Agriculture Committee on Feb. 17th, 2022

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

Did Guy want to—

[Catherine Lefebvre]

If I may, I'd like to respond to you on risk management.

I agree with Ms. Ward on the AgriStability program that it would take a majority of provinces to sign on to for changes to occur. When we hear about a 100% rate to increase AgriStability margins, we find that incomprehensible. There are only two provinces that don't want to follow suit, while the problem is glaring in all the other provinces. We need to find a way to merge the answers and move forward. This is a program that should be tailored to our farms.

[The Chair, Liberal, Kody Blois]

Thank you, Madam Lefebvre and Mrs. Valdez.

Mr. Perron has the floor for two and a half minutes.

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

Thank you.

Ms. Lefebvre, I'd like to let you finish your answer on poaching.

[Catherine Lefebvre]

Last fall, farms had to deal with this situation. The labour market impact assessments were approved. We were lucky because it happened at the end of the season, when they went to Montreal to work for construction companies.

Unfortunately, what we are experiencing now is that poaching also occurs between farms with different specialties. There are some for whom it has less impact on the bottom line. Some people can afford to pay a higher wage, but that poaching has to stop now. This includes the removal of the job bank that is presented in Spanish.

We have written to Ms. Qualtrough and Ms. Bibeau about this, as solutions must be found and implemented as soon as possible, especially before many foreign workers arrive in April and May.

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

Could you send these solutions to the committee in writing? We could benefit from them and include the need in our report as needed.

I'd like your opinion on the proposed structure of the procurement commissioner's office. Other witnesses have told us that it wouldn't necessarily be effective, that it could be a structure that produces reports, but that it would have no impact.

Is this something you think should be put in place?

[Catherine Lefebvre]

We believe that, yes, it could provide effective solutions. As long as there are concrete and quick results, we aren't opposed to other ideas. We see the creation of a commissioner's office as an idea that could get us out of this situation.

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

Okay.

Should there be a coordinator rather than a commissioner?

[Catherine Lefebvre]

I don't know the difference between the two. I'll let you make that decision in an informed way.

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

Okay.

I'd like to hear Mr. Milette speak briefly on the subject.

[Guy Milette]

For us, it's very simple.

Of course, we would agree that there should be someone in government who would look at many more issues than just agriculture. Our problems are far greater than those of producers, although they are very significant. Our difficulties are really in the areas of transportation and various interprovincial regulations.

[The Chair, Liberal, Kody Blois]

Thank you very much, Mr. Milette.

I'm sorry, Mr. Perron. Your speaking time is up.

Mr. MacGregor, you have the floor.

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

Thank you, Chair.

Maybe I'll turn to the Canadian Produce Marketing Association. When we had the Agri-Food Innovation Council before our committee, there was a little bit of a back and forth with them regarding looking at people's supply chains in real-time when they might be impacted by something unexpected; for example, when the Port of Vancouver was cut off by flooding, and of course most recently when three of our major border crossings were blockaded by illegal blockades.

Can you talk to me a little bit about businesses in your sector? Are some of them starting to incorporate technology that allows them to get real-time updates on supply chain problem? Also, does the Government of Canada need to do more to invest in this type of technology so that shipments can possibly be re-routed using artificial intelligence.

Do you have anything you can contribute to that conversation?

[Guy Milette]

I will answer very quickly.

When we talk to truckers, we have the flexibility to change their route relatively easily. The impact of the Ambassador Bridge closure was felt immediately. It caused delays for us, as trucks got stuck in long lines. So trucks can be moved easily. However, if you want to change the route of a container, it's a tedious process that can often take one to two weeks, which is often the same delay you'll experience if you keep the same route.

There are already tools provided to us by maritime companies. We are in a very modern era, so a lot of tools are available. I don't think we are looking for tools to have flexibility in terms of transportation. Rather, we are looking for tools to establish rules, find truckers and make the job attractive. New generations don't want to become truck drivers, and there are fewer and fewer of them.

Some jobs need to be made more attractive. Farm workers, warehouse workers and truck drivers are all jobs that are no longer in demand. So we have to do everything possible to make sure that the people who take these jobs can get what they need out of them.

[The Chair, Liberal, Kody Blois]

Thank you, Mr. Milette and Mr. MacGregor.

On behalf of all members of the committee, thank you very much for appearing this morning, for your testimony and for your work in the industry.

Have a good day.

Colleagues, we're going to take a slight break, and we'll be back shortly, so please don't go far.

Thanks.

