Agriculture Committee on Feb. 14th, 2022

[The Chair, Liberal, Kody Blois]

Welcome to the fifth meeting of the Standing Committee on Agriculture and Agri-Food.

Today's meeting is taking place in a hybrid format, pursuant to the House order of November 25, 2021.

The proceedings will be made available via the House of Commons website. So you are aware, the webcast will always show the person speaking, rather than the entirety of the committee.

Colleagues, I think we've been at this long enough to know the rules and parameters. Of course, when you're in this room, abide by the public health guidelines of the Board of Internal Economy.

For our witnesses, for those who are online, you can toggle between English and French your language of choice and for interpretation. Of course, if there is a problem with translation, just signal me and we will work on it technically.

Colleagues, pursuant to Standing Order 108(2) and the motion adopted by this committee on Monday, January 31, 2022, the committee is resuming its study of the agriculture and agri-food supply chain.

I'm going to welcome our witnesses to the panel, but just before I do that, I will remind colleagues that this is of course a big topic. We were talking off-line with some members about this; let's make sure that we try to stay within the boundaries of the text of the motion. It's ultimately the prerogative of members to ask questions in the direction they want, but I do want to make sure that we have a report that is befitting of the industry and the people we're seeking to represent. Let's try to be pointed and detailed so that we can have good recommendations to bring back to the government.

Today, joining us by teleconference, from the Canadian Meat Council, we have Marie-France MacKinnon, vice-president of public affairs and communications. Welcome.

From the Canadian Pork Council, we have Rick Bergmann, chair of the board of directors; and Gary Stordy, director of government and corporate affairs.

We are also hearing from David Duval, president of the Éleveurs de porcs du Québec.

You have five minutes each for opening remarks.

Ms. MacKinnon, I'm going to start with you, for five minutes, please.

[Marie-France MacKinnon, Vice-President, Public Affairs and Communications, Canadian Meat Council]

Good morning. Thank you for inviting the Canadian Meat Council to testify today.

I'm Marie-France MacKinnon, vice-president of public affairs.

CMC represents federally inspected meat processors and packers across Canada. We employ 70,000, while red meat consumption and export support about 288,000 jobs.

From the COVID pandemic to the loss of export markets, floods, border issues and unprecedented labour shortages, our meat plants across the country have been put under immense pressure and challenge for the past two years. We've been resilient, but it has exacerbated our meat processors and the supply chain. Yet, our essential workforce kept us fed throughout this pandemic, and this is in large part thanks to the temporary foreign workers who work in our plants.

Three years ago, we worked really hard to get the agri-food immigration pilot and we demonstrated to government that we deserved this pilot. We had three ministers at the table. We had the union. We had departmental officials. Everyone agreed. At that time, we had 1,700 empty butcher stations. That's 1,700. Last year at this time, I ran the numbers, and we had 4,500. We ran the numbers again in October, and we're now at 10,000 empty butcher stations. This number is alarming.

I challenge any industry or sector to compare the work and effort that our members do for recruitment and retention, yet we're still faced with 10,000 empty butcher stations. Despite best efforts, we have a chronic labour shortage. All meat processors would love nothing more than to hire a Canadian. It would be a lot easier, and you can't imagine the financial and time burden that would be alleviated. Canadians just don't want to work in meat plants, so we're stuck with using this temporary foreign worker program, yet there's nothing temporary about jobs in our sector. Our jobs are full time. They are permanent. We're mostly all unionized. A Canadian and a temporary foreign worker have the same pay, the same benefits and the same chances for advancement.

The biggest and most important factor affecting us is this cap imposed on our sector. We're allowed to hire only up to 10% of our job vacancies. Our plants are now facing a 20% to 35% job vacancy rate, so 10% doesn't quite cut it. On top of that, add an extra 10% due to the latest COVID wave.

This cap is really limiting our ability to have made-in-Canada protein. It means more meat being processed in the U.S. and more food imports for Canada. Picture a beef or pork shipment to another country. Well, in that container, you might as well add jobs, rural growth, economic growth and lost GDP, because we're not just exporting meat. We're sending jobs to other countries when we could actually be doing more value-added cuts here and grow our exports. This cap is capping our processing capacity and our sector's growth potential. It's an economic issue for Canada.

There have been 11 reports over the past six years that have asked to fix this cap: the 2015 labour task force, the HUMA committee, The Conference Board of Canada, the value chain round table and the Barton report and the agri-food economic table, to name only a few.

