Agriculture Committee on Feb. 14th, 2022

[Francis Drouin, Liberal, Glengarry—Prescott—Russell, ON]

Thank you, Mr. Chair.

I agree with my colleague Mr. MacGregor. We're okay with the first amendment, even though all blockades are illegal, but it's important to stress to make the point.

With regard to the second amendment, for us, we won't be supporting it, but I don't want to talk this out forever. We've had an agreement, I believe, and I'll be presenting a short amendment after, but I'll wait for those two votes to happen, if they do.

[The Chair, Liberal, Kody Blois]

All right. I'd like to move that we go to a vote on the first amendment, which was on the term “illegal” and which I do believe has the support of this committee. Unless anyone deems otherwise, just signal your intent to support that and we can move forward.

(Amendment agreed to [See Minutes of Proceedings])

Yes. Okay. It's unanimous. Great.

On the second one, which I don't have the wording for, I can read it out to this group, but I think it's already clear where this committee stands.

Would you like a recorded division or would you simply like it on division—perhaps against it, based on what I've heard, Mr. Barlow?

[John Barlow, Conservative, Foothills, AB]

No, we don't. It's fine.

[The Chair, Liberal, Kody Blois]

Okay.

Are you suggesting that you remove it, Mr. Barlow, for the benefit.... Would you want to remove it on the basis of what Mr. MacGregor and Mr. Drouin have signalled? What's your—

[John Barlow, Conservative, Foothills, AB]

No. We want to vote on it. We'll just say “on division”—

[The Chair, Liberal, Kody Blois]

That it was defeated....

[John Barlow, Conservative, Foothills, AB]

—that it was defeated.

[The Chair, Liberal, Kody Blois]

Okay. Great. Thank you very much.

(Amendment negatived on division [See Minutes of Proceedings])

Thank you very much.

Mr. Drouin.

[Francis Drouin, Liberal, Glengarry—Prescott—Russell, ON]

If members will indulge me, Mr. MacGregor, in your motion, you suggested that “The federal government must play a leadership role”.

We would simply make a friendly amendment and say, “All governments must play a leadership role”.

[The Chair, Liberal, Kody Blois]

Mr. Drouin, you're moving that amendment to the motion that's been brought forward by Mr. MacGregor.

Is there any debate on that? Is that something this committee supports, those two words that Mr. Drouin has suggested?

I'm seeing a thumbs-up from some folks on the screen. If there's no other debate, can I seek that it is unanimous consent, I guess, from the members? I see nodding heads.

(Amendment agreed to [See Minutes of Proceedings])

Thank you.

Mr. Clerk, you've got that?

Let's move on to our witnesses. Thank you for bearing with us.

[An hon. member]

[Technical difficulty—Editor] vote on the main motion.

[The Chair, Liberal, Kody Blois]

Oh. Right.

[Some hon. members]

Oh, oh!

[The Chair, Liberal, Kody Blois]

Thank you. My apologies. New chair....

Mr. Clerk, you have to prevent me from making those mistakes.

We'll have the vote on the entire motion, then, please. If we need to, we can record it, but if not, if it's all in approval, we can just signal accordingly. Signal with your hands. Okay. That's passed unanimously.

(Motion as amended agreed to [See Minutes of Proceedings])

Thank you, Mr. Clerk.

Now, with our apologies, we go to our witnesses.

I have Mr. Bilkes.

You have five minutes for opening remarks. It's over to you.

[Brian Bilkes, Chair, Canadian Hatching Egg Producers]

Thank you.

Good afternoon, Mr. Chair, vice-chairs and honourable members of the committee. My name is Brian Bilkes and I am the chair of the Canadian Hatching Egg Producers. Joining me today is our executive director, Drew Black.

Our farmers supply fertilized broiler hatching eggs to the Canadian chicken industry. These hatching eggs allow chicken farmers to provide safe and healthy poultry to consumers and the food service industry. Your invitation to appear today to discuss agricultural supply chains is a well-timed and critical discussion.

Like my fellow witnesses appearing before you today, I would be happy to report that our domestic supply chains are uninterrupted, but, unfortunately, we are currently experiencing disruptions with regard to required imports. These challenges have been intensified by unexpected situations, such as the extreme flooding in B.C., the heat dome last year and the ongoing global pandemic.

