Finance Committee on May 16th, 2022

[Ed Fast, Conservative, Abbotsford, BC]

Okay.

Is there anything in the budget right now that supports genetic engineering?

[Dr. Sylvain Charlebois]

Not clearly, no, but I can say that the most recent climate change report tabled by the Intergovernmental Panel on Climate Change does implicitly—not directly and clearly—encourage the use of genetic engineering to actually provide a safer, more sustainable agriculture to the world.

[Ed Fast, Conservative, Abbotsford, BC]

I have a question to the mead association from Quebec.

Are you aware of whether the federal government ever conducted an economic assessment to determine the impact this new excise tax would have on your own industry?

[René Bougie]

Actually, I cannot tell. Maybe Vincent heard about something.

About the specific impact, we just know the money they want to put in the compensation program. Actually, Vignerons Canada is doing some research about it to evaluate the impact that it can have. Other than that I don't know.

Do you have other information, Vincent?

[Vincent Lambert]

We did have conversations with Wine Growers Canada, who told us, as René said, that the program that would be put in place to reimburse the excise tax was not sufficient. If they did some sort of a study on the costs and impacts, I couldn't tell.

[The Chair, Liberal, Peter Fonseca]

Thank you, MP Fast.

We're moving to the Liberals.

MP Chatel, you have five minutes.

[Sophie Chatel, Liberal, Pontiac, QC]

Thank you, Mr. Chair.

I would like to clarify one point. In the budget, $600 million is dedicated to innovation in agriculture in order to recognize the absolute importance of being more and more efficient in our practices.

I thank the witnesses for being with us today.

I also thank Mr. Charlebois for suggesting some very important solutions. We know very well that the war in Ukraine has caused an increase in the price of food, wheat and oil. It has also caused problems with supply chains. Even though we are working very hard with our allies to deal effectively with the resulting global crisis, we have to be fiscally prudent in the wake of a pandemic. However, this does not change the fact that, in reality, it is the most vulnerable people who are at risk of food insecurity.

In my constituency, I represent a rural area. Soon people will have to choose between putting gas in their car to go to work or paying for groceries. That worries me a lot, obviously.

Mr. Charlebois, you mentioned some possible solutions, and I thank you for that.

Do you know whether our partners in the G7, the G20 or the Organisation for Economic Co-operation and Development, or OECD, have found innovative solutions that would allow us to make better use of the budgets we have?

[Dr. Sylvain Charlebois]

Thank you for the question.

It is always difficult to change things in a few days. To ensure food affordability, you have to have a long-term vision.

Some government measures have helped the sector. For example, it has helped one of the organizations we work with, Protein Industries Canada, which is located in Regina. It's an innovation cluster that was created in 2016, I believe. Those measures have encouraged a lot of companies to invest in the food processing sector. I think that, in the future, we need to focus particularly on processing across Canada.

Let's take the example of Atlantic Canada. In the Atlantic provinces, there is virtually no food processing. In some provinces, buying local accounts for 3% or 4% of food consumed. New Brunswick and Nova Scotia are examples. Nova Scotia has lost 28% of its farms in the last five years, and there is no strategic anchor for the industry.

The government should have a vision for food processing first, and that should be for the whole industry, from farm to fork. In my opinion, buying local is extremely important. To encourage consumers to think about buying local, it has to be done in an open economy, as Quebec has done. In my opinion, Quebec has understood this and has set up its food autonomy policy. Domestic production capacity must be developed to meet local demand. We must also export products in order to create wealth within the province.

I will give the example of Quebec strawberries. In recent years, consumers have been encouraged to eat strawberries all year round. Consumers are being programmed, so to speak, to think about Quebec strawberries all year round rather than just a few weeks a year. This is the kind of initiative that we will have to think about seriously, throughout the country, and not just in Quebec.

[Sophie Chatel, Liberal, Pontiac, QC]

Thank you very much.

We must therefore think about a strategy for food autonomy and buying local, among other things, as Quebec has done.

[Dr. Sylvain Charlebois]

Over the past five years, the only province that has created agri-food companies is Quebec. In fact, 461 companies have been created.

[Sophie Chatel, Liberal, Pontiac, QC]

That is excellent. I find that inspiring.

Thank you very much for your answers, Mr. Charlebois.

I would now like to talk about the beneficial ownership registry, which is a very important tool.

