Agriculture Committee on Feb. 6th, 2023

[Catherine Lefebvre]

Here's what happened at the beginning of the season, in June, when the green onions came out. The price of greenhouse-grown and transplant green onions was set based on a certain cost. The harvest cost alone was less than what the grocery chains offered to pay, and that doesn't include the production inputs at the field level. Growers couldn't even harvest the crop. They left it in the field.

[Patrice Léger Bourgoin]

I'll give you another example, fresh asparagus.

In previous years, when the grocery stores received Quebec-grown fresh asparagus, they promoted Quebec produce. This year, they put Quebec-grown asparagus in competition with asparagus grown in Latin America. The sheer economics make it impossible for Quebec growers to compete with growers in Latin American countries and their production costs, because we have to abide by environmental rules and labour laws.

[The Chair, Liberal, Kody Blois]

Thank you, Mr. Perron, Mr. Léger Bourgoin and Ms. Lefebvre.

We now go to Mr. MacGregor for six minutes.

[Alistair MacGregor, NDP, Cowichan—Malahat—Langford, BC]

Thank you, Mr. Chair.

Thank you to our witnesses for providing a very helpful narrative and insight into the other side of the equation. I think we approached this study looking at it from the consumer point of view, but it's also very important that we get our processors and producers, because you have detailed quite well the challenges that you have faced in your relationship with large retailers.

I would like to direct my first question to the CFA.

I understand that the conversations around the code of conduct are confidential. However, in an ideal world, what would the CFA like to see as an end product?

I know that you've told the committee before, but for the purposes of this study, I think it would be great to have your answer on the record again. Specifically, I'm looking for details on follow-through to ensure that the goals of the code are being adhered to and that there is a level of transparency. That is, what is the role of government in that process to ensure that the code is being met honourably? In an ideal world, what does the CFA want to see?

[Scott Ross]

I think the starting point for the CFA has always been that any code of conduct must be mandatory and enforceable. I think that can mean different things in different situations. There's not a prescriptive approach to what that necessarily looks like in practice. However, I think that the government has a critical role in ensuring that it meets that threshold. I think that when we start from the space of looking at large retailer practices, it's ensuring that large retailers are under that code and are following and abiding by its rules.

Without getting into the details of the code itself, I think from our perspective what's critical is that there's accountability to the trade provisions that are laid out in the code of conduct and to ensuring that there are sufficient teeth and enforceability to ensure that those provisions are being followed. From the perspective of government, how active a role it has to take is really a matter of reality once we see a code of conduct in practice and what that looks like.

It's to be determined what the mechanism may be, but I think, from a fundamental starting point, it's ensuring that all of the key players are in the code and abiding by its rules and that there's accountability to those rules.

[Alistair MacGregor, NDP, Cowichan—Malahat—Langford, BC]

Thank you. I appreciate your putting that on the record again.

To the Quebec growers association, thank you for being here, as well.

We very clearly heard reference to the term “oligopoly” and the concentration of power among a select few grocers. We heard testimony on what many producers would like to see in a code of conduct.

Another focus has been on the existence of Competition Bureau Canada. Right now, around the same time it was announced that we were doing our investigation, the Competition Bureau also announced it was going to do an investigation. It is limited by only accessing publicly available data. It's not really an investigation; I think they're calling it a study. They cannot compel witnesses. We also know Competition Bureau Canada has, with other investigations in the past, struggled with resources and time limits.

Does your association have any comments to offer on the role of Competition Bureau Canada? What would you like to see this committee recommend to possibly strengthen it? Does it need an expanded mandate, etc.?

[Patrice Léger Bourgoin]

Consider the Federal Trade Commission in the U.S., the counterpart to our Competition Bureau. It regularly examines whether American consumers have access to products in a marketplace of healthy competition.

The best example out there right now is Kroger's bid to acquire Albertsons, a relatively minor grocery chain in the U.S. The Federal Trade Commission is asking a whole lot of questions about how American consumers will be ensured access to competitively priced groceries in an environment where grocers can't take advantage of industry concentration.

I think we should apply similar logic here, with a like-minded approach.

[Alistair MacGregor, NDP, Cowichan—Malahat—Langford, BC]

Thank you.

I'll pose my last question to the CFA.

We know the new Canadian agricultural partnership will take effect in April. Last year, the federal government and provinces announced the agreement in principle, and so on. However, it's probably an understatement that 2022 has been a year with a lot of flux and changing conditions. You detailed, quite well, the many challenges farmers have to face—2022 being the most expensive year to put a crop in the ground, ever.

Do you feel the next five-year framework has enough adaptability to be nimble enough to respond, given what you have seen in the past year alone?

[Scott Ross]

With the announcement of the sustainable Canadian agricultural partnership, we see a very high-level agreement. The details of the programs are still being ironed out in many respects. The ability of those programs to adapt is to be seen. I think that structure and the nature of an FPT agreement like that can provide tools to be flexible and adaptable. We certainly hope that, as situations like this evolve, they will look very closely at that.

