AGRI Committee Meeting

37th PARLIAMENT, 2nd SESSION

Standing Committee on Agriculture and Agri-Food

EVIDENCE

CONTENTS

Thursday, October 9, 2003

¹

1530

The Chair (Mr. Paul Steckle (Huron—Bruce, Lib.))

Mr. Bruce Deacon (Assistant Deputy Minister, Corporate Management Branch, Department of Agriculture and Agri-Food)

¹

1535

The Chair

Mr. Howard Hilstrom (Selkirk—Interlake, Canadian Alliance)

Mr. Douglas Hedley (Assistant Deputy Minister, Farm Financial Programs Branch, Department of Agriculture and Agri-Food)

Mr. Howard Hilstrom

Mr. Douglas Hedley

Mr. Howard Hilstrom

Mr. Douglas Hedley

Mr. Howard Hilstrom

¹

1540

Mr. Bruce Deacon

Mr. Howard Hilstrom

Mr. Gilles Lavoie (Senior Director General, Operations, Market and Industry Services Branch, Department of Agriculture and Agri-Food)

Mr. Howard Hilstrom

Mr. Gilles Lavoie

Mr. Howard Hilstrom

Mr. Gilles Lavoie

Mr. Howard Hilstrom

Mr. Douglas Hedley

Mr. Howard Hilstrom

Mr. Douglas Hedley

Mr. Howard Hilstrom

Mr. Douglas Hedley

¹

1545

Mr. Howard Hilstrom

Mr. Douglas Hedley

Mr. Howard Hilstrom

The Chair

Mr. Louis Plamondon (Bas-Richelieu—Nicolet—Bécancour, BQ)

M. Gilles Lavoie

Mr. Douglas Hedley

Mr. Louis Plamondon

Mr. Douglas Hedley

The Chair

Mr. Douglas Hedley

Mr. Louis Plamondon

Mr. Howard Hilstrom

Mr. Louis Plamondon

Mr. Bruce Deacon

Mr. Louis Plamondon

¹

1550

Ms. Donna Mitchell (Executive Director, Rural and Co-operatives Secretariats, Department of Agriculture and Agri-Food)

Mr. Louis Plamondon

Ms. Donna Mitchell

Mr. Louis Plamondon

Ms. Donna Mitchell

Mr. Louis Plamondon

Ms. Donna Mitchell

Mr. Louis Plamondon

The Chair

Mrs. Rose-Marie Ur (Lambton—Kent—Middlesex, Lib.)

Mr. Bruce Deacon

Mrs. Rose-Marie Ur

The Chair

The Chair

Mr. Bruce Deacon

Mr. Rick Borotsik (Brandon—Souris, PC)

Mr. Bruce Deacon

Mrs. Rose-Marie Ur

Mr. Bruce Deacon

Mrs. Rose-Marie Ur

Mr. Bruce Deacon

Mrs. Rose-Marie Ur

Mr. Bruce Deacon

¹

1555

Mrs. Rose-Marie Ur

Mr. Bruce Deacon

Mrs. Rose-Marie Ur

Mr. Bruce Deacon

Mrs. Rose-Marie Ur

Mr. Bruce Deacon

Mrs. Rose-Marie Ur

Mr. Bruce Deacon

Ms. Donna Mitchell

Mrs. Rose-Marie Ur

Ms. Donna Mitchell

º

1600

The Chair

Mr. Rick Borotsik

Ms. Donna Mitchell

Mr. Rick Borotsik

Ms. Donna Mitchell

Mr. Rick Borotsik

Ms. Donna Mitchell

Mr. Rick Borotsik

Ms. Donna Mitchell

Mr. Rick Borotsik

Ms. Donna Mitchell

Mr. Rick Borotsik

Mr. Bruce Deacon

Mr. Rick Borotsik

Mr. Bruce Deacon

Mr. Rick Borotsik

Mr. Bruce Deacon

Mr. Rick Borotsik

Mr. Bruce Deacon

Mr. Douglas Hedley

Mr. Rick Borotsik

Mr. Douglas Hedley

Mr. Rick Borotsik

º

1605

Mr. Bruce Deacon

Mr. Rick Borotsik

Mr. Carl Neggers (Director General, Prairie Farm Rehabilitation Administration, Department of Agriculture and Agri-Food)

Mr. Rick Borotsik

Mr. Carl Neggers

Mr. Rick Borotsik

Mr. Carl Neggers

Mr. Rick Borotsik

Mr. Carl Neggers

Mr. Bruce Deacon

Mr. Rick Borotsik

Mr. Carl Neggers

Mr. Rick Borotsik

Mr. Carl Neggers

Mr. Rick Borotsik

Mr. Carl Neggers

Mr. Rick Borotsik

Mr. Carl Neggers

Mr. Rick Borotsik

The Chair

Mr. Howard Hilstrom

Mr. Bruce Deacon

Mr. Howard Hilstrom

º

1610

Mr. Bruce Deacon

Mr. Howard Hilstrom

The Chair

Mr. Howard Hilstrom

Mr. Douglas Hedley

Mr. Howard Hilstrom

Mr. Douglas Hedley

Mr. Howard Hilstrom

Mr. Douglas Hedley

Mr. Howard Hilstrom

The Chair

Mr. Larry McCormick (Hastings—Frontenac—Lennox and Addington, Lib.)

Mr. Douglas Hedley

º

1615

Mr. Larry McCormick

Mr. Douglas Hedley

Mr. Larry McCormick

Mr. Douglas Hedley

Mr. Larry McCormick

Mr. Douglas Hedley

Mr. Larry McCormick

The Chair

Mr. Larry McCormick

Ms. Donna Mitchell

Mr. Larry McCormick

º

1620

Ms. Donna Mitchell

Mr. Larry McCormick

Ms. Donna Mitchell

Mr. Larry McCormick

The Chair

Mrs. Rose-Marie Ur

The Chair

Mrs. Rose-Marie Ur

The Chair

Mrs. Rose-Marie Ur

Mr. Bruce Deacon

Mrs. Rose-Marie Ur

Mr. Bruce Deacon

Mr. Paul Schubert (Assistant Deputy Minister, Communications Branch, Department of Agriculture and Agri-Food)

Mrs. Rose-Marie Ur

º

1625

Mr. Paul Schubert

The Chair

Mr. Larry McCormick

The Chair

Mr. Douglas Hedley

The Chair

º

1630

The Chair

Mr. Gordon White (Vice-President, Corporate Services, Canadian Food Inspection Agency)

º

1635

The Chair

Mr. John Maloney (Erie—Lincoln, Lib.)

Ms. Debra Bryanton (Executive Director, Food Safety, Canadian Food Inspection Agency)

Mr. Greg Stubbings (National Manager, Forestry Section, Plant Health Division, Canadian Food Inspection Agency)

Mr. John Maloney

Mr. Greg Stubbings

º

1640

Mr. John Maloney

Mr. Greg Stubbings

Mr. John Maloney

Mr. Gordon White

Mr. John Maloney

Mr. Gordon White

Mr. John Maloney

Mr. Gordon White

Mr. John Maloney

Ms. Debra Bryanton

º

1645

Mr. John Maloney

Ms. Debra Bryanton

Mr. John Maloney

Ms. Debra Bryanton

Mr. John Maloney

The Chair

Mrs. Rose-Marie Ur

Mr. Gordon White

Mrs. Rose-Marie Ur

Mr. Gordon White

Mrs. Rose-Marie Ur

Mr. Gordon White

Mrs. Rose-Marie Ur

Mr. Gordon White

º

1650

Mrs. Rose-Marie Ur

The Chair

Mr. Larry McCormick

Ms. Debra Bryanton

Mr. Larry McCormick

Ms. Debra Bryanton

Mr. Larry McCormick

The Chair

Ms. Debra Bryanton

º

1655

Mr. Larry McCormick

The Chair

Mrs. Rose-Marie Ur

Ms. Debra Bryanton

Mrs. Rose-Marie Ur

Ms. Debra Bryanton

Mrs. Rose-Marie Ur

The Chair

Ms. Debra Bryanton

The Chair

Ms. Debra Bryanton

The Chair

Mr. Larry McCormick

»

1700

The Chair

---

CANADA

Standing Committee on Agriculture and Agri-Food

---

NUMBER 047

l

2nd SESSION

l

37th PARLIAMENT

---

EVIDENCE

Thursday, October 9, 2003

[Recorded by Electronic Apparatus]

¹  (1530)  

[English]

    The Chair (Mr. Paul Steckle (Huron—Bruce, Lib.)): Ladies and gentlemen, we're going to begin our meeting. This afternoon, we're meeting pursuant to the question before the committee, and that is of course the reviewing of the supplementary estimates.

    This afternoon we have with us a number of witnesses. We have, from the Department of Agriculture and Agri-Food, Bruce Deacon, assistant deputy minister, corporate management branch; Doug Hedley, assistant deputy minister, farm financial programs branch; Mr. Gilles Lavoie, senior director general, operations, market and industry services branch; and Bruce Archibald, assistant deputy minister, research branch.