[The Chair, Liberal, Kody Blois]

I call the meeting back to order.

It is great to see everyone. We will continue with the second hour of our testimony here today.

With us by video conference, from the Canadian Chamber of Commerce, we have Robin Guy, who serves as the senior director of transportation, infrastructure and regulatory policy, and Jarred Cohen, who is a policy adviser. From Pulse Canada, we have Greg Northey, who serves as the vice-president of corporate affairs. From the Retail Council of Canada, we have Jason McLinton, who is vice-president of the grocery division and regulatory affairs.

Welcome to all our witnesses. As you know, you have five minutes for opening remarks.

We are going to start with Mr. Guy.

[Robin Guy, Senior Director, Transportation, Infrastructure and Regulatory Policy, Canadian Chamber of Commerce]

Thank you very much, Chair.

Honourable members, it's a pleasure to be appearing at this committee for the first time. My name is Robin Guy. I'm the senior director of transportation, infrastructure and regulatory policy at the Canadian Chamber of Commerce. I am joined today by my colleague, Jarred Cohen, policy adviser.

I recognize that it may seem out of the norm for the Canadian Chamber of Commerce to appear at this committee, but as the country's largest industry association with members in all sectors, we have a deep stake in the success of the agriculture and agri-food industry. Our membership includes companies and associations at various points of the agriculture supply chain, including producers, processors, retailers and ancillary business.

Over the last number of months, the Canadian Chamber of Commerce has been running the Canada's FoodLink campaign, which has been seeking to draw visibility toward a number of priorities for the industry, such as regulatory competitiveness, trade and innovation. As such, the committee's study is both welcome and timely.

Before discussing a few specific priorities for the committee's consideration, it's worth noting the volume of papers littering the town talking about the sector's potential. This includes the advisory council on economic growth, the agri-food economic strategy table, the industry strategy council and the Guelph statement.

Although the sector has remained resilient in the face of a destructive two years, I mention these reports not for posterity purposes, but to underscore that it's important to ensure we take the voluminous work that has been produced and put it into action. I hope this committee can catalyze on that action.

In the time available, allow me to focus on a few points in the areas the committee has identified as points of interest.

The first is regulatory. While, oftentimes, the cost of input fluctuations is due to market forces, the regulatory burden imposes a significant cost on companies and it's a cost that is within our control. Diverging from regulatory best practice and science-based international standards raises the cost of business. It makes Canadian companies less competitive and it prevents small business owners from running their companies. Too often, regulators do not give sufficient consideration to economic and business impacts when making decisions. To remain competitive, this cannot be the case.

We would urge the government to adopt an economic and competitive lens mandate for regulators to ensure that they do not hinder growth for Canadian business. As Canadian business turns to recovery, I would also stress that now is simply not the right time to introduce new regulations that would hurt economic growth and add new strains to our supply chain.

The second point of interest is transportation corridors. Extreme weather events and aging infrastructure remain challenges to ensuring we can get products to buyers and to markets. We have a serious infrastructure deficit in Canada, which will require us to perform triage. It's essential that we avoid the temptation to spread whatever money is available like peanut butter across Canada. Infrastructure capacity takes time to build and we need to move now to reap benefits later. We cannot simply address existing gaps, but must look to our future needs to reach our potential. This forward vision is essential to ensuring that our transportation system can meet the future needs of our economy.

The Canadian Chamber of Commerce commends the government for its investments through the national trade corridors fund. Through this program, we must continue to look at building redundancy through tools such as twinning of rail in high congestion areas, increasing the capacity of our bridges and protecting industrial lands around airports and ports.

I would also stress that the investments must be based on clear priorities with measurable economic returns. These priorities must be clearly communicated by governments, so that the private sector can act accordingly, and they must be backed by data to ensure we can see the impact projects are having to strengthen our trade corridors.

I would also like to commend the government for launching the supply chain summit. Partnership and dialogue between the government and the private sector are critical to working through these complexities. Establishing supply chain work groups for information sharing and moving issues forward cannot be overlooked. These are not flash-in-the-pan issues that will be solved overnight.

The third and last point of interest is supporting supply chains through innovation. The success of the Canadian agriculture sector relies on our ability to adopt new technologies that will support the sustainable economic growth of the agriculture and agri-food sector. The long-term viability of the industry also relies on innovation to enable the tackling of climate change. The government needs to work closely with industry to develop a technology-neutral, net-zero transition plan, such as the 4R nutrient stewardship program, and support carbon capture, usage and storage for the upcoming federal budget.

