what we refer to as “bilateral late participation”, which allows producers who aren't currently enrolled to enrol in the program. Insured producers can also make claims under AgriInsurance, which insures crops against losses due to weather.

As you have heard from the president and chief executive officer of Farm Credit Canada, FCC has reached out to affected clients to offer flexible financing terms to help ease the pressures on cash flows.

In closing, I should mention that during her visit to British Columbia in December 2021, Deputy Prime Minister Freeland said that agriculture would be eligible for a share of the $5 billion in disaster recovery support outlined in the economic and fiscal update.

In December, the Committee of British Columbia and Federal Ministers on Disaster Response and Climate Resilience held its first meeting. They're working together with first nations to ensure an effective response and recovery, while also enhancing climate adaptation and response measures.

Mr. Chair, AAFC officials and our federal-provincial colleagues will continue to support B.C. producers during this incredibly difficult time.

Thank you again, Mr. Chair. We're now available to respond to your questions.

[The Chair, Liberal, Kody Blois]

Thank you very much, Mr. Del Bianco.

Of note for the committee, some may be wondering about officials from the Government of British Columbia. An invitation was sent. There were challenges in being able to coordinate the interpretation and audio test. Unfortunately, they were not able to make the meeting today. I know that Mr. MacGregor particularly had signalled this, along with others.

We'll turn now to our questions and begin with six-minute rounds. We have a few folks joining us on this committee: Mr. Albas, Mr. Fast and Mr. Vis. Welcome. It's great to have you here.

I'll turn the floor over to Mr. Vis for six minutes.

[Brad Vis, Conservative, Mission—Matsqui—Fraser Canyon, BC]

Thank you, Mr. Chair.

I'm one of the MPs who represent some of the hardest-hit areas. My questions today will largely focus on a meeting I had with blueberry producers in the region last week.

I read the DFAA website from the federal government, and it says that the program aims to bring back people's personal property to “pre-disaster condition”. Right now, my constituents, when they read that statement, look at it in the context of the agreement with the provincial government in British Columbia, which, unfortunately, to my knowledge.... The program will provide an 80% compensation on eligible expenses exceeding $1,000 up to a maximum of $300,000.

In our region right now, we have some berry producers especially who didn't participate in the AgriStability or AgriInsurance programs and who have incurred significant losses. What should I be telling these constituents about what programs to access? You did note that there is a late entry for AgriStability—that's helpful information—but what steps should they be taking to receive adequate compensation for the losses they've incurred?

That's for Mr. Del Bianco or the representative from Public Safety Canada. Thank you.

[The Chair, Liberal, Kody Blois]

Mr. Del Bianco, it's over to you.

[Francesco Del Bianco]

Thank you, Mr. Chair.

I'll defer to my colleague with regard to the disaster financial assistance arrangements and the emergency management in B.C. program.

With regard to the programs available jointly through the federal and provincial governments related to business risk management, there is AgriStability. For those who hadn't enrolled, we've introduced the provision for late participation. AgriStability, in the case of British Columbia, is administered by the province. They informed me this morning that approximately 122 producers have made use of that and have requested to be enrolled in the program. They can also make requests for interim payments. Traditionally, producers could receive up to 50% of the anticipated payment under the program. We've increased that to 75%, so producers who are in immediate need of support can make requests for interim payments under AgriStability. In addition, producers do have access to AgriInvest. On average, producers have about $20,000, so it does provide some support in the immediate.

With regard to the longer term, in the case of blueberry producers, there is insurance coverage in place for the loss of blueberry plants due to excess moisture. Again, B.C. administers the AgriInsurance program. The role of the federal government is to ensure that they're actuarially sound. Hopefully, a large number of those producers had agriculture insurance that would cover the productive asset—

[Brad Vis, Conservative, Mission—Matsqui—Fraser Canyon, BC]

Thank you, Mr. Del Bianco.

Many farmers do not have insurance. That is a reality. What type of support could they receive through the AgriRecovery program when they're not eligible for some of those additional programs that you just referenced? How much funding is available through AgriRecovery for the loss of income, the soil damage, and the loss of agricultural infrastructure?

[Francesco Del Bianco]

AgriRecovery is a framework. It's not an actual program. We do an assessment with the provinces to determine what the extraordinary costs are. Then we put in place a program and seek the authorities and the source of funds in order to put the program in place.

In the case of AgriRecovery, it doesn't offset income losses—that would be covered through AgriStability—but AgriRecovery can cover the extraordinary costs producers need to incur to resume their operations.

[Brad Vis, Conservative, Mission—Matsqui—Fraser Canyon, BC]

Where are the Government of Canada and the Government of British Columbia at in discussions related to the AgriRecovery framework and future agreement through the joint committee?

