Agriculture Committee on Feb. 28th, 2022

[The Chair, Liberal, Kody Blois]

I call the meeting to order.

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

Today's meeting will be conducted in a hybrid format, in accordance with the order of the House adopted on 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.

I remind you that screen shots or taking photographs of your screen is not permitted.

Colleagues, it's great to see a good crowd here in person. That's been a rarity over the last year or so, but just as a reminder, of course, please keep the health protocols that we're all accustomed to top of mind.

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

I would now like to welcome our witnesses for our first panel.

With us today on the teleconference is Jennifer Wright, who is the acting executive director and the director of operations, programs and partnerships with the Canadian Agricultural Human Resource Council.

Welcome.

From the Canadian Horticultural Council, we have Rebecca Lee, who is the executive director, and Quinton Woods, who serves as the chair of the trade and marketing working group.

From the Department of Industry, we have Murad Al-Katib, who is the chair of the economic strategy table for agri-food.

You're going to have up to five minutes.

Colleagues, we did not sit last week, and I think it's important that we put on the record that we saw the terrible events with Russia invading Ukraine. I know that I speak on behalf of all members of this committee when I say that we denounce and condemn this egregious violation of international law. The images we've seen have been horrific.

Our thoughts and prayers are with all Ukrainians and those who are fighting for freedom. I know that our work as parliamentarians will extend beyond thoughts and prayers to concrete action, as we've already seen, and I know that this will be a top priority for all of us as members of Parliament and elected officials in the days ahead.

I think it's a reminder that democracy is not a given and freedom is not a given, and perhaps it is a solemn reminder today as we undertake our important work as parliamentarians. I just want to say that. I know that I speak for all the folks on this committee and elsewhere.

With that said, I'd now like to invite Ms. Wright to make an opening statement of five minutes, and then we'll follow with Ms. Lee and Mr. Al-Katib.

Ms. Wright, we will go to you for five minutes, please.

Ms. Jennifer Wright (Acting Executive Director and Director of Operations, Programs and Partnerships, Canadian Agricultural Human Resource Council):

Thank you, Mr. Chair.

Mr. Chair and members of the committee, thank you for the invitation to participate in the standing committee's study.

I'm Jennifer Wright, acting executive director, and director of research, programs and partnerships at the Canadian Agricultural Human Resource Council.

My comments today will focus on the pervasive labour shortage currently being experienced in Canadian agriculture and what we can do together to address this.

The workforce needs of Canada's agriculture industry are something that CAHRC has been examining for more than 15 years. It is clear that the industry cannot continue to produce healthy, safe and affordable food for Canadians and for global consumers without an adequate supply of agriculture workers.

The COVID pandemic has put an even greater spotlight on the issue and confirmed that there is no more time to waste. We must work together toward longer-term and systemic solutions to the persistent labour shortages the agriculture industry is facing.

CAHRC's labour market research indicates that job vacancies are exceptionally higher in agriculture compared to other industries, resulting in close to $3 billion in lost revenues in 2018. The inability of farmers to fill all their vacant positions with either Canadian or foreign workers makes the business of food production in Canada very difficult.

International workers come to Canada to work on farms and fill positions when Canadians can't be found. Although approximately 60,000 foreign workers are brought in each year, thousands of vacancies still remain, with 16,500 vacancies in 2018. In fact, workforce shortages are doubling every 10 years, with a forecast total labour gap of 123,000 by 2029. Businesses that are unable to fill vacancies face high production losses and delayed expansion plans, and some are forgoing operations altogether.

Securing a full team of workers is challenging for farm businesses at any time. It is especially challenging during a pandemic. CAHRC's research on the impacts of COVID on the sector confirm significant impacts on farm operations, including production delays, overtime costs and delayed or cancelled investment or expansion.

While Canada's agriculture employers are actively trying new and creative ways to find and keep more of their workers, the scope of the problem is significant. At present, the sector is on an unsustainable path, with a growing number of jobs going unfilled. To address the myriad challenges facing the agriculture and food manufacturing sector, government departments, educational institutions, sector associations and other stakeholders will need to work together.