    I'm not sure, do we have someone here from the CFIA? This will be the group that we hear now. The other group will be meeting with us later.

    So as usual, we have your presentation, and then we begin the questioning process.

    Mr. Deacon.

    Mr. Bruce Deacon (Assistant Deputy Minister, Corporate Management Branch, Department of Agriculture and Agri-Food): Thank you, Mr. Chairman.

    Perhaps I could introduce a couple of other colleagues who are also here and available to come to the table and take questions should the members ask. They are Donna Mitchell, who is executive director of our rural and cooperative secretariat; Carl Neggers, director general of the prairie farm rehabilitation administration; Steve Verheul, chief agricultural negotiator, international trade policy directorate; and last, Paul Schubert, our ADM communications.

    Perhaps I could start where we were when we last appeared before the committee when we were discussing estimates and the report on plans and priorities. At that time, we indicated that the budget for the department this year was expected to be $2.7 billion, approximately the same amount as we had in the previous fiscal year. We also indicated at that time that $1.3 billion would be coming in through main estimates, and we anticipated an additional $1.4 billion would be coming into the department through supplementary estimates (A).

    Since then, the government has announced the $312 million support for BSE, which means that the forecast budget for the department this year will now be slightly over $3 billion.

    Second, the Treasury Board has revised the supplementary estimates (A) process this year, so that it does not include statutory items or items, for the most part, less than $20 million. The result of this is that what you see in supplementary estimates before you are in fact voted items. It does not include statutory items, and it is limited to the larger amounts that are coming into the department. Effectively, however, it does include all items under APF. So it's effectively bringing in the voted component of the $1.4 billion that we had indicated to you earlier.

    The remaining funds, which are statutory, are available to the department. They usually appear in supplementary estimates only as information items, and they will be reported to Parliament in supplementary estimates (B) at the end of the year.

    In terms of the actual components of the estimates, you have it broken down by vote. It's also broken down into three components under the explanation section, but I should note all three of those components were in fact approved as part of APF. Then there is a breakdown in terms of the object expenditures. These are estimates based on historical experience within the department and pro-rating across the new budgets. Last, there is a breakdown of the transfer payments. These are shown by business line within the department.

    To repeat on a different basis what I said, the $189 million, which shows in voted transfer payments, is approximately 8% of the total grants and contributions available within the department this year. The rest is statutory or items that were approved under main estimates.

    I think I'll close there and we'll take questions. Thank you, Mr. Chairman.

¹  (1535)  

    The Chair: Questions. We'll start with Mr. Hilstrom.

    Mr. Howard Hilstrom (Selkirk—Interlake, Canadian Alliance): Today Quebec signed on to the APF, and the APF of course is included in your expenditures here. Quebec is getting a special deal on this sign-on. It's different from any other province that is signing on to this.

    The farmers there are going to have a different program. It's going to be administered differently. So I'd ask you guys, in relation to the amount of money you've set aside for this program in Quebec, are the farmers there going to be able to have different criteria for getting the federal government's money than the other provinces? And is their payout from the federal government support going to be larger or smaller than what farmers in other provinces would get? The third part of that is that the problem with the previous programs is that the trigger to get it out has been so difficult that many farmers couldn't get their money out, or get a portion of it out.

    So can you comment on those three things in relation to the budget that you've set aside here for the APF funding on the safety net side? Or am I wrong that this is a special deal? If I'm wrong on that, I'll accept the correction right now.

    Mr. Douglas Hedley (Assistant Deputy Minister, Farm Financial Programs Branch, Department of Agriculture and Agri-Food): Mr. Chair, the agreement Quebec has signed is the same as all other agreements. We have another clause in the agreements that says that if a province does something with the federal government it is available to other provinces. But as far as I know, the agreement is the same. In terms of program delivery, the programs in BRM will be delivered, for example, in Quebec by la Financière. They will be delivered to the same standard, with exactly the same details, as they will be in other provinces.

    As for the shares, the business risk management programs are demand driven. As a result, that federal money will flow to wherever the programs need that money anywhere in Canada; there is no fixed share on the business risk management money.

    On the non-BRM, there is a fixed share. That was established some time ago with all of the provinces, and I believe all provinces have agreed to that share.

    Mr. Howard Hilstrom: It seems that some provinces may be better at negotiating a good deal for their province, and unfortunately Manitoba hasn't done a very good job compared to what Quebec has done, in my opinion, because Quebec is able to keep some of their companion programs. But anyway, I don't need to discuss that any further.

    Now, this non-business risk management program, does that include the green cover program? Is that what's being referred to there? Is that one of the other non-business risks?

    Mr. Douglas Hedley: The non-business risk management programming refers to all of those things within the APF that are included in food safety, environment, renewal, and science. The green cover program, however, is separate from the APF funding; it was part of the $589.5 million announced this spring as part of the bridge funding.

    If there are further questions on that, I would turn to Carl Neggers, who is here with us.

    Mr. Howard Hilstrom: On the bridge funding, I happen to be a farmer in Manitoba. How come I haven't got a cheque yet from that $600 million?

    Mr. Douglas Hedley: The minister just announced that program recently. In terms of the detail, we are grinding on the computers now to get it out, and we anticipate that cheques will flow by the end of November.

    Mr. Howard Hilstrom: Just for the public record, mine will be very small, if anything, because I know what my NISA shows.

    I think the big concern on the BSE side is the fact that you appropriated, Mr. Deacon, $3 billion...or what was the figure you used there for BSE? How much does it add up to?

¹  (1540)  

    Mr. Bruce Deacon: It's $312 million.

    Mr. Howard Hilstrom: How much money has flowed so far to the cow-calf producers who don't have any fat cattle and this sort of thing? Have the cow-calf producers across the country been getting some of that money?

    Mr. Gilles Lavoie (Senior Director General, Operations, Market and Industry Services Branch, Department of Agriculture and Agri-Food): Yes, the estimation for the cows and bulls, because the calves were not eligible under the program--it was for slaughter animals only--is for $18 million.

    Mr. Howard Hilstrom: So it's still under the BSE funding program. The amount of money that's available is unlimited. Whatever the demand is, it's unlimited, right?

    Mr. Gilles Lavoie: No, it is limited. Federally, it's $312 million. The provinces are participating, and when we add the provincial share, it's $520 million that is available. But it's not limited to cows, or steers, or heifers. There is an overall cap, but not....

    Mr. Howard Hilstrom: It's under the CAISP program that this is going to be paid out to the producers, I suppose.

    Mr. Gilles Lavoie: It is the delivered by the provinces, but it's additional money that has been counted by the cabinet.

    Mr. Howard Hilstrom: How could the department be so sure the provinces were going to sign on to this agreement and have this money all in place even though there still aren't enough provinces--it's my understanding--that have signed on to make this new APF go ahead on the safety net side? How can that be done? Is that a normal parliamentary procedure?

    Mr. Douglas Hedley: The agreements that we had previously, in particular the NISA agreement, required an amending formula that said that two-thirds of the signatory provinces and 50% of the eligible net sales from those provinces were needed to make an amendment to the program. To put the new program in place, what we said was that we would use that amending formula to bring the new program in. At the present time we have seven signatures. In other words, we have enough provinces signed, but we do have enough of the ENS, so it would take either Ontario or Saskatchewan to trigger the amending formula and bring all of the new programming into place.

    Mr. Howard Hilstrom: Is it costing any extra in administration and hold-up in trying to get people to sign on? I assume it's having a negative effect on the budget of the department to try to put this through as opposed to it having been signed quickly and easily on April 1. Are there any figures for how much extra this is costing the department?

    Mr. Douglas Hedley: No, I have none of those, Chairman. But I would point out that we have completed the work with the provinces. We have responded to all of their concerns. The federal authorities are in place to sign when those provinces sign.

    Mr. Howard Hilstrom: My last question is, is there any special funding within these estimates that I wasn't able to detect there? The first nations people, particularly in western Canada, are getting additional TLE lands, treaty land entitlement lands, and in the case of one reserve that I know of offhand, it's an additional 60,000 acres. So the first nations people are probably going to be doing more in the way of farming, because they're going to be having some pretty good farmland to add to the farmland they already have. Is there special funding in here any place for promoting or developing first nation agriculture?

    Mr. Douglas Hedley: There are two things, if I may, Chair.

    In all of our business risk management funding, those programs are available to first nations. We have talked with them about that to make sure they are available and that we have application procedures that are in line with their needs. We do work with them in terms of the analysis of take-up in the program and their use.

    As to developments, specifically with regard to the first nations, I would turn to others, Bruce or Bruce.

¹  (1545)  

    Mr. Howard Hilstrom: Would the first nations be under the provincial agreement for the safety nets or will there be special agreements with the first nations people individually to sign on to the safety net programs?

