Agriculture Committee on Feb. 13th, 2023

[Rechie Valdez, Liberal, Mississauga—Streetsville, ON]

That's no problem. Maybe another way to position it is more like what I'm trying to understand. For restaurateurs and the industry, what do they feel are the drivers of food inflation?

You're on mute, Mr. Bourbeau.

[Olivier Bourbeau]

Of course: 2023 and still on mute. My apologies.

We thought the worst for us was everything that is food related, but we unfortunately realized in the past 12 months that the worst in terms of inflation touches labour costs, touches amenities and touches insurance—when we can get insurance, because it's a real problem.

These three cost points are the worst for us in terms of inflation currently.

[Rechie Valdez, Liberal, Mississauga—Streetsville, ON]

Thank you, Mr. Chair.

[The Chair, Liberal, Kody Blois]

Thank you, Mrs. Valdez.

Thank you, Mr. Bourbeau.

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

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

Thank you, Mr. Chair.

I'd like to thank the witnesses for being here this evening. We appreciate it.

Ms. Cloutier, in your opening address, you provided a good overview of the causes of inflation and the problems we are currently experiencing.

If you had just one recommendation to make to the committee about how the government could help your consortium's processing businesses, what would it be?

[Sylvie Cloutier]

I personally believe that we need support for the implementation of a best practices code for major retailers, distributors and suppliers.

I'll let my colleague Mr. Fraeys tell you about our recommendations which apply specifically to the labour shortage and temporary foreign workers.

[Dimitri Fraeys, Vice-President, Innovation and Economic Affairs, Conseil de la transformation alimentaire du Québec]

As we said earlier, labour is a serious problem. In our area, 15% to 20% of jobs are vacant because of a labour shortage. That means we have to bring in temporary foreign workers to fill these jobs. That ends up costing an additional $5 an hour.

The problem with bringing in temporary foreign workers is the delays. It could take 8 to 15 months from the time you make the application to the time you receive the worker. Our main recommendation is therefore to shorten the delays at Immigration, Refugees and Citizenship Canada. It can take a very long time to obtain a work permit; up to four, five or six months.

As for the labour market impact assessments, even though service Canada has begun to operate much more efficiently, the fact remains that if it were possible to create a system of trusted employers, somewhat like the customs NEXUS program, employers that bring in the same workers year after year would have faster access and fewer delays.

The real problem is the considerable delays, which we would like to reduce by half, if possible. We can't change the dates for the harvest season. When employers make an application, they expect the workers to arrive in time for the harvest, not after. That's something that has actually happened.

I also think that interest rates are the greatest problem at the moment. Mr. Bourbeau talked about loans earlier. For the processing companies, stocks are huge because the ordering process is difficult. If restaurant owners or other clients have trouble knowing what their ultimate requirements are, then there will be less demand. To give an example, it used to be that one-year contracts were typical, but we are now talking about 1-to 3-month contracts. The processor therefore needs to keep much more stock in storage, for longer periods, at a time when interest rates are much higher.

We therefore recommend facilitating access to short-term credit, in a manner similar to the way Business Development Canada provides five-year interest-free loans to companies that invest in digital transformation. If we had something equivalent for lines of credit, it would greatly help businesses get through the next 12 to 18 months, which are difficult as a result of higher interest rates and inflation.

Those are our main recommendations.

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

Do you believe this measure would help control food price inflation, at the end of the day?

[Dimitri Fraeys]

As soon as interest rates drop, pressure will ease off. As I was saying earlier, stocks are large and prices are increasing. When costs rise, demand for financial instruments automatically increases.

What we are proposing would help businesses get through the next few months, which are likely to be somewhat less difficult.

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

Thank you, I've taken note of that.

In the Conseil de la transformation alimentaire du Québec's opening address, the National Supply Chain Task Force was mentioned. You said that you would need lower interest rates because huge stock levels are required as a result of transportation problems.

Can you tell me more about that? What can be done about it?