Now more than ever, we need government to provide some relief to the agri-food sector by raising the cap to 30%. It's great that Quebec received 20%, but that's not even enough for our Quebec members, who are well over 30%, and now this gives that province a competitive advantage over other provinces. Allowing us more flexibility with the cap is just good public policy. Canada has set an ambitious goal to grow its agri-food exports to $75 billion by 2025. Meat processors are well poised to help grow the exports, but the roadblock is this cap.

We came to government with a solution. We've presented our solution, but we needed results yesterday. Our empty butcher stations aren't just affecting us. The impact is from farm to fork, from producer all the way to consumer.

Our members have enough to worry about. Having a full workforce would certainly help them navigate all of the ongoing supply chain issues that we keep facing and would allow us to grow, to work at full capacity, to innovate and to look at automation and at AI, but we can't do that when our focus is on managing day-to-day operations.

Thank you.

[The Chair, Liberal, Kody Blois]

Thank you very much, Ms. MacKinnon.

We're now going to Mr. Bergmann for five minutes.

[Rick Bergmann, Chair of the Board of Directors, Canadian Pork Council]

Thank you, Mr. Chair.

Good morning, all. I'd like to thank you for the opportunity to appear before the standing committee to provide the perspectives of Canadian pork producers on the agriculture and agri-food supply chain.

My name is Rick Bergmann. I'm a producer from Manitoba and the chair of the Canadian Pork Council.

Producers work hard every day to produce high-quality, safe, affordable protein that is in demand in Canada and around the world. We export almost 70% of production in the form of live animals to the U.S. and meat worldwide. These exports to more than 90 countries exceeded over $5 billion last year and contributed significantly to the health of rural communities and the broader Canadian economy.

We need to talk about the problems this morning. For numerous years, as has been mentioned already, we have talked about a labour shortage. It is now critical. The processing facilities are shutting down due to the labour shortage, forcing producers to find other options, requiring longer distances to travel and, of course, higher costs. I believe this is actually the straw that breaks the camel's back forcing some of them to leave the sector.

We have to defend that. We're dealing with a shortage of trained livestock drivers, and the protests, of course, at border crossings can easily lead to producers needing to euthanize animals due to animal welfare concerns. As of last Friday, 80 loads, including market hogs, culled sows, early weans and feeder pigs have been cancelled directly due to border issues. It is fair to say that those numbers have no doubt increased over the weekend. These backed-up loads are in addition to the estimated 180,000 hogs backed up in Quebec and Ontario because of labour issues that have already been mentioned.

Capacity for holding culled sows, market hogs, and isoweans will get tighter across Canada within the next week to 10 days. The barns are not built to retain livestock that should already be shipped. All this results in overcrowding, and it is not clear how we'll get through the backlog if we encounter more delays.

What we do know is that the Government of Canada's additional vaccination rules, announced on December 7 for employees of all federally regulated workplaces, will be the straw that breaks the camel's back. Our traceability records show that we use approximately 700 trucks per month to move hogs interprovincially, and the implementation of that rule will set us up for guaranteed failure.

The reality is that we're experiencing a significant shortage of trucks and trailers to haul hogs across Canada, and the situation is worse than publicly stated. Our inquiries indicate the livestock trucking industry has a lower vaccination rate than the public average. According to the latest survey information we have, the industry has a vaccination rate of 72%.

Of course, drought conditions caused about half a crop in western Canada to fail this last year, and has increased demand and eliminated local feed supplies. We're increasingly relying on importing feed ingredients from the U.S., paying approximately 30% to 40% more for the feed, and a freight increase of about 50%. What's even more disappointing is that the AAFC recovery program has been made available to almost every other animal in agriculture that needed to feed during the drought conditions, except for pork producers. So before we can focus on the future, we need to fixate on the issues right in front of us.

It is high time for us to advance a solution. The Government of Canada needs to cut the time it takes to process temporary foreign workers applications. The 8 to 12 month wait time is eroding and will continue to erode the strengths of our sector. We needed those employees yesterday. We need a more sustainable way of managing the COVID pandemic.

Another factor impacting the supply chain interruption is slowdowns at Canadian ports. It is important to state that no time sensitive Canadian agricultural export should ever be disrupted, especially perishable meat products. We are suggesting that the perishable and time sensitive commodities, such as meat, be added to the exemption from the labour disruptions under section 87.7 of the Canadian Labour Code.

In closing, the pork industry supply chain operates on a structured very just-in-time delivery system for the movement of live animals, animal feeds, and pork shipments across Canada and into the U.S. Any disruptions mentioned today cause major issues.

