Evidence of meeting #21 for Finance in the 43rd Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was industry.
A recording is available from Parliament.
5:50 p.m.
Liberal
The Chair Liberal Wayne Easter
You did well in the last round.
Elizabeth May, you're on, and then we have Julie with one quick question.
5:50 p.m.
Green
Elizabeth May Green Saanich—Gulf Islands, BC
Thank you, Mr. Chair.
As somebody who is not a full member of this committee, I would sure love it if we did a study on that.
We've done a lot of work in the Green Party already, Pierre. We'll talk later about how we pay for the program, because it pays for itself—
5:50 p.m.
Green
Elizabeth May Green Saanich—Gulf Islands, BC
—but I wanted to direct questions to the wonderful witnesses we have here.
I'm very curious. From the cattle producers' expertise, it seems to me that we have a structural issue that makes the industry extraordinarily vulnerable when one plant closes down. I remember the XL beef incident in 2012. To have only three plants for all the cattle.... I really feel for people who are producing the pigs and cattle. I'm wondering if there's a long-term solution.
I'll give a small background. In Saanich—Gulf Islands, we did a ton of fundraising when the provincial regs changed so that we could build an abattoir on Salt Spring Island and the lamb slaughter could continue locally and not be more centralized. Is it worth considering as a long-term response to these kinds of issues that the abattoirs and production facilities be potentially more decentralized?
It may be a naive question. As I said, my only background on this was fundraising for the abattoir on Salt Spring, but I'd be very interested in your perspective.
5:50 p.m.
Executive Vice-President, Canadian Cattlemen's Association
Maybe I'll start. It has been a trend over years that larger modern facilities are available, and they certainly have brought in some of the most sophisticated food safety programs that we've ever seen. There have been many benefits to their size and structure. We're far more vulnerable now, obviously, in dealing with a pandemic. It's probably the first time in a hundred years that this sort of circumstance has presented itself.
Obviously, I think, the more capacity that we have.... We've had recommendations, particularly in eastern Canada, to try to build on capacity and to build what I call “surge capacity”. If you increase cooler capacity and different things, plants can process more. We're looking at every option right now. These companies are also looking at options and at how they are going to be doing some refitting to achieve this.
There are many different things, and I did want to go back a bit. We're dealing with this uncertainty, and there was a question of whether the price insurance is mid- or longer-term. Right now, it's the time of year when producers are making all of their decisions about how many heifers they're going to keep and what they're going to do over the summer. It's the most urgent time to move ahead quickly with things like that. It helps your whole business planning. It's similar to what you're talking about with the packing plants. The faster we move, the better the solutions we're going to bring forward.
5:55 p.m.
Liberal
5:55 p.m.
Liberal
Julie Dzerowicz Liberal Davenport, ON
Thanks so much, and thanks to everybody for their patience.
Thanks for the outstanding discussion today.
Mr. Lachaîne, I want to say that I very much appreciated your most recent comments and your thoughtful ideas.
I also want to thank the Canadian Pork Council and the Canadian Cattlemen's Association for really reinforcing some key points that make us truly understand that if we're not addressing the needs right now in both of these industries, it's really going to impact our food security. I think it's important for us to thank you.
My final question is for Mr. Kelly from the Canadian Federation of Independent Business. I know that a lot of our focus today has been on continued emergency measures right now. What model would you propose for us to continue to help our small businesses in the medium term as we go into what I call this “grey zone”, where we don't yet have a vaccine but are going to bring our economy back a little bit?
What's the model that you would propose so that we can get to some good solutions? Also, then, how do we get to a model, and what's the model that will get us to a post-COVID-19 plan?
5:55 p.m.
President and Chief Executive Officer, Canadian Federation of Independent Business
We've been doing a lot of thinking about just that. It requires careful coordination with the provincial governments, obviously. Provinces are the ones that have put the emergency services rules in place. I will say that while we did need to put very blunt measures in place quickly, of course, to be able to slow the curve, now that this going into month two and there are no signs in many parts of the country that it's lifting, we need to rethink some of those emergency services rules to allow a trickle, a heartbeat, of business in more and more locations.
