Agriculture Committee on May 28th, 2026

[The Vice-Chair, Conservative, John Barlow]

Ladies and gentlemen, I call this meeting to order.

Welcome to meeting number 37 of the House of Commons Standing Committee on Agriculture and Agri-Food. Today's meeting is taking place in a hybrid format, pursuant to the Standing Orders. Members are attending in person in the room and remotely. We do have one witness on Zoom.

Before we continue, to ensure we are protecting our interpreters, I would ask all participants to consult the guidelines written on the cards on the back of your table regarding the microphones.

For the witnesses and the members, please wait until I recognize you by name before speaking or asking a question directly to a witness. For those participating through video conference, click on the microphone icon to activate your microphone, and please mute yourself when you are not speaking. Also, for our witness on Zoom, at the bottom of your screen you can select the appropriate channel for interpretation: floor, English or French.

Certainly, those of you in the room are well versed on the earphone in front of you. If you need some assistance, please let us know. I would like to remind the witnesses that committee members may ask questions in either French or English. If you do need interpretation, the panel in front of you will help you get the language in which you are most comfortable.

As a reminder, all comments are through the chair, please.

Now I would like to welcome our first panel of witnesses for our study on business risk management programs in Canada's agricultural sector.

We have with us, from the Dairy Processors Association of Canada, Mathieu Frigon—it's good to see you again, Mathieu—and Chathurika Dayananda, senior director of regulatory affairs and member relations; from the Ontario Ministry of Agriculture, Food and Agribusiness, Stephen Duff, chief economist; and from Novalait, Élise Gosselin, the executive director, who is joining us via video conference.

Each of you will have up to five minutes to make your presentation. Then we will go to questions from our committee members.

I will now start with the Dairy Processors Association of Canada.

You have five minutes. Go ahead, please.

[Mathieu Frigon, President and Chief Executive Officer, Dairy Processors Association of Canada]

Good morning, Mr. Chair and committee members.

On behalf of the Dairy Processors Association of Canada, I would like to thank the committee for inviting an association representing food processors to participate in your study. We recognize that the vast majority of stakeholders invited to speak as part of this study represent agricultural producers. We appreciate that you recognize that risk management doesn't stop at the farm gate.

As you know, the Dairy Processors Association of Canada is the national association representing the policy and regulatory interests of the Canadian dairy processing industry. We work closely with dairy producers and all stakeholders across the dairy sector. Since the Canadian dairy sector functions as an interdependent system, a disruption at any level of the supply chain directly threatens the stability of the entire industry.

On that note, I'll give the floor to my colleague, Chathurika Dayananda.

[Chathurika Dayananda, Senior Director, Regulatory Affairs and Member Relations, Dairy Processors Association of Canada]

Thank you, Mathieu and Mr. Chair.

Canada's dairy-processing sector operates within an increasingly complex environment shaped by economic volatility, infrastructure challenges and global trade pressures. While risk management programs have traditionally focused primary on production, processes also face significant operational and supply chain risk, along with a growing regulatory burden and red tape.

As the government seeks to modernize these programs in 2028 and advance broader regulatory reform within the BRM framework, we encourage the consideration of four key principles.

First, regulatory reform and red tape reduction must be treated as foundational policy principles. A key example is EPR, or extended producer responsibility, in plastics. When the Canadian Council of Ministers of the Environment, or CCME, had the opportunity to agree on what would be covered from one ocean to the next, things were left unresolved, including what products should be covered, what pricing should be determined and what reporting requirements should apply. As a result, we ended up with a patchwork of different systems across provinces. Processors ultimately bear these costs. Greater federal-provincial harmonization is essential.

Second, the federal plastics registry imposes an unusually burdensome reporting regime on us. Canada is effectively the only country requiring this level of detailed reporting on complex materials. We believe much of the information collected is repetitive and provides limited policy value, while creating a significant administrative workload for us, driving resources away from innovation, productivity and competitiveness in the dairy sector.

Third, Canada's dairy standards are 100 years old and increasingly misaligned with modern manufacturing and marketplace realities, particularly when it comes to the standards of identity and the compositional requirements we have to address. Canada should strengthen regulatory alignment with our international global trading partners, international standards and scientific best practices.

Fourth, research should be recognized as the core pillar of risk prevention, not an optional activity. It requires stable, long-term funding and sustained partnership in order to support ongoing innovation in the dairy sector and dairy-sector resilience.