    Mr. Douglas Hedley: They will fall under the provincial agreements, making them eligible for all of the business risk management funding.

    Mr. Howard Hilstrom: Thank you, Mr. Chair.

    The Chair: Thank you, Mr. Hilstrom.

    I'll move on to Mr. Plamondon.

[Translation]

    Mr. Louis Plamondon (Bas-Richelieu—Nicolet—Bécancour, BQ): The first question asked by my colleague from the Canadian Alliance raised some questions in my mind about the amount Quebec received.

    What percentage of the total Canadian production does Quebec account for? Is it 15 per cent, 25 per cent or 20 per cent?

    M. Gilles Lavoie: I think it is about 15 per cent.

[English]

    Mr. Douglas Hedley: It depends on how well--

[Translation]

    Mr. Louis Plamondon: I think I remember reading in La Terre de chez nous that the figure was between 18 and 20 per cent. That is fairly similar to your figures.

    Given that Quebec accounts for 25 per cent of the population and produces, say, 18 per cent of the total Canadian production, what percentage of the federal agriculture budget goes to Quebec, within 1 or 2 per cent?

[English]

    Mr. Douglas Hedley: Chairman, I don't have numbers by province, in part because, first of all, we cannot forecast it because the largest share of the money going to each of the provinces is demand driven. We don't know from one year to the next until we are finished the year how much in fact will go to each of those provinces. Crop insurance, the new CAISP program, the old NISA program, and the old CFIP program in fact were demand driven.

    The Chair: Can you give us some historical background as to what might have happened in 2001-02, as an example?

    Mr. Douglas Hedley: We can certainly provide that to the committee, Chairman. I don't have that with me.

[Translation]

    Mr. Louis Plamondon: So you will send that to us, but a study I was looking at said that the figure was about 10 or 11 per cent, depending on the year. That means that we produce close to 20 per cent of the total production, we account for 25 per cent of the population and we get 10 or 11 per cent of all the federal funding for Agriculture Canada. That means that when Quebec signs an agreement, as was the case today, I do not think we need to determine, as my colleague from the Canadian Alliance was saying, whether Quebec got too much. Historically, it has never received its fair share of federal funding for agriculture.

    I have another question for you. You have established, and I see that you are doing some calculations—

[English]

    Mr. Howard Hilstrom: I have a point of order. To clarify, I said “more or less”, that Quebec would get more or less; I didn't say “get more”. It's important that it be corrected.

[Translation]

    Mr. Louis Plamondon: I felt the need to clarify my question; and you felt the same need and that is just fine.

    With respect to developing the potential of rural communities, how long has this propaganda agency that you established been in place? Two or three years?

    It shows up in your budget. As you know, you place large signs in the countryside inviting people to be careful, to think about safety and for some time now, you've been organizing Christmas parties for children living in rural communities in Quebec, you have also given grants to 4-H clubs in Quebec for some time. The idea behind all this is to achieve some visibility. I would like to know how long ago you decided to have a national unity propaganda office of this type. For how many years has this program been in place?

[English]

    Mr. Bruce Deacon: Mr. Chair, I'll ask Donna Mitchell to answer this question.

[Translation]

    Mr. Louis Plamondon: Can no one answer my question?

¹  (1550)  

[English]

    Ms. Donna Mitchell (Executive Director, Rural and Co-operatives Secretariats, Department of Agriculture and Agri-Food): Mr. Chairman, I can answer for the Canadian rural partnership. It has been in existence for five years and is commencing its sixth year.

[Translation]

    Mr. Louis Plamondon: Thank you. The organization has been in place for five years. What is its annual total budget?

[English]

    Ms. Donna Mitchell: We started the Canadian rural partnership with funding of approximately $5 million a year. In the last fiscal year that funding was increased to $11 million. Under the APF, funding was given for the Canadian rural partnership of $11 million per year for five more years, this being the first year.

[Translation]

    Mr. Louis Plamondon: This is the first year that the annual budget has been $11 million, is it not? This year, you will be spending $11 million.

    Ms. Donna Mitchell:

    Beginning this year, we have an $11 million budget for Canadian Rural Partnership.

    Mr. Louis Plamondon: So this year's budget is $11 million compared to the $5 million budget you had last year. It that not correct?

    Ms. Donna Mitchell: Last year, we received additional funding that increased our budget from $5 million to $11 million.

    Mr. Louis Plamondon: So it is $11 million. For five or six years now, all departments have this mission of spending about $10 million a year to increase the federal government's visibility.

    Would you not agree that this is not the type of service that farmers want? They want something concrete, direct assistance, not a Christmas party program or signs promoting safety on farms, advertising brochures, support for 4-H clubs, and so on. I am not saying that the 4-H clubs are not good, but they have other sources of funding.

    I fail to understand this desire to increase visibility, rather than dealing with farmers' concrete problems. I am very surprised that we are increasing the budget for visibility and propaganda by 100 per cent, when money is not available for another programs.

    That was just a comment. I do not expect an answer. Thank you for listening.

[English]

    The Chair: That's the last of the questioning.

    We move across to the government side. Mr. Maloney, do you have something? Mrs. Ur, yes.

    Mrs. Rose-Marie Ur (Lambton—Kent—Middlesex, Lib.): I'm going to start with a very simple question. What does “vote 1, vote 5, vote 10” mean?

    Mr. Bruce Deacon: Good question.

    Mrs. Rose-Marie Ur: I asked some of my colleagues and I sit here not understanding. I thought I was the only one. So I thought I'd be brave enough to ask.

    The Chair: Good question. I think it's probably the most honest question we've heard all afternoon--

    Some hon. members: Oh, oh!

    The Chair: --because all of us were wondering that same thing.

    Mr. Bruce Deacon: In simple terms, vote 1 is the operating vote. That includes salaries and non-salary operating moneys, and it pays basically for all the work we do. “Capital” is capital expenditures, which is everything that is capitalized--for the most part, infrastructure. It includes equipment and, increasingly, other items that are normally capitalized within organizations. Last, vote 10 is grants and contributions, and that includes all transfer payments.

    Mr. Rick Borotsik (Brandon—Souris, PC): And what's vote 30?

    Mr. Bruce Deacon: Vote 30 is CFIA.

    Mrs. Rose-Marie Ur: Thank you. We're all much wiser now.

    My first question is, under “Objects of Expenditure” there's “Personnel”. This personnel, is that salaries?

    Mr. Bruce Deacon: Yes. It includes benefits as well.

    Mrs. Rose-Marie Ur: We get down here to “Professional and Special Services”. What does that include? It's $55.6 million.

    Mr. Bruce Deacon: In this particular case there's a very large component for the Canadian farm business advisory services, which we deliver at arm's length. That's approximately $25 million of that $55 million. The remaining $30 million is for expenditures we would have for specialized external expertise we buy: legal advisers, accountants, IST experts, and a wide range of professionals we would not normally have within the department. If I can put it into perspective, that's about 8% of our total salary budget.

    Mrs. Rose-Marie Ur: That surprises me. Why wouldn't you have that expertise in your department?

    Mr. Bruce Deacon: In some cases we would have people, but this would be specialized expertise above and beyond what we would normally have. For example, for lawyers we would hire--

¹  (1555)  

    Mrs. Rose-Marie Ur: There are no lawyers in the department?

    Mr. Bruce Deacon: We use the Department of Justice, but if you have special cases where you require litigation, etc., we wouldn't necessarily have litigators within the legal complement of the department, so we would use outside firms. Similarly, our IST group would have expertise for running our IST systems, etc., but from time to time we would have to hire specialized IST expertise as required, outside auditors, and professionals of this sort. But it's a relatively small percentage of our total overall salary budget; as I say, it's about 8% or 9%.

    Mrs. Rose-Marie Ur: I'd like to bring forth some of the good work done by a researcher here: 48% of the supplementary estimates or $177 million is being used for capital and operating expenditures, the balance of $189 million will go to programs, and that's almost half and half. Can you justify those numbers?

    Mr. Bruce Deacon: I think one has to put it into the perspective of the total budget. For example, the $189 million that is shown here is transfer payments, and it's a relatively small percentage of our total grants and contributions. That, for example, is only 8% of our total amount of transfer payments in the department.

    Similarly, if you take our total budget--and you can cut it differently--I said earlier our budget would be about $3 billion this year. Some $2.3 billion of that will be transfer payments to farmers, and the remaining $700 million will be for operating and capital.

    Mrs. Rose-Marie Ur: You also stated in your opening remarks that items of less than $20 million were not part of the supplementary estimates. Could you give me an example of what's not there under the $20 million amount?

    Mr. Bruce Deacon: For example, last year we rolled over about $15 million of regular operating money that was not utilized last year. That item will appear in the supplementary estimates (B). There's approximately $40 million not included in what we forecast to be our total budget that has not been approved either as estimates, supplementary estimates (A), or statutory. We have virtually all of the departmental budget currently available to the department.

