Agriculture Committee on June 16th, 2026

[Sylvie Cloutier]

As you know, in Quebec, 70% of agricultural production is currently processed and resold, of course. As for Quebec's seafood products, the figure is nearly 100%. We hope to have a more productive food processing industry. We also hope to work more closely with Quebec's agricultural and agri-food producers to increase agricultural output.

My colleague, Mr. Fraeys, could certainly add more to this topic.

[Jacques Gourde, Conservative, Lévis—Lotbinière, QC]

I just wanted to add that we can't live on hope alone. As lawmakers, as members of Parliament, our responsibility is to ensure that Canadians have access to affordable food. Right now, we're just hoping for greater affordability and increased productivity. We've reached the limit. There has never been such a high level of mechanization with such high performance. We have the technology. We can't expect to do much more than that. We have to hope we have enough people to do more. What is your message?

[The Chair, Liberal, Michael Coteau]

Thank you.

Next we'll go to the Liberals for five minutes.

MP Chatel, go ahead.

[Sophie Chatel, Liberal, Pontiac—Kitigan Zibi, QC]

Thank you very much, Mr. Chair.

Ladies and gentlemen, thank you for your very positive comments regarding the new national food security strategy. I'm not surprised to hear you say such positive things, because they're coming from you. We've been consulting with you and discussing this with you for a year. We're grateful for your contributions and feedback throughout the process. Thank you very much.

Ms. Farrell, we've had several discussions over the past few months regarding the entire processing sector. You have consistently advocated for additional investments in food processing.

You, too, Ms. Cloutier, have been a strong advocate for this sector.

We've put a number of measures on the table. These include, in particular, the productivity superdeduction, which is an investment that will be made through tax credits—that is, through the tax system. I'd like to hear your comments on how this measure is being applied in practice. Are your processors starting to use it?

Indeed, we have added a $1‑billion fund of fresh capital to Farm Credit Canada. Several witnesses, among others, have told us that Farm Credit Canada is truly an effective vehicle for supporting our businesses. The organization will now hold $8 billion. So this is an additional $1‑billion fund on top of the $2‑billion investment and the $5‑billion investment from a coalition of investors.

Thanks to these investments, will we achieve our policy objective of increasing food processing here in Canada by 2.75% per year?

Let's start with Ms. Farrell.

[Kristina Farrell]

Thank you.

The productivity superdeduction was very welcomed by our members. We provided a session to our member companies to explore this further and to provide them with advice as to how they could take advantage of the measure. There were some new funds announced, including for the regional development agencies, which I think is fantastic, as that will provide support, especially to some of our SMEs.

For some of these new programs, though, the really important thing will be the details. In terms of FCC, their previously announced venture with an additional 20 other firms was welcomed, but that will only serve the needs of a very specific type of company in this country.

The new fund sounds like a lot at $1 billion, but we don't know the details of that. As Sylvie mentioned, we are looking in some cases for non-refundable contributions that help to reduce the total project costs and that are sometimes needed to meet the return on investment thresholds required by private investors or commercial lenders.

Really, we are looking for a good mix of repayable and non-repayable contributions. I think there's still a bit of work to do, but there has been promising news over the last week.

[Sophie Chatel, Liberal, Pontiac—Kitigan Zibi, QC]

Thank you, Ms. Farrell.

Ms. Cloutier, what do you think?

[Sylvie Cloutier]

I'll let my colleague Dimitri Fraeys say a few words on this subject.

[Dimitri Fraeys, Vice-President, Innovation and Economic Affairs, Food Processing Council of Quebec]

Good afternoon, Mrs. Chatel.

In fact, economic uncertainty has considerably slowed down business investment. In 2025 alone, investments declined by more than 16% in Quebec. However, to be able to benefit from the tax deduction, businesses still need the economic context that enables them to invest.

You know very well that for the past 18 months, economic uncertainty has caused some projects to be postponed. That's why Ms. Farrell and Ms. Cloutier were saying that it takes both grants and loans. I think that's the key message.

If the goal is for investments to start increasing again and for businesses to feel that the risk is decreasing in the economic system as a whole, then it's really important to create a climate, an ecosystem, that encourages investments. If you look at the findings of the Organisation for Economic Co-operation and Development, Canada has lost its spot when it comes to productivity.

I think that's the key: It's necessary to build confidence among businesses to revitalize investment and productivity.

[The Chair, Liberal, Michael Coteau]

You have 12 seconds.

[Sophie Chatel, Liberal, Pontiac—Kitigan Zibi, QC]

I would just like to point out that, with Ms. Cloutier, we spoke a lot about buying Canadian and the importance of giving consumers the tools to choose Canada. That's also included in the strategy.

