Agriculture Committee on Jan. 27th, 2026

[The Chair, Liberal, Michael Coteau]

I have to stop you. That's over the five minutes. Thank you so much.

We're going to the Conservatives for six minutes.

Go ahead, Mr. Bonk.

[Steven Bonk, Conservative, Souris—Moose Mountain, SK]

Thank you very much for being here today, and happy new year to all of our guests.

I have a question for Mr. Laycraft.

We know that in 2020, the Canadian Cattle Association discontinued the boxed beef report. We understood there was a real value to this report after the crisis with BSE, when no one really knew what was happening. We didn't even know inventory numbers. It was very important for us to have this information.

We're just wondering if you think there's a value to this report. If so, would you be interested in bringing it back?

[Dennis Laycraft]

It's a great question. I'm actually going to ask Brenna Grant. She was very involved at the time. It was certainly our preference to maintain the boxed beef price report, but we'd exhausted a number of different efforts to try to get it operating properly.

Brenna, do you want to comment on that?

[Brenna Grant, Executive Director, CanFax Division, Canadian Cattle Association]

Absolutely.

We started the boxed beef report in 2003, as you indicated, after BSE. It was really critical at that time when we had a different market, because we had different market access than the U.S., in terms of understanding where to prioritize marketing initiatives to utilize all of our undervalued cuts. That's something that really directed Canada Beef's marketing efforts throughout that time period.

We have tried a number of ways to bring it back. The greatest concern from the packers has been confidentiality, given the limited number of players in the market. There are ways to address that.

The mandatory price reporting in the U.S. has confidentiality rules in terms of suppressing prices when there are a limited number of players reporting over a certain amount of time. In addition to that, though, while it's not the ideal solution, it would be to only publish the primal and the cutout values and not the subprimal price, which is considered sensitive for some packers. However, it would at least give industry an idea of where to prioritize marketing efforts to get the greatest value for industry.

[Steven Bonk, Conservative, Souris—Moose Mountain, SK]

I'll switch gears a bit to supply chains, which we are discussing today.

As you mentioned in your opening remarks, Mr. Laycraft, there's been a 30% increase in input costs in the beef sector, and labour continues to be a huge issue in the cattle sector. We recently heard an announcement by the CFIA and CCIA that they are going to pause the publication of their new traceability requirements. This is hugely unpopular with cattlemen out there, as I'm sure you've heard. We're facing an aging population of farmers, whose herds are dwindling or expanding because you have to specialize these days.

Things people do not have are extra time and an appetite for more red tape. We just finished a red tape review of the CFIA in this committee. I just wanted to let you know how detrimental this would be to the farmers I've spoken to. As a cattle producer myself, the last things I want to deal with are more regulations and more red tape.

I'm wondering what you've heard from your members. I know your provincial associations, for example the Saskatchewan Cattle Association and the Saskatchewan Stock Growers Association, are dead set against these regulations. What is the position of the Canadian Cattle Association?

[Dennis Laycraft]

Yes, you're absolutely right. It is one of the most sensitive discussions that's taken place in some time.

As a little history, the proposed regulations were based on what was called a “cattle implementation plan” all the way back in 2011. As we took a look at a number of foreign animal disease threats, it was more how to manage after you have an event. How could you do it with what I call “traceability light” requirements?

That developed a number of additions to our current system. Right now, if you're over 1,000 heads, you're required to read in the numbers. This would have removed that 1,000 heads. We'd be capturing more read-in data, so that if there was an event, we'd know where the cattle are so that we could respond more quickly to it. It was also done in a way so as to have the least impact on the cow-calf sector, particularly, where, as you described it, the aging and the lack of technology is probably the greatest.

Following that, there are a lot of provincial meetings right now getting feedback from it. We're going to host a summit again in March, while we have our annual meeting here in Ottawa. We're inviting everybody back in to have that conversation, and from that conversation discuss what the road map forward is on this.

[Steven Bonk, Conservative, Souris—Moose Mountain, SK]

From my experience raising cattle and having a few farms in Europe, where they had the NR—negligible risk—system, it was mandatory to tag calves within the first 24 hours of birth. I had to have a vet sign off if I moved cattle that were born on my farm from one field to another field on my farm and read every tag. This is a very slippery slope.

I just hope that the CCA, when they hear from their members, will be a very strong advocate as we have those discussions with the CFIA when it's time to talk about these proposed regulations.

