Finance Committee on May 16th, 2022

[Dr. Sylvain Charlebois]

I will say that there's nothing wrong with food inflation, but food inflation that is out of control is a disease affecting many families. That's where we are right now. I would say that food affordability is a challenge. Honestly, right now, I don't see any evidence that the government is properly overseeing the entire system.

I'll give you one example. Again, I mentioned that I'm in the U.S. I've been in the U.S. for six months. The White House has been very forthcoming and, frankly, aggressive in how price-fixing is occurring in the U.S. There are some anomalies right now in Canada, I must say. Some price increases are justified, while others are difficult to explain.

I'm not suggesting that there is criminal behaviour going on, but there are increases right now that are beyond any data that we have at the lab. It's hard to explain. In some sections of the grocery store, we're seeing double-digit increases. I'm thinking of the centre of the store, at the meat counter and the dairy. There are a lot of things going on that I would encourage Ottawa to look into very seriously.

[Adam Chambers, Conservative, Simcoe North, ON]

Thank you very much.

I have about 30 seconds left. I would like to switch to Mr. Caldera for a moment.

Thank you for your work in pushing the government to advance its interests.

I have two quick questions for you. First, the need for it to be publicly accessible, that is planned for the future but not immediately. Can you touch on that briefly? Second, and quickly, has Industry Canada reached out to you yet to begin consultations?

[Sasha Caldera]

Thank you very much, Mr. Chambers.

Yes. The registry must be publicly accessible, full stop. All other G7 countries [Technical difficulty—Editor]. You even have fragile states, globally, that are [Technical difficulty—Editor] publicly accessible registries. For Canada not to have a publicly accessible registry, [Technical difficulty—Editor] it would be a very limited registry [Technical difficulty—Editor] as part of the registry design being put forward.

We have not been contacted yet by Innovation, Science and Economic Development with regard to the status of consultations. We do hope they will take place over the summer.

[Adam Chambers, Conservative, Simcoe North, ON]

Thank you very much.

Thanks, Mr. Chair, for your indulgence.

[The Chair, Liberal, Peter Fonseca]

Thank you, MP Chambers.

We'll now move to the Liberals and MP Dzerowicz for five minutes.

[Julie Dzerowicz, Liberal, Davenport, ON]

Thank you so much, Mr. Chair.

I want to thank all the presenters for their excellent presentations and for being here today.

My first question is for JDRF Canada.

In the last Parliament, my colleague Sonia Sidhu sponsored Bill C-237, which was adopted with support from all parties. Bill C-237 set a requirement for the government to present a national framework for diabetes. This framework, I understand, is due by the end of June.

Have you been consulted by the government on this framework, and what do you hope to see from it?

[Dave Prowten]

Thank you for the question.

Yes, we have been involved in the consultations. There has been a series of meetings. I would say the Public Health Agency of Canada seems to be driving it.

What we hope to see from it is a real mandate. I think a framework could just be a document that outlines some things to do. I would prefer to see a mandate with some real action that would help address things like the prevention of diabetes.

We're a type 1 diabetes organization, but there's type 1 and type 2. We need to have a strategy that would address the different areas of diabetes—prevention, research, management, etc. I think it has to be comprehensive and action-oriented.

[Julie Dzerowicz, Liberal, Davenport, ON]

Thanks very much.

I want to give a huge thanks to you both, Mr. Prowten and Dr. Weisman, for your extraordinary leadership. I think we're very determined to take additional measures to provide support to those suffering from diabetes in Canada.

My next question is for the Agri-Food Analytics Lab.

Dr. Charlebois, you presented some very important testimony this morning. I want to continue the questioning that Mr. Chambers started. How can the Canadian government...? It's very difficult when there are forces beyond our control, but I really want to explore what more we might be able to do here in Canada to help support Canadians and farmers, and to improve food security. Is there any way we could even slightly reduce some of the anticipated pricing increases we'll be seeing?

I heard from you that we need more affordable fertilizer. I heard about diesel prices. As you know, that's nothing we can deal with. I heard from you about dealing with price-fixing, and being more aggressive. Is there anything else we could do nationally? That's question one.

Question two is, what can we be pushing for internationally that would be helpful?

