Industry Committee on May 4th, 2020

[Keith Currie]

If our animal populations decrease, that hurts the market for the grains and oilseed sector as well.

I don't know, Bob, if you want to jump in on the animal welfare side of things.

[Bob Lowe]

Sure.

As we've heard, pork and poultry have a shorter time frame. The beef sector is longer. One of the reasons we want to increase advance payments out to three years is that it covers the cycle of beef. However, as producers, there is not a producer on the planet who will talk about euthanasia unless it is absolutely the last-ditch effort.

[Nathaniel Erskine-Smith, Liberal, Beaches—East York, ON]

That's a useful segue into my next question. I've already seen reports of euthanasia. P.E.I. is an example. I saw hundreds of pigs that had been euthanized.

Mr. Currie, is your organization tracking the number of euthanized animals or tracking the number of animals that are to be euthanized? Is there any system of reporting here?

[Keith Currie]

Our system stays in collaboration with our national commodities and we get reports back from them.

You're right that in particularly the pork sector there is grave danger. I know that Manitoba, Quebec and P.E.I. in particular are looking at euthanasia. Ontario is very, very close. We even had a producer in P.E.I. who spent $50,000 out of pocket to run an extra shift at the Olymel plant in Quebec on the weekend just to get his market pigs through. He's never going to recoup those costs, but he didn't want to euthanize his animals, so he found money to run an extra shift.

To Bob's point, farmers will do what they have to do to keep these animals alive, but at some point in time a decision has to be made.

[Nathaniel Erskine-Smith, Liberal, Beaches—East York, ON]

When that decision is made.... I don't know if this is right, but it was provided to me. I'd like some clarification with respect to approved and authorized practices for euthanasia. Is the practice of thumping actually approved for pigs?

[Keith Currie]

I can't answer that, because I'm not a veterinarian. I also can't answer in terms of a particular provincial law.

I don't see farmers who would do that. Farmers are going to euthanize in a humane way. They will work with their veterinarians to make sure this done in a proper way.

[Nathaniel Erskine-Smith, Liberal, Beaches—East York, ON]

I hope that is the case. The National Farm Animal Care Council suggests that blunt-trauma euthanasia is acceptable and is administered by “grasping the hind legs of the piglet and striking the top of the cranium firmly and deliberately against a flat, hard surface.” I've seen pictures, certainly, of the cranium hitting a flat cement floor. If that's approved, that's a challenge.

I will close with this, because I'm running out of time. It just seems to me that this is what happens when we treat sentient animals as commodities. Of course, there are economic fallouts, but there's also a serious fallout for animals.

Thanks very much.

[The Chair, Liberal, Sherry Romanado]

Thank you very much, Mr. Erskine-Smith.

The next round of questions goes to Lianne Rood. You have five minutes.

[Lianne Rood, Conservative, Lambton—Kent—Middlesex, ON]

Thank you, Madam Chair.

My question is for you, Mr. Lipsett.

The beef industry in Ontario and eastern Canada has faced severe processing capacity shortages for months. I have been asking the federal government since December of 2019, which was when the Ryding-Regency plant closed here in Ontario, what their plans were to ensure that our beef producers had somewhere to send their cattle for processing. I've also been hearing from many industry representatives and farmers across my riding of Lambton—Kent—Middlesex that the current business risk management programs are not able to address the challenges they're currently facing. That's something you alluded to in your opening remarks.

Now with the COVID-19 pandemic, we're seeing the vulnerabilities in our food supply chain. There may be shortages across Canada for Canadians trying to access Canadian beef. Many farmers, including our beef producers in Ontario, are facing very critical times. They're questioning their financial viability going forward.

What immediate initiatives can the federal government take to help our cattle and beef industry through this crisis, and perhaps specifically in Ontario? You alluded to the cattle set-aside program. Perhaps you would like to elaborate on that a little bit more.

[Rob Lipsett]

Sure. Thanks, Lianne.

It's kind of a two-pronged approach for us in Ontario. Our ask for the Ontario risk management program top-up is really vital. It's a program that has been proven to work. It goes hand in hand with CCA's national ask to cost-share the premium with the WLPIP as well. We need the set-aside program at the same time, because that set-aside program allows us to control the flow of market animals. There's a mechanism set with the committee that lets them speed up or slow down that flow. We could release animals early if there was room at processing, or we could hold them back longer. The costs to hold them back longer would be covered off.

I think the real answer is that the set-aside and a top-up to our Ontario risk management program go hand in hand.

[Lianne Rood, Conservative, Lambton—Kent—Middlesex, ON]

Thank you.

You did allude as well in your opening remarks to the many programs that the federal government has announced to help Canadians weather the COVID-19 pandemic, including the CERB, wage subsidies and loan programs. Are any of these government-announced programs helpful for the beef industry? Would Mr. Currie like to weigh in on this question? I know you've touched on it a bit, but what about specifically here in Ontario?

[Rob Lipsett]

Yes, sure.

Part of the problem with the wage subsidy program is that.... I'll use cow-calf operators as an example. Their revenue comes in two to three times a year, based on their sales. Right now we're not showing a revenue reduction because of the market uncertainty. We can't move those animals at the present time, so we don't have a significant enough price decline currently to qualify for that program.

