Thank you, Mr. Chair.
Good afternoon everyone.
My name is Benoît Fontaine. I am a chicken farmer in Stanbridge Station, Quebec, and I am the chair of the Chicken Farmers of Canada. Our executive director, Michael Laliberté, is with me today.
Our sector contributes $8 billion to Canada's GDP, supports 101,900 jobs and generates $1.9 billion in tax revenue. The country's 2,877 chicken farmers are proud to be raising the number one meat protein in Canada, in the good times and the more challenging ones.
Chicken Farmers of Canada was pleased with the government's announcement in support of the agriculture and agri-food sector, but we need to highlight that these measures do not go far enough in supporting chicken farmers. In order to continue to ensure food security, farmers need support as they navigate the unprecedented stress and pressures of the pandemic.
Currently, the Canadian chicken sector is seeing unprecedented market conditions. Food service, which usually represents approximately 40% of the market, has experienced a rapid decline in sales almost overnight. In retail, there was an initial surge in sales caused by consumer stockpiling, but that demand has now stabilized, resulting in a total demand that is below usual volumes.
The rapid decrease in food service led to surplus production for a short period of time. Thankfully, the flexibility provided by supply management allowed our board of directors to quickly react and adjust production, hoping to avoid a worst-case scenario of depopulation, or euthanasia.
The board of directors reduced allocation for May to July by 12.6% and readjusted allocation for July to August by 9.75%. While we have been able to adjust production, that does not entirely alleviate the stresses on farmers and processors during this time. Some processing plants may have to reduce their slaughter volumes owing to physical distancing requirements, absenteeism of plant employees and complete shutdown.
Processors are working closely with one another and with farmers to redirect birds if and when needed. This reduced throughput and risk of plant shutdowns significantly increases the risk of farmers having to depopulate flocks.
Farmers do not take depopulation lightly. In addition to impacting the food supply of Canadians, depopulation is a loss of the flocks farmers have spent time, money and energy raising, and it also means extensive losses. In the event that processors do not have the necessary capacity to process chickens, farmers will have to work quickly with their processors to determine next steps.
At this point in time, they do not have government assurance that the live price of the birds will be covered. Our understanding is that the AgriRecovery program will cover up to 90% of the costs of depopulation. This does not address the value of the flocks being depopulated, the administrative burden on the farmer or the lobbying of provincial governments to provide their portion of business risk management funding.
Throughout numerous conversations with government officials, they have been reminded that, under the Health of Animals Act, depopulation is supported in instances of disease. We are well aware the act was specifically designed to cope with animal disease, but we believe what the sector is experiencing now—with processing capacity, depopulation and the overall impact on operations—follows the intent of the act and results in the same impacts for the farmers.
We are disappointed that government has not looked to this model to support the chicken sector should depopulation be necessary. While the business risk management programs are designed to address fluctuations in income to support farmers in times of need, they do not work for chicken farmers in cases of depopulation.
The uncertainties resulting from COVID-19 are in addition to the financial stress farmers were already facing with the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, or CPTPP.
As you know, Canada's chicken farmers lost a significant portion of their domestic market and have been waiting on government to announce programs to strengthen the long-term sustainability and competitiveness of the sector for over a year. We certainly acknowledge that government has greater priorities right now; however, since the government has not communicated when the federal budget will be presented, Canadian chicken farmers continue to wait for the support that they were promised.
I hope this presentation helps members of the committee understand that the measures announced to date do not address the financial implications for chicken farmers if depopulation becomes necessary. In addition, we continue to patiently await the promised CPTPP support package that will help give us some certainty at a highly uncertain time.
Thank you for your continued support for our sector, and I hope you will raise these issues with your fellow members in government. Canadian chicken farmers are here for Canadians, and always will be.
Thank you, Mr. Chair and members of the committee.