Agriculture Committee on March 3rd, 2022

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

Thank you.

You mentioned human infrastructure in your response and also in your opening remarks. You also mentioned that you'd like to attract and retain people who are living here in Canada in your communities.

What do you think the industry can do to try to better attract and retain people in the industry, from the transportation sector to the processing sector?

[Carla Ventin]

The human infrastructure piece really speaks to the support for the workers, making sure they get the right skills and child care, mental health support and whatnot. How can we attract and retain? What can companies do? We have several examples of member companies that have to run their own public transit, their own buses, in order to get folks to their facilities.

In addition, we have companies that make direct contact with, for example, newcomer centres. We have a company in New Brunswick, Crosby Molasses, that made direct contact with a newcomer centre in their town and brought people to their facility and got a lot of folks hired. They were really reaching out and making those direct contacts and helping people integrate in the community.

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

I'm sure you're aware of the national child care program that our government has been negotiating with all the provinces. Do you feel this will be a benefit to your member companies?

[Carla Ventin]

Definitely. I think it will be a benefit for my member companies, as well as likely most Canadians across the country, including women, men, and families.

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

Thank you very much.

Mr. Innes, I know you have an extensive background in the industry beyond Soy Canada. You talk about the value chain a great deal. Within the context of the agri-food supply chain, how does Soy Canada stay focused on what's valuable to Canadian customers and work to deliver on those things?

[Brian Innes]

Thanks very much.

Part of what we do as an association is try to connect all the folks involved in producing our product with the customer and ensure that information flows right from the seed company to the producer, the processor, the exporter, the customer and back. One of the things we do is connect with our customers.

Just this week, we had a mission with our Japanese customers, where we were able to connect with them directly and explain what's been happening in the supply chain. We talked a bit about how these container challenges have made it difficult for us to deliver on time for them. It was very helpful for us to be able to make those connections. Tonight we're connecting with some of our Asian customers further south in Singapore, Malaysia, and Indonesia. It's really helpful for us as an organization to bring together all of these parts of the value chain to talk to each other.

For example, it may not be evident to a producer that we only have one option to ship our soybeans to east Malaysia, and that at times that container shipping line won't even give us—

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

Sorry to interrupt, but I want to ask one follow-up question and I know my time is short.

When you're talking to these customers, especially the ones in.... As you said, most of your product is exported. Are they hearing similar problems from producers in other parts of the world, or is this unique to Canada?

[Brian Innes]

The challenge of disrupted supply chains is global, and the anti-competitive practices used by shipping lines that are limiting our service are global. Unfortunately, as we illustrated in the price example, the effects aren't always equal. Everyone is experiencing challenges, but we're experiencing greater challenges than our chief competitors, the American suppliers of soybeans.

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

Thank you very much.

[The Chair, Liberal, Kody Blois]

Thank you, Ms. Taylor Roy and Mr. Innes.

Mr. Perron, your birthday was yesterday.

Happy belated birthday, my friend.

It's over to you.

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

Thank you, Mr. Chair. That's very kind of you. I'm going to use this committee meeting to celebrate. I'm expecting a song at the end of the meeting.

I'd like to thank the witnesses for being with us today for this very important study.

I'd like to continue with Mr. Innes.

I felt that you ran out of time at the end of your five‑minute speech. I'd like to give you the opportunity to quickly explain and further elaborate on the two concrete solutions you mentioned.

[Brian Innes]

Thank you very much for your question.

At the end of my speech, I was going to say that the soybean industry in Canada can remain competitive on the world stage with any country. The problem we have right now is that we don't have a level playing field.

We have two options at the moment. First, an inquiry could be launched under section 49 of the Canada Transportation Act. The minister has the power to launch an inquiry that could shed light on the situation we are currently facing.

Second, the task force announced at the transport summit in late January could be set up. It is very important that this task force be able to focus on challenges that container congestion poses to the supply chain, because the situation is serious, even for exporters in Quebec. The soybean industry is very proud in Quebec. It includes companies that are world leaders. Unfortunately, even though we are less than an hour from the Port of Montreal, the service required to get products to the world market is very limited.

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

How do you explain the vast difference in price increases between Canada and the United States?

We've heard from some witnesses about the possibility of lifting the exemption for container companies.

In relation to the Competition Act, do you think this is a good way forward?

[Brian Innes]

Yes.

We believe that, regardless of the company, they should all follow the rules of the Competition Bureau. There is a lack of clarity in Canada as to whether global alliances are subject to the rules and authority of the Competition Bureau.