One issue we see is a significant need to delve more deeply into—as I said in my earlier response—pricing, scarcity of inputs and how we, as an industry, contend with that new reality, because it is very much a new reality for many producers across Canada.

[The Chair, Liberal, Kody Blois]

Thank you, Mr. MacGregor.

Thank you, Mr. Ross.

Colleagues, we're a bit tight on time. I'm going to give four minutes to the Conservatives, four minutes to the Liberals, two minutes to the Bloc and two minutes to the NDP. If you get to three minutes and 30 seconds, don't think you're going to jam a late one in there, because I'm going to have to keep it tight.

I'm looking at you, Mr. Lehoux.

[Richard Lehoux, Conservative, Beauce, QC]

Oh, oh!

[The Chair, Liberal, Kody Blois]

It's not you, specifically. Everyone does it, but you happen to be the one with the mike, so don't test me. It's over to you. You have four minutes.

[Richard Lehoux, Conservative, Beauce, QC]

Thank you, Mr. Chair.

Thank you to the witnesses for being here.

Ms. Robinson, you gave us three recommendations at the outset. You mentioned that $34 million in tariff income had been collected on fertilizer. I noted that we don't know whether it's $33 million or $34 million, so we don't know which number is the right one.

How would you like to see that money allocated? I imagine that your view has already been shared with the people concerned.

Has it not?

[Mary Robinson]

Yes, it has. We asked for it to come back to producers, in order to enable them to invest in technology and improve sustainability in our production systems.

Very importantly, we understand it's muddy waters now—sending the money directly back to producers. We're trying to find a way to make sure the bulk of it comes back to producers in some way so that it gets used towards something that will bring benefit for the greater good.

[Richard Lehoux, Conservative, Beauce, QC]

I'm fine with that.

You said “bulk” of the money. I sincerely hope that all of the money goes back to producers. After all, it came from them in the first place.

I have a question for Ms. Lefebvre or Mr. Léger Bourgoin.

You mentioned the reciprocity of standards. That's something I've been quite concerned about since joining the committee. Certain things need to change quickly. Would do you think that change should look like? The fact that your produce can't compete with produce from Latin America came through loud and clear.

What do you recommend to ensure adherence to a reciprocity of standards? How quickly should it be put in place? Surely, your association has discussed it with the department.

[Catherine Lefebvre]

First, more random inspections certainly need to be carried out at customs. We've been told that a total of 1,200 inspections are conducted annually. Given how much produce is coming into the country, suffice it to say that we would like to see more inspections than that.

For pesticide residue testing alone, we have some of the most stringent standards out there. Just focusing on the reciprocity of pesticide standards would go a long way towards making things easier for us, while doing consumers a lot more good. Those standards were put in place for a reason.

[Richard Lehoux, Conservative, Beauce, QC]

I'm happy to hear you say that. If growers in other countries had to follow the same standards as growers in Quebec and Canada, grocery stores probably wouldn't sell imported produce for the same prices they do now.

My understanding is that the Canadian Food Inspection Agency, or CFIA, just doesn't have enough inspectors to control what comes in at the border.

[Catherine Lefebvre]

We are the ones missing inspectors at the border, not other countries.

[Richard Lehoux, Conservative, Beauce, QC]

Yes, of course. We really don't have enough people at the border.

The committee asked CFIA officials about that, and they said that one in 10 shipments was inspected. That means nine shipments come into the country uncontrolled.

[Catherine Lefebvre]

That's exactly right. A CFIA officer told us at a conference that the agency conducted 1,200 inspections a year.

[Richard Lehoux, Conservative, Beauce, QC]

I see. Thank you.

Ms. Robinson, I want to ask you about the code of conduct. I realize that it's confidential, but it's probably something we need to get across the finish line.

Can you give us an idea of the timetable for that?

[Scott Ross]

I can speak to that as I'm involved more directly in that process.

We are approaching a stage where we will have a code of conduct to present that is approaching implementation. It's very hard to say with certainty how long the implementation of a code will take.

We also have further consultation with stakeholders to make sure that it meets the expectations of all of the growers and stakeholders in the supply chain. I think we are at the final stages of development of the code and are moving into a phase of consultation and implementation in very short order.

[The Chair, Liberal, Kody Blois]

Thank you very much, Mr. Lehoux and Mr. Ross.

We'll go to Mr. Turnbull for four minutes.

[Ryan Turnbull, Liberal, Whitby, ON]

Thanks, Chair.

Thanks to all of our panellists for being here today. We really appreciate your being here and your testimony.

I want to ask you a series of shorter questions. It seems to me, from what we've heard, that farmers are in a vice. They're being squeezed from both sides. On the one hand, they're subject to input costs going up, which are beyond their control. On the other hand, they're outsized by an oligopoly of retailers that are pushing their price down.

Are farmers getting fair value for the product they produce? Can you just give simple, straightforward responses?

Ms. Lefebvre.

[Catherine Lefebvre]

No, they don't get a fair price. No country's vegetable production costs compare to ours.