Finally, future policy frameworks should prioritize agile, outcome-based regulatory reform that adapts to evolving science and market realities. This would strengthen our sector's resilience while supporting consumers, economic growth and Canada's long-term food security.

Thank you for your time. We look forward to your questions.

[The Vice-Chair, Conservative, John Barlow]

Thank you, Ms. Dayananda.

We will now go to Mr. Duff for five minutes.

[Stephen Duff, Chief Economist, Ontario Ministry of Agriculture, Food and Agribusiness]

Thank you, Mr. Chair, for the opportunity to speak today.

My name is Steve Duff. I am chief economist of the Ontario Ministry of Agriculture, Food and Agribusiness. I started working on business risk management programs and farm risk management in 1997, and will offer my input and experience from Ontario.

Canadian agriculture, in particular Ontario's agriculture sector, is incredibly diverse. Ontario farms produce over 200 different commodities annually. The production and market realities facing each of these over 200 commodities have long been different in many ways but similar in others. All farms have and continue to face climate volatility, extreme and recurring weather events, geopolitical instability, input cost pressures, animal and plant disease and overall market uncertainty.

Primary agriculture, despite its many challenges, supports an agri-food system that provides food independence to Ontarians while at the same time providing a key cornerstone of Ontario's economy. For example, roughly one in nine Ontario jobs is tied to our agri-food sector.

Some farms in specific sectors have a wider and longer-running suite of both public and private tools to help mitigate commonly faced risks. In Ontario, the actual number of commodities that have access to this wider and longer-running suite of public programs such as BRM, advanced payments, etc., and private tools such as futures markets, forward contracts, etc., is relatively small. These may include grains and oilseeds, hogs, cattle, dairy and poultry, which make up the bulk of our production and our land base, but there are another roughly 180 commodities, most of which are fruit, field vegetables and other unique forms of agriculture, that have much less access to private tools and, in some cases, public tools to manage what are often very unique risks. For example, the kind of public data on prices, production and returns that is long-standing and available for many commodities is not available to most of these individual commodities.

Many of the most perishable products do not have private tools available to them, other than direct-to-consumer sales, to proactively mitigate price risk. These limitations in Ontario have affected land use, production levels and increased import reliance for some of these commodities as producers make production decisions that favour commodities with more risk tools such as grains and oilseeds. It's important for us to acknowledge that there are limitations in the breadth of both public and private risk tools available and across commodities and that more can be done for us to understand the needs of these commodities to develop and offer solutions.

At the same time, for many of our farms, public and private tools have become increasingly fragmented and are now seen, understood and often used as stand-alone rather than part of an overall farm risk management framework. As we all face growing uncertainty, this makes it difficult for producers to manage production and the financial and mental risks they face in both proactive and reactive senses. Our sector cannot continue to contribute to economic growth, food security, innovation and sustainability without a solid, proactive risk management that starts at the farm level.

As we look to the next policy framework, we need to examine how government policy, information, research and knowledge transfer can help expand and enhance public and private risk management tools for all farms. This starts with improving available data for more commodities. Better data will lead to better information and better risk management tools, again, both proactively and reactively.

A great example is publicly funded research that enables increased productivity at the farm level to reduce costs, increase production and proactively manage risk. There is a need to help farmers develop, understand and implement an integrated framework of farm risk management that incorporates our current and future public and private tools. This could offer greater certainty to more farms across Canada, empower them to be more actively engaged in their farm risk management as part of business planning and, in turn, help them to continue to invest and grow their businesses.

In closing, I believe that there are many ways to strengthen our sector through improved public and private tools that enable the sector to more actively prepare and manage risk.

I'd again like to thank you for the opportunity to speak today. I think it brings great attention to this key issue, and I look forward to your questions.

[The Vice-Chair, Conservative, John Barlow]

Thank you very much, Mr. Duff.

I will now go to Ms. Gosselin for five minutes, please.

[Élise Gosselin, Executive Director, Novalait]

Mr. Chair and committee members, thank you for the opportunity to allow Novalait to contribute to your work on agricultural risk management.

Novalait's mission is to invest in research that addresses the current and future challenges facing dairy producers and processors. All Quebec dairy farms and processing plants contribute to Novalait's funding in proportion to the volumes of milk produced or purchased. I must clarify that Novalait doesn't act on behalf of dairy companies. Instead, it acts as a strategic lever for innovation, in partnership with all farms in the dairy sector.

