Evidence of meeting #89 for Agriculture and Agri-Food in the 44th Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was prices.
A recording is available from Parliament.
Conservative
Lianne Rood Conservative Lambton—Kent—Middlesex, ON
Thank you.
Mr. McCann, we heard from some witnesses previously in 2023 that perhaps this wouldn't affect our trading partners and it wouldn't affect trade with our trading partners. The U.S. is our closest trading partner. We've heard that they don't want to have anything to do with this plastics ban, and they're not on board.
How would this P2 plastics ban for fresh produce impact our trading partners and the trade relations we have with respect to getting the food we need into this country?
Managing Director, Canadian Agri-Food Policy Institute
One of the greatest advantages our food system has is a relatively open border with the United States. The ability for food to go north and south is important in terms of food security for Canadians, economic prosperity for North America and environmental sustainability. Anytime you thicken that border, it has an impact on all of those things.
I always use as a bit of a measure who else is talking about this issue. My counterparts in public policy institutes in the United States have raised their concerns with the plastic ban. Clearly there is concern about the impact it will have on the border and the added impact on U.S. exporters that are a source of food security in Canada.
Liberal
February 6th, 2024 / 12:25 p.m.
Liberal
Tim Louis Liberal Kitchener—Conestoga, ON
I appreciate the witnesses all being here.
I will direct my first questions to Mr. McCann from the Canadian Agri-Food Policy Institute.
In your opening remarks, you suggested a food affordability task force—which would be something similar to our national supply chain task force—and how we can take more action with that. Some of the recommendations you made involved the retail side, supply chain side, regulatory issues side and declines in productivity. We're all looking out for our farmers. We're looking out, at the end of the chain, for our customers—for Canadians and food prices. How do you see a task force addressing those issues?
Can you also expand specifically on the Canadians who are food insecure and who are most affected by the high price of food?
Managing Director, Canadian Agri-Food Policy Institute
The starting point needs to be that this is a systemic challenge. Food prices aren't a retail issue and they're not a farmer issue; they are food chain issue. We need to look for systemic solutions. The reality is that, for better or for worse, it can be hard to have some of those more thoughtful dialogues around what the challenges are and what the different tools that we have to solve them are.
I think a task force approach—we've seen this recently—can really dive into what those different drivers are, what the different approaches we can take are and how much of an impact some of these different forces have on food price inflation.
I think there are some easy solutions and there are short-term solutions, but there are also longer-term solutions. I really like to talk a lot about R and D. We don't often appreciate the important role that a more productive food system has on driving down costs and on keeping food more affordable. The reality is that we're not investing as much in R and D in Canada as we used to. We're losing out on some of that advantage.
I think there's an opportunity to look at some of those long-term causes and not just at the short-term issues that were talked about.
Liberal
Tim Louis Liberal Kitchener—Conestoga, ON
I appreciate your saying that. That you're talking about a longer conversation as I set a timer because I only have a few minutes to talk to you speaks volumes right there.
A lot of it comes down to sustainability in agriculture. We need to help those farmers build the resilience to address the climate change we're facing. We need to do it in a way that helps farmers produce more and be more profitable at the same time. You're talking about R and D.
What types of measures are working right now, and what would you like to see more of?
Managing Director, Canadian Agri-Food Policy Institute
I think the reality is that we've shied away from additional investments in R and D in Canada. Some of the unsung heroes in the fight around sustainability and food affordability are our plant breeders in this country that are doing really good work to make more productive and more sustainable varieties. We don't do enough to create the conditions for more of that work. I think that's just one example of many.
I want to go back to the question about poverty, though. I think we often lose sight of that. We talk about this in the context of an agriculture discussion. Again, it's the agriculture committee here holding these hearings.
These issues and those Canadians who are most impacted by this are dealing with a broad set of issues that require a different, broader set of solutions at the end of the day.