Thank you again, Ms. Cloutier.

[Sylvie Cloutier]

Thank you.

[The Chair, Liberal, Michael Coteau]

We'll go to the Bloc for five minutes.

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

Thank you, Mr. Chair.

It's always interesting to see colleagues proudly defending the work they have done.

Mrs. Chatel, I congratulate you for mentioning it.

However, our role here is also to criticize it. For that reason, I will take the liberty of looking at things in a binary and very honest way, seeing the good guys and the bad guys.

Before entering politics, I may have had a bias when I looked at the cost of groceries. I thought that producers were making less and less money and that the groceries, especially now, were costing us about twice as much. I wondered who was making money in between. I had the impression that the processors were a big part of it. However, it becomes clear that it's really in the concentration of grocers, distributors and wholesalers that massive and significant profits are being made, at the expense of processors' profit margins.

Ms. Cloutier, how could we promote more competition in the grocery sector so that it's ultimately more profitable to engage in agri-food processing?

[Sylvie Cloutier]

Obviously, less concentration in the grocery sector will mean that we probably have more opportunities to put our products on the shelves in Quebec and Canada.

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

The grocery sector code of conduct has been in place for six months. Have you seen an improvement in the relationship between processors and the various grocers?

[Sylvie Cloutier]

There are now a few hundred members of the office of the grocery sector code of conduct. We know that a new board of directors is working on that. We will most definitely see results in the coming months.

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

Last week, the government announced its investments. You mentioned the positive aspect of that earlier. I believe that more processing is needed in Quebec and Canada to create value.

In concrete terms, what are your expectations? We know how important the details are in a program. What are the processors' expectations of the government's guidelines?

[Sylvie Cloutier]

Of course, they deal with access to funding, investments and tools. The foundations have to address immediate needs to enable our food processors to do more and be more productive. Processors also need a skilled workforce to support them throughout the current landscape. It's also necessary to work on the supply chain.

Earlier, you said that you had doubts about who was making money in the supply chain. I can tell you that, when it comes to production and processing, processors' profit margins are very slim, between 3% and 5%.

Reinvesting in innovation is quite a challenge right now. If we want to stay on grocery store shelves, we have to continually invest in innovation. We have to innovate and be more competitive. The only way to do that is through productivity tools.

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

For a remote region like mine, I think it's necessary to create agri-food hubs so that local producers and processors can have opportunities other than public markets or direct sales, which are often very energy-intensive and don't necessarily guarantee success.

How can we promote the creation of this type of more community-based infrastructure in remote regions, such as Abitibi-Témiscamingue, and turn it into a model? For processors, could that be an advantage in terms of accessing a potentially more reliable clientele?

[Sylvie Cloutier]

Most definitely. The goal is to have access. You talked about public purchases. That's a very important issue both provincially and nationally. We have to find ways to encourage people to buy Quebec and Canadian products so that there are more of them in our grocery baskets and our institutions. The same applies in restaurants. When we talk about institutional purchases, we're also talking about everything related to hotels, restaurants and so on. It's important to encourage buying local and to build relationships and networks at the local and regional levels.

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

I was just going to talk about the institutional aspect.

In recent years, Quebec has worked to ensure that the products available in the various public institutions are local products. It's the same thing for processors. Has the Stratégie nationale d'achat d'aliments québécois had an impact on your council members? Could this initiative be strengthened by the federal government?

[Sylvie Cloutier]

Absolutely.

[The Chair, Liberal, Michael Coteau]

I'm sorry. We have to stop there. We've exhausted the time.

We're going to do a final round, but we do need some time for drafting instructions. We've reserved 15 minutes. If it's okay with folks, we'll do rounds of two and a half, two and a half and one and a half, after which we'll go into drafting instructions.

Mr. Epp, you have two and a half minutes.

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

Thank you, Mr. Chair.

No one is challenging this government's ability for grand announcements. No doubt they're always accompanied with top-shelf graphics as well. If I were American, I'd be from Missouri, the “show-me” state. What I'm hearing from witnesses today is “show me”.

I'll start with you, Ms. Farrell, and the quote, “it does not fully reflect the level of ambition needed to significantly expand domestic processing capacity and create more value from Canadian agriculture.” No doubt we're all welcoming a focus on the missing middle of value-added processing. Can you explain your comment, Ms. Farrell?

[Kristina Farrell]

The strategy includes measures that may help, but it does not yet provide the scale, coordination or ambition required to significantly expand domestic processing capacity, which means targeted measures to support modernization, automation and investment but also labour, regulatory efficiency and costs.