Thank you again for the opportunity to address the committee.

I look forward to your questions.

[The Chair, Liberal, Kody Blois]

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

It's over to you, sir.

[Greg Northey, Vice-President, Corporate Affairs, Pulse Canada]

Thank you, Mr. Chair.

Good afternoon to committee members. As was mentioned, my name is Greg Northey. I'm the vice-president of corporate affairs at Pulse Canada.

Pulse Canada is the national association representing growers, traders and processors of Canadian pulses, which include peas, lentils, beans, fava beans and chickpeas. We are proud to be leading the future of healthy, sustainable food through the growth of Canada's pulse industry. We are the world's largest exporter of pulses, shipping to over 130 countries. Our industry's growth is directly related to our ability to meet global customer demand. To do that, we need a reliable, functioning supply chain.

Unfortunately, our sector is currently facing historically poor rail performance. In addition, for the past two years we have experienced considerable disruption to service in the Canadian container shipping market. Roughly 40% of pulses are exported via shipping container, which means the current container disruptions we are seeing are severely impacting our industry's ability to participate in international trade.

I want to be very clear about what these disruptions have meant for pulse growers and exporters. Shipping lines have removed historic routes to the Indian subcontinent, South America and other destinations that our trade has traditionally relied upon. As a result, average transit times for our containers of pulses have gone from between 20 and 40 days to reach destination to now between 70 and 90 days, depending on the destination.

We have experienced record low schedule reliability due to vessel delays and blank sailings. An estimated 90% of pulse exports were either rolled to a later vessel sailing or missed shipment altogether in 2021. Some containers of pulses have sat at port for up to six months before getting on a vessel.

In addition, Canada's export shipping capacity has effectively been cut in half through the decision by container shipping lines to ship empty containers back to Asia instead of shipping containers fully laden with Canadian exports.

As a result, our industry has experienced lost sales and cancelled sales contracts, which has impacted our competitiveness in international trade markets. This has been exacerbated by record high freight rates and additional supply chain costs. For example, the cost to retain a single shipping container for use for export increased from between $1,300 and $1,800 for a container in 2020 to between $4,000 and $5,000 in 2021.

At the same time there have been these excessive freight increases and poor service, it is notable that the profitability of container shipping lines has hit record levels. It is predicted that collective carrier profits for 2021 are in the region of $120 billion to $190 billion. This is a record for them. There is no doubt that a good portion of these profits has been extracted from the pockets of farmers, exporters and Canadian consumers.

This is why Pulse Canada helped found a cross-commodity initiative beyond agriculture, called containercrunch.ca, which is calling on the federal government to act to fix the container crunch and fix the issues facing the containerized supply chain.

We are here today to advocate for two things. The first is that the government immediately open an investigation under section 49 of the Canada Transportation Act to investigate what is contributing to the current container disruptions and to better inform the legislative and regulatory changes required to address the competitive failures in the container shipping industry. We do have a real need to update our legislative system regarding the governance of shipping lines.

The second piece is that we are asking the government to name a supply chain commissioner to lead the recently announced industry-government task force to bring together stakeholders to identify immediate solutions to address supply chain disruptions specific to containerized shipping.

These two actions are critical next steps to help ensure that we identify immediate solutions to the disruptions, but also to help ensure that we are able to move to a new, more desirable state with improved operating levels and financial performance for all who are using the containerized supply chain.

When given a level playing field, Canada's pulse industry can compete in any market around the world. If we are to increase the production and export of sustainably grown, nutritious pulse crops, our industry needs access to a well-functioning, resilient supply chain.

The committee has an important role to play by helping to draw needed attention to this issue, and by providing recommendations that will end the harm this issue is having on Canadian businesses and consumers.

I want to thank you for the opportunity to be here today, and I look forward to answering your questions.

[The Chair, Liberal, Kody Blois]

Thank you very much, Mr. Northey.

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

[Jason McLinton, Vice-President, Grocery Division and Regulatory Affairs, Retail Council of Canada]

Thank you, Mr. Chair and members of the committee, for the opportunity to come and discuss the agriculture and agri-food supply chain with you today.

Let me give you a quick introduction to the Retail Council of Canada, the RCC.

Retail is the largest private employer in Canada. Over 2 million Canadians work in our industry. Recognized as the voice of retail in Canada, the RCC represents more than 45,000 businesses of all types, including department stores, specialty stores, discount stores, independent businesses, online shops and, most importantly, food retailers.