[Dimitri Fraeys]

Yes, that's right. The National Supply Chain Task Force, which comes under the aegis of Transport Canada, released its report in October, in which it made a number of recommendations, the most pressing of which was to use digital technology to improve logistics and transportation in Canada.

Canada can be viewed as a huge manufacturing plant. If efficiency is improved, the processes and operations will be less expensive and things will flow more quickly. When the flows improve, the costs go down.

For example, in February 2022, the Ambassador Bridge was closed. The closing of an essential link like that had an impact on Canada's entire economy.

If the transportation flows could be improved, whether land, marine, rail, or even transshipment between boats and trains, we could become more efficient and hence reduce…

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

Mr. Fraeys, I am sorry to interrupt you, but my speaking time is almost over.

To conclude, you'd like more investment for this in the next budget. Right?

[Dimitri Fraeys]

Yes, we'd like to see more substantial investments in the budget to be able to improve logistics and transportation in Canada.

[The Chair, Liberal, Kody Blois]

I was worried when I saw that another question was being asked with only 15 seconds to go, but both of you, Mr. Perron and Mr. Fraeys, managed to finish within the time allotted,

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

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

Thank you, Mr. Chair.

Thank you to our witnesses.

Dr. Cochrane, I'd like to start with you.

I do appreciate the work that Canadians for Tax Fairness does, and I'd like to thank you for your opening remarks, particularly for highlighting oil and gas profits.

You heard my colleague, Mr. Barlow, talk about the price on carbon. Certainly we hear a lot about that from the Conservatives, but what we don't talk about enough is the insane profit margin of oil and gas companies. We have a document that was submitted to us by Mr. Jim Stanford. It shows that, since 2019, the change in annual net income of oil and gas companies has been 1,011%. That's $38 billion in net profit.

We know, of course, that fossil fuels are necessary on the farm. Farmers do get an exemption because of the Greenhouse Gas Pollution Pricing Act. There are exemptions for agricultural activities, but, when it comes to freight and everything that's needed, of course fossil fuels are necessary.

Dr. Cochrane, can you put into context what that kind of an insane profit increase over the last three years is doing to affordability for struggling Canadian families right now?

[Dr. D.T. Cochrane]

Our organization was founded to counter the vilification of taxation. We saw taxation as a vital social mechanism, and we wanted to be able to have adult conversations about it. We certainly never wanted to vilify taxation in and of itself, but I sometimes think about corporate profits as being like a tax that gets paid to private sector actors rather than to our public institutions. The large increase in corporate profit margins in some way is just like a large increase in taxes, except, instead of going into public institutions to then be used in ways to benefit the public, it goes into private hands and then gets distributed to the shareholders, who are overwhelmingly at the upper end of our economic hierarchy.

Increasing profit margins from something as essential, as you say, as fossil fuels are going to end up increasing the costs of pretty much every other business, some of which will be able to pass those costs along, some of which will be able to pass those costs along less and some of which will have to just simply absorb those costs. This is really a redistributive struggle playing out, with the oil and gas companies as the big winners. One of the consequences we're seeing of this is that the big global players, three of them—Shell, BP, and I cannot remember the third—have basically said they're all going to back away from their promised investments in clean energy to go even harder at further development of fossil fuels.

We're heading in the exact wrong direction. The huge profits these companies are making are sending us in the wrong direction, and we need to consider tax mechanisms as a way of helping us move in the right direction. If these players are not going to make the investment in clean energy that we need, then we need government to lead with the investment that's necessary and use tax mechanisms as a way of funding those.

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

In other words, Dr. Cochrane, you would say that, if parliamentarians want to seriously tackle affordability issues for working families across Canada, if we focused our efforts on these insane profits rather than on carbon pricing, we would have much more of an impact. Would you agree?

