Agriculture Committee on May 8th, 2023

[Leah Taylor Roy, Liberal, Aurora—Oak Ridges—Richmond Hill, ON]

Thank you very much.

I appreciate that you're focusing on higher-value items in the local market.

To some of the officials, did you receive any requests from Olymel for assistance or for any programs to help with the situation in Vallée-Jonction? Was there any kind of formal request before they made the decision to close this plant?

[Jacinthe David, Director General, Operations, Temporary Foreign Worker Program Branch, Department of Employment and Social Development]

Yes, the company reached out to us a few days before the public announcement, without knowing the location, to seek our assistance in terms of what we could do to work together to find other opportunities for the TFWs, either in Quebec or elsewhere.

[Leah Taylor Roy, Liberal, Aurora—Oak Ridges—Richmond Hill, ON]

Thank you.

It seems that once they had made the decision to close the plant, they sought assistance in relocating some of the workers, which is excellent.

Before they made the decision to close the plant, did they reach out to you, for example, to discuss what supports could be put in place to keep the plant operating?

[Donald Boucher]

In fact, there had been no official requests made to AAFC prior to that decision being made by the company.

[Leah Taylor Roy, Liberal, Aurora—Oak Ridges—Richmond Hill, ON]

Thank you, sir.

It seems the decision was made, obviously, for global reasons, and there wasn't much the government could do to maintain this.

We're sitting here at the agriculture and agri-food committee. As we're here discussing this, what role do you see...? Could the government have prevented this somehow?

I'm just trying to comprehend what the discussion is about and why we're discussing this here, if they did not make a formal request, if this is due to global markets and it's a corporate decision to focus on fresh meats locally and then value-added products for the export market.

Do you see that there is something the government could have, should have or would have done differently that could have affected this decision?

[The Chair, Liberal, Kody Blois]

Unfortunately, your time is up. I'm going to allow Mr. Boucher to make a brief response, though.

[Donald Boucher]

I think from AAFC's perspective, the support we've been providing is mostly looking at the hog industry altogether. It's looking at things like public trust, sustainability, innovation and how to make the industry more resilient and more competitive. On market access, obviously a lot of work continues to happen by our officials who are posted abroad and also here.

I think this is how we are trying to look at the supply chain and look at the industry in a holistic fashion.

[Leah Taylor Roy, Liberal, Aurora—Oak Ridges—Richmond Hill, ON]

Thank you, and thank you to all the witnesses for their answers.

[The Chair, Liberal, Kody Blois]

Thank you very much.

We'll now go to Mr. Savard-Tremblay for six minutes.

[Simon-Pierre Savard-Tremblay, Bloc, Saint-Hyacinthe—Bagot, QC]

Thank you, Mr. Chair.

I thank the committee for welcoming me once again.

My question is for Mr. Elharrar and Mr. Gillespie.

Following the closure of the Olymel plant, a number of temporary foreign workers will be out of work. They will therefore have a closed work permit.

The situation is not unique to Olymel. It has been the same for other companies that we have all heard about.

Before the end of a closed work permit, a new agreement is usually negotiated with the impacted workers at the end of the contract. If they do not sign the agreement for a fixed term while they are waiting for an open work permit, they are shown the door by the employer at the end of the contract. Because their permit is closed, they find themselves in a situation where they are not allowed to work for several months. They often end up working illegally to support themselves and their families.

In concrete terms, what recourse is available to these workers?

As members of Parliament, we receive calls about these types of cases. When our teams contact the companies to inquire, they are told that there is nothing they can do.

What can we say to these workers today? What can they do?

[Dr. Ian Gillespie]

I'll just start by saying that all foreign nationals who are in Canada on work permits do have the right, the authority or the ability to apply for a new work permit. That's enshrined in the Immigration and Refugee Protection Act regulations. To do so, there are a number of criteria. It can include a labour market impact assessment, which would come from Employment and Social Development Canada. Otherwise, they may meet the criteria of one or any of the pathways in an international mobility program.

Ultimately, if those workers were laid off or whatever, and they were on closed work permits, they could pursue other job opportunities. It would just depend on the employer and the situation. They could apply for a new work permit.

[Simon-Pierre Savard-Tremblay, Bloc, Saint-Hyacinthe—Bagot, QC]

What happens during the processing period?

[Dr. Ian Gillespie]

As I mentioned in my remarks, we have a public policy to help these workers change employers more quickly.

If they get a new job offer, they can apply to IRCC, and they can be working for that new employer within two weeks.

[Simon-Pierre Savard-Tremblay, Bloc, Saint-Hyacinthe—Bagot, QC]

All right, thank you.

My next question is for the Olymel representatives, Mr. Beauchamp and Mr. Banville.

I represent the riding of Saint-Hyacinthe-Bagot and I feel as if I'm once again in a sad movie. Six months ago, you announced the closure of the Saint-Hyacinthe plant. Each case is different, but there are certain reasons that are often given, notably the oft-cited reason related to labour shortages.

Should we be monitoring other plants right now, whose survival could be in danger if no action is taken quickly?

[Paul Beauchamp]

I'll start answering your question and then I'll turn it over to my colleague.

Certainly, a company like Olymel, which operates 35 facilities, is always reviewing its operations in order to improve its business processes. I would be lying to you if I said that plant closures would never happen again. That said, our priority is to take care of the employees who have worked with us for many years. Some have spent their entire careers with Olymel.

Mr. Banville, you have the floor.

[Louis Banville, Vice-president, Human Resources, Olymel L.P.]

Thank you, Mr. Beauchamp.

Sir, I would like to reiterate what Mr. Beauchamp said. In the case of the Vallée-Jonction plant, our teams are continuing to work with various levels of government. We want the temporary foreign workers in Vallée-Jonction, more specifically, to have access to other jobs in Olymel facilities to maintain their employment relationship. These people have one, two, three or four years of seniority and we will recognize them, as we will all other employees who will be transferred.

