Industry Committee on April 29th, 2020

[The Chair, Liberal, Sherry Romanado]

I call this meeting to order.

Welcome to meeting number 10 of the House of Commons Standing Committee on Industry, Science and Technology. Pursuant to the order of reference of Saturday, April 11, the committee is meeting for the purpose of receiving evidence concerning matters relating to the government's response to the COVID-19 pandemic.

Today's meeting is taking place by video conference. The proceedings will be made available via the House of Commons website.

Members and the witnesses, I would like to remind you to please wait until I recognize you by name before speaking. When you are ready to speak, please unmute your microphone and then return to mute when you are finished speaking. When speaking, please speak slowly and clearly so that the interpreters can do their great work.

As is my normal practice, I will hold up a yellow card for when you have 30 seconds left in your intervention, and I will hold up a red card for when your time for questions has expired.

I would now like to welcome our witnesses. Tonight we have the Honourable Marie-Claude Bibeau, Minister of Agriculture and Agri-Food; the Honourable Mélanie Joly, Minister of Economic Development and Official Languages; Siddika Mithani, president, Canadian Food Inspection Agency; Chris Forbes, deputy minister for the Department of Agriculture and Agri-Food; and from the Department of Industry we have Mr. Simon Kennedy, deputy minister; and Mr. Paul Thompson, associate deputy minister.

We will begin with witness testimony. Each of the witnesses will have 10 minutes to present.

Minister Joly, you have the floor for 10 minutes.

[Mélanie Joly, Liberal, Minister of Economic Development and Official Languages]

Thank you, Madam Chair.

Good morning, everyone, dear members of the committee.

Good morning, Ms. Bibeau.

I’m pleased to be here today to report to the members of the Standing Committee on Industry, Science and Technology on all the work done by the Canada Economic Development team—which includes the six regional development agencies, or RDAs—in response to the COVID-19 pandemic.

I’d also like to take a moment to acknowledge all the staff who work behind the scenes to make these virtual meetings possible.

Thank you for your commitment to our democracy.

Thank you also to all the members of the opposition who have been working collaboratively with the government to deal with the pandemic—to protect and save the lives of Canadians, and definitely to protect their health—while also dealing with the impact on the Canadian economy.

I know that some of you are from Alberta. Obviously, I want to send my regards, and tell you that my heart and all our hearts are with you and with all the people in Fort McMurray right now as they deal with the impacts of floods.

Across the country, the COVID-19 pandemic has triggered a whirlwind of uncertainty and anxiety among Canadians. All of our lives have been turned upside down. Such is the case for entrepreneurs and workers in small and medium-sized enterprises. And for the tourism sector as well, including indigenous tourism, which faces unique challenges. These are very difficult times for an industry that was really on a roll.

Over the past few weeks, we've heard from a number of entrepreneurs who, although their day-to-day realities are different, are experiencing very similar situations. These people work hard, play by the rules and do whatever it takes to ensure the survival and growth of their businesses. Despite all this, they're now facing an economic tsunami that, until quite recently, would have been hard to imagine. These businesses are a source of good local jobs, and of local pride. They are nothing less than the backbone of our neighbourhoods and our regions.

We are at a turning point in the history of our country. We know that, more than ever, our decisions will ensure the success, not only of our economy, but also of our communities. That means having frank and honest conversations, like the one we'll have today and like the ones my team and I have had with thousands of individuals, business leaders, associations and entrepreneurs from all over the country since the crisis began.

Through the most extensive economic assistance program in our history, we are putting money into the pockets of Canadians who need it—like those who have lost their jobs because of COVID-19 and who have access to the Canada emergency response benefit.

What have we been hearing? That our efforts are having a tangible impact. Thanks to the Canada emergency wage subsidy, businesses can keep their workers, and rehire those they've had to lay off.

We've also put in place a number of measures for business, as Minister Ng indicated before this committee last week. However, despite the extensive social safety net that has been put in place, we're also hearing that the situation remains difficult for smaller businesses. We've listened, and we've made adjustments. We were told that the various support measures offered needed to be more flexible. This is certainly what the mayor of Montreal, Valérie Plante, told me during the conversation we had. This is what we did with the support provided by BDC, and by broadening the criteria for access to support programs, such as the wage subsidy.

Janet De Silva, from the Toronto Region Board of Trade, told us that their members were anxious about rent payments and were hoping government would be there for rent relief. We agreed. Within a week, we reached an agreement with all provinces and territories to implement the new Canada emergency commercial rent assistance for small businesses.