    Mrs. Rose-Marie Ur: I didn't get the name of the lady who spoke a little bit earlier regarding Canadian rural partnerships. That's certainly music to my ears, because I represent a large rural riding, and to see the funding go from $5 million to $11 million.... How would that benefit rural communities? What will we see coming that's different if we have that increased budget?

    Mr. Bruce Deacon: Perhaps I could ask Donna to come back.

    Ms. Donna Mitchell: Thank you.

    Mr. Chairman, the Canadian rural partnership was indeed put forward as a federal government commitment to raise awareness for issues in rural Canada and to ensure there was a mechanism to coordinate the federal commitment towards rural Canada. This was in terms of access to programs, policies that played out in rural Canada in a different way from how they might in urban Canada, and a means to ensure that services were indeed available to citizens in rural Canada.

    The Canadian rural partnership allows us to apply what we call the rural lens to all policies, programs, and services of all the federal government departments. We couple that with research that brings out the empirical information we need to make a case around how certain world trends play themselves out in rural communities differently from how they do in other places. We have conducted rural dialogues, citizen engagement mechanisms, so we have a two-way communication with rural Canadians and we can understand the issues from their point of view as opposed to simply from a bureaucratic and analytical point of view.

    Mrs. Rose-Marie Ur: Are you involved with the Magog conference and things like that?

    Ms. Donna Mitchell: That's right, and that's part of our dialogue and indeed our outreach as well, which is the two-way communication.

    The last piece of it is a small amount of programming we use to lever activities that otherwise might not take place in rural Canada. It's usually used as a top-up in programming so things will be done and play themselves out so rural Canadians will be able to take part in, for example, the summits that have been done on technology. We made sure there was a rural summit so this perspective could be brought to bear on policy development through Industry Canada.

º  (1600)  

    The Chair: Thank you, Mrs. Ur.

    Mr. Borotsik.

    Mr. Rick Borotsik: Of the additional $6 million, how much is programming dollars?

    Ms. Donna Mitchell: This year the programming dollars are about $2.8 million of that.

    Mr. Rick Borotsik: That's $2.8 million of $6 million?

    Ms. Donna Mitchell: That's of $6 million.

    Mr. Rick Borotsik: So $3.2 million is operational?

    Ms. Donna Mitchell: That's right.

    Mr. Rick Borotsik: Whew. That's like the Governor General.

    Ms. Donna Mitchell: Well, this is a national program. We have staff working in these areas that need support, or these things simply don't occur. They're not brought up on the radar screen; they don't hit the agenda.

    This year we have as well expanded our influence into the provincial governments. We have held the first meeting of rural ministers to see if we could deal collaboratively with them, given that the provinces probably have an equal amount of jurisdiction in the way things will--

    Mr. Rick Borotsik: I'm going to cut you off because I'm going to need some time, but I do have another question.

    I am a fan--or was a fan--of the rural lens. I questioned once before just how the dialogue goes on between department and department. There are issues that happen in rural areas; for example, when you cut back on customs services, it affects rural areas. I hate to say this, but the gun registry has, unfortunately, affected rural areas quite dramatically with respect to hunters coming in from the U.S.

    Have you in fact expanded, with this additional $6 million, an interdepartmental dialogue that's actually going to help rural areas and identify how impacts from a department like CCRA or impacts from a department like Justice affect rural areas? Have you ever done that? Have you expanded that dialogue?

    Ms. Donna Mitchell: We've expanded it in terms of rural teams that are out in each province and territory in order to make that process more comprehensive, and we've expanded it in terms of analytical work on research and the rural lens in particular. As programs and policies are brought forward, it's our role to examine those and to bring out the ways they will impact a rural community that otherwise might not have been thought of.

    Mr. Rick Borotsik: I hate to tell you, but Canada Customs has just implemented a reduction in services that has impacted rural areas, and I haven't heard anything from the Canadian rural partnership.

    We'll go on to the estimates. One of the first questions I have is on the supplementary estimates. I'm familiar with them. The minister has always said that with the BSE crisis particularly there's $5.5 billion sitting there in the APF. He's always said we can borrow forward; we can bring more of those dollars forward as we need them, and I understand you have some $2.3 billion already identified in programs. How would you be able to bring forward some of the remaining dollars in the APF? He said that, right? We have access to those dollars. How do we bring it forward if it's necessary? How do we bring it into this budget year?

    Mr. Bruce Deacon: Perhaps I could answer and then turn to Dr. Hedley.

    The minister's comment was with reference to the fact that it's demand driven. Do we have flexibility to move moneys, if required, from year to year? The answer is yes.

    Mr. Rick Borotsik: Then how would you bring it forward into this fiscal year?

    Mr. Bruce Deacon: If there is a demand against those programs, the flexibility exists for you to draw that down to meet the need in a particular year, as required.

    The BSE special item is a statutory item, approved as a special amount or as a separate ad hoc expenditure.

    Mr. Rick Borotsik: So you'd have to go back as a separate ad hoc expenditure to bring more money into it if necessary?

    Mr. Bruce Deacon: That BSE item had an identified amount around it.

    Mr. Rick Borotsik: But I'm saying the amount may be greater. The minister said, if it's greater, we have access. Would you then go back to a statutory requirement to bring money forward?

    Mr. Bruce Deacon: It's true there's flexibility for us to draw down in years as required to meet the need.

    Mr. Douglas Hedley: Mr. Chairman, if I may, the minister's comments on business risk management were that, of the $1.1 billion we nominally have for each year, if the two programs—crop insurance and production insurance—as well as the CAISP program, drew more than $1.1 billion under the new programs, we could use it. It would be brought in technically under sups (B) in the year, if we needed it.

    Mr. Rick Borotsik: So we'd find it in supplementary (B).

    Mr. Douglas Hedley: Similarly, if we don't use all of it, that money is still available to us in future years.

    Mr. Rick Borotsik: I just want to make a comment to Mr. Plamondon; I'm sorry he left. He was talking about the percentages. I also understand that 47% of the dairy quota is in Quebec, which has only 25% of the population. So there are inequities in a number of areas.

    You said that Carl Neggers was the one who could give us a better understanding of the non-business risk management programs. Is Carl here? Could he give us a better understanding and breakdown as to what that $68 million entails out of the non-business risk management program? I know you touched on it briefly, but can you give us a better understanding as to what that really means: $68 million out of $189 million on sups?

º  (1605)  

    Mr. Bruce Deacon: If you're asking specifically with regard to the health of the environment component in these transfer amounts, then Mr. Neggers can take you through that.

    Mr. Rick Borotsik: I am. That's exactly what I'm looking at, the contribution support of non-business risk management, health of the environment, $68,552,000.

    What is it? What is health of the environment?

    Mr. Carl Neggers (Director General, Prairie Farm Rehabilitation Administration, Department of Agriculture and Agri-Food): Thank you, Mr. Chair.

    The opportunities within the context of that dollar portfolio are fourfold. I'll just list them off so that you'll know them, but I'll explain each one briefly. There's a national water supply expansion program, the green cover program, the environmental farm plan initiative, and the national farm stewardship initiative.

    The national water supply expansion program is about extending quality sustainable water sources to producers and to rural communities.

    Mr. Rick Borotsik: Is it funded under the PFRA?

    Mr. Carl Neggers: This is a national program. The PFRA's technical staff are assisting in the implementation of that program, but it's a national program.

    Mr. Rick Borotsik: Of the $68 million, how much is it?

    Mr. Carl Neggers: It's $60 million, and that is a four-year program.

    Mr. Rick Borotsik: So it's $60 million for four years.

    Mr. Carl Neggers: Four years, yes.

    Mr. Bruce Deacon: Perhaps I could just comment.

    It's important to note that this $68 million is approximately 20% of the total expenditure the department will have on the environmental program. So this is merely money we brought in under this heading in transfer payments, but it constitutes about 20% of the total environmental program. Some of the elements that Mr. Neggers is talking about are components of the total program.

    Mr. Rick Borotsik: So you have national water at $60 million. How much does green cover cost?

    Mr. Carl Neggers: Over the five-year term, the green cover program is $100 million. I can get you the annual breakdown.

    Mr. Rick Borotsik: I know you can, but the annual breakdown is $68,552,000. Okay, that's over five years...so the annual breakdown would be nice.

    So now we have the environmental farm plan, which is really intriguing. How much?

    Mr. Carl Neggers: That is $193 million over five years.

    Then the ratcheted incentive component, or the national farm stewardship piece, which will allow farmers not only to plan but also to actually take advantage of some of the initiatives within the context of their plan, is $100 million.

    Mr. Rick Borotsik: Over five years.

    Mr. Carl Neggers: Yes, over five years.

    Mr. Rick Borotsik: Can you give us the annual breakdown of expenditures on that, as opposed to over five years?

    Mr. Carl Neggers: Yes.