Canada's agriculture and agri-food supply chains require investments in resilient systems like supply management to keep our agriculture sector strong. Our farmers work hard every day to supply our markets with what is needed to feed Canadians.

Regrettably, some trade deals have eroded the market for Canadian poultry and egg producers. They've weakened the sustainability of our supply chains because we rely on 20% of the market being filled by TRQ, which is no longer available for purchase from the U.S. market.

Mr. Chair, we need flexibility in our system to increase production. With the CPTPP and CUSMA trade agreements now in effect, an increasing number of TRQ volumes need to be taken into consideration, which will reduce our domestic production in the coming years.

Full and fair support for the poultry and eggs sectors through CUSMA mitigation needs to be a priority. We know that investing in farmers to remain competitive in all aspects of sustainability will improve and strengthen our supply chains.

Mr. Chair, allow me this opportunity to elaborate on the current U.S. broiler hatching egg supply shortage. Currently, 21% of the broiler hatching eggs and chicks required to meet Canadian production are filled by the U.S. market. While our Canadian farmers are supplying the volumes asked of them, 21% of the market is set aside for TRQ that is no longer supplied in sufficient quantities. Chick placements in Ontario have been reduced by 2%, and it's predicted that this reduction will increase to 5% by the end of this month. Other provinces' hatching egg producers are expecting similar shortages to be coming soon. This market unavailability is expected to last throughout the year.

To address these shortfalls, we must and have increased domestic production, but with the short notice we received with regard to these shortages, there are limited steps that we can take without having more breeder hens in our barns.

We are seeing our freight costs tripling, and the fact that our carriers are struggling to cross the border will undoubtedly cost our farmers their livelihoods. This week, a truck transporting breeder chicks was at a standstill, stuck in traffic, trying to cross the border. The driver was informed the truck was not going to move and would ultimately not cross the border because of the blockades. We were fortunate that, this time, the truck was able to be rerouted five hours to another point of entry. But if these disruptions continue, we will not always be so lucky. These chicks must reach our farms so that we can successfully grow our product.

Mr. Chair, it is my hope that, through processes like today's important discussions, we will be able to create solutions to supply chain disruptions for years to come.

Thank you very much for the opportunity to speak to you today. Drew and I are here to answer any questions you may have. I hope our presentation was informative. Thank you.

[The Chair, Liberal, Kody Blois]

Thank you, Mr. Bilkes.

We're now going to move to Mr. McFall for five minutes.

It's over to you, Mr. McFall.

[Ian McFall, Chair of the Board of Directors, Canadian Poultry and Egg Processors Council]

Thank you, Mr. Chair. Good afternoon to you and to all of the committee members.

My name is Ian McFall and I chair the board of directors of CPEPC, the Canadian Poultry and Egg Processors Council. While I'm here as chair of CPEPC, I'm also executive vice-president at Burnbrae Farms, a family-owned company with egg grading, breaking, boiling and farming operations in five provinces, and sales across Canada. I'm joined today by CPEPC's president and CEO, Jean-Michel Laurin.

We're pleased to take part in your study on the agriculture and agri-food supply chains alongside our industry partners at CHEP, the Canadian Hatching Egg Producers, and EFC, the Egg Farmers of Canada.

This is an important topic for us, because Canadian poultry and egg processors play an essential role in Canada's food chain. Our association represents Canadian hatcheries, egg graders and processors, chicken and turkey processors and further processors. Collectively, our membership represents more than 180 establishments of all sizes. Our members also collectively process over 90% of the poultry and egg products raised by Canadian farmers.

Just to help you understand where we fit into the supply chain versus CHEP and EFC, our hatchery sector members buy and hatch the broiler hatching eggs raised by CHEP's members, which are then sold to chicken farmers, who then supply our members' poultry processing operations. For the record, our membership also includes laying hen and turkey hatcheries.

In the egg sector, Canadian egg farmers supply our egg grading and processing operations. In other words, something CPEPC members have in common is that they buy their main inputs from supply-managed Canadian farmers and then compete with each other to supply Canadian grocery retailers, as well as food service and industrial markets.

I'd like to share a few observations, after which we'll be pleased to answer your questions.