Steve McLellan, from the Saskatchewan Chamber of Commerce, told us that the wage subsidy was a step in the right direction, but it needed to be higher, from 10% to 75%. We listened and we took action.

Bridgitte Anderson, from the Greater Vancouver Board of Trade, shared the concern of businesses on how they could keep as many people employed as possible.

Sheri Somerville, from the Atlantic Chamber of Commerce, asked us what role ACOA could play. Many people pointed toward the regional development agencies as the right tool to support local economies and businesses that were unable to get access to the support our government was putting forward.

Each time, we listened carefully and asked ourselves how we could help as many entrepreneurs and businesses as possible with measures that would assist workers. We also believe that the best way to help the people who run much-needed businesses in our communities on a day-to-day basis is through an institution they trust.

Our six federal regional economic development agencies are well positioned to help workers and businesses in this time of crisis. That's why we created the regional relief and recovery fund, which has a total budget of $962 million. This fund will support businesses that are unable to benefit from existing programs and that play a key role in their local economy.

Specifically, this new fund will double the funding to support regional economies. We will provide $675 million to regional economic development agencies and $287 million to support the network of what's known in Quebec as the Sociétés d'aide au développement des collectivités, or SADCs. In the rest of Canada, they're called

community futures development corporations, or CFDCs.

These corporations play an essential role in our rural regions. This assistance will relieve immediate pressures, and will help local businesses pay their employees and cover their fixed costs. We need to protect our main streets and our local businesses, and that's what we're going to do with the help of these partners. The funding will be administered by the six RDAs, which are often the first point of contact at the local level.

In addition, $15 million has been allocated for the creation of the northern business relief fund to assist northern businesses impacted by the pandemic. I have also asked all the development agencies to relax some of the criteria for their current clients, starting with a three-month moratorium on all payments due to the agencies, in order to relieve some of the financial pressure these clients are facing. I have also taken steps to speed up project approvals and asked agencies to commit unallocated funds to help those sectors most in need, including tourism.

Support was also provided to help businesses meet essential needs during the pandemic. This is the case of Bouctouche Bay Industries in New Brunswick, which took advantage of the networking of the Atlantic Canada Opportunities Agency, or ACOA, to market protective visors for Nova Scotia health care workers. There's also Groupe CTT, a specialized textile technology centre in Saint-Hyacinthe, Quebec, which received funding to acquire the equipment needed to certify protective gowns for health care workers, a skill that had been relocated internationally. VIDO-Intervac, based at the University of Saskatchewan in Saskatoon, received support from our government for two facility-modernization initiatives to allow the company to develop and fast forward the production of veterinary and human-quality vaccines for domestic and commercial markets.

Tourism was one of the first sectors affected by the pandemic. You know as well as I do that tourism drives our communities—your communities—as well as regional economies across the country by creating good jobs and unique visitor experiences. The crisis has been a hard blow to the industry, and we're going to get through it together. We've introduced a number of measures, and we continue to be in constant contact with the main stakeholders in the sector, as well as with the provincial and territorial ministers, to ensure a coordinated approach and a clear understanding of regional issues.

At the start of the pandemic, our agency, Destination Canada, also partnered with research firms to study the repercussions of COVID-19 on tourism and to provide evidence on the matter. We will then be able to make better decisions.

During these difficult and uncertain times, Canadians can be confident that the government is there to support them. We remain vigilant, and we'll continue to make the necessary adjustments.

Our message to workers and businesses is clear: we're there for you with concrete support measures in all regions of the country. This also holds true for official language minority communities—

[The Chair, Liberal, Sherry Romanado]

I'm sorry, Madam Minister, your 10 minutes are up.

[Mélanie Joly, Liberal, Ahuntsic-Cartierville, QC]

Okay. I just want to finish my last sentence.

[The Chair, Liberal, Sherry Romanado]

Quickly, please.

[Mélanie Joly, Liberal, Ahuntsic-Cartierville, QC]

—and we will be there for you now, in the weeks to come and as we move forward.

I'd be pleased to answer any questions you may have and to discuss this with you.

[The Chair, Liberal, Sherry Romanado]

Thank you very much, Madam Minister.

I now invite the hon. Marie-Claude Bibeau to take the floor.

You have 10 minutes, Madam Minister.

[Marie-Claude Bibeau, Liberal, Minister of Agriculture and Agri-Food]

Thank you, Madam Chair.