    Mr. Rick Borotsik: I'd appreciate that, thank you.

    That's the health of the environment. Okay, that's it.

    Thank you, Mr. Chairman.

    The Chair: We'll now to Mr. Hilstrom.

    Mr. Howard Hilstrom: Thank you.

    I know you've been waiting for this. I have some Canadian Wheat Board questions. It seems that it's the Alliance that has to bring these things up all the time.

    There's been a legal fight going on with the United States over red spring wheat, as you're well aware. The duty has been confirmed and imposed and there were legal fees with that, but the last time I talked to Minister Goodale, he was telling me he doesn't really have a budget. Is there anything under “professional and special services“ that went to legal fees for the trade dispute with the United States over red spring wheat and durum?

    Mr. Bruce Deacon: To the best of my knowledge, there would not be. The department does provide support to Mr. Goodale, as the Minister responsible for the Canadian Wheat Board, but that is a relatively small ongoing function within the department. To the best of my knowledge, there would not have been special moneys set aside. Those would have been covered, probably, by the Wheat Board.

    I'm sorry I can't answer that more specifically.

    Mr. Howard Hilstrom: Well, you see, if there's no money coming out of here, you can't answer it. But if there's any money coming out of here that went to this legal dispute with the United States, whether you flowed it out of this budget through the Wheat Board or directly in legal fees by sending a lawyer down to Washington, D.C., then those are questions that you have to answer to me. If it's the Wheat Board that did it and there's nothing in the agriculture department spending to do with this issue, then you can refuse to answer it. And if you need to have time to get back to the committee, I'd appreciate that, because this is an important issue for those in the designated region, to know how much this legal fight has cost us.

º  (1610)  

    Mr. Bruce Deacon: Mr. Chair, I'll have to have that verified, and we will get back to the committee with the answer.

    Mr. Howard Hilstrom: We may be having an additional hearing in regard to estimates at some point.

    The Chair: There will be ongoing meetings with respect--

    Mr. Howard Hilstrom: Okay. My second question is, does this budget have anything in it that...? I guess this may still be an “if” question, but if the initial payment guaranteed by the federal government has to be implemented, does that come out of Agriculture and Agri-Food guaranteeing the initial payment that was made to farmers last year, which looks unlikely to now be covered by sales?

    Mr. Douglas Hedley: Chairman, that's a statutory amount. There is a shortfall in the Wheat Board account that's governed by the Government of Canada. It is not part of our budgets, as we have them here.

    Mr. Howard Hilstrom: Okay, that's fine.

    The third question on the Canadian Wheat Board is this. The board issues export permits to exporters who are outside of the designated region. Of course, that costs some money. It was my understanding that it was legislated that the federal government pay for those export permits, the costs associated with them, as opposed to the Canadian Wheat Board paying for them.

    Can you enlighten me in any way as to whether there's anything in this budget that has to do with the costs of export permits issued to exporters outside of the designated region?

    Mr. Douglas Hedley: Chairman, I'm fairly certain those are paid for from the Canadian Wheat Board accounts, not from this budget, but I would be happy to confirm that and get back to you.

    Mr. Howard Hilstrom: Yes, because it still is an issue that arises often. Here again, we may not be talking that many millions of dollars, but as you folks are well aware, every dollar counts in agriculture right now.

    With that having been said, I would sure like to know when the U.S. border is to open, but I asked the parliamentary secretary today and he couldn't answer, so I won't ask you folks either. But that is one of the most important issues.

    I also asked Farm Credit the other day if they'd done an analysis of CAISP, how much was going to be coming out of CAISP into individual farm accounts, if there's been an estimate of the average that is going to be coming out, and that was not possible either.

    If you're sending these cheques out for the interim payments, transition payments, have you done any estimates yet how much you expect the CAISP to deliver to farmers for the coming year, based on the old NISA accounts? You're giving us a reference margin. Do you have any estimates of how much farmers can expect to receive across the country under this new CAISP, or do you have to wait for the applications?

    Mr. Douglas Hedley: We would have to wait on those applications. We continue to try to forecast this, but as market conditions change--and they have been quite variable this year, particularly in the beef industry--estimates today are gone tomorrow, that sort of thing.

    This is an extremely difficult program in which to forecast what those payments will be. We know what they would be over a very long term, but to try to estimate it in the short term is extremely difficult in these market conditions.

    Mr. Howard Hilstrom: Thank you, Mr. Chairman. You gave me extra time there. I appreciate that.

    The Chair: Sure.

    Mr. McCormick.

    Mr. Larry McCormick (Hastings—Frontenac—Lennox and Addington, Lib.): Thank you, Mr. Chair, and I thank the witnesses, everyone in the room, for being here.

    I'm just curious here. On the $57 million used to fund the spring credit advance program--a great program, and I wish we could get more producers to use it--I'm wondering why you waited to put this into the supplementary estimates. Was there not enough there? Did more people take it up this year?

    We know this is happening. We know this is coming. I just wonder why you listed it now.

    Mr. Douglas Hedley: Chairman, that number has appeared in our supplementary estimates in the past, approximately $59 million for that program. I think it's a matter of timing, as we brought it forward out of the main estimates and having all our APF money put in place. We have now brought it in.

    I would point out on that money that the program normally costs us somewhere around $18 million to $20 million annually, even though our estimates show $59 million. Any money not used in that program is available for the remainder of business risk management funding.

º  (1615)  

    Mr. Larry McCormick: That's good news that way.

    Also, is there anything in these estimates on the fall advance and what it costs in any additional money?

    Mr. Douglas Hedley: The fall advance program is under its own legislation. As a result, you will not see it explicitly here.

    We normally spend around $27 million to $30 million annually on that program. It normally advances $1 billion to $1.4 billion to farmers through the course of the fall.

    Mr. Larry McCormick: That's good news.

    Dr. Hedley, I just want to ask you, is there normally enough money there for all the people who want to take part in those programs, who qualify?

    Mr. Douglas Hedley: In the business risk management or the advance programs?

    Mr. Larry McCormick: For the spring and fall programs.

    Mr. Douglas Hedley: As I indicated, on the spring cash advance program, we have nominally $59 million. We're really spending only about $18 million to $20 million on it annually, so we have lots of room for continued expansion. We're putting out about $750 million in lending through the banks.

    Concerning the fall program, that is a legislated program, and we will pay whatever it takes to operate the program on demand.

    Mr. Larry McCormick: It's very good for me to get that clarified so that I can assure people.

    Under the Canadian Food Inspection Agency, the supplementary estimates are $41 million. It would be used for operating costs for enhancing food safety.

    The Chair: I wonder, Mr. McCormick, if you would withhold that question until the CFIA people come before the committee.

    Mr. Larry McCormick: Okay. I just thought Dr. Hedley could have helped me with that. But that's fine; it's not fair.

    I'll go back to the rural partnerships, which is a great program. I sure wish we had had this...I wonder what would have been our excuse if we'd had the rural lens in back when the only bill that we can refer to by number.... We'll probably still refer to a certain bill by the name of Bill C-68 decades from now in rural Canada. We've handled it so poorly, and we are still handling it poorly. And that's me saying that--a person who supported the bill.

    But we have a rural lens. It will help. It is helping. I'm a great fan of all that you're doing there. I've heard that from here on in there'll be less money used for pilot projects. I can probably buy that, but I just need to hear how you're using it in a different way and how that could be better than pilot projects in the areas where it has helped us in the past.

    Ms. Donna Mitchell: Through the life to date of CRP, we've started our programming with pilot projects. That was an attempt to ensure that rural communities had the capacity to diagnose and take into account trends and forces that were affecting them and helpful ways to move that community forward. That program ran for four consecutive years and was fairly successful on a one-by-one basis. We used it to learn about the issues in rural Canada and the capacity of communities to bring forward local solutions.

    Last year we had a one-year program that tried to advance that and tried to help communities focus on bringing together partnerships in the community--rather than one group doing a project that would help that community, trying to get them thinking about community-wide interests and interests across economic, social, cultural, and environmental issues. That worked to help communities move forward.

    Now, with the five-year renewal of our funding, we're taking another look at that and what would be the best practices in terms of building the capacity of rural communities to address their own issues. We are looking to test and evaluate particularly community-based models, although we would do some government programming, particularly if that was federal and provincial programming, to see what works best and what might be the future of rural programming through other departments in the federal government--and by influence, hopefully in the provincial governments as well--and take a more global approach to that.

    Mr. Larry McCormick: Mr. Chair, I just want to take the opportunity to mention that I think Minister Mitchell has done a great job with this. It is one part of the government that doesn't get much money. You people don't really have a lot of money to spend, yet there is the opportunity of going horizontally through other departments to bring in some money.

    But with this new direction or approach, will there be fewer communities that get involved in programs? I thought most of these one-shot programs were quite successful. I've spent a lot of time reviewing them, and not just in my own riding. I'm just concerned. I don't doubt that the feds and the provinces can do a great job, but are we cutting out these small communities? These few dollars have made a big difference in many cases.