Now is the time to ensure that the food production system continues to be resilient through COVID and beyond and is well positioned to overcome the persistent labour shortages that have been limiting growth. We urgently need a national agriculture and food manufacturing labour strategy, as has been done in other jurisdictions such as Australia.

In spring 2021, CAHRC, along with our partners, the Canadian Federation of Agriculture and Food and Beverage Canada, commenced the development of a national workforce strategy for agriculture and food manufacturing, with the goal of bringing stakeholders together to collaborate and develop an actionable road map to address the increasing labour shortage. There are over 50 industry organizations contributing to this process.

This strategy identifies short-, medium- and long-term actions in the areas of skills development, automation and technology, people and workplace culture, perceptions of the industry, and immigration and foreign workers. Overarching themes include equity, diversity and inclusion, infrastructure, data and competitiveness, and profitability. We are also engaging CAHRC's indigenous advisory committee to help inform this process.

CAHRC is pleased that both the Minister of Agriculture and Agri-food and the Minister of Employment, Workforce Development and Disability Inclusion have committed to developing an agricultural labour strategy. CAHRC is looking forward to working with industry, education and government partners to move this forward. In particular, we encourage the federal government to build on and support the work we've undertaken to date.

In summary, COVID has highlighted that food is essential to Canadians and workers are essential to food production. Without stabilizing the supply of workers and getting the right people with the right skills into agriculture jobs, our industry will not thrive. Now is the time to ensure the food production system stays operational and is well positioned to overcome the persistent labour shortages that have been impacting the sector and limiting its growth. We can start by working together to develop an agriculture and food manufacturing workforce strategy for all of Canada.

I look forward to questions from the committee. Thank you.

Thank you very much, Ms. Wright.

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

[Quinton Woods, Chair, Trade and Marketing Working Group, Canadian Horticultural Council]

Thank you, Mr. Chair.

Good morning, Mr. Chair and members of the agriculture committee, and thank you for the opportunity to join you today and to speak on behalf of growers on the ongoing supply chain disruptions felt by the agriculture and agri-food sectors.

My name is Quinton Woods. I am the sales and plant operations manager at Gwillimdale Farms in Bradford, Ontario. I also serve on the Canadian Horticultural Council as the chair of the trade and marketing working group.

The Canadian Horticultural Council, also known as CHC, is an Ottawa-based national association that represents 14,000 fruit and vegetable growers across Canada involved in the production of over 120 different types of crops, with farm gate sales of $5.7 billion in 2020.

I'd like to begin my comments by saying that the supply chain disruptions we're facing today are not new disruptions and existed well before the beginning of the COVID-19 pandemic; however, the public health challenges in the past two years have exacerbated economic and logistical challenges along the global supply chains.

Given the perishability of fruits and vegetables, our growers continue to feel these impacts and work daily to find solutions to ensure that consumers in Canada and around the world continue to have access to our safe, healthy and nutritious products. The increasing costs and delays along the supply chain threaten our food security and the long-term economic viability of the fruit and vegetable sector. Some of the challenges our growers face include but are not limited to crippling port congestions, delays in container shipping, inconsistent product delivery, persisting labour shortages and unprecedented increases of input costs.

Among the input costs we're seeing today is that our labour rates have increased through the roof, and the biggest problem with the labour rates is actually the shortage and the lack of access to labour. We also are experiencing increased prices for lumber, which impacts the availability of pallets; increased costs in pulp and plastic resin used to make cardboard boxes and plastic packaging; and increases in the price of crop protection products. One of the biggest cost increases we've seen this year is actually the cost of fertilizer, with some growers facing increases as high as 53%.

Lastly, one of the most important challenges—and very timely, based on recent events—is the availability of trucks and truck drivers. These shortages were there before the COVID-19 pandemic, but the introduction of the new border measures further reduced the supply of available truck drivers to haul our goods across international borders.

It is important to note that the costs associated with these disruptions cannot be fully borne by growers like me, and that, wherever possible, we will need to pass these on to consumers. Sadly, these increases, which are being felt by the end consumer, are likely to escalate and most affect those who can least afford it.

Now I'll pass it on to Rebecca Lee for her comments.