Supply chain delays impact the economy, producers' mental health and, potentially, the health and welfare of the animals we're entrusted to take care of. Our industry really can't afford to sustain any more delays.

Thank you.

[The Chair, Liberal, Kody Blois]

Thank you, Mr. Bergmann.

I now give the floor to Mr. Duval for five minutes.

[David Duval, President, Les Éleveurs de porcs du Québec]

Good morning, everyone.

I am happy to be testifying before you today to discuss issues related to Canada's agriculture and agri-food supply chain.

I want to thank you for undertaking this important study. It shows how seriously our elected officials are taking our profession and their commitment to solving the problems we are experiencing.

I will get into the heart of the matter.

The Quebec pork industry has experienced all sorts of events that have disrupted its supply chain. Some events are unexpected, such as the pandemic, while others are the result of government policies.

I will start with the severe labour shortage.

The biggest buyer of pork in Quebec is Olymel. The company accounts for over 80% of pork processing. Its slaughterhouses have been unable to catch up on the backlogs caused by the pandemic and the four–month long strike, which ended in late summer 2021.

Right now, more than 130,000 hogs are ready to be sold to slaughterhouses. In December, we had a record number of 200,000 hogs. That is not taking into account the ongoing hog surpluses, which continue to be high.

In concrete terms, for a pork producer, this means they must make more use of credit lines to address the shortfall. They must continue to feed their animals without even being sure they will eventually get compensated by the slaughterhouse.

This also means that the hogs are at greater risk of contracting diseases and of contaminating healthy lots of hogs. That is increasing their mortality rates.

The labour shortage in Quebec hurts our trade balance, as we must export larger cuts of meat, at a lower cost, to then import from the United States a more processed product for retail sale. This is a real economic loss for Canada.

To address the issue of hog disposal, automation and robotization must play an important role to mitigate the consequences of the shortage on processors. However, robotization is a long and expensive process. Slaughterhouses appear to have started the transition, but this still does not enable us to operate at full capacity.

Over the shorter term, the government must stop limiting the number of foreign workers who can be used in food processing facilities. The primary agriculture sector is exempt from this limit, while the processing sector is not. This bottleneck means that synergy is lacking in our sector and that the arrival of new workers is delayed. That is what we are currently seeing in Quebec. The positions of food processing worker, industrial butcher and all other jobs necessary to the operation of a slaughterhouse are not among the most sought after jobs by Canadians.

Quebec's minister of labour, employment and social solidarity made a nice announcement recently that the position of industrial butcher will no longer be subject to the newly set 20% limit of temporary foreign workers. The only thing still missing is the federal government applying that measure.

The Government of Canada must consider all the available options to implement, as requested by Quebec, the addition of occupations to Quebec's list of occupations eligible for simplified processing. If departments come across technical or administrative problems that prevent the quick application of this measure, ministers must make every effort to resolve them, especially since collaboration with the provincial government is possible to add professions to that list. Collaboration between the federal and provincial governments is urgently needed for resolving any computer issues that are hurting our businesses.

These jobs in the agri-food sector are essential for our sector to continue growing, as required by various government biofood policies.

I also want to talk to you about slaughterhouse concentration.

Nowadays, slaughterhouses are major players that account for a large share of the market. As a result, there is a power imbalance between producers and buyers.

In Quebec, in 2019, we were finally able to get a price for our product that is more reflective of buyers' ability to pay, but the concentration of buyers has led to the power relationship reversing.

The federal government must implement the recommendations from your committee's first report, published during this parliamentary session. Improved slaughter capacity in Canada would surely help reduce hog disposal issues.

For instance, owing to current hog disposal difficulties, more than 1,250,000 hogs—530,000 in Quebec and 750,000 in Ontario—will not have an assigned buyer as of next week. However, a slaughterhouse was assigned to those hogs when they were born.

Thank you for listening. I am available to answer your questions.

[The Chair, Liberal, Kody Blois]

Thank you, Mr. Duval.

We will begin the period of questions, but I would first like to propose something.

Colleagues, we are expecting a vote at 11:30. As opposed to waiting until 11:30 and interrupting our questions, can I ask for unanimous consent that if that bells do start ringing at 11:30, I will extend our sitting until we get closer to the vote given the fact that we have the ability to vote by phone. Then we'll use our discretion at that point.

Can I seek unanimous consent to do that? Is everyone on line?

We're good.