º  (1620)  

    Ms. Donna Mitchell: It's really a matter of seeing how we can align ourselves so that in the future we can have an even bigger impact. It will take a period of testing and evaluation where, if we work with partners and lever other moneys, some of the overall effect can be quite considerable. But for the future, we would hope to be able to impact even more.

    Mr. Larry McCormick: Are there programs that are going to communities this year?

    Mr. Chair, that's my final question.

    Ms. Donna Mitchell: Yes, but they have not been finalized or announced yet.

    Mr. Larry McCormick: Thank you very much, Mr. Chair.

    The Chair: Mr. Duplain, have you any questions?

    What about Mr. Maloney? No?

    Then we have Mrs. Ur for the last word.

    Mrs. Rose-Marie Ur: I am devastated. Everyone has left but my honourable parliamentary colleagues here on the Liberal side. The opposition doesn't want to hear my good questions here today.

    The Chair: We just want them to know that the government is working on their behalf.

    Mrs. Rose-Marie Ur: Okay, good. I just thought I had offended someone along the way.

    Regarding the Canadian Food Inspection Agency, in the supplementary estimates $41 million will be used for operating costs for enhancing food safety.

    The Chair: Mrs. Ur, would you hold that question? You'll have a chance, because I think we are going to have the government ask a few questions of the next group.

    Mrs. Rose-Marie Ur: Okay.

    Also, I'd asked you questions regarding the funding for professional special services. Do those dollars include the cost to promote or explain the APF?

    Mr. Bruce Deacon: Effectively, that would be included under transportation and communications, although there could be some professional services included if we hired outside people.

    Mrs. Rose-Marie Ur: Do you know what we're talking about on the APF as to communications, the dollars that have been spent to promote or explain the APF, the total thus far?

    Mr. Bruce Deacon: I would have to ask Paul Schubert to come forward and explain that in more detail.

    Mr. Paul Schubert (Assistant Deputy Minister, Communications Branch, Department of Agriculture and Agri-Food): Thank you, Mr. Chair.

    The communications activities around APF are really being integrated with pretty much the full communications efforts the department undertakes. The communications budget for the department proper is approximately $25 million, and a good portion of that has to do with our translation budget. In fact, it's better than $6 million worth on translation, with about $14 million on salaries, and the remainder is in supporting our activities, most of which focus in one way or another in promoting APF.

    We have initiatives like direct mail programs. There's something called Agri INFO to go to all rural households in Canada, providing as much up-to-date information as we can about the status of the implementation agreements and the rollout of programs. And we hope to increase the frequency now that we're moving further along with the delivery of programs. We have advertising, which is done to support, again, the awareness of the programs; and particularly now that we have a movement towards implementation of CAISP, there'll be a real requirement to be out and informing producers about the availability and all of the details of the program. And through our exhibits program, public opinion research that we do also supports APF. So it's very difficult to separate costs that are specifically related to APF inasmuch as virtually all of our activity now is geared towards promoting APF and its activities.

    Mrs. Rose-Marie Ur: Right. That being said, when they had the big rally on the Hill here with that truck from out west, we had meetings afterwards with the minister and some farm leaders. One of the farm leaders--and I couldn't believe what I heard--said he was having complaints that farmers had never heard of APF.

    So how are you going to change your mode of delivery, or have you looked at ideas on being more creative so that it tweaks the interests of the farming community so that we don't hear those kinds of responses? I have to admit communications are very slow, and not just in agriculture. I give a kudo when a kudo is to be had, but it's very tough sometimes to get information flowing. So I think communications are very important and I wouldn't have a big problem having dollars increased there. Good work is done by the minister and staff, but we need to get it out to the farming community.

º  (1625)  

    Mr. Paul Schubert: I certainly agree with the analysis. It is challenging to raise awareness across such a broad audience. But I think with the use of a range of communications vehicles and products, which we're increasing to do.... And as I said, as we move along with the implementation agreements and the effective rollout of programs, the level of communication will continue to increase. And through constant repetition and use of a variety of channels--advertising, direct mail, information sessions--I think over time we will see that rise in awareness.

    The Chair: Mr. McCormick, you have one minute.

    Mr. Larry McCormick: Yes, Mr. Chair, I have one question here, and I'm sure I would want to allow some time for their answer too. On this $2.3 billion that's available for the department and $700 million for operating--and that's excellent; I think the department's doing a really good job, and it could always be more--approximately what percentage of this money in this year will go to the...? We know about what the conditions are, we know about BSE, we know what your estimates are for the grain in the different provinces. Approximately what percentage of this money will go to the grain producers of Canada, and approximately what percentage might go to the red meat producers? It's more than beef; it's dairy and otherwise. I realize this program is based on total farm income, but I would like your response for my own information, because I don't think people realize how much is going out to producers.

    Mr. Chair, thank you.

    The Chair: Mr. Hedley.

    Mr. Douglas Hedley: Mr. Chair, I don't have those numbers, because our programs are arranged on a whole farm basis. Even if we try to do the analysis, it's a little difficult to try to break it out. As an example, is a grain and oilseed farm that has half grain and oilseeds and half livestock a beef farm or a grain and oilseed farm? We can't split the farm. So we have some rules that we try to sort on, but they're very crude numbers in terms of trying to go at that. That's partly because our programming is on a whole farm basis.

    We can get at the individual payments under crop insurance by crop and start doing that--split horticulture, for example, from the grains and oilseeds. It's only where we have programs like the BSE recovery program, for example, which is quite specific to a commodity, that we do know the nature of the farms they're going to. That, of course, is the 520 that has been announced, most of which is going to the farming community for fed cattle.

    The Chair: Thank you.

    On that note, we conclude our session with you gentlemen. We want to thank you, as always, for being candid and trying to respond. I know you have your work cut out to get back to us with some of those responses that have been committed to, and we await your further responses to some of those questions. Thank you again. We look forward to future meetings.

    We'll ask the people from the Canadian Food Inspection Agency to come to the table. We want to thank you, Mr. White and Ms. Bryanton, for being here this afternoon and representing CFIA.

    You will note that we're heavily weighted on the government side this afternoon in our questioning period, and we expect that the questions will be reasonably friendly coming from the government.

    Some hon. members: No.

º  (1630)  

    The Chair: Not? We have to now take the role of the opposition as well since there is no opposition here this afternoon to do the onerous duty of trying to be the opposition.

    We will begin.

    Mr. White, are you on or Ms. Bryanton?

    Mr. Gordon White (Vice-President, Corporate Services, Canadian Food Inspection Agency): Thank you, Mr. Chairman.

    I'm pleased to appear before this committee to answer your questions concerning the Canadian Food Inspection Agency supplementary estimates (A).

    My name is Gord White. I'm vice-president, corporate services, at the agency. Joining me today is Debra Bryanton, our executive director of food safety.

[Translation]

    As you are aware, the CFIA is the Government of Canada's regulator for food, animals and plants. We are committed to enhancing the safety of the food supply, working with other levels of government, producers, processors, distributors and consumers.

    The CFIA's plans and priorities over the near term are being influenced by a number of challenges affecting the future of food safety, animal health and plant protection in Canada. Issues such as increased global trade, major pest and disease outbreaks, evolving—and, in some cases, conflicting—science and changing societal values that require strategic responses by governments and agri-food industries.

[English]

    Our agency recently published its corporate business plan for the period 2003 to 2008. This document outlines our strategic goals for the next five years, all of which relate to the Government of Canada's priorities. These goals include protecting Canadians from preventable health risks, delivering a fair and effective regulatory regime, sustaining Canada's plant and animal resource base, promoting the security of Canada's food supply, and providing sound agency management.

    In terms of the 2003 budget, the federal budget identified the government's commitment to further improving the safety of Canada's food supply by allocating an additional $50 million per annum to the Canadian Food Inspection Agency. This $50 million is a total figure that includes $6.1 million for contributions towards an employee benefit plan and $2.8 million for the Public Works and Government Services Canada accommodation charges. Supplementary estimates (A) for 2003-04 are seeking authority to formally increase the agency's budget by the net amount of some $41 million. Mr. Chair, this will bring our budget, by the time supplementary estimates are hopefully approved, to some $524 million annually.

    In deciding how to distribute the funds, we've carefully considered where investments would most effectively advance our priorities and our overall capacity to carry out our work.

[Translation]

    After much consideration, the agency has decided to allocate $24 million (59 per cent) of the incremental $41 million to three key areas. These areas are: reinforcement of inspection capacity, including training; informatics to support the inspection capacity; and strengthening corporate support.

    The volume and complexity of imported and exported products continue to increase the demand for CFIA inspection and certification services. At the same time, the growth of domestic industries produces similar demands within Canada.

    For example, production (sales) in the domestic food and beverage processing sector were $52 billion in 1996, and are expected to grow to $77 billion by 2005.   