First is that this pandemic has created a perfect storm situation for our supply chain. It caused, and is still causing, significant disruption in our markets, in our business operations, in our customer base and, especially, in our people and labour situation. Recent events, from the floods in B.C. to the recent cases of avian influenza found in Atlantic Canada, are also testing our resilience.

A second point is that we play a dual essential service role in the agri-food sector. We're an essential service to Canadian farmers, who rely on us to buy, process and market their products. We're also an essential service to Canadians, who rely on the food we make to feed themselves and their families. Our supply chain is heavily focused on supplying the Canadian market. This is a role that we take very seriously, but it has also taken a toll on our workforce.

Our industry is no different from the rest of the Canadian food processing sector, which finds itself short of labour by about 25%. This means that we can't fill a quarter of the positions in our industry. We faced chronic labour shortages before the pandemic, but they have been growing significantly. This is having a direct impact on people working in our establishments and on the availability of Canadian food products. It's now clear that we need help and we need it quickly.

Canada's food processing sector has been advocating for an emergency foreign labour program. The only short-term solution at our disposal is to bring in more temporary foreign workers to fill our immediate labour gap. We will be pleased to expand on this, but what we're essentially asking for is to make immediate adjustments to existing agri-food pilot programs so that we can bring in more temporary foreign workers, streamline the application process and speed up processing times.

While labour is an important and immediate concern, we are also working with our industry partners on developing a mid to long-term labour strategy for our sector. Other policy solutions that would help address challenges faced by our industry include fulfilling the government's commitment to support our industry after market access concessions were made in the recent trade agreements, implementing a grocery code of conduct and taking measures to improve the resilience of Canada's critical infrastructure.

We look forward to working with you to tackle these and other challenges, and would be pleased to answer your questions.

Thank you, Mr. Chair.

[The Chair, Liberal, Kody Blois]

Thank you, Mr. McFall.

We're going to move now to Mr. Pelissero for five minutes.

It's over to you, sir.

[Roger Pelissero, Chair, Egg Farmers of Canada]

Thank you, Mr. Chair. Good afternoon to you, to the vice-chairs and to the members of the committee.

My name is Roger Pelissero. I'm a third generation egg farmer from St. Ann's, Ontario, and am chairman of the board of Egg Farmers of Canada. Joining me today is Tim Lambert, chief executive officer of Egg Farmers of Canada.

It is an honour to appear before you today to discuss supply chain issues in our sector. I would like to begin by acknowledging that the study we are participating in today is being conducted on the traditional and unceded territory of the Algonquin people.

Egg Farmers of Canada manages the national egg supply and promotes egg consumption, while representing the interests of regulated egg producers from coast to coast. There are over 1,200 family farms across Canada, located in every province and in the Northwest Territories. We are dedicated to producing fresh, local eggs.

Today we are here to talk to you about the agriculture and agri-food supply chain and share issues we are currently experiencing in our sector, along with what actions the government can take to ensure the long-term sustainability and reliance of this supply chain in the face of disruptions.

I'll pass things over to Tim Lambert to start.

[Tim Lambert, Chief Executive Officer, Egg Farmers of Canada]

Thank you very much, Roger.

Today's egg farmers are experiencing unprecedented challenges, from summer-long droughts in the Prairies to mass forest fires to flooding and all of these incredible winter storms battering Atlantic Canada, all in the midst of a global pandemic. Supply chain disruptions have been constant and farmers have been at the front lines of it all, continuing to feed Canadians and providing strong domestic food security when we need it the most.

Climate change events have been one of the top causes of extreme supply chain disruptions in our sector. These events are occurring more and more frequently, as we've all seen. The level of destruction they have caused is continuing to increase.

We need proper funding to prepare for these events and to strengthen infrastructure and emergency preparedness where needed. Additionally, significant funds for research and sustainable initiatives are absolutely imperative to ensure the future of farming in Canada and to prevent more significant events from occurring.

Canadian egg farmers are leaders in best practices. Our innovative practices and new efficiencies have allowed Canadian egg farmers to reduce their environmental impact and footprint while still meeting Canada's growing demand for local eggs. Just as an example, in the past 50 years, we've reduced the environmental impact of egg production by 68% in terms of greenhouse gas emissions. There's a 68% reduction in water use, an 81% reduction in the land use and a 41% reduction in the energy required to produce eggs, a record we are very proud of.