Mr. Barlow, you have six minutes.

[John Barlow, Conservative, Foothills, AB]

Thank you very much, Mr. Chair; and thank you to our witnesses for being here. We certainly appreciate your insights.

Rick, I want to start with you. You talked about some of the issues facing your industry. I was reading this morning that food security is a number one priority for Canadians. As we talk about the ability and the issues in our supply chain, it's quite timely. To hear that you're having to euthanize animals for a number of reasons, I find it quite disconcerting, and with the 180,000 hogs backed up in eastern Canada that's making things even worse.

When we obviously have some issues and weak links within our supply chain, now does not seem to be the time to throw further wrenches into that very fragile process.

You mentioned the trucking mandates, and now that the Prime Minister is talking about bringing in interprovincial trucking mandates as well, was the Pork Council consulted on the trucking mandates that were instituted a month ago; have you been consulted on interprovincial trucking mandates; and what would be the impact on the industry if those mandates were to indeed be implemented?

[Rick Bergmann]

Thank you for the question, Mr. Barlow.

We have always held the position that a mandate on interprovincial trucking would be very devastating to our country, to our business. We have made that position known. We notice that people love eating meat and the world is calling for our product, yet for some of the concerns that have been mentioned, we have inability to take advantage of that.

When 72% of the Canadian drivers who are required for interprovincial travel are vaccinated, that would be a very strenuous point for our sector.

We've talked with different drivers, different driving businesses, transport companies, and so on, and they're pulling their hair out, because if this in fact happens, the problem has gotten much worse than what it is today.

[John Barlow, Conservative, Foothills, AB]

It's interesting. We never had trucking mandates for the international border or interprovincially during the height of the pandemic. Now, when provinces are lifting mandates, it seems quite counterproductive to be putting in these mandates when we seem to be on the other side of this pandemic.

The other aspect of this is that, on February 20, the federal government is going to be bringing in or starting to enforce these new animal health transportation regulations that have been on the books for a couple of years but they haven't really been enforcing them. Again, when we are in a supply chain crisis, which I think all of us agree is the fact, it was really disappointing when we had the officials from AAFC here last week and I asked them about this question, had they been in consultation to maybe extend that deadline until we can get through this crisis, and they said they haven't really been consulting on it. This has a direct impact on agriculture, agriculture processing and producers.

Have you been consulted or have you had any conversations with Transport Canada or with Ag Canada in terms of the impact of enforcing those new animal health transportation regulations, which are going to be difficult in the best of times, but certainly in circumstances we find ourselves in now? What will be the impact of those new regulations, and have you been consulted or put forward a proposal to again delay the implementation of those new regulations?

[Rick Bergmann]

No, I have not been consulted.

Our sector is always okay with rules and regulations and protocols. That's fine, but folks, we're in a crisis now, so I think we really need to take a step back and focus on the situation of the crisis and ensure that any upcoming regulations, again, that are imposed—whether it be transport related or otherwise—be reflected upon to avoid further disruption in our world.

We have to ship our products further when plants are not able to take our products. Throughout the whole transportation regs and so on—now is the wrong time to pursue that.

[John Barlow, Conservative, Foothills, AB]

Thanks and I appreciate that, especially when some of the meat producers are asking what science database research [Inaudible—Editor] that has been done.

I want to move really quickly to Ms. MacKinnon.

I understand that a number of organizations, including Food and Beverage Canada and the meat council, presented the government with a number of solutions and proposals to try to address the labour issue. I sympathize. We've talked abut this many times, and the current government has done very little to address this.

Has the government acted on any of those proposed solutions. If so, what are they, and if not, do you have an idea of why not?

[Marie-France MacKinnon]

We've presented the solutions. We've had further discussion. We even refined our proposal based on what we were hearing from different officials.

The short answer is that we have no answer, really. What we need is a 30% cap. Even 20% is not enough for our sector.

The main underlying problem of the supply chain right now is that our members, who are—

[The Chair, Liberal, Kody Blois]

Ms. MacKinnon—

[Marie-France MacKinnon]

—affecting producers and—

[The Chair, Liberal, Kody Blois]

I'm sorry to cut you off, but I want to be mindful of the time. I know you will get an opportunity to continue to address that because this is something this committee has heard.

I want to go to Mr. Louis, for six minutes now.

[Tim Louis, Liberal, Kitchener—Conestoga, ON]

Thank you, Mr. Chair.

Thank you to all of our witnesses. I very much appreciate your being here and your time on this important discussion.

