AGRI Committee Meeting

37th PARLIAMENT, 2nd SESSION

Standing Committee on Agriculture and Agri-Food

EVIDENCE

CONTENTS

Thursday, June 5, 2003

¹

1515

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

Mr. Stan Eby (Vice-president, Canadian Cattlemen's Association)

Mr. Dennis Laycraft (Executive Vice-President, Canadian Cattlemen's Association)

¹

1520

Mr. Ben Thorlakson (Director, Canadian Cattlemen's Association)

¹

1525

¹

1530

The Chair

Mr. Garry Breitkreuz (Yorkton—Melville, Canadian Alliance)

¹

1535

Mr. Dennis Laycraft

Mr. Garry Breitkreuz

The Chair

Mr. Odina Desrochers (Lotbinière—L'Érable, BQ)

Mr. Dennis Laycraft

The Chair

Mr. Mark Eyking (Sydney—Victoria, Lib.)

¹

1540

Mr. Ben Thorlakson

The Chair

Mr. Dennis Laycraft

The Chair

Mr. Rick Borotsik (Brandon—Souris, PC)

The Chair

Mr. Rick Borotsik

¹

1545

Mr. Ben Thorlakson

The Chair

Mr. Stan Eby

The Chair

Mr. Dick Proctor (Palliser, NDP)

Mr. Dennis Laycraft

¹

1550

The Chair

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

Mr. Stan Eby

Mr. Dennis Laycraft

The Chair

Mrs. Carol Skelton (Saskatoon—Rosetown—Biggar, Canadian Alliance)

Mr. Dennis Laycraft

¹

1555

The Chair

Mr. Rick Borotsik

Mr. Dennis Laycraft

Mr. Ben Thorlakson

Mr. Rick Borotsik

Mr. Ben Thorlakson

Mr. Rick Borotsik

Mr. Ben Thorlakson

Mr. Rick Borotsik

Mr. Ben Thorlakson

The Chair

Mr. Claude Duplain (Portneuf, Lib.)

Mr. Rick Laliberte (Churchill River, Lib.)

Mr. Dennis Laycraft

º

1600

The Chair

Mr. Dick Proctor

Mr. Ben Thorlakson

The Chair

Mr. Garry Breitkreuz

Mr. Dennis Laycraft

º

1605

The Chair

Mr. Rick Laliberte

Mr. Dennis Laycraft

The Chair

Mr. Rick Laliberte

Mr. Dennis Laycraft

The Chair

Mr. Rick Borotsik

º

1610

Mr. Dennis Laycraft

Mr. Rick Borotsik

Mr. Dennis Laycraft

The Chair

Mr. Stan Eby

The Chair

Mr. Dick Proctor

Mr. Dennis Laycraft

The Chair

Mr. Dick Proctor

Mr. Dennis Laycraft

The Chair

Mrs. Rose-Marie Ur

º

1615

Mr. Dennis Laycraft

Mrs. Rose-Marie Ur

Mr. Stan Eby

Mr. Ben Thorlakson

Mr. Stan Eby

Mr. Brad Wildeman (Chair, Foreign Trade Committee, Canadian Cattlemen's Association)

The Chair

Mr. Dick Proctor

Mr. Dennis Laycraft

Mr. Dick Proctor

Mr. Brad Wildeman

º

1620

The Chair

Mr. Rick Borotsik

Mr. Dennis Laycraft

Mr. Rick Borotsik

Mr. Dennis Laycraft

Mr. Arno Doerksen (Chairman, Alberta Beef Producers)

The Chair

Mr. Garry Breitkreuz

º

1625

Mr. Dennis Laycraft

The Chair

Mr. Dick Proctor

Mr. Brad Wildeman

The Chair

Mr. Garry Breitkreuz

Mr. Brad Wildeman

The Chair

Mr. Stan Eby

º

1630

The Chair

---

CANADA

Standing Committee on Agriculture and Agri-Food

---

NUMBER 036

l

2nd SESSION

l

37th PARLIAMENT

---

EVIDENCE

Thursday, June 5, 2003

[Recorded by Electronic Apparatus]

¹  (1515)  

[English]

    The Chair (Mr. Paul Steckle (Huron—Bruce, Lib.)): Ladies and gentlemen, we want to begin our meeting this afternoon. We're meeting in rather different circumstances. It's a rather hastily planned meeting, and we want to thank the members of the committee for making time for it because it's a very timely and time-sensitive issue. The Canadian Cattlemen's Association and their representatives want to tell us something this afternoon, perhaps give us some sense of where they are at and what they would like to see us do.

    I want to welcome Mr. Thorlakson, Mr. Eby, Mr. Laycraft, and Mr. Wildeman to the table. I understand there are others who are coming. They're doing some radio-television work, perhaps at this moment, and they will be joining us later.

    I think there's also been a request to introduce those who may be a part of this group and who may have some interest in this issue, particularly as it relates to the members at the table. The chairman will grant permission for them to be introduced by some member at the table.

    This being a bit of a different kind of meeting today, we want to thank you again, and let's begin so we can accommodate as many of your questions as possible and respond appropriately.

    Mr. Eby.

    Mr. Stan Eby (Vice-president, Canadian Cattlemen's Association): Thank you, Mr. Chairman.

    My name is Stan Eby. I'm vice-president of the Canadian Cattlemen's Association, and we'd like to thank you for this opportunity to meet with you on this crisis situation our industry is facing.

    I'd like to introduce the people at the table. Ben Thorlakson is a feedlot operator from Alberta and president of the Canada Beef Export Federation. Dennis Laycraft is the executive vice-president of the Canadian