[Dr. Sylvain Charlebois]

It's a great question. I'm not sure there's anything we can do this year, because it's May 16. Either our seeds are in the ground or they're about to be in the ground. Contracts are signed. Right now I would say if you start with farm gate, a lot of farmers are flying in the dark. They're actually committing to contracts without knowing how much they're going to pay. That is not helping.

Farmers are motivated to grow. They're motivated to produce because prices are very high, but up the food chain you're seeing a lot of consolidation. There are fewer players having a lot of power, whether it's in grain handling, processing or distribution. I know that the Competition Bureau actually registered concerns about the Shaw-Rogers deal recently. I would have hoped that the bureau would actually have registered concerns about the 1998 deal between Provigo and Loblaws, the 2005 A&P deal with Metro, and the 2015 deal between Empire and Safeway out west.

All of these deals have actually given more power, more authority and more influence to just a handful of players, which is really impacting competition. It's impacting everything we do domestically.

Internationally, it's important to recognize that we need to make sure that our supply chains remain resilient and that we continue to encourage companies and traders to trade abroad and make our agriculture much more efficient.

I have just one piece of data for you. There are only a few provinces in which the territory used to support agriculture has increased in the last five years. We're talking 1% or 2%. Those are Quebec, Alberta and, I believe, Manitoba. Since 2003, Canada is at minus 8%. We're using less land to produce more food. You can see that, right now, agriculture is under a lot of pressure to produce more. I would look into that.

Thank you.

[Julie Dzerowicz, Liberal, Davenport, ON]

Thank you so much.

[The Chair, Liberal, Peter Fonseca]

Thank you, Ms. Dzerowicz. That's your time.

Now from the Bloc for two and a half minutes, we have MP Ste-Marie.

Go ahead, please.

[Gabriel Ste-Marie, Bloc, Joliette, QC]

Thank you, Mr. Chair.

My question is for Mr. Bougie or Mr. Lambert.

You have clearly shown us that, because of its special characteristics, mead is more expensive to produce than cider or other alcohols.

However, all costs are increasing. In addition, there is the question of the excise tax, because Ottawa does not distinguish between wine and mead and does not recognize your particular situation.

What is the situation in Quebec City and at the SAQ, and how could Ottawa be inspired by what is done in Quebec City?

[René Bougie]

Thank you very much for the question.

Within our association, we had the opportunity to speak to some negotiators from the Quebec ministère de l'Économie et de l'Innovation. They told us that, in their negotiations, they were able to make the distinction between the various types of alcohol.

So, in talking to Australian officials who negotiated at the WTO, we learned that it was grape wine that was really targeted, a major source of aggravation for the Australians.

As we said earlier, the amount of mead we produce in Quebec is really limited, about 90,000 litres in total. However, this production is constantly increasing, and it is a growing industry.

So the fact that mead is currently classified in the same category as other types of alcohol, such as grape wine, is really a major burden for our types of businesses. What surprises us most is that the provincial negotiators were able to make this distinction and have the mark-up applied by the SAQ on meads, ciders, berry wines and maple wines removed as of December 1, 2023.

However, in the federal regulations, more specifically in Bill C-19, this distinction is not found in the exceptions section. As I said earlier, all costs are increasing, and this tax creates undue pressure on our production at a time when we are increasingly seeking to diversify and add value here in Canada. This distinction would be essential for our businesses to continue to grow.

In addition, this tax on all wines made from 100% Canadian ingredients has not been collected since 2006. Although there are some compensatory programs, we realize, when discussing with all of our colleagues at the national level, that the money that is put on the table would not even compensate for the sums that would have to be committed.

Our first demand is therefore that the exemption be maintained and that our products be included in the exceptions. If this is not possible, we would at least like to have access to compensatory programs that would allow our producers to be compensated at their fair value, especially since our products were not taxed before.

We would therefore like to obtain the committee's support so that the special nature of our businesses is recognized and their products are included in the exceptions.

[Gabriel Ste-Marie]

Thank you, Mr. Bougie. We will work on that.

[The Chair, Liberal, Peter Fonseca]

Thank you, Mr. Ste-Marie.

Now we'll hear from the NDP, MP Blaikie, for two and a half minutes.

[Daniel Blaikie, NDP, Elmwood—Transcona, MB]

Thank you.

Mr. Caldera, I want to circle back on the question about the public beneficial ownership registry.

We've talked a little bit already about how there are some first steps toward that, but I wonder if you could highlight what you think are the important next steps that need to follow and what the timeline ought to be for those next steps.