I'll start in English and then switch to French.

Madam Chair, Minister Joly, members of the committee, it's good to join all of you today. I would like to mention that my deputy minister, Chris Forbes, is on the line, as is the president of CFIA, Siddika Mithani.

First and foremost, I want to thank Canada's farm families, our food processors and everyone who is stepping up to serve during this unprecedented crisis, including truckers, retailers, grocery store workers, community groups and food banks. Everyone is working very hard to adapt to the enormous pressures on the supply chain.

More than ever, Canadians can appreciate how essential our farmers and food processors are. They are stepping up to feed Canada in this time of need. While Canadians continue to have access to an abundance of food, we certainly recognize that many agricultural sectors are impacted by COVID-19. For example, some processing plants have temporarily closed or have slowed down operations. There are concerns of not having enough labour on farms and in processing plants. The closure of restaurants and food services has resulted in surplus production for some sectors.

I care deeply about the well-being of our farmers and food production workers and I understand how stressful this period is for them. Our team is working around the clock to respond to the impacts of the COVID-19 outbreak on our food sector. We understand that each sector of agriculture has specific needs and is impacted differently. I want to assure producers that we are actively exploring additional measures to support them.

I appreciate this opportunity to share our actions to date to support our farmers and food processors, and to help ensure that Canadians continue to have uninterrupted access to food.

As you know, meat processing plants across the country have been significantly impacted by COVID-19, with some forced to temporarily close. This has a domino effect on ranchers, and increasing costs for cattle and hog producers, as they need to keep their animals longer on farms while prices are changing rapidly. I know that some producers are now forced to humanely cull some of their animals, which is a hard decision they make only as a last resort.

To address the current challenges, our government is working directly with industry working groups to look at ways for farmers to manage their production during this volatile period. We are connecting with provincial and local health authorities to provide the best-informed advice to employers on what measures they can take to protect their employees' health, including in the agriculture and agri-food sector.

As well, the Prime Minister has announced $20 million to help the Canadian Food Inspection Agency, CFIA, to hire, train and equip additional staff. This also means more capacity to accommodate overtime and extra shifts to meet any changes in processing capacity. This funding also supports the sharing of inspection resources between provincially and federally inspected processing facilities. We are doing it already in Alberta.

Before the pandemic, the food sector was already challenged by significant labour shortages. The horticulture sector depends greatly on temporary foreign workers for planting and harvesting fruits and vegetables. To protect the health of Canadians and the workers, and to help ensure the strength and reliability of our food supply chain, the government acted quickly to exempt seasonal farm workers from travel restrictions, while mandating strict protocols for pre-screening and 14-day isolation upon their arrival. And we invested $50 million, or $1,500 per worker, to help employers cover the costs of implementing these health measures. At the same time, we are reaching out to all Canadians who have lost their jobs due to COVID-19 to consider the many opportunities to work in our agri-food industry.

We are offering incentives to help students find jobs this summer—including in agriculture—and we have increased the wage subsidy under the Canada summer jobs program to 100%.

We have also launched a jobs portal and social media campaign urging Canadians to step up to the plate and feed their fellow Canadians during this crisis.

Our government has announced a range of financial tools to help farmers and food processors have access to financing and to manage cash flow challenges related to COVID-19.

We have allocated up to $5 billion in new lending capacity to Farm Credit Canada to help farmers and agri-businesses keep their businesses strong during the pandemic and to help with their cash flow. This has already allowed thousands of producers to defer over $2.5 billion in loans.

We have also extended the payment deadline by six months for eligible farmers who have borrowed money through the advance payment program, totalling $173 million targeted towards the grains and cattle sector in particular. Producers also continue to have access to a comprehensive suite of business risk management programs to help them manage significant financial impacts and risks beyond their control.

We have extended the enrolment deadline for the AgriStability program to July 3, to help more farmers manage the impact of current market disruptions, increased expenses and current production challenges.

I am talking regularly with my provincial and territorial counterparts to ensure we have the support in place to address immediate challenges.

Our government's stimulus package for Canadians and businesses includes key measures to help our agri-businesses, including access to $40,000 interest-free loans, with 25%, or up to $10,000 forgivable, subject to certain conditions; deferment of income tax payments, as well as GST/HST and customs duties; and a wage subsidy for employees. Businesses that aren't eligible for other federal COVID-19 measures have access to additional financial support through Canada's regional development agencies, as Minister Joly mentioned.