Innovation is a key risk management tool. In a transforming agricultural landscape, risk management can't rely solely on financial compensation mechanisms. It must also be based on the ability to anticipate, adapt and innovate. In this regard, innovation is a fundamental tool to anticipate and reduce risks at their source, improve business resilience and increase the capacity to adapt to rapid change.

Novalait's research investments contribute, for example, to optimizing productivity per cow and improving the profitability of dairy farms; to harnessing artificial intelligence to support the welfare and health of dairy cows; to preparing for and addressing biosecurity challenges; to adapting to climate change; and to supporting the carbon neutrality objectives set by the dairy sector and Canada both in production and processing. These advances directly help reduce exposure to economic, environmental and health risks.

Several issues currently limit the full potential of innovation as a risk management lever. There's a disconnect between innovation and current risk management programs. These programs are often focused on compensation after the fact, rather than on prevention and strategic investment. Moreover, the research funding is insufficient and sometimes unstable. Innovation requires long‑term, consistent and predictable investments.

Since its creation in 1995, over 30 years ago, Novalait has consistently funded research by supporting over 150 projects worth a total of $80 million. Agriculture and Agri‑Food Canada has been a major partner in this success, both in terms of funding and in carrying out research projects. However, during this period, funding programs from Agriculture and Agri‑Food Canada have fluctuated significantly. Some initiatives, such as the living laboratories initiative, have recently come to an end. We're pleased to have the chance to continue the living laboratories project until March 2028. Unfortunately, the expected follow‑ups won't take place. This poses a problem for the 20 farms that invested in shifting towards practices that help reduce their carbon footprint. This also affects the 40 or so researchers involved and our ability to pass on the results obtained to all dairy farms in Quebec and Canada.

In light of these observations, we would like to put forward three key messages.

First, we must recognize innovation as a pillar of risk management. Programs should explicitly integrate research and innovation as tools for risk reduction, not merely as development activities.

Second, we must strengthen investments in applied research. For Agriculture and Agri‑Food Canada, investing in partnerships with organizations such as Novalait helps ensure continuity in innovation efforts; responses tailored to the specific challenges of the dairy sector; and better knowledge transfer to farms and dairy processing plants.

Third, we must maintain Agriculture and Agri‑Food Canada's research infrastructure and teams. In Canada, all university and government research institutions have evolved in a complementary manner. Any cuts to research infrastructure represent a net and irreversible loss in the ability to address the research priorities and needs identified by Canada's dairy producers and processors.

In conclusion, agricultural risk management would benefit from a more holistic approach, from prevention to compensation, with the full integration of innovation as a structuring solution. Novalait is ready to collaborate with public authorities to maximize the benefits of research investments by Quebec producers and processors and to contribute to a more sustainable dairy sector.

Thank you for your attention. I'll be happy to answer your questions.

[The Vice-Chair, Conservative, John Barlow]

Thank you very much, Ms. Gosselin.

We will now turn to the Conservatives for six minutes.

Mr. Epp, go ahead, please.

[Dave Epp, Conservative, Chatham-Kent—Leamington, ON]

Thank you, Mr. Chair.

Thank you to the witnesses for appearing.

When a resident of Chatham-Kent—Leamington turns 100, we prepare a certificate, and I usually try to deliver that personally. I wasn't aware that our dairy standards were 100 years old, and I'm not sure if that's the same cause for celebration.

I'm going to begin with Mr. Duff.

You identified that Ontario's agriculture is very diverse, with over 200 commodities, and 180 that aren't necessarily fitting into some of the existing programs, at least not well. Broadly speaking, testimony at the committee has shown that AgriInsurance is largely supported where it does work well. Obviously most of the focus has been on AgriStability and the improvements that are required there. Let's begin with that.

Are there opportunities, again to get at some of those other 180 commodities, to improve the linkages between our tax filing systems and the capture of data? You also mentioned the importance of data and that we need to improve the programs. What are the opportunities there? As well, let's get to the three main criticisms: lack of acknowledgement of the diversification at farm level; timeliness of payments; and the coverage, moving basically from stabilization to disaster coverage as the coverage levels have been dropped.

Would improved data collection address some of those concerns and also allow the timeliness, particularly around farmers wanting to maintain cash filing when the AgriStability program works on an accrual basis? Can you address those concerns?

[Stephen Duff]

On improved information, we've evolved in the sector. Obviously, I've been involved with this for close to 30 years. Some of the issues that have caused challenges with respect to available data are the same as they were 30 years ago when I started working on this.