When we look at the Canadian emergency business account, we see that the current program's payroll requirements exclude what many cattle producers have for payroll expense at the current time. The other piece of it is that many of the larger feeder operations are too large to qualify, because they go over the $1.5 million cap.

[Keith Currie]

I'll just add that on top of a revenue loss perhaps not being shown, what we are seeing is a doubling of expenses, so the net profit is way down. It's very problematic that we can't seem to get across that these incurred expenses are going up and up without that revenue stream continuing to follow suit.

[Lianne Rood, Conservative, Lambton—Kent—Middlesex, ON]

Thank you.

I've also been hearing from farmers in my area in southwestern Ontario that they're considering not planting corn this year. They've been telling me that the carbon tax has been adding to their margins at drying, and ethanol has lowered in value and oil has dropped. Obviously this is going to be a problem in the fall, because we could potentially see feed shortages.

I'm not sure, Mr. Currie, if you want to comment on that. What do you see happening down the supply chain if indeed farmers are not going to be planting the corn that's needed?

[Keith Currie]

This is what I spoke to earlier. Not only do we need immediate help, but we also need help in the long-term aspect of what we're doing. Every single farm business is making that independent decision on what they do or don't do this year. For a lot of people it's cutting back, and even though the impact immediately isn't on grains or oilseed, they're looking at the future and saying, “Hmm, I'm not sure I want to plant as much this year.” It will have an impact, yes.

[Lianne Rood, Conservative, Lambton—Kent—Middlesex, ON]

Thank you.

[The Chair, Liberal, Sherry Romanado]

Thank you.

The next round of questions goes to MP Lambropoulos. You have five minutes.

[Emmanuella Lambropoulos, Liberal, Saint-Laurent, QC]

Thank you.

To begin, I'm going to ask the Dairy Processors Association of Canada a few questions, mainly because in Quebec it's a very important industry, and in my riding there are quite a few facilities, such as Saputo, Agropur, etc.

I had read a couple of the things you had mentioned with regard to COVID-19 and I listened to your earlier comments today regarding the impact on the dairies. Could you give us a bit more of a description and explain how these fluctuations have impacted your sector? You said that the wage subsidy doesn't necessarily apply to you, as you haven't lost 30% of your revenues. However, it would apply to you if it were a slightly lower amount.

[Dominique Benoit]

Yes, I can certainly answer your question, and bonjour, it's nice to see you again.

I guess the dairy processors are in the following situation. We have lost a very significant share of our market, which is the food service business, as it has disappeared in large part. We have not been able to recuperate that business entirely from the gross growth in retail, so we end up in a situation of processors losing sales. Their mix of product is different, too, but certainly they're facing a lot higher costs to operate.

I think, thanks to all the processors and our labour, we've been able to maintain supply in the market and feed Canadians, and we're really proud of that. However, the reality is that we're facing lower sales and higher costs, and none of those programs put in place to cope with the COVID situation have been made for our situation.

What we're asking for are changes to current programs to support our industry, because right now our situation is that the financial viability of businesses is at risk. Furthermore, when you take into account the trade environment that we were already in, and it's even worse now that CUSMA is coming into play, we're facing a tough situation and we need help now.

[Emmanuella Lambropoulos, Liberal, Saint-Laurent, QC]

Thank you very much.

You are in my riding, and I haven't received any kind of feedback from you or from any of the dairy processing companies. I would encourage you to reach out to your MPs. That's our role here. We want to make sure we're getting feedback to the government when these programs are rolled out so quickly.

Obviously the COVID-19 situation was one that we had to adapt to very quickly. We tried to help as many people as possible, as quickly as possible, but it's important to hear your feedback in order to change the programs to better reflect your needs, so thank you for that.

Turning to the Fédération canadienne de l’agriculture, you mentioned that there are many things we can do as a government to help your industry. If we were to make changes today in order to make sure we secured an affordable domestic food supply, what would those changes be?

[Keith Currie]

I'm sorry; was that question for me? You cut out there.

[Emmanuella Lambropoulos, Liberal, Saint-Laurent, QC]

I forgot to change the language on my computer screen. I'm sorry.

Yes, that question was for you. Basically, if we could implement changes today to the programs that are available, which ones would you recommend that we change immediately to help your industry?

[Keith Currie]

We've been advocating for changes to AgriStability, certainly raising the reference margin level, but that would not be responsive enough or quick enough. It would be part of a suite of what we're looking for. Certainly, we've been asking for a direct investment of 5% of 2018's annual net sales into AgriInvest accounts. That will provide the cash necessary for people to try to keep their operations afloat and keep going.

We certainly need investment all along the entire value chain. If processing is healthy, so will our sector be. As we see now with processing backing up, we need some investment there, along with our distribution system as well. I think Morton has highlighted that this is important to us as well.

It's a tiered approach to how we invest in the industry to make sure it's healthy.

[Scott Ross, Assistant Executive Director, Canadian Federation of Agriculture]

Just to add to Keith's remarks, I want to highlight—

[The Chair, Liberal, Sherry Romanado]

Thank you very much. Unfortunately, that's all the time—