International trade is vital to our food supply, and it is the lifeblood of our industry and our economy. We are working hard to keep our agricultural products moving around the world so that safe, affordable and nutritious food is available and accessible to Canadians and people everywhere.

Last week, I participated in an extraordinary virtual meeting with the G20 agriculture ministers to share our responses and experiences, and to enhance global co-operation.

As well, Canada and 23 WTO members signed a joint statement to reinforce international co-operation on trade in agricultural and agri-food products. This will help to promote food security, nutrition and the health of people around the world.

I also had calls with Sonny Perdue, the United States secretary for agriculture, and Victor Villalobos, Mexico's secretary for agriculture. We recognized that collaboration and trade are essential to food security across our continent, and we underscored our shared commitment to the continued flow of food and agriculture trade.

Lastly, food banks and community food organizations have been stepping up in a big way during this crisis, while being forced to adapt. They have to find new volunteers, minimize interpersonal contact, and offer home deliveries. The government acted quickly and dedicated $100 million under the Food Policy for Canada, in support of food banks and other organizations on the front lines. Organizations can use the funding to purchase, obtain and distribute food, hire temporary help to fill volunteer shortages, and implement biosecurity measures, such as the purchase of personal protective equipment.

Madam Chair, my sincere thanks. I know these are challenging times, and our heartfelt thank you goes out to everyone in the agri-food sector. I continue to work with the sector, and provinces and territories so we can respond quickly and effectively as this situation continues to evolve. Step by step, we are giving our farmers and food processors the tools they need to continue their vital work. We will be there to support them through this difficult period.

Thank you.

[The Chair, Liberal, Sherry Romanado]

Thank you very much, Madam Minister.

Now we will go to the six-minute rounds.

Our first MP is John Barlow.

[John Barlow, Conservative, Foothills, AB]

Thank you very much, Madam Chair, and thank you, Ministers, for being here.

Minister Bibeau, I'm glad that you have identified many of the problems facing agriculture, but the issue here is you have not come forward with any initiatives that actually resolve the problems you have identified. You talk about Farm Credit Canada and the $5 billion that was actually a campaign promise in 2019, which is not an unprecedented response to a critical issue right now. It only applies to those producers who are actually Farm Credit Canada clients, so about 75% of producers don't benefit from that at all.

You keep saying that they just need to get the emergency business account, some $40,000, which is woefully inadequate. Just as an example, Minister, do you know how much it costs to feed hogs, cattle or poultry in one day?

[Marie-Claude Bibeau, Liberal, Compton—Stanstead, QC]

I am well aware that $40,000 is not a significant amount for large agricultural companies, because it can easily be spent in a week. However, you mentioned the loans, $5 billion in total, that are available through Farm Credit Canada. Agricultural companies, like those in all sectors, also have access to very favourable loan products provided by all the commercial banks across the country.

[John Barlow, Conservative, Foothills, AB]

Minister, most agricultural producers do not qualify for any of these programs.

Let me use an example. One poor producer in my riding, Arnold Beusekom, has about 1600 hogs he puts through his farm per month, and he's already lost more than $200,000 since COVID started. His feed bill in one month is almost $300,000. I have feedlot alley in southern Alberta, and their costs on feed for the month of May alone are more than $2 million. The emergency business account program does not work. They cannot qualify for the wage subsidy.

What programs, if any, are you going to be announcing in the near future to address this critical situation within the hog, cattle and poultry industry?

[Marie-Claude Bibeau, Liberal, Compton—Stanstead, QC]

Thank you for your question, Mr. Barlow.

We already have an entire range of risk management programs. I agree with you that this situation is particularly critical and that producers are looking for additional assistance. However, a number of programs are accessible right now.

Let me give AgriInvest as an example. You may tell me that, again, the average in the accounts of hog producers is $30,000, and, for a large producer, that is enough for perhaps one week. But it is something.

Then, AgriStability is designed precisely to assist producers experiencing major income losses. They can also apply for an advance payment under the program.

Let me reassure you by saying that, since last summer, I have been working very actively with my provincial partners to improve the range of risk management programs, especially AgriStability.

There is also AgriRecovery. This is a very effective mechanism that I am discussing very actively at the moment with my provincial partners. The program is designed precisely to provide assistance in critical situations. Generally, these are natural disasters, but we consider that the COVID-19 pandemic is an exceptional situation...

[John Barlow, Conservative, Foothills, AB]

Thank you, Minister.

Is it okay if I get to my next question before I run out of time?