[Francesco Del Bianco]

As I mentioned in my remarks, we have a task team. We're working very closely with our provincial counterparts to identify all of the extraordinary costs that the producers have incurred, both in the immediate this year and what we anticipate to be the longer-term costs into 2022. I think there's a commitment to move very quickly and to respond in short order.

[Brad Vis, Conservative, Mission—Matsqui—Fraser Canyon, BC]

Has the provincial government come forward with any initial requests or assessment of the damage in British Columbia to date?

[Francesco Del Bianco]

Yes, it's a joint task force, so we've essentially done it together, but given that they are physically located there, the province has been able to provide us with an incredible amount of information to help us assess both the gravity of the situation and the type of support that should be provided.

[Brad Vis, Conservative, Mission—Matsqui—Fraser Canyon, BC]

Thank you, sir. I really appreciate your appearance today. I will be going back to farmers in my community, and I hope they can still enter the AgriStability program if they were not previously a part of it.

Just one final—

[The Chair, Liberal, Kody Blois]

Mr. Vis, I apologize. You will have another opportunity.

[Brad Vis, Conservative, Mission—Matsqui—Fraser Canyon, BC]

Thank you, sir.

[The Chair, Liberal, Kody Blois]

Thank you for the questions. I know this is important to your region and to your constituents.

Mr. Turnbull, go ahead for six minutes, please.

[Ryan Turnbull, Liberal, Whitby, ON]

Thank you, Mr. Chair.

Thanks to all the panellists for being here today. I appreciate your expertise and all the hard work you're putting in. Obviously, we have heavy hearts for all the people of British Columbia. The natural disasters they experienced last year alone are unprecedented, I think.

I wonder if Mr. Del Bianco could give us a sense of the scale of the impact on the food system and the agri-food supply chain in B.C. and across Canada. I wonder just how big the impact of this natural disaster is in comparison to other ones. Is it unprecedented? Is it larger in size and scale, or are there others that are on a similar scale?

[Francesco Del Bianco]

Part of an AgriRecovery assessment is to see whether this is a recurring event. There was an event in 2011 called the Canada-British Columbia excess moisture initiative, but the scope and magnitude of this is far beyond that. We would categorize this as a one-in-a-hundred-years event.

In terms of the specific details, I will turn to my colleague Scott Pellow to give you an impression of the magnitude and the impact it's having on producers.

[Scott Pellow, Executive Director, Planning, Coordination and Disaster Assessment Division, Business Risk Management Programs Directorate, Department of Agriculture and Agri-Food]

Thank you, Mr. Chair, for the question.

As Francesco articulated, it has been categorized as a one-in-a-hundred-years event impacting southwestern British Columbia with regard to flooding and landslides. It has been described as the worst financial agricultural disaster in B.C.'s history.

In terms of the regions that are impacted—the Sumas Prairie region, Abbotsford, Merritt and Princeton—we know that these are the major agricultural production areas in B.C. With regard to the dairy industry, it has been estimated that it represents approximately 80% of the milk production in the province. With regard to poultry, it represents around 56% of the province's production. With regard to eggs, it's around 77%. Again, it is a very large area with regard to the cropland that's been impacted, particularly for the horticulture, fruit and vegetable sector.

This is a major agricultural disaster event that we've seen in British Columbia.

[Ryan Turnbull, Liberal, Whitby, ON]

Thank you for that detailed answer. It highlights the importance of addressing climate change, for sure, but also understanding the full impact. It must be quite the challenge.

In response to Mr. Vis's question, Mr. Del Bianco pointed to the AgriRecovery framework and trying to estimate those extraordinary costs.

Mr. Del Bianco, could you or any member of your team help us understand the process of actually estimating those extraordinary costs, obviously working with the B.C. government?

[Francesco Del Bianco]

Yes. There's a formal process when we launch an AgriRecovery initiative. First, we need to determine if it is a recurring event or an abnormal event, and if there are extraordinary costs. This event has clearly met those requirements. Next, we look at whether it is a collective experience. Are there significant negative impacts? Are these extraordinary costs significant, and do the producers have a capacity to manage them?

We're in the process of finalizing that assessment and identifying all of the costs related to livestock, perennial crops, farmlands and environmental concerns, and developing a response in partnership with our colleagues in British Columbia, who will administer the program on our behalf. We will cost-share the response sixty-forty.

[Ryan Turnbull, Liberal, Whitby, ON]

Are there any gaps in that process in getting a full understanding of the costs? It sounds pretty thorough to me.

[Francesco Del Bianco]

We try to get it right. With the B.C. wildfires and drought, whether it is the drought in the western provinces.... To date, we've been able to respond to producers' needs in a timely manner, and we aim to achieve the same with this initiative.