º  (1635)  

[English]

    To address these challenges, the agency will spend approximately $14 million, or 34% of the supplementary estimates funding, on reinforcing our inspection capacity. These funds will cover existing payroll shortfalls, increase inspection staff in certain programs, and provide for rotational flex for critical training and certification.

    An additional $2.2 million, or 5%, will be spent on the agency's science and program capacity. As a regulatory agency, the CFIA relies on sound science as a basis for its program and policy development. We must also continue to invest in research, technology, and tools that will support the delivery of our mandate.

    As well, $2 million, or 5%, will go toward security and preparedness coordination to help in the prevention of the inadvertent or deliberate spread of food pathogens, toxic substances, pests, and diseases that could pose a threat to human health, the agriculture production base, or the environment.

    The CFIA relies significantly on technology to conduct our inspection activities and will be investing approximately $3.5 million, or 7%, to upgrade and improve current inspection systems and the operating infrastructure. On strengthening the corporate support capacity within the agency, approximately $3 million, or 7%, is being invested in our international affairs capacity, corporate audit and review, financial and realty services, human resources, and settling specific legal liabilities that we have.

[Translation]

    Given the government's overall financial situation and the pressures on the fiscal framework, the agency has been directed by Treasury Board ministers to allocate $17.6 million (43 per cent) of the incremental funding to cover emergency costs relating to issues such as Bovine Spongiform Encephalopathy (BSE), Bovine Tuberculosis, Emerald Ash Borer, Brown Spruce Long-Horn Beetle, and Asian Long-Horn Beetle.

    The agency will endeavour to meet emergency costs within the $17.6 million threshold.

[English]

    This has been a very quick overview of how the Canadian Food Inspection Agency will be spending the $50 million announced in the federal budget of February 2003. I welcome the committee's questions and comments.

    The Chair: Ms. Bryanton, you're simply going to respond to the questions.

    Who is first? Mr. Maloney.

    Mr. John Maloney (Erie—Lincoln, Lib.): In the Niagara region of southwestern Ontario and in Nova Scotia there were problems with plum pox. We had a three-year program to address the situation, and there was talk that an extension would be necessary. Was that ever granted, and if so, how much was it?

    Ms. Debra Bryanton (Executive Director, Food Safety, Canadian Food Inspection Agency): If there is no objection, I'd like to ask one of our plant health folks to come to the table.

    This is Greg Stubbings. He's the national manager of the forestry program, but he's also a very talented individual who knows much about the plant health programs, so he can answer that question for you.

    Mr. Greg Stubbings (National Manager, Forestry Section, Plant Health Division, Canadian Food Inspection Agency): You referred to an extension of the program. At this time, as you know, we're coming up to the end of our third year of the plum pox program, and we're expecting to have the sampling results completed at the end of November. Then the committee that's been formed will present some options to the minister. There are about four options being considered.

    We're fully aware that the industry is seeking an extension. They would like another four years to be added to the program. At this time it's hard to say what option will be selected, but they are certainly looking at all the options for both Niagara and some of the isolated areas outside the Niagara area.

    Mr. John Maloney: Are you in a position to advise what these four options are?

    Mr. Greg Stubbings: I can provide some details. One of the options is eradication in all areas--in Niagara and the isolated areas. Again, complete eradication would probably go beyond another four years, especially in the Niagara area, but in the isolated areas four years would probably suffice.

    The second option is essentially no eradication or suppression programs--simply quarantine's own management. Based on our surveys, we would quarantine a zone and not allow movement of, let's say, nursery stock or infested material outside of that zone. Of course, there would be outside regulatory controls placed by the United States, etc., on that zone, but other areas of Canada would continue as normal.

    The third option would be eradication in the isolated areas but not in the Niagara area. Again, looking at the four-year timeframe, we feel that eradication could be achieved in four years in the isolated areas.

    Finally, with option four we would continue toward eradication, essentially as we have in the past three years, bringing down the threshold levels in the Niagara area while trying to achieve eradication in the isolated areas.

    Those are basically, in broad terms, the four options.

º  (1640)  

    Mr. John Maloney: Is the industry represented on the committee that will sit down to make the decision?

    Mr. Greg Stubbings: Yes. There is representation from AgriCorp, the Ontario ministry, Agriculture Canada, and the CFIA.

    Mr. John Maloney: Thank you very much for that information.

    There's a reference on page 2 of your report to 7% being invested in international affairs, corporate audit review, etc. What do you mean by international affairs?

    Mr. Gordon White: We have an international affairs group within the agency that deals with not only our international partners but also our colleagues in other departments, specifically DFAIT and Agriculture Canada. The technical issues we're dealing with are sort of one or two steps down relative to the trade issues, so we're using that group to basically be our brokers and negotiators on the technical front.

    Mr. John Maloney: Thank you.

    On the BSE issue, we've only had one cow. Are there any contingencies if, God forbid, more animals show up with this disease?

    Mr. Gordon White: I guess we would have to look at what containment exercise to engage in. On the current BSE exercise, our estimate is that we went through between $8.5 million and $10 million in our eradication and containment trace-back exercise. It would be tough to answer your question because it would depend on the scope.

    Over the last four or five years, the Treasury Board and the Government of Canada have supported us quite well on our emergencies, but we would obviously be put in a position to go back to seek more funding.

    Mr. John Maloney: How many cows were actually eradicated?

    Mr. Gordon White: I believe around 2,700 head of cattle were put down, plus or minus.

    Mr. John Maloney: Food inspection at these packing plants is certainly becoming a concern to the consumer--another problem in this area. What involvement do you actually have, at least with the packers that come under federal jurisdiction? For those that are under provincial jurisdiction, are we starting to look that way as well? Do we have some responsibility if provincial people are not doing their jobs? I'm looking at consumer health.

    Ms. Debra Bryanton: As the committee is aware, many of the animals that are slaughtered in Canada go through the federal system, so approximately 95% of the meat that is consumed in Canada goes through the federal system.

    As the committee may also be aware, we introduced a regulatory package to look at excluding specified risk materials from animals, as a contribution toward continued food safety in relation to BSE. That requirement is also being implemented within provincial establishments, and we're working very closely with those provincial establishments to help in any way we can in their implementation.

    Some provinces are very advanced. We are working harder with other provinces to see these requirements implemented. We've been providing them with our materials and helping them interpret and implement some of these requirements within the provincial establishments. The SRM requirements have been implemented in the federal establishment successfully. That's related more to recent measures that address BSE in particular.

º  (1645)  

    Mr. John Maloney: Just as a point of information, I appreciate that the disposal of specified risk material doesn't fall under your financial jurisdiction, but it's the responsibility of someone in the system. Do we have any idea what that cost is now? Before we were recycling most of this stuff.

    Ms. Debra Bryanton: I don't know that cost. If it's of interest to the committee, we could investigate whether that cost has been estimated.

    Mr. John Maloney: We used to ship a lot of offal offshore, too. I suppose that's come to a halt as well?

    Ms. Debra Bryanton: Yes, it has.

    Mr. John Maloney: Thank you.

    The Chair: Thank you, Mr. Maloney.

    Mrs. Ur.

    Mrs. Rose-Marie Ur: I, too, thank you for presenting to us this afternoon.

    When you made your presentation, your priorities--you had five--were protecting Canadians from preventable health disease, and that is certainly a responsible goal for the agency. That being said, in regard to your allocations, do you get any dollars from the Department of Health, from the minister's office, or is it all totally from Agriculture Canada?

    Mr. Gordon White: I noticed you asked the question earlier about the vote structure. Vote 30 is the CFIA's operating vote, so our funding is allocated directly to the agency by Parliament. We do not receive any funding per se from the Department of Agriculture or the Department of Health unless there is some sort of negotiated program, a joint program where we would participate jointly with those two other departments. Then we would be sharing in that funding according to the terms and conditions of those agreements.

    Mrs. Rose-Marie Ur: Great. I appreciate that answer.

    Also, in your budget for 2003 you indicated that the $50 million includes $6.1 million for contributions to employee benefit plans. What amount goes to salaries, then, if that's the benefit plan?

    Mr. Gordon White: If you are looking, if you have the supplementary estimates page in front of you, you'll see that our object of expenditure breakdown indicates that we have $30.8 million of the $41 million going to salaries.

    Mrs. Rose-Marie Ur: You mentioned in your presentation, under how you are spending the $41 million, informatics to support inspection capacity. Can you elaborate on that, please?

    Mr. Gordon White: The agency runs a number of operating systems for inspection and laboratory activities as well as two or three corporate systems such as the finance system and an HR system.

    The amount of money we're looking to allocate to strengthening that support will be primarily to improve some of the existing inspection programs that we have--a laboratory systems sampling program--as well as to upgrade our infrastructure to the new Windows XP environment so we're on the same platform as other departments in government and as our partners in provincial governments and in the United States, for example.