If you look at the pressure that our food banks are under, it's quite significant. It's greater now than it's been in recent memory. If you look at the analysis done by Food Banks Canada on their report card, it's a very challenging assessment of our approach to these issues. It should require us to think differently about how to use a different set of tools outside of food systems solutions to address that food affordability and accessibility issue.
Liberal
Tim Louis Liberal Kitchener—Conestoga, ON
Thank you for that.
We also have the potential to help feed the world. I know you have done quite a bit research about turning agricultural sustainability into a competitive advantage for Canada. That would not only lower the prices of food here for Canadians, but give us a chance to export.
Can you expand on what kinds of measures we can take to help feed people here in Canada as well as globally?
Managing Director, Canadian Agri-Food Policy Institute
Those are two different but I think equally important objectives at the end of the day.
The challenges around agriculture are not simple. It is a complex economic-organic system at the end of the day. I think the thing we need to do first is recognize the strategic role that agriculture plays in the economy in Canada. We don't recognize the important role that agriculture plays. We don't treat it as the critical strategic sector that it should be. I think there's just that starting point of recognizing that agriculture is different. It is a great asset to Canada. It can be an innovation asset. It can be a geopolitical asset. It can be a sustainability asset. We need to think differently.
Unfortunately, we're looking at missing some opportunities. I think the sustainable agriculture strategy has potential. I think there's increasing concern that it's not going to be as ambitious and as strategic as it could be. I think it's important to think differently about this issue than we have in the past.
Liberal
Tim Louis Liberal Kitchener—Conestoga, ON
I appreciate that.
Mr. Janzen, in my last minute I want to ask a quick question of the Fruit and Vegetable Growers of Canada.
You briefly talked about the grocery sector code of conduct in your opening remarks. In the words of Mr. McCann, value chain challenges require value chain solutions.
Can you give us what you would like to see from the Fruit and Vegetable Growers of Canada in a grocery code of conduct? How will that help our farmers?
Vice-President, Fruit and Vegetable Growers of Canada
I think that, at the end of the day, we would like serious consideration to be given to its being legislated.
Liberal
The Chair Liberal Kody Blois
Mr. Louis, you have 15 seconds. I'm going to take that back from you.
Mr. Perron now has the floor for six minutes.
Bloc
Yves Perron Bloc Berthier—Maskinongé, QC
Thank you very much, Mr. Chair. For once, I’m not the one losing 15 seconds. That’s nice.
I’d like to thank the witnesses for being here today.
Mr. Janzen, I’d like to give you the opportunity to expand upon something you raised earlier.
You mentioned the importance of adopting a code of conduct. How do you see the possibility of this code not being enforced in the industry, or only partially enforced? Do you think it could be viable?
Do you really need this code to be implemented?
Vice-President, Fruit and Vegetable Growers of Canada
That didn't come through.
Bloc
Yves Perron Bloc Berthier—Maskinongé, QC
Yes, I’ll repeat it.
You said earlier that it was important for your industry to have a code of conduct. How do you view the possibility of the code of conduct being implemented, but certain players refusing to adhere to it? Do you think it’s important for such a code to be introduced on a mandatory basis?
Vice-President, Fruit and Vegetable Growers of Canada
Yes. I think that, if participants can't all come to a consensus, the only choice for the industry would be to make it mandatory. I recognize the challenges we would have working across different provinces.
Just because it's complicated doesn't mean it can't be done and isn't the right thing to do.
Bloc
Yves Perron Bloc Berthier—Maskinongé, QC
Thank you very much.
Mr. McCann, you also mentioned the importance of implementing a code of conduct. Groceries are complex; there are different products.
How do you envision this, given the data you currently have? Is it possible for a code of conduct to be partially introduced and for reluctant players to adhere to it later on, or do we really need to propose a mandatory code from the outset?
Managing Director, Canadian Agri-Food Policy Institute
When you look at the situation in other countries, very often there is an evolution. Some may start by implementing a voluntary or more limited code, but they usually end up adopting a fairly detailed mandatory code.