[Rebecca Lee, Executive Director, Canadian Horticultural Council]

Thank you, Quinton.

Good morning, members of the committee. My name is Rebecca Lee and I am the executive director of the Canadian Horticultural Council.

As you have heard, ongoing supply chain disruptions have had significant impacts on the Canadian fruit and vegetable sector. The growers we represent from across the country, including Quinton, have demonstrated remarkable resilience over the past two years to continue providing our communities with fresh, nutritious food sources, but in order for them to continue doing so, we are calling on the federal government to take swift and decisive action to address the deficiencies in our supply chain.

We were pleased to see this need acknowledged in the recently convened supply chain summit and through the government's establishment of a national supply chain task force. These challenges are complex and will require the collaboration of multiple ministries, departments and stakeholders. We believe it is essential for government to work in a multilateral and holistic manner to address these ongoing challenges.

In order to ensure that the task force is able to bring the necessary players around the table and take meaningful action to address disruptions, we are requesting the appointment of a supply chain commissioner to lead the group, as many other industry associations have. This would mirror the process undertaken in the United States.

The commissioner must be empowered with decision-making authority and prevent the bureaucracy of government from getting in the way of bringing about substantive action. Without doing so, the issues experienced now will create long-lasting impacts, to the detriment of all North American economies. These include bankruptcies, legal disputes, industry consolidation, inflation and inaccessible food supplies, among others.

Despite all these threats, Canada's agricultural sector has stepped up and continued to provide stable and safe food to Canadian families, which has been critical to maintaining—

[The Chair, Liberal, Kody Blois]

Ms. Lee, I apologize. I even gave you a few extra seconds. I'm sorry. I know that members will get to ask questions.

[Rebecca Lee]

That's okay.

[The Chair, Liberal, Kody Blois]

Mr. Al-Katib, we will move to you for five minutes.

[Murad Al-Katib, Chair, Economic Strategy Table—AgriFood, Department of Industry]

Thank you very much. I appreciate the opportunity to see the committee today.

My name is Murad Al-Katib. I'm here as the chair of the agri-food strategy council and also as the CEO of AGT Foods, based out of Regina.

Today I'm going to bring you some comments with a very specific focus on the western Canadian cropping system. I want to start with an acknowledgement that Canada has been blessed with a very significant agricultural endowment, with some of the best and most productive agricultural land in the world, making Canada a world leader in agricultural production and export.

For decades we've been known as the breadbasket of the world; however, in recent years, we've increasingly been known as the first stop on the protein highway. With food, fuel, fertilizer and feed, Canada has what the world needs and wants, and Canadian agriculture is on the front line in providing societal solutions to global challenges in protein, food and renewable fuel supplies. We will be vital to the United Nation's FAO mission, which requires the world to produce the same amount of food in the next 40 years as it produced in the last 10,000 years of civilization to meet the growing population of 10 billion people by 2050.

The agriculture sector, with our farmers and farm families, processors and exporters, is up to this challenge. We employ sustainable solutions, such as a three-crop rotation of canola, nitrogen-fixing pulses and wheat, and technologies like zero- and minimum-tillage farm management. We succeed even in an environment of rising fuel prices, carbon policies that increase production and input costs, and other challenges that face our farm families and processors across this country.

To continue to succeed, though, we must address risks and uncertainties and future-proof our sector, including for stronger competition and changes in consumer demand for quality plant-based proteins, environmental stewardship and cleaner energy.

Labour availability is a major obstacle in agriculture, one I'm certain you'll have questions about. In a post-COVID environment there's been a dramatic effect on availability of workers at every level of our industry. Prospective workers have moved on to other positions with increased pay, better benefits and other advantages, while others have exited the workforce entirely.

While there are methods of dealing with labour shortages, such as technology, robotics and automation, labour will continue to be an ongoing challenge, especially as processors make investments in new infrastructure to add capacity to meet the growing consumer demands.

With projects like AGT's planned protein extraction facility in Regina, as well as a $360-million canola crushing facility in partnership with Federated Co-operatives, announced last month to produce one billion litres of renewable diesel, which is part of the $2-billion integrated agricultural complex project, the availability of ready, trained and available workforce is of utmost concern.