    Mrs. Rose-Marie Ur: I have to commend the agency; they've certainly proved their worth over the last few months. We can be critical, but we have to hand out bouquets when the job is well done. Canada certainly was marked around the world for doing a great job, so I certainly appreciate that.

    Do you believe your budget will need to increase even more? Of course, everyone wants more money; that may be a kind of silly question. But with the specifics that other countries may require of Canada, do you foresee that more will have to be done by the CFIA, that because of our strong science-based agency we'll need to improve in that way, which will require more dollars coming forth to open some doors?

    Mr. Gordon White: That's a very interesting question.

    Mr. Chair, I would start by saying our workload essentially is broken down between the regular ongoing inspection activities and the emergencies we must manage. There is a balancing act that we have to engage in.

    The government, as you understand, is in a very tight financial situation these days, and we're trying to live within our means. The easiest way to answer that is that it will depend on what obligations are imposed or negotiated and how they will ultimately roll out in terms of incremental work we will have to do.

    For example, ongoing surveillance and testing as a result of the BSE incident is where we will hopefully be coming forward with a request for incremental funding.

º  (1650)  

    Mrs. Rose-Marie Ur: Thank you.

    Thank you, Mr. Chair.

    The Chair: Mr. McCormick.

    Mr. Larry McCormick: Thank you, Mr. Chair. I'm glad of those excellent questions by my colleagues.

    Again, congratulations for the excellent work. You were so busy working around the clock eight days a week. I hope the fact was noted that all members around this table—all five political parties—before we got into the debating about moneys, did recognize the great work you and your department did. It's worth repeating.

    I have a couple of questions that may not be pertinent to this, but I want to put them on the record and clarify for myself the threat we have today, as a reality, from the Asian longhorned beetle. Bear with me for a moment, because what this beetle, which is found live now in Canada, may do to our maple trees is really scary. In many parts of this country the maple industry is of course a sizeable business, and I'm wondering what department has the guidelines and the lead on this, and the money, if I could ask that, please.

    Ms. Debra Bryanton: The CFIA's role and responsibility for plant protection includes the responsibility for the protection of the maple stands, as an example.

    The introduction of the Asian longhorned beetle is indeed unfortunate. We're happy for now to see it in an urban area and are very anxious that it not go beyond that urban area. Mr. Stubbings can provide more information on what the status is on Asian longhorned beetle, if the committee is interested.

    Mr. Larry McCormick: Could we just verify for the record also that according to other studies there's no health threat to people who consume any maple product due to this beetle being in the trees, because we think it may be afield now in this country.

    Ms. Debra Bryanton: No, there is no health and safety issue at all associated with this. If it had an impact on the maple tree, it would just be on the production capacity of that maple tree.

    Mr. Larry McCormick: It seems a shame for a national symbol to be threatened like that.

    My other question, Mr. Chair, is this. The CFIA does so much work, but I'm thinking about meat packing plants, and about one in eastern Ontario--and it is provincially inspected--at a federal penitentiary in my riding near Kingston. We, the provincial government in their report and the federal Solicitor General's Department, pulled the plug and shut down this packing plant in the last few days.

    Now, it was provincially inspected, I believe, and yet...in fact, my colleague may have mentioned something about the inspection process coming together a little better in the future. But I question this. It's provincially inspected, because I know the meat's not going outside the province, but it certainly is being retailed from these penitentiary sites—more than it should, I will say, and that's my opinion only. According to the small business people in that area, it has affected them very unfairly.

    There seems to be a bit of a conflict when we have a federal institution—we only have seven of them in the Kingston area, and they have two farms—and yet the inspection is done by the provincial government. Could you just fill me in on that briefly?

    Thank you, Mr. Chair.

    The Chair: It's a jurisdictional question.

    Ms. Debra Bryanton: Meat inspection regulations are based on trade and commerce authority. That means they apply to product that crosses a provincial or an international border.

    Any food product that doesn't cross a provincial border is subject to provincial legislation, but it's also subject to the requirements of food and drug legislation, which is federal. Because of the shared jurisdiction, provinces generally take responsibility for meat inspection within their jurisdiction. The province of Ontario has a meat inspection system in place, and it is one of the more effective systems in Canada.

    With regard to this particular situation, unfortunately at this time there have been allegations made, but there's certainly no information to indicate to us that any meat has been distributed in the marketplace that is unsafe.

º  (1655)  

    Mr. Larry McCormick: Thank you for clarifying that, Mr. Chair.

    The Chair: Next we have a supplementary question by Ms. Ur.

    Mrs. Rose-Marie Ur: Yes, I forgot to ask one question and was reminded when Larry was asking his question. It's about the emerald ash borer, close to my riding of Lambton--Kent--Middlesex in southwestern Ontario. How many dollars are being spent in those four different areas you alluded to in your presentation? How much is going to the emerald ash borer situation? And is it to pay for the removal of trees, or what is the funding actually used for?

    Ms. Debra Bryanton: Perhaps I could begin by saying that we're in the very early stages of this. The plans are being developed for emerald ash borer, so I'm not sure that we have the allocations by specific pest at this point, particularly for some of the newer infestations. If you're interested in any additional information on our emerald ash borer investigation, again, Mr. Stubbings would be happy to provide that for you.

    Mrs. Rose-Marie Ur: All right. I have been in contact with CFIA on this because it is so close to my riding. I've had some correspondence, but I would certainly be more than pleased to be kept updated on the status of the emerald ash borer in the community because it is causing a lot of havoc in southwestern Ontario. It's a very serious situation.

    Ms. Debra Bryanton: We had in the past put information packages together on the Asian longhorned beetle. We're in the process of doing the same thing for the emerald ash borer. So we hope to have that out fairly soon, and we can then distribute it to the committee.

    Mrs. Rose-Marie Ur: I would appreciate that, thank you.

    Thank you, Mr. Chair.

    The Chair: Does anyone else have any questions to the panel?

    If not, I want to say that we've been very kind to you today. I think generally Canadians have been kind to CFIA. However, there is always the other side as well. I think there is still, because of the fact that the borders still remain closed, that question of the Americans to Canadians, when might we expect Canadian borders to open to cattle moving north? You know the issue--bluetongue, and of course its affiliate.

    I know CFIA takes a very strong position against cattle moving north. The industry has perhaps reversed itself. Maybe that's not the correct term, but I think they've taken a position that cattle ought to flow both ways. This has become one of the forces perhaps that have not been helpful in our getting our borders open.

    I'm wondering, what are your comments on that? I realize you're not the front-line medical people who make these decisions on some of those issues, but what's your comment on that? What's the feeling within CFIA on that issue?

    Ms. Debra Bryanton: Perhaps I could start by saying that CFIA's interest is in protecting the health status of Canada. Our animal health status has been very important in establishing markets internationally. The animal diseases that are involved in what we call the feeder program...there actually have been some very progressive steps made over the past number of years to permit the flow of cattle from the U.S. into Canada to the feeder lot operations.

    The diseases of concern, of course, are anaplasmosis and bluetongue. We do have a system in place so that cattle can come north during the winter months when the insects that transmit these diseases are not active in Canada. We had also introduced a pilot project to permit the import of cattle during the summer months to some specified quarantined feedlots. Unfortunately, there wasn't uptake on the pilot project because of our summer situation in dealing with BSE.

    The Chair: It was attempted this year.

    Ms. Debra Bryanton: It was in place for this summer. As of today, because we're heading into the winter months again, cattle can come into Canada once again.

    We have sought to introduce continuous improvements to this program because we know it has been an irritant. We continuously review the diseases that are involved. We continually update our scientific information on which we base our animal health decisions. So we are trying to take steps to open the border, but it's very important that we do protect our animal health status.

    The Chair: Yes, Mr. McCormick.

    Mr. Larry McCormick: Mr. Chair, I have a point regarding the Asian longhorned beetle. I know we people here at this table at this table are aware of it, but it is scary. You've sent us out an information sheet. But when I see this new colour-illustrated one, I'm wondering if it would be possible to send it around to members. I know some of us are putting it in our householders, because many ridings have some temporary operators in that. It's hard to keep track of all the paper, but if you could also send us one of these sheets that I'm going to present to our witnesses, Mr. Chair, it would be worthwhile, in our opinion.

    Thank you.

»  (1700)  

    The Chair: Are there any other questions?

    I want to thank you, on behalf of the committee, for attending here today. Obviously supplementary estimates are not at the top of everyone's list of priorities, but they are a necessary requirement of us, as members of the committee, to present to the House. In order for us to do that, we have to of course hear you people and we need to take appropriate action this afternoon in terms of having this presentation of yours adopted and appropriately put before the House.

    I want to thank you, on behalf of the committee, for attending, for your indulgence of your time, and for being forthright. As for any information that's not been presented today but committed to be brought to the table, we would ask that you submit that to our clerk. Thank you very much.

    I would ask my committee to remain. We're still awaiting one member.

    [Proceedings continue in camera]