It is all very well to have a registry, but the data must be of good quality. We really need to be able to ensure the quality of the data and have the authority to look at what is behind a chain of multiple companies.

Mr. Caldera, what are the challenges you face in terms of getting quality data?

[The Chair, Liberal, Peter Fonseca]

Give a short answer please.

[Sasha Caldera]

Right now, data validation and verification is, I would say, an emergent technology. It has also been raised as an issue of concern among the countries that are implementing publicly accessible registries. When the U.K. first implemented the Companies House registry in 2016, one of the biggest criticisms was that the data was not verified. That hindered the ability of law enforcement and competent authorities to carry out investigations, and it made the data quite risky for reporting entities that had due diligence obligations. The tool itself was useful, but without verifying or validating data—

[The Chair, Liberal, Peter Fonseca]

Thank you, Mr. Caldera. We appreciate it. If you could get some more of that answer to us in writing, that would be great.

The reason I say that is that I am looking at the time, members, and I have the Bloc and the NDP, to be fair to all the parties and give them an opportunity.

Mr. Ste-Marie, you have two and a half minutes.

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

Thank you, Mr. Chair.

Mr. Charlebois, I thank you very much for all the work you do. You always present an accurate and clear picture of the situation in the agri-food sector through the media, and you are proving that again today before the committee. I take my hat off to you and I thank you for giving us a picture of the seriousness of the current situation.

I'll ask you my three questions in rapid succession.

To what extent are last year's droughts affecting inflation in the food sector this year?

To what extent can we increase our agricultural capacity or cropland acreage across Canada this summer? As a corollary, to what extent can we put in place, in the short term, the solutions you have suggested for the food processing sector?

Finally, how might the recent flooding in Manitoba affect inflation in the food sector?

[Dr. Sylvain Charlebois]

Thank you for those questions.

Because of the droughts, we started the year 2022 with extremely low stocks. This year, we wanted to start a more productive year, but unfortunately, there is more humidity in western Canada than last year. It could get better, but nature has to cooperate.

Last year's drought was disastrous, as shown by the statistics. It was a major problem and will remain so. There have also been droughts in Russia and the United States and floods in Germany. We hope that, in the northern hemisphere, we will have a better year. The southern hemisphere is having a better year so far, which will help us.

As for cropland acreage, I have to tell you that there is not much to be done at this stage. Producers are already motivated to produce more. We don't think the flooding in Manitoba will have a huge impact. It's certainly going to take longer to plant, but the flooding shouldn't affect production for the year.

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

That's very clear. Thank you very much, Mr. Charlebois.

[The Chair, Liberal, Peter Fonseca]

Thank you, Mr. Ste-Marie.

Our final questioner before we conclude our meeting today will be MP Blaikie from the NDP.

[Sophie Chatel, Liberal, Pontiac, QC]

Mr. Chair, I think we have to adjourn. It's 10 minutes.

[The Chair, Liberal, Peter Fonseca]

We're just going to give two minutes to MP Blaikie.

Is everyone okay with that?

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

Thank you very much.

I want to come back quickly to Mr. Caldera who spoke about the timing of further changes that would be required to establish a public beneficial ownership registry.

One of the criticisms we've heard of the government's enactment of sanctions against Russian oligarchs is that it took longer than it should have, and in that time, a number of the targets of those sanctions were able to sell off their assets.

Is there a similar consideration here in terms of the timeliness of establishing a public beneficial ownership registry, particularly for those who are concerned about having that as a tool to apply pressure to Russia?

[Sasha Caldera]

For sure. That concern is being echoed by anti-money laundering experts in all G7 countries, particularly those who are part of REPO task forces. This is why the registry needs to be set up expeditiously with verified data. There is technology on how to do this in Canada and that the Canadian government can learn, particularly from the Digital Identification and Authentication Council of Canada.

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

I know we're short on time, Mr. Chair, so I'm happy to leave it at that.

[The Chair, Liberal, Peter Fonseca]

Thank you, MP Blaikie.

I want to thank the witnesses. We really appreciate your time and expertise. Thank you for coming before our committee on Bill C-19. You may submit anything that you would like to put in writing to the members, if you were not able to give a fulsome answer.

On behalf of the committee members, the clerk, the analysts, the interpreters and all the staff here, we thank you very much. Have a wonderful day.

The meeting is adjourned.