[Dr. D.T. Cochrane]

Absolutely. You need to start intervening in this redistributive struggle, with the winners being those who have always been the winners. The pandemic has just amplified the amount they're winning. We are going to see a massive worsening of inequality after a short-lived improvement in it, in part because we almost had something close to a guaranteed annual income that was supporting a huge swath of Canadians, and now that money is trickling upwards into the accounts of the already ultra-wealthy, in part because of huge increases in corporate profit margins that we ultimately all pay for.

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

I appreciate your stating that on the record because we often get crickets when it comes to critically looking at this. I think more voices such as yours are needed in this conversation to really juxtapose what Canadian families are going through. Where is their hard-earned income going? Where is it actually ending up?

Mr. Chair, out of respect to my committee members, I want to take the opportunity in this final minute to read a notice of motion into the record. I will respect my committee members' time and move it in the second hour.

I'm going to read into the record the following motion: “That the committee expand the study on Food Price Inflation by increasing the number of meetings in the motion adopted on Wednesday, October 5, 2022 to at least 6 meetings; that the committee summon the Chief Executive Officers and Presidents of Loblaw...Metro...and Empire...to appear before the committee; that the committee invite additional witnesses to provide testimony and that the parties shall each provide to the clerk of the committee, by 4:00 p.m. EST on Tuesday, February 28, 2023, their lists of additional witnesses, who the Chair shall schedule in a manner that is fair to all parties.”

Mr. Chair, that's on the record now as a notice. I'll move it in the second hour. This just gives colleagues an opportunity to look at it and make a determination.

Thank you.

[The Chair, Liberal, Kody Blois]

Thank you, Mr. MacGregor. I know colleagues will contemplate that.

We'll now move to our second round.

I have, for the Conservatives, Mr. Lehoux.

Mr. Lehoux, It's over to you for five minutes.

[Richard Lehoux, Conservative, Beauce, QC]

Thank you, Mr. Chair.

Thank you to the witnesses for coming today.

In their opening addresses, two of the witnesses mentioned the labour problem.

I'll begin with Ms. Cloutier, and then move on to Mr. Bourbeau.

You mentioned problems related to the labour market impact assessments, the LMIAs. Given a context in which unemployment rates are very low and companies are having trouble finding workers, would you agree, first of all, with recommending that the LMIAs be set aside to speed up the process?

You also spoke about the delays in issuing work permits, which take forever. What would you suggest? We've heard all kinds of proposals, but it seems to me that the federal government could play an important role here, because it has a direct impact on the cost of food.

[Sylvie Cloutier]

You're right.

I'll let my colleague Mr. Fraeys answer your question.

[Dimitri Fraeys]

Doing away with the LMIAs Is an excellent idea. They may be worthwhile for new workers, but as I was saying, there are some foreign workers who've been coming here for 10 or 15 years. The LMIAs had initially been introduced to make sure that no Canadian workers were available before hiring foreign workers. Now, with unemployment rates at 4% or 5%, it's clear that there are no more workers available in the regions. That's why companies have to hire foreign workers. Your suggestion to eliminate the LMIAs is therefore a very good one.

Secondly, with respect to the Immigration, Refugees and Citizenship Canada delays, the basic problem is a shortage of resources, as was the case at Service Canada a year ago. The only way of speeding up the process would be to simplify it. If IRCCs could use digital technology for applications, things would move much more quickly. It would obviate the need for a large number of workers to undergo an assessment.

[Richard Lehoux, Conservative, Beauce, QC]

I'd like to ask you a question about those workers who arrive here after overly lengthy delays.

During the pandemic, foreign workers were allowed to shift from one company to another. Would a measure like that be a problem in terms of worker availability?

That, at least, is what I've seen in my region. Some processing companies and restaurants ended up losing the foreign workers they had arranged to bring here because they were taken on by other companies.

What's your view of the situation? Have you noticed that it was a problem?

[Dimitri Fraeys]

Yes, we've seen this problem primarily for permit renewals. The business may have done all the work, but the worker, once the permit has been renewed, may decide to work for another employer. This is obviously unfair to the company that made all the arrangements.