RCC member food retailers are a proud and integral part of the Canadian food system. They are the stakeholders who are in direct contact with consumers, providing Canadians with the wide variety of foods they eat every day.

The COVID‑19 pandemic has caused unprecedented upheaval in the Canadian food supply system. The RCC and its members have worked closely with Canadian producers, processors and importers throughout this crisis to adapt to emerging challenges and changing consumer behaviours and demands.

We recognize and applaud the work that the government of Canada has done to date, but more needs to be done to ensure that the country is well placed to meet the medium and long-term challenges of maintaining our food supply chain in the wake of the COVID‑19 pandemic.

In this regard, I would like to point out that our members are already expressing serious concerns about the current supply chain challenges and pandemic-induced shortages that are greatly affecting the availability and costs of food products on retail shelves.

Challenges include international container availability and cost; extreme weather events, such as the flooding in British Columbia; rising fuel and transportation costs; the availability and cost of labour; and rising costs that suppliers are charging for goods. These challenges have been severely exacerbated by border crossing blockades, and this at a time when Canada is particularly dependent on fruits and vegetables from outside the country, impacting their perishability and further compounding the issue of availability and price.

RCC is respectfully calling on the federal government to help stabilize supply chains and lower inflationary pressures in three key areas.

First, as significant progress has been made towards removing existing blockades, RCC is asking the federal government to work together with all levels of government to swiftly develop proactive solutions for each unique crossing, point of entry—land, air and rail—and critical supply line in Canada to prevent future disruptions elsewhere in the country in the days and weeks ahead.

Second, we ask the government to delay the implementation of any discretionary regulations so that retailers can focus resources on ensuring the stability and reliance of their supply chains. While RCC members are supportive of the intent behind such proposed regulations as front-of-pack nutrition labelling and reformulating labels for natural health products, every new regulatory consultation and requirement requires a shift in focus and adds additional costs at a very sensitive and fragile time.

Finally, the federal government can help ease inflationary pressures in areas where it has direct control. This includes allocating quota under Canada’s new free trade agreements at the retail level, which is the level closest to Canadian consumers, if Canadian families are to see some of the benefits of free trade agreements in the form of savings and choice. Quota is currently being allocated by Canada to processors. This adds an unnecessary layer and added cost, and essentially gives all the quota to those who compete with the very products that would be imported.

This also includes conducting a review of the process for setting dairy prices in Canada. The Canadian Dairy Commission’s current process does not include, in any meaningful way, the views of the grocery and restaurant retail industries, along with those of consumers, and instead relies on self-reported and unverified data. We ask the federal government to improve this process based on the need for greater representation, transparency and authentication.

I will be happy to answer your questions.

[The Chair, Liberal, Kody Blois]

Thank you very much, Mr. McLinton.

Before moving on to questions, I'd like to welcome Mr. Boulerice to our committee.

I will now give the floor to Mr. Barlow, who has six minutes.

[John Barlow, Conservative, Foothills, AB]

Thank you, Mr. Chair.

Thank you very much to our witnesses for some great information.

Mr. Northey, I'm going to start with you. You brought up a couple of what I think are pretty critical issues that we have been trying to raise for some time. In fact, a letter was written to some of the ministers several weeks ago at this point.

You mentioned, in one of the points that you're asking of this committee and certainly asking of this government, initiating that investigation under section 49 of the Canada Transportation Act to address some of the supply chain disruptions and to be proactive so we can address some of these things in the future. I assume from your points that it hasn't happened yet.

What has been the explanation from the government as to why that step has not been taken, considering it's been many weeks since it has been raised as an option?

[Greg Northey]

We initially raised this about a year ago, and it was in response to what we're seeing particularly in the U.S. but in other countries where, at the highest level, and certainly in the U.S.... The current administration at the presidential level has raised containerized supply chain issues as one of the key drivers for economic growth and for risks to their economy.

One of the things that we felt section 49 would do, if launched, would be to raise the profile of the issue that we believe is an incredibly important issue, not just for us but for many people in the supply chain. An investigation would be similar to what other countries have done. Regulators have looked at the issue, assessed it, collected data and evidence, and they've mapped a path forward.

We haven't seen that happen in Canada; we haven't seen a section 49 investigation. Obviously there's potential to do that now. We'd like to see it launched as soon as possible.

[John Barlow, Conservative, Foothills, AB]

I'm sorry, I don't want to cut you off, but I have limited time.

Has the government, the Minister of Transport, Transport Canada or anybody given you an explanation why that hasn't happened?