In our sector, industry is competitive. Sometimes exporters fight, but it's done in a competitive spirit. We don't see that kind of competition at the Port of Montreal, for instance, where one company controls 70% of the container market share.

It's very important to our industry that all players follow the same rules, and the Competition Bureau must have the ability to monitor these global transport alliances.

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

Okay.

In practical terms, what can the government do?

Is it simply a matter of it launching a competition investigation? Are there other avenues?

[Brian Innes]

The question, not just for the government but for all members of Parliament who make rules and laws, is whether shipping conferences are subject to the Competition Act.

That's a very important question to clarify. If that happens, it will help promote a more competitive environment.

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

Okay. Thank you.

You also mentioned the idea of appointing a supply chain commissioner. A number of witnesses have talked about that.

We're concerned that such a commissioner would have little power, merely table reports and create an additional structure.

Don't you think that the work could be done by a responsible minister, for example, or someone who should be accountable?

[Brian Innes]

That's a good question.

What's very important for us, is the power to bring stakeholders together, report on the situation and propose solutions.

We think a supply chain commissioner with these ministerial powers would be helpful. Ministers can also do the same thing if they have enough power. For us, it's important that someone have the ability and power to bring stakeholders together and make recommendations to improve the situation.

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

Thank you very much.

Ms. Ventin, I'll proceed quickly because I don't have much time left. I'll ask you more questions later.

You talked about a 25% increase in fines imposed by grocery stores, and you referred to the implementation of a code of conduct for food retailers.

Could you briefly explain that point?

[Carla Ventin]

Sure. Thank you.

I do appreciate your remarks to the Canadian Federation of Agriculture yesterday calling for a grocery code of conduct to be mandatory and how we should move forward quickly with that.

The 25% increase in fines is not just on food manufacturers. I've spoken to a lot a farmers as well. They have product to deliver, to put on a grocery store shelf and it may be a little late, it may be a little early, it may not be exactly the fill rate, and therefore there are very large penalties put on suppliers of all sizes. It's important to note that this is not just small companies and small suppliers that it has happened to; it's also large ones.

[The Chair, Liberal, Kody Blois]

Thank you, Ms. Ventin and Mr. Perron.

Mr. MacGregor, you now have six minutes.

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

Thank you very much, Mr. Chair.

Mr. Comeau, with Top Shelf Feeds, maybe I'll turn to you. I very much appreciate your being with us today and providing an important Vancouver Island perspective. Your business has been in operation for a number of decades now. I think you very clearly pointed out just how many farms on our island are dependent on that well-run transportation network.

I wonder if you could maybe give us, as a committee, a sense of some of the particular challenges your business faces, being an island-based business, some of the challenges that might not be present, for example, for a mainland business.

[Dennis Comeau]

Thank you very much for that question.

Yes, basically our main costs right now are the infrastructure set up for a transload facility that is 45 minutes away from the mill. Trucking comes at a heavy cost. We also get hit with demurrage bills for railcars that sit on the island, which we can't unload in a timely manner. In the last year of rail service alone, I think we did not have a dollar of demurrage. Lately, we've been seeing demurrage bills of up to $5,500 in a month. The delay in the cars getting unloaded in a timely manner and back into the supply chain definitely hurts us, and it hurts other businesses as well.

It comes at a heavy cost for the maintenance aspects. Our maintenance team is designated to the mill, but when there's an issue 45 minutes away, we could lose our maintenance team at the mill for up to half a day.

Supply isn't a problem. Our volume and our contracts go out quite long. On April 1 of this year, the barge will be down for two weeks for maintenance issues, so we will be storing up a lot of grain on Vancouver Island to get through those two or three weeks that the barge is out of service. It's going to come with a hefty cost in demurrage. Those cars will be sitting a while.

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

You touched on this a bit in your opening statement, what it was like during the time that we experienced catastrophic floods, having Vancouver cut off from the rest of the country, but you were able as a business to continue running.

Can you provide a few more details on some of the contingency plans you had in place that allowed you to do that? It was quite catastrophic for many businesses.

[Dennis Comeau]

It timed out, actually, quite perfectly for us. The storm rolled in at a time when we actually had quite a few cars in storage in a Nanaimo yard. We thought maybe rail service would be back online in two or three weeks. The hard part was that the grains we didn't have, which we secured at the port to get us through, were unable to be picked up, as the mainland feed mills utilize most of the trucks in the Lower Mainland. We actually have some of that contract still sitting in place to be picked up. We haven't had a chance to pick it up yet.

We had enough grain on reserve. That was a real blessing to get through that part, and we assisted the mainland feed mills as best we could.