I would like to address my questions to Mr. Bergmann and Ms. MacKinnon.

We've had discussions before because in my riding of Kitchener—Conestoga we have Conestoga Meats, the second-largest pork processor in Ontario. They did receive funding from the emergency processing fund—over $1 million in funding for that—which would be for supporting meat processing facilities, the safety of workers and those measures to enhance the protection of employees.

Measures have been taken by processors everywhere across the country to keep workers safe—the daily temperature readings, symptoms screening, increased sanitation, staggered shifts and break times. We're very proud of our workers who are working across this food chain and we need to continue to protect them. Preventing short-term shutdowns will prevent long-term disruptions.

Maybe you could start, Ms. MacKinnon. What lessons have we learned with those kinds of investments to keep our employees safe, the ones who are there in those congregate settings, and what can we do to keep that going for the future?

[Marie-France MacKinnon]

I think the agri-food sector as a whole has spent probably over $1 billion in measures to fight COVID. Let's be frank; our members, our meat processors, bore the front of all headlines before government even knew what was going on in trying to figure out what was happening in public health. Our sector worked hand in hand with government officials at all levels to ensure that our employees were safe there. We need their workforce, and we are all about family and protecting our employees.

There was a lot done, and keeping them safe is key for us. We cannot afford to be shut down. We already struggle with labour, so all of the money.... It will take everything to keep protecting our workforce, and we've done that. We did that a long time ago, and now our establishments are safe. I think our employees feel that, and they see that when they walk in every day.

It's an adjustment for everyone, as you know. We all see every day in our day-to-day lives the adjustments we've made. The same thing applies to our members.

We need the workforce. We can't afford to have employees miss. The latest wave of COVID has resulted in an extra 10% vacancy rate among our members on top of the already existing 20% to 35% vacancy rate in our sector, so that 10% is additional. It's taking a toll on processors, and it's taking a toll on producers because it's not just about us. It affects everyone, so we want to keep everybody safe, and I think we've been doing a good job of that.

[Tim Louis, Liberal, Kitchener—Conestoga, ON]

Thank you, I appreciate that.

Ms. MacKinnon, you referred to the employees as family. That's exactly what we heard. When we talked to the processor plants, they were asking how they could protect their families. You did mention that on top of the shortages you already have, you have to make sure the workers who are there are safe.

Maybe I could ask the same question of Mr. Bergmann. Moving forward, what lessons can we learn in order to take some of those measures that we thought might be temporary and make them more permanent to protect the workers who are there?

[Rick Bergmann]

I believe the measures that have been taken to protect the employees are good. However, envision a hockey team where you have three lines and a goalie on the ice and one as a backup. Now, you only have one goalie and you don't have three lines. That is the problem. Now the people who are there have to work harder—way more than what they're asked to.

They're safe, yes, but the fundamental problem is there's not enough of them. We need to really focus on that.

[Tim Louis, Liberal, Kitchener—Conestoga, ON]

I appreciate that.

You also mentioned the drought conditions that we had, which would affect feed, and the devastating flooding that we've had in B.C. We've already done studies on it to see how we can help and lessons we can learn.

Maybe I'll stay with you, Mr. Bergmann. How have the losses in B.C. and the drought conditions affected the supply chain? What kind of lessons can we learn to strengthen our supply chains against the climate crisis that we're now facing?

[Rick Bergmann]

When we're all working in real time or with just-in-time deliveries, whenever there's a little bit of a glitch, there's a major problem. We can look at the transportation. The drivers that we have right now are great, but it's not like we have an overabundance of them.

I think having the foundational bricks in place to continue building on.... In other words, make sure that we have the drivers. The infrastructure is critically important, whether it would be ports, rail or trucks. Those are fundamental. When those aren't working well due to natural disasters, or certainly the pandemic we're in and some of the challenges within it, then the brakes get put on hard and we realize the areas with big voids.

[Tim Louis, Liberal, Kitchener—Conestoga, ON]

Thank you.

I do believe my time is up. I just want to thank the witnesses for that insightful testimony. I appreciate it.

[The Chair, Liberal, Kody Blois]

Thank you, Mr. Louis.

Mr. Perron, go ahead for six minutes.

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

Thank you, Mr. Chair.

I would like to begin by thanking the witnesses for joining us today.

My first question is for Mr. Duval.

Mr. Duval, you really emphasized the labour shortage issues during your presentation.

Can you explain to us in more detail the consequences of the current labour shortage on Quebec's pork industry?