It’s fairly easy to understand that, if not every stakeholder in the chain adheres to the code, its impact will be lower than if it were more detailed and everyone adhered to it. I think it will come to that eventually.
I fully agree that simply because something is difficult to do shouldn’t serve as an excuse to do nothing. Indeed, Canada’s jurisdictional reality is complex. The process of getting the provinces to agree on a mandatory code may not be that simple, but it can be done. All it takes is a willingness on all sides.
Bloc
Yves Perron Bloc Berthier—Maskinongé, QC
Thank you very much.
Mr. Lee, I enjoyed your opening remarks. You’re shaking things up a bit, and that’s interesting.
I agree with most of what you said. It’s quite obvious that governments can’t dictate everything. On the other hand, capitalism is a system that works well, provided it is regulated. Let’s take tax rates as an example: they are gradual and take income into account to try and bring things back into balance.
You say the state can’t intervene in pricing. Do you think introducing a code of conduct is a good thing or not?
If not, do you have any other suggestions for us today?
Associate Professor, Sprott School of Business, Carleton University, As an Individual
Thank you, Mr. Perron.
I'm not a libertarian who says there's no role for government. My late father had 43 years in the Government of Canada and half of my family work in the government. The Government of Canada is one of the most qualified, highly trained and skilled governments in the world. I use StatsCan and other government data in my classes exclusively. There is no question about the quality. That wasn't my point.
My point is that there are value chain issues. I don't believe parliamentarians should be trying to get into the value chain of a company and micromanage strategic decisions about marketing, R and D investment, plant location and pricing, because that's not the role. The role of the government is to be the referee of the hockey game. It's not to tell Sidney Crosby when to shoot the puck, at what time in the game and at what level and speed.
That's where you're going by focusing on the micro instead of the more macro issues like reducing barriers to entry to discourage or reduce concentration in grocery retail, which is high. It's not the highest in Canada. We know telecom, banking and airlines are higher. I use the concentration ratio every week in every class, but grocery retail is high. We need to encourage foreign investment. It's probably going to come from the States because of the large capital needed to enter this industry.
I have one more quick point before I run out of time. The Competition Bureau talked about this in its excellent report. I don't think enough people have talked about this in Ottawa, including your committee.
I believe that online grocery retailing is going to be a disruptive force in grocery pricing. We know online e-commerce makes the industry more competitive because the prices are much more transparent. Anybody can sit on their chair in their bathrobe and literally compare prices across a whole range of companies, rather than go to the store to find out what the apples or cucumbers are. Online e-commerce grocery competition is going to change the dynamic of grocery competition in Canada.
Liberal
The Chair Liberal Kody Blois
Thank you very much to both of you. That's time.
I'll go to Mr. MacGregor for six minutes, please.
NDP
Alistair MacGregor NDP Cowichan—Malahat—Langford, BC
Thank you, Mr. Chair.
Mr. McCann, thanks for coming back before our committee.
Carbon pricing is a frequent guest of topic before this committee. Yes, it is true. The rationale is that you are trying to use a market-based mechanism to change behaviour. The other part of the argument is that, if the behaviour does change, you necessarily incur a lower cost.
In your opening statement, you were careful to point out to this committee that we shouldn't grab individual facets of information when we're talking about food price inflation. We have to look at it as a whole. On the topic of the carbon tax and fuel price volatility, in the previous panel, I was making mention of the fact that diesel fuel, in 2022, was priced as high as $2.30 a litre. It's now down to $1.70. We've seen worldwide massive fluctuations in energy prices, whether it be natural gas, propane, gasoline or diesel.
Can you put carbon pricing in the context of that volatility that exists out there and how important it is for us to keep that in mind and maybe also take into account that, since 2019, oil and gas profits have been substantial? A lot of that wealth seems to be flowing out to investors and paying out dividends rather than servicing the Canadian economy.