So our priority is to make sure that staff can continue to work for us. For those employees who will want to stay in the region, we are involved in the process of obtaining an open permit, if possible. We are still waiting to hear back.

In general, in its other facilities, Olymel has done its homework to recruit the necessary workforce. Sixteen collective agreements were reopened in 12 months to ensure that we are competitive in hiring, which in many facilities has yielded results. It also allows us to move forward with value-added products and maintain jobs in other facilities.

As my colleague mentioned, you can never say never, but the efforts to date in our other 29 locations to hire and retain employees and create jobs have been successful. We are continuing to do so in order to secure the operations of these facilities.

[Simon-Pierre Savard-Tremblay, Bloc, Saint-Hyacinthe—Bagot, QC]

Thank you.

How much time do I have left, Mr. Chair?

[The Chair, Liberal, Kody Blois]

Mr. Savard-Tremblay, you only have 15 seconds left.

[Simon-Pierre Savard-Tremblay, Bloc, Saint-Hyacinthe—Bagot, QC]

I thank the witnesses for their answers.

[The Chair, Liberal, Kody Blois]

Thank you very much.

I'll now turn it over to Mr. MacGregor for six minutes.

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

Thank you very much, Mr. Chair.

Thank you to all of our witnesses. I'd like to echo my colleagues in expressing our collective sorrow at what's happened to the workers at this particular plant.

Mr. Beauchamp, I'd like to start with you.

I was reading a CTV news article from the middle of April in which both CEO Yanick Gervais and the head of the union, Martin Maurice, were both quoted. I think Mr. Gervais mentioned that this plant had been chosen because, among other things, it needed some serious upgrades, about $40 million in renovations. The head of the union, Martin Maurice, stated that this plant, in fact, was the most profitable, and he raised questions about the $150 million in public money that Olymel had received two years ago to help it become more competitive.

Just for our committee's understanding, you have the CEO mentioning that this plant needed about $40 million in renovations, and the head of the workers' union said that this plant was the most profitable and that your company had received a fairly large sum in public funds.

Was there any internal decision-making about how those funds could have been used to upgrade what the head of the union said was the most profitable of your plants?

[Paul Beauchamp]

This is a question that deserves a fairly detailed answer, if I may.

The question of the amount of investment has been studied by our people. We're talking about $40 million — and I can confirm that figure — to keep the plant operating. Another thing we have to consider is the condition of the building. It is an old plant, which has been expanded from the inside, if I may say so, and which has limitations for the installation of new technology tools, such as automated palletizing and the use of a robot. There is no space, either in terms of surface area or even height, to invest and bring this plant up to standard, i.e., to make it competitive with the world's leading group.

The plant is said to be the most profitable in the company. At one time, the Vallée-Jonction plant was considered the flagship, the only plant that allowed us to export value-added products to Japan. However, since then, all our other facilities in Canada have managed to reach the level of Vallée-Jonction. I want to point out one small detail: we don't have a profit centre per plant. What we do have are cost centres. As long as all the plants are capable of making the same product, it is not a question of profitability, and everyone can be equal. That was part of the criteria.

As for the money that the government has invested — it is not a grant that has been given, but an investment in the company — the Quebec government holds a percentage of the company. A list of projects was given to the government, as an indication. These were projects that we were targeting, such as technology upgrades, where the largest amount was dedicated to information technology.

The amount of government investment may seem large, but it was not for one plant, but for the entire company. As we mentioned, you have to look at the number of facilities and the number of industries. I remind you that this is an investment, not a grant. That makes a big difference.

I too would like to point out—

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

I'm sorry to interrupt. I just want to get one more question in, and you can add to it if you wish.

We have received, as a committee, data from the Government of Canada that shows that in 2020 there was a massive surge in pork exports to China. You have also verified this. It was a result of their home industry being decimated by African swine fever.

What I want to understand is, how does a company like yours during the good times prepare for the bad times? We saw a huge surge in 2020. I want to know how Olymel's profits increased in 2020. Then, of course, there was a fairly catastrophic drop in 2021 and 2022. How does a company like yours prepare when you get a surge in profits in a very good year and look at the horizon for what may be bad times? Do you reinvest that money? Do you maybe look at plants that you foresee as struggling?

I just want to know how the internal decision-making happens in your company during the good times.

[Paul Beauchamp]

You're right to point out that there have been good years, but we've had some terrible years. I would remind the committee that we operate in four sectors: fresh pork, processed pork, fresh poultry, and processed poultry. All of the sectors have benefited from those years when we have had good results. In fact, we had some interesting results. However, they were not solely attributable to fresh pork production.

I mentioned earlier that the results were highly volatile in that sector. There were good years, but not necessarily only because of fresh pork production, and the bad years we just went through were only due to fresh pork results. In the other three areas, the company had its best results ever. So it hurt the organization very much.

Fortunately, our owners and agribusiness entrepreneurs are patient. They understood the situation. They knew that this was a “cyclical low point”, but that we had to make some important, even drastic, decisions to correct the situation and protect ourselves from future negative results of this magnitude.

The business plan that was proposed by senior management and that we subsequently implemented was aimed at trying to counter this type of problem in the medium and long term. It's not that we are abandoning the sector, it's just a strategy adjustment.

[The Chair, Liberal, Kody Blois]

Thank you very much, Mr. Beauchamp and Mr. MacGregor.

Colleagues, we're going to go with four minutes for the Conservatives, four minutes for the Liberals and two minutes for the Bloc and NDP. We'll run just a few minutes over, but we were a few minutes late getting started because of technical difficulties.

Right now, we have Mr. Gourde for no more than four minutes, please.