We have a couple of different options for producers when it comes to tax filing. All of those forms use different sets of coding. The more detailed one that goes all the way back to the NISA program would, for example, break out horticultural production across Canada and other unique commodities in a more detailed way, enabling better data. We could harmonize that and do that in a way that would greatly improve the ability to help those producers access the programs, etc.

We really don't have a singular database for farm income in this country. It's disjointed in many different ways. It's still very functional, but it could be improved in ways that could contribute to the factors that have been identified, as far as timeliness, simplicity, etc., are concerned.

I'd also mention that I listened to the testimony the other day from some people from MNP whom I know quite well, and I echo some of the comments there. By my math, over 75% of farms in Canada have external credit. If you have external credit, you're creating an accrual financial statement, which has inventories, etc. That is the base of good, solid production information, whether it's for the farmer, whether it's for government or whether it's for CRA or industry.

To acknowledge that and enhance some ways that we could do that.... It doesn't mean you have to suddenly file income tax on the accrual basis, because if you're a corporation, you submit your accrual financial statement and adjust to cash. We could do that in a much greater sense with relative ease in my opinion, and in turn that would enable some better data, etc. That is not without work, granted, but that would go I think quite a way towards improving some of the things that have been identified.

[Dave Epp, Conservative, Chatham-Kent—Leamington, ON]

Thank you.

As we've been going through this study, there have been calls not to tweak our present suite of programs, but to actually really take a look at some major overhauls to get at some of those fundamental weaknesses. Again, they've been largely focused around AgriStability.

I'm going to pick up on a comment in your testimony about looking for an overall framework. Could you envision an AgriStability national program that basically followed a plug-and-play model, where regional programs that are supported well by different sectors would be plugged into a national framework and then, with the enhanced tax collection data, access a more timely response from the program and a more predictable response?

[Stephen Duff]

Again, from the perspective of harmonized data and my experience in terms of administering that kind of dataset, it all does come back to the farm's financial information income statement. One of the things that, again, is interesting about this idea of lack of information is that for these more unique commodities, their financial statement—their production records—are the true base of that information for their sector within their own information.

To have this common dataset that would clearly identify.... Even for peaches, as an example, which is a pretty common product, if you're not participating in AgriInvest or AgriStability, which many don't, your data is lumped in as a fruit sale. Therefore, Statistics Canada, Agri-Food Canada and we don't have the ability to analyze that. To have that base broken out sets you up for many different options. Again, if everybody's in the system, you have tools available to you to make other kinds of calculations, adjustments, etc.

[Dave Epp, Conservative, Chatham-Kent—Leamington, ON]

Picking up on the word “options”, there have been calls to raise the coverage level back to 85%. Perhaps more experienced producers would not necessarily seek the 85% if there were some cost or discount considerations. You said you've been in the business for 30 years. We have done margin accounting records going back at least 20-plus years.

Is there enough information to create an actuarially sound matrix of premiums, potentially, for a program that would take into account on-farm diversification with an enhanced collection of data as well as producer choice of different coverage levels?

[Stephen Duff]

Again, I'm not an actuary, but I have done enough of this stuff to know that data is a limitation. Our current dataset specifically...and I will use the peach example. It's a good one. That particular set of data is more limited than it might be for a grain farm or a beef farm. Similarly, if we were to have that kind of model for dairy, poultry and some other commodities, it would be limited as well.

To say that we can come up with actuarially sound numbers is tricky, because an actuarial program will tend to build in what would be determined as a fair premium—how much the program would cost over time—and also a risk to reflect the unknowns. There are lots of unknowns. Oftentimes, that's the additional cost, from a premium perspective, that becomes really tricky. It's challenging to get something that could be seen as both effective and affordable.

Again, with that better data, it gives us a better chance to do that. I was part of that very exercise in the 2000s here. The CAIS program was originally designed to have the continuous participation of all farms in Canada. That would have helped facilitate that dataset. It would give you a better chance, but again, it's not necessarily a slam dunk, either. It's a significant effort.

[The Vice-Chair, Conservative, John Barlow]

Thank you, Mr. Duff. It's the end of his time. I gave you a little leeway there to finish your thought.

[Stephen Duff]

I appreciate that.

[The Vice-Chair, Conservative, John Barlow]

Madame Dandurand, you have six minutes, please.

[Marianne Dandurand, Liberal, Compton—Stanstead, QC]

Thank you.

I would like to thank the witnesses for joining us to express their views on this key topic.