In the agriculture sector, we have always wrestled with transportation-related issues, especially with our cold climate and market-locked nature. Recently, funding options such as the national trade corridor fund replenishment in our budget are very welcome announcements. Strong leadership is always needed, though, to create transportation policy frameworks to support trade and continue to provide long-term funding to build capacity, invest in infrastructure, remove bottlenecks and make supply chain improvements that are critical to maintaining Canada's reputation as a reliable supplier of products.

You may know that I was on the federally appointed panel in charge of reviewing the Canada Transportation Act, the Emerson report, which paid special attention to recommendations to the agriculture industry. I was also honoured to chair the Industry Strategy Council's agriculture subcommittee with Monique Leroux. We tabled our report in 2020.

Key to that work was rekindling recommendations about long-term infrastructure planning. How can we develop a multimodal strategy in our country if we're planning in election cycles of two to four years versus 10, 20 and 50 years? We need to ensure that the economic prosperity of Canadians and the maintenance of our social programs and our way of life are really tied to economic prosperity. Trade infrastructure is very key to that.

In our report from the ag strategy table, we provided a number of key recommendations for the ag sector, many of which provide the basis for our discussions with you today at this committee meeting. These included five key areas to strengthen the agri-food sector to collectively embrace the future- proofing of our agriculture and agri-food sector by renewing our regulatory system to become more agile and embracing digital innovation to provide safe, traceable, sustainable food, feed and ingredients. Through this work, we can only lay the groundwork for agriculture 2.0. It is a generational opportunity that has never been more exciting for our economy.

I'll be happy to take questions from the committee on the supply chain challenges, transportation, labour and skills.

Thank you, Mr. Chair.

[The Chair, Liberal, Kody Blois]

Thank you very much. We're going to get right to questions. We'll start with Mr. Epp for six minutes.

[Dave Epp, Chatham-Kent—Leamington, CPC]

Thank you, Mr. Chair, and thank you to the witnesses for their excellent testimony.

I'd like to begin with CAHRC and Ms. Wright.

I'm going to start with longer-term labour shortages. You mentioned being short 123,000 jobs by 2029. Can you put that into context? What percentage of our labour force would that represent?

[Jennifer Wright]

I don't have the percentage right in front of me, but I would say it is significant and it does impact the amount of growth that can happen between now and then.

Certainly what we've seen over the last decade and continue to hear through COVID is that agriculture producers are not reaching the potential that they could as far as revenue and production are concerned. Some are making decisions not to expand and maybe not to continue forward with their production.

[Dave Epp]

Thank you. I'll take it a little more short term now.

You're also involved in the creation of the emergency foreign worker program, together with other ag organizations. Can I ask what the feedback has been on that? I know there was a request to have some changes made by the end of January. We're a month later than that. Can you update the committee on the progress?

[Jennifer Wright]

That request was actually from the food manufacturing side of the value chain, and CAHRC was not involved directly with that. I can't really comment on the progress that's been made. Certainly, from the food manufacturing side of things, it's an essential and big request that they're looking to move forward.

[Dave Epp]

Thank you.

I'll flip over to the Canadian Horticultural Council. I have a different question, specific to your supply chain commissioner taking a whole-of-government approach. We have heard from CPMA on their perspective.

Rebecca or Quinton, what would be the problems you're trying to solve with that kind of an approach at the grower level?

[Quinton Woods]

One of the biggest things we're trying to solve at the grower level is just to have somebody in place to be able to make the decisions to streamline the supply chain systems and start easing some of the challenges that indeed we're facing at the grower level.

We have growers who are starting to question whether they're going to continue producing food for our country. It's becoming a very difficult environment to work in.

[Dave Epp]

Fertilizer was mentioned. I want to come at it from two perspectives. One is obviously the cost, but the other is also the discussions regarding a 30% decrease over time, with greenhouse gas emissions potentially up to a 20% cut in application rates or even more.

Can you comment on the effect, particularly on horticultural crops? That's my background, so I'm aware that often horticultural crops are higher users of nitrogen. What would be the impact of such a proposal or policy direction?