[Sasha Caldera]

Thank you very much, Mr. Blaikie.

First of all, what we think would be the immediate next step is for stakeholder consultations to occur with industry, civil society, journalists and international civil society. These consultations can be stretched out over the summer, and they should be conducted in a very transparent manner.

If it's possible, have these consultations in front of committee, where all stakeholders can submit their views and perspectives on the record and talk about what they want to see in a registry publicly. That is ideal, because the very nature of this tool is to utilize transparency as a way to deter the proceeds of crime from entering our economy, and we think a transparent consultation would be very important and consistent with that goal.

The next step would be for the federal government to convene provinces and territories through the regular finance ministers' meetings, say that we are going ahead with a centralized, publicly accessible registry and reach out to provinces and form a coalition of the willing. This way, we think there will be many early-adopter provinces that would be interested in joining.

We note that the Province of Quebec has already made a commitment to make its beneficial ownership information public and searchable in its own registry. British Columbia has done the same with properties, and the Atlantic Canada provinces I think will be very much enthusiastic supporters, simply because they might not have the capacity to do this kind of upgrading. The agreement and the framework for a pan-Canadian registry can be achieved through the federal-provincial-territorial meetings that regularly occur.

After consultations, we think that all of this should be packaged into the next budget implementation act and, as a whole, swiftly passed before the end of the year.

Those three steps I think will set up Canada to meet that 2023 target.

[Daniel Blaikie, NDP, Elmwood—Transcona, MB]

Thank you very much.

[The Chair, Liberal, Peter Fonseca]

Thank you, Mr. Blaikie.

We'll hear questions from the Conservatives.

We have MP Albas for five minutes.

[Dan Albas, Conservative, Central Okanagan—Similkameen—Nicola, BC]

Thank you, Mr. Chair.

Thank you to all of our witnesses for being here today. I'd like to concentrate mainly on Monsieur Charlebois and then maybe get to the mead and honey alcohol producers.

I want to say to Mr. Prowten and Dr. Weisman, thank you for the work you do. Connecting me with local advocates like the Findlater family in West Kelowna has really changed my thinking on what we can do as a country. I want to thank you for your work, and I'm very glad that my colleague, MP Stewart, has been asking questions.

To start with, Mr. Charlebois, thank you for being here. You've been a little critical of the government in saying that the White House is looking to try to effect as many policies as it can to help Americans cope with inflation.

You've been very critical of the government. As a G7 country, we've seen others—Joe Biden being one of them, I guess—propose in the United States to open up the strategic gas reserves. We don't have those strategic gas reserves here, but we do have what Conservatives have proposed: a cut to the GST on diesel and regular gas as a way to allow businesses, especially those that are affected, save a bit of money so that they can cope with it but also, especially, for those with low incomes or on fixed incomes.

Do you think a GST break on diesel and fuel in general would help at the agricultural level and in the grocery chain, as well as with consumers?

[Dr. Sylvain Charlebois]

Thank you for the question.

I would probably say that at the farm gate it would be critical to apply a break like that. Closer to the consumer, I don't know, but I do believe that farmers have no options but to absorb extra costs. They're at the mercy of what's happening. As was mentioned before, we don't have control over diesel prices, but certainly we can help our farmers.

For other components, other levels of the supply chain, they have options. Don't forget that when you walk into a grocery store there are, on average, 18,000 different food products. There's lots of that going on. People have choices. In farming, farmers don't have a choice, so I would look at the farm gate specifically.

[Dan Albas, Conservative, Central Okanagan—Similkameen—Nicola, BC]

Thank you very much for that.

I'll move to the Association of Mead and Honey Alcohol Producers of Quebec.

I have to say that I'm sorry,

My French is not excellent.

Maybe you could explain this to me. You've been lumped in, your association says, with the wine category. Now you are subject to the same changes that the wine industry and cider industry are under. Is that correct?

[René Bougie]

Yes. In answer to your question, actually, under federal law when we're talking about wine, we're talking about all fermented products that are produced by Canadian producers. There's no difference between grape, honey and other things like that. Actually, with the end of the exemption, we will all have to pay this tax. This is why we are asking to have the same acknowledgement done in Quebec to be able to not be....

[Dan Albas, Conservative, Central Okanagan—Similkameen—Nicola, BC]

Subject to it.

[René Bougie]

Yes.