However, the adoption, innovation and development of these new practices and efficiencies are often costly, placing a financial burden on farmers. This creates a barrier to implementing and developing new sustainable technologies, which therefore limits overall reductions in resource use, obstructing our path towards a possible net-zero future with predictable and mild weather events.

Additionally, hard policy choices such as a carbon pricing plan and a possible cap on emissions are forcing change ahead of available infrastructure, funding and affordable alternatives. This creates significant challenges, as many technologies are not advanced enough or remain too costly to adopt. In order to strengthen agricultural supply chains, farmers must be given the tools they need to develop and prevent extreme climate events. More government funding and collaboration with industry are required to maintain the transition to net zero that supports farmers, consumers, the environment and Canadian supply chains.

When these events do occur, our sector requires a quick response and appropriate assistance from government in order to prevent further damage to our supply chain. While we are pleased to have a government that provides recovery programs to farmers, these programs do not go far enough. AgriStability provides a good example. It can be accessed only once a farmer's production margin falls 30% below the historical average. A 30% drop caused by events out of a producer's control is a huge hit for farmers to take. We would like to see this changed so the program can be accessed when production margins fall below 15% of historical average.

Roger, I'll turn things back over to you.

Thank you.

[The Chair, Liberal, Kody Blois]

You have 20 seconds, gentlemen.

[Roger Pelissero]

Thanks, Tim.

Another issue we are experiencing has to do with current labour shortages. The labour emergency across this country has left few sectors untouched when it comes to food production and processing. The situation has reached a point where food availability and supply chains are at risk. Shortages are leaving some processors—

[The Chair, Liberal, Kody Blois]

Mr. Pelissero, I apologize. Your five minutes is up. I know we could go on, but committee members will, of course, get answers from you. We appreciate what we heard in those five minutes.

Colleagues, we're pushing the time we're normally allowed. We do have the ability to extend the time. I've had conversations with some of the folks in the room. I propose we do a six-minute round of questioning so that every party has the ability to ask questions. We will then suspend afterwards and be able to move on with the rest of our day and let the witnesses continue on as well.

With that, I'm going to start with the Conservative Party. I think it might be Mr. Epp.

[Dave Epp, Conservative, Chatham-Kent—Leamington, ON]

Thank you, Mr. Chair; and thank you to the witnesses.

I'm going to begin with exactly the number one issue we've heard in previous testimony: labour shortages.

You're under a very broad umbrella, and I congratulate this umbrella of the food and beverage manufacturing for proposing an emergency foreign worker program. I'm going to spend most of my time fairly pedantically to make sure that all five components get on the record.

In earlier testimony today, we heard of the 11 studies that have identified various aspects of the labour shortage. I congratulate the industry because I've spent a lot of time in it and it's not always easy to bring 10 organizations together and agree upon a document. Therefore, congratulations to you.

I'll jump right into that. To begin with, I'll be directing most of my questions to the Canadian Poultry and Egg Processors Council.

I've heard a fair bit about the cap and the proposal to raise it from 10% to 30%. We heard this morning from the Canadian Meat Council that their shortages are up to 35% of their labour force. I heard in your testimony that it was up to 25%.

Can you comment? If the cap was raised to 30%, would that at all incentivize you and your members from hiring Canadians first, or could we safely go to 30% to address shortages in other sectors without jeopardizing Canadian workers?

[Jean-Michel Laurin, President and Chief Executive Officer, Canadian Poultry and Egg Processors Council]

That is an excellent question. Thanks for noting that we were able to bring 10 associations together. Actually, we're now up to 11 associations.

This is a very important topic. In regard to the challenge in our industry, you're asking about a request to increase the cap to 30%. I just want to make clear that the position we've taken with our colleagues running other food processing associations is to put a temporary emergency program in place over an 18-month period. The idea there is to have emergency measures to help us address the labour gap we're facing in the food manufacturing industry. Our objective is to address the immediate short-term issue we're facing, but we know we need to develop medium- to long-term solutions at the same time.

Through the Canadian Federation of Agriculture and Food and Beverage Canada, we're all working together on a two-year project to develop a labour strategy for the food sector in Canada.

I know that's also something that fits into the government's priorities, so we're very much focused on looking at other solutions and increasing the pool of available labourers from Canada. I could expand on this if you're interested in—