First, I would like to point out that the dairy sector is thriving in my constituency, particularly in the Coaticook region. We also have people involved in the living laboratories, including the owners of Ferme Morine. This farm wins the Lait'xcellent competition year after year. So there really is a thriving dairy industry in my neck of the woods. I would also like to mention the Laiterie de Coaticook, a major processor in Quebec. I'm keenly interested in the lives of dairy farmers.

My question is for the people from the Dairy Processors Association of Canada and for the Novalait representative.

The dairy industry is currently dealing with a number of sources of uncertainty, such as inflation, energy costs, labour, climate and international trade. What risks are the most difficult to manage for the dairy and dairy processing industries?

[Mathieu Frigon]

Thank you for the question.

I would say that it's the risks involved in international trade. We're working closely with the government on this. Obviously, the uncertainty doesn't come from our government. It comes more from south of the border. However, this has been part of the new reality for almost two years now.

The cost of energy is another factor. It certainly has an impact.

Lastly, the market is changing dramatically. That said, this presents an opportunity worth seizing. It's always impressive to see how much past research can explain current events. For example, I would argue that not everyone saw the protein craze coming. You have probably heard about this craze. Over the past two years, we've seen an explosion of interest in dairy proteins in particular. These are the best proteins. Research shows that dairy protein is the best way to combat something called sarcopenia, or the loss of muscle mass as we age. Weight‑loss drugs have also contributed to this craze. People want to lose weight without losing muscle mass.

Anyway, I'm saying all this to echo Ms. Gosselin's earlier comment on the importance of research. It's always impressive to see how much past research explains current events. I would say that the protein craze certainly stems in part from past research, particularly on dairy proteins and their significant contribution to maintaining muscle mass. Does this count as a risk? No. It's a major fundamental change for the dairy market, but it's also an opportunity worth seizing.

[Élise Gosselin]

I would like to chime in.

I agree with the previous comments. I would also like to draw your attention to the challenges of adapting to climate change. Our producers are on the front line of this battle. The 20 producers involved in the carbon‑neutral milk living laboratory are all different. However, they all take pride in being able to pass on their company to the next generation. They all have concerns in this area too.

The producers are currently facing drought issues and sudden climate events. This isn't happening in the future. It's happening right now, in their own backyard. They need to make changes that include adopting new farming practices. Our research in this field is being applied quickly. They need this research to adapt and to reduce the carbon footprint of dairy production. As a result, this also meets the requirements of producers working towards their carbon neutrality objectives, as well as the requirements of processors working towards their own objectives. This aspect is part of the requests. We've almost reached the level of market access that helps to satisfy the requirements of distributors and consumers.

[Marianne Dandurand, Liberal, Compton—Stanstead, QC]

Thank you. I would like you to continue speaking, since you have many projects related to biosafety and processing, for example.

On your end, do you think that the industry is calling for more solutions to reduce long‑term risks?

[Élise Gosselin]

Yes. Novalait has been around for 30 years. If the producers and processors had failed to invest in research together from the start, I don't think that the organization could have lasted this long. I think that they learned that the research carried out in the past provides current solutions for the future.

Funding research projects isn't just about gaining knowledge or developing transferable processes. It also means that researchers can be on hand to understand the challenges and to establish biosafety research chairs. In the event of an outbreak of avian flu or other issues, we can count on people who already have the capacity to respond and to support the dairy industry in dealing with these issues. The same goes for many other areas.

Last year, Novalait reviewed its financial capacity. Each of my shareholder groups—made up of Quebec dairy producers and processors—decided to increase Novalait's financial capacity and the amounts set aside for research. I think that this ensures our presence and the continuation of our activities.

As a result, we're telling the government authorities that supporting research addresses the short‑term, medium‑term and long‑term challenges facing dairy producers and processors. Producers and processors invest funds, and we ask the government authorities whether they want to join us and support us. We then ensure that these results are applied on the farm or at the plant.

[Marianne Dandurand, Liberal, Compton—Stanstead, QC]

Thank you.

[The Vice-Chair, Conservative, John Barlow]

Thank you, Ms. Dandurand.

Now we'll go to Mr. Lemire for six minutes, please.

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

Thank you, Mr. Chair.

Mr. Frigon, thank you for joining us today. Since the start of this study, we've talked a great deal about the need to diversify markets, find new markets and export. However, we've said little about the need to develop domestic markets.

The dairy sector accounts for one of the largest domestic consumption markets, in particular as a result of supply management.

What lessons can we learn about risk management, the supply management model and the strength of the dairy and dairy processing sector?