We've learned a lot over the last little while, and I do think that where government could help is in ensuring that businesses have an understanding of the rules of the game, and of what social distancing might mean in more small firms and helping them procure protective equipment to be able to operate through the start-up phase of the pandemic. We're coming to that soon in some provinces—as soon as May in Saskatchewan, for example, God willing—but we need to start thinking about these measures now.
Many of our members have pointed out that if Costco and Walmart are allowed to sell frying pans and T-shirts, but we've prevented the tiniest little stores from selling anything, that's quite unfair, and these stores can play a role. Small firms can serve consumers safely through the start-up phase.
We're working with provincial governments to try to do some of that. Support from the federal government on the re-entry would be particularly helpful, and that's where I think the wage subsidy can play an important role as firms start to rehire the people they have laid off. I credit the government for moving on this; it was slow, but we got there with the wage subsidy. I think we're going to need to continue at least a partial measure as we move over the summer months.
5:55 p.m.
Liberal
The Chair Liberal Wayne Easter
Okay. Thanks to you both.
We do have a couple of minutes left here, so I will ask a question.
Bob, I know that hogs require a different program from the one for cattle, but you mentioned at the start that the set-aside program for the cattle industry is important right now. I think Pierre Poilievre and I might have been in Parliament when the last one was in place. John may understand it. Could you just explain the set-aside program a little bit and how it works? You're dealing with a lot of people on this committee who aren't in cattle production or who don't understand farming. Perhaps you could explain how that works in terms of going to maintenance rather than pushing them through, and what it means in terms of saving the economy and really probably saving the government money in the long run, because you're not going to use the safety net programs as much.
Dennis or Bob.
6 p.m.
President, Canadian Cattlemen's Association
I'll move that along to Dennis, given that he's the guy who designed it.
6 p.m.
Executive Vice-President, Canadian Cattlemen's Association
A set-aside is actually an inventory management program where we can slow animals down by reducing or changing the type of feed they get. We have a group of industry experts working with government that looks each week and says how much capacity will be available this week, over the next month and over a longer term. Then you try to slow animals down in the system. You match up the number of market-ready animals to that capacity. Sometimes, as we're building inventories, we start slowing down further in the system. We can go all the way back to cow-calf producers. If it looks like it's longer term, we can try to get more heifers retained to go into the herd. Our herds are at a 30-year low, so there's certainly room to do that.
If we manage that, we create a price stability. The BSE era circumstance was referred to. If we can create some price certainty or stability in the industry, we can start to get rid of panic buying or forced selling. The alternative, if you don't have programs and you continue to have more animals than you can get to market, is that you end up talking about things like euthanizing them. We don't believe we need to go there. If we manage this properly, we'll have those animals and we'll be ready to come out of this differently.
Again, if you can do that, you will quickly see the markets start to move, with the panic out of it, to a stronger location. That really makes a big difference in terms of the losses overall in the industry. Moving rapidly on that...and with insurance, you create business confidence for the cow-calf and backgrounding sector. They are the beginning and intermediate parts of our industry. Then they're in a better position to talk to their bankers. They can make decisions to manage through this. Most of their product is sold in August, September and October through into November and December.
So it all helps when you're trying to manage a problem like this and actually come up with appropriate solutions instead of desperate decisions.
6 p.m.
Liberal
The Chair Liberal Wayne Easter
Thank you very much, Dennis. I think that explains it very well. We'll just clip that out, send it right up to the Department of Finance, and they'll have the explanation right there.
I do thank you all for your presentations today. Thank you for your constructive criticisms of the programs as well. I know it's two hours out of your day, including some preparation time.
I also want to thank the committee members for their endurance. We had some technical difficulties in the second panel. We'll see you tomorrow at 2 o'clock Ottawa time.
Thank you again. The meeting is adjourned.