[Dennis Laycraft]

I think we can assure you that none of those requirements are in the current proposal that you're referring to, sir.

[The Chair, Liberal, Michael Coteau]

Thank you.

I'll go to MP Harrison for six minutes.

[Emma Harrison, Liberal, Peterborough, ON]

Thank you.

On the sentiment of our colleague who has left the committee, Mr. Perron, thank you for always coming to committee and showing up for our producers.

To Mr. Bonk, we hold a lot of the same sentiments. I'm a small producer of beef, and I come from a long line of people committed to continuing along a very challenging road of being a small producer of beef in Canada. I watched my family struggle my whole life for their commitment to farming, and my husband and I decided to take on the same path. It's a piece of you that exists. I think it's really important to acknowledge the efforts you all make to help support our producers as we see the need for more domestic food production and the value you bring to the table of representing the Canadian cattle, pork and chicken farmers of Canada. I wanted to start off by saying thank you for being here.

We have already heard about the Livestock Mandatory Reporting Act. Mr. Laycraft, do you believe it would benefit Canadian producers to have something similar in Canada?

[Dennis Laycraft]

We're a pretty strong advocate, with Brenna on here. We have our Canfax, and we work closely with CattleFax in the United States. Every day, when we're receiving bids, there's a U.S. processor bidding against at least two Canadian processors.

I'm not sure. When you take a look on the beef side, it's a different competitive scenario from what, I would suggest, exists on the pork side. We're looking at how we maintain as much price transparency as we can, but some days, the cash trade is so small that it's difficult to report it.

Brenna, I'll throw it over to you. You've been following this as closely as anyone, and you're so deeply involved in market and price discovery. What are your comments on this?

[Brenna Grant]

The advantage really is the fact that a free market works best when there is market information to respond to in a timely manner. That's one of the great strengths of the U.S. system. We need to recognize the Canadian reality, though, in terms of the concentration that we have at the packing level in order to ensure that competitiveness and competitive bids remain a part of the system.

[Emma Harrison, Liberal, Peterborough, ON]

Without creating more red tape and regulation.... Mr. Bonk already brought up the 30% rise in input costs. What could we do to help support the cattle farmers of Canada in offsetting some of these costs in order to remain competitive?

[Dennis Laycraft]

We did, and we will be submitting comments on this bigger regulatory review that's taking place. It's usually a combination of many things that are out there. Obviously, we mentioned the specified risk material. We're expecting Canada Gazette, part I, to address that in 2026—hopefully sooner in 2026. Labour always becomes a factor, as does how we are able to approve the new pharmaceutical products that are available, and we are working with the Government of Canada on that.

Canada is a smaller market than a number of the other big countries, so we're not going to be the first country you come to in order to get these products approved. However, if we're working with the U.S. and if it's approved in the U.S., which is the largest market for it, we can basically pull that approval over into Canada. The sooner you get it, then, down the road, the sooner generics become available. It isn't just one thing. Over time, it accumulates into the costs.

Brenna, you do the cow-calf survey every year that gets specifically into the increased costs. Do you want to comment on those?

[Brenna Grant]

Yes. The one thing I would like to stress is that the 30% increase is an average over a benchmark of 63 farms of different sizes. I do want to point out that smaller operations are being hit harder than that 30%, and part of that is on the depreciation side of increased machinery costs and parts.

Things like that are why producers are having to make big adjustments on their balance sheets. They used to be able to replace that machinery 10 years ago, and now they're having to adjust to a very different price level if they want to replace that machinery and stay in business.

As well, there are some things that are better in terms of some softer feed grain prices that have been helpful on the feedlot sector side, but labour is another piece that is impacting all of the sectors on the beef side in terms of cost, hours and efficiencies.

[Emma Harrison, Liberal, Peterborough, ON]

Mr. Chair, do I have much time left?

[The Chair, Liberal, Michael Coteau]

You have 30 seconds.

[Emma Harrison, Liberal, Peterborough, ON]

I will just take this time to summarize.

Thank you for being here again. I really don't have any other questions.... Well, I have bigger questions that will take much longer than 30 seconds.

Thank you and welcome, Kyle, to the world of meat.

[The Chair, Liberal, Michael Coteau]

Thank you.

Next is Mr. Lemire.

You have six minutes.