[Quinton Woods]

The direct impact that we would face in the horticulture sector would be decreased production. The fertilizer that we're currently using is all done by specific soil testing, ensuring that we are applying correct rates of fertilizer applications onto the ground. As we start easing the rates of fertilizers, we would then decrease our production.

[Dave Epp]

Related still to horticulture, I noticed that the supplementary estimates include over $350,000 to begin to fund another layer of oversight with the pest management regulatory agency. I know horticulture uses a lot of niche crop protection products.

Can you comment on the availability and the potential lack of availability, particularly vis-à-vis our competitiveness with our number one competitor and number one import supply for fruits and vegetables coming into Canada? What would be your comment on another layer at the PMRA for that kind of oversight?

[Dr. Rebecca Lee]

As you can imagine, our growers are already subject to a number of oversight mechanisms across the board. Adding anything to it would only increase the time needed to address their questions and take away from what they're good at, which is producing food. On the government side, our main concern is being able to have the number of products in the tool box that they need in order to produce.

What we really need are mechanisms whereby the government can streamline the process to research products that should be made available and increase the productivity and competitiveness of our Canadian growers when compared with other countries, especially our neighbours to the south.

[Dave Epp]

Thank you.

I want to mention infrastructure, port congestion, container movement and the costs related to that. Coming from the part of the country that has the largest concentration of greenhouses, I'm familiar with some of the infrastructure shortfalls. Can you provide some more specifics? I know in our area we're looking for some sewers to be built. It also flips over to some of the labour issues in our area, but more specifically across the country. Can you comment beyond ports, or would that be the main area of focus that needs to be addressed by the federal government?

[Al-Katib]

I would suggest that the definition of infrastructure is much broader. You certainly need to address water, waste water and the connectivity of roads, rail, ports and overall infrastructure. The long-term nature of planning is.... We're planning cities and expansions, but we're not thinking about 10, 20, 30, 40, 50 years from now and what the requirements will be in a connected multimodal infrastructure. We have to change the way we do that.

[The Chair, Liberal, Kody Blois]

Thank you, Mr. Al-Katib and Mr. Epp.

C'est maintenant le tour de M. Drouin, qui dispose de six minutes.

M. Francis Drouin (Glengarry—Prescott—Russell, Lib.): Je vous remercie, monsieur le président.

Je tiens à remercier tous les témoins qui ont pris le temps de venir témoigner devant ce comité.

Ms. Wright, I want to start with you.

You've raised a few issues that I've certainly been paying attention to. One is the national framework for a labour strategy. You've mentioned that Australia has done that. I don't know what the answer is, so I'm asking you, how far along have they created the strategy? Have there been positive results based out of that strategy? Are you aware of this?

[Jennifer Wright]

The strategy was developed over 2020, maybe 2021. We were contacted to contribute input on the Canadian experience as part of their strategy development. From what I can tell so far, from what they've developed, it's more of a report.

What we're looking to do is a bit different. We're looking to create a real action strategic plan in which there are short-, medium- and long-term actions and an evaluation to make sure we're moving forward on some of the things. That would be a bit different from what I've seen from the Australian strategy.

[Francis Drouin]

Okay. With regard to Canada, how do you measure success versus that of other countries? Do you know how we are doing compared to some of the northern countries in Europe, for instance Holland? How do you measure the labour need versus the output?

If I can explain quickly, if one worker 10 years ago was able to output 10 bushels of corn or whatever, today they can do a lot more output because of technology, etc. Are you measuring those sorts of needs within the future and are you able to compare datasets with other countries?

[Jennifer Wright]

That's one area that is part of developing the workforce strategy we're looking at. I'm sorry I don't have that data for you right at hand, but it is an area that we're looking at. I can say that the labour shortages in Canada have resulted in workers increasing their own output by about 33% to cover off for not having enough workers in the environment to get the work done that's required. We will be looking at how that may change with automation technology over the next year.

[Francis Drouin]

In the short term, I assume that our reliance on temporary foreign workers is something that we cannot take lightly. We should be doing everything we can to streamline the process and make it easier for the ag sector.