[Marie-Claude Bibeau, Liberal, Compton—Stanstead, QC]

…and that the program could help farmers in that sense.

[John Barlow, Conservative, Foothills, AB]

Thank you.

Basically you're saying the programs that exist are all that agriculture is going to get, even though we know the vast majority of agriculture does not subscribe to those programs.

Right now, processing capacity is at a critical stage within Canada. Cargill is going to try to reopen on a limited basis on Monday and JBS in Brooks is hanging on by a thread, meaning about 70% of our cattle processing is at risk. With 22 plants now closed in the United States, the issue is even more critical in Ontario and eastern Canada. Have you seriously considered programs like the set-aside program or an enhancement to the livestock price insurance insurance program as ways to address cattle and pork processing?

You really have two choices here: Either you do something to ensure that the processing plants can remain open, or you do something for the producers themselves, because they are going to have to start euthanizing animals, which none of us wants to see when we're on the verge of a food crisis.

[Marie-Claude Bibeau, Liberal, Compton—Stanstead, QC]

The situation is particularly difficult at the moment in the food processing sector. As you just said, the Cargill plant had to shut its doors for several days, but it is going to reopen on Monday. That is good news.

I can assure you that I am working actively with my provincial partners to establish programs designed to respond to the needs of both farmers and processors.

[The Chair, Liberal, Sherry Romanado]

Thank you very much, Madam Minister.

Our next round of questions goes to MP Ehsassi.

You have six minutes.

[Ali Ehsassi, Liberal, Willowdale, ON]

Thank you, Madam Chair.

Thank you to the ministers for appearing before our committee today. I'm very grateful that you have taken the time. I will start off with Minister Bibeau.

Minister, you have made it abundantly clear that these are very challenging times for our farmers. You've also touched on how incredibly important it is that there be federal and provincial co-operation.

One program, the business risk management program, allows our farmers to mitigate and manage risk. As I understand it, it's a cost-sharing program between the federal and provincial levels of government. Could you explain to us whether there has been co-operation between the different levels of government and how you have experienced that?

[Marie-Claude Bibeau, Liberal, Compton—Stanstead, QC]

The business risk management program actually includes different programs. The one we hear the most about is AgriStability. This program is designed to support farmers when they face an important decrease in their revenues. They can also ask for an advance payment.

I would say that the program we are discussing the most right now with different provinces is AgriRecovery. We are having ongoing conversations. Depending on the province, the reality is not exactly the same. The levels of challenges for the different sectors are not necessarily the same, either. I would say this is one option on the table.

There are many others, such as the set-aside program for the beef sector that has been mentioned earlier. We are really at the point right now that these discussions are advancing well.

[Ali Ehsassi, Liberal, Willowdale, ON]

Thank you for that.

Another sector that's truly on everyone's mind these days is the meat processing sector. Obviously, food security is something we take very seriously.

As I understand it, there is a division of responsibilities again between the federal and provincial levels of government. As I understand it, provincial inspectors can certify meat that is only for intraprovincial use. The federal government is responsible for inspecting meat that is going to other parts of the country. Have we worked something out collaboratively with the provinces to ensure that we can work seamlessly?

[Marie-Claude Bibeau, Liberal, Compton—Stanstead, QC]

Yes. I can tell you that with the Canadian Food Inspection Agency we are working really hard to make sure we will be able to offer all the services to the food processors, amongst others.

We have a pretty good collaboration with the provinces. It started with Alberta. We have an agreement with them. We are training their inspectors to have the possibility to share the resources. If we face a food shortage in one province or one territory, then in such a particular circumstance CFIA is absolutely open to allow some movement between provinces and territories, even if there has been an inspection under a provincial authority and not a federal authority.

The president might correct me if I'm wrong, but I think this is an agreement we have already started between the Northwest Territories and Alberta.

Siddika, could you just confirm or complement?

[Dr. Siddika Mithani, President, Canadian Food Inspection Agency]

Madam Minister, you are absolutely right. We are working on an agreement with provinces to look at interprovincial trade.

[Marie-Claude Bibeau, Liberal, Compton—Stanstead, QC]

Thank you.

[Ali Ehsassi, Liberal, Willowdale, ON]

Perhaps I could turn to Minister Joly.

Minister, you touched on the fact that you have taken the initiative to invest $962 million into regional development agencies. The money is meant to assist businesses that cannot avail themselves of other programs. Could you kindly unpack that for us so we're all more familiar with what these agencies are doing and how they're assisting?