[Sébastien Lemire, Bloc, Abitibi—Témiscamingue, QC]

Thank you, Mr. Chair.

It is somewhat coincidental that my first meeting here is with Mr. Gilbert Lavoie. For the information of the committee members, before entering politics, I worked for two years at the Fédération de l’Union des producteurs agricoles d’Abitibi—Témiscamingue. I wanted to conduct a study on our needs, particularly in terms of slaughtering, to see what our reality was. I worked with the firm Forest Lavoie Conseil. I could submit the study to the committee for information purposes. It is already a few years old, but I think its content is just as relevant today. We wanted to look at access and marketing in relation to consumers in Abitibi—Témiscamingue. In a second study, we looked at all the sectors affected in the agri-food industry in Abitibi—Témiscamingue. We realized that there are gaps everywhere and that the government can take action to help at every stage. I won’t talk about that too much, because that’s not the purpose of this meeting.

Mr. Lavoie, I’m very happy to see you again. Since today’s study focuses on prices in the beef and pork supply chains, I would be remiss if I didn’t ask a question about the more remote regions. Would it be appropriate to set up small local slaughterhouses and government programs to finance them in order to serve local markets and bring some competition or accessibility to the slaughter sector for agricultural producers of all species? Would this reduce transport costs and the price paid by consumers? We know that the price of groceries has skyrocketed everywhere, particularly in remote areas such as Abitibi—Témiscamingue, northern Quebec and northern Canada.

[Gilbert Lavoie]

Yes, it would be more than essential. Keeping slaughterhouses in business in the more remote regions' slaughtering infrastructure, if I can say it that way, is a challenge. There have been many studies done in your region, but also in other regions of Quebec and eastern Ontario. Basically, agricultural production development and food security in the regions can be structured through a regional infrastructure. Sometimes, this form of infrastructure is compared to an arena or another type of revitalizing infrastructure. That's what's missing to develop the agri-food sector. Guarantees and subsidies are often what allow the small players to make their business profitable. The economic benefits would have a major impact on the local economy and regional pride for the consumption of local products.

[Sébastien Lemire, Bloc, Abitibi—Témiscamingue, QC]

I now compare it to a drinking water system. The government should be funding this, because it can recoup its investment through consumption taxes, or other means, and pass the cost on to the consumers.

I listened to your presentation earlier. Thank you for explaining these rather complex elements in layman's terms. What influence do American slaughterhouses have on the sales price in Quebec and Canada? Are they pushing prices up or down? We're making ourselves vulnerable to another country's strategies.

[Gilbert Lavoie]

I honestly don't know if they're pushing prices up or down, but they're clearly reacting to their country's reality. The same thing often happens in Canada. We'll share fairly similar business environments, but, as I said earlier, there are major price differences.

Let me give you a very simple example of a situation that happened in 2008 or 2009, I can't remember exactly. There was a shortage of hooks in the U.S. to slaughter hogs. As you know, when a hog producer's animals are ready, they have to go. If the slaughterhouse is out of hooks, prices will drop to levels…. Also, slaughterhouse margins in the U.S. are now very high. Meanwhile, in Canada, there was a shortage of hogs, and slaughterhouses were looking for hogs, which led to a great deal of frustration. The U.S. Livestock Mandatory Reporting Act has allowed us to study those margins and how they play out.

What has been the impact here? Hog producers in Quebec and other provinces have met with their buyers to re‑establish a fairer margin. However, this led to the development of a slaughtering structure in the U.S., and when they saw what the margins were, hog producers decided to reinvest in slaughtering. Someone asked earlier about increasing investment capacity. That information is made public. It's transparent. Producers who've invested billions of dollars in their farms realized that their business was at risk and made decisions to change that. The new hooks were all developed by so-called co-operative slaughterhouses, meaning the producers are the ones who invested to set up these new slaughterhouses. It restored the price and margin structure we now see in the U.S.

[Sébastien Lemire, Bloc, Abitibi—Témiscamingue, QC]

Thank you.

Mr. Larkin, I'd like to hear your thoughts on transparency. Do you think the lack of transparency is actually hindering production? Does the issue of price transparency conflict with Canada's Competition Act?

[Kyle Larkin]

Thank you for the question, Mr. Lemire.

As I said in my opening remarks, unfortunately, we're just not in a position right now to comment on pricing or margins because of competition laws and because of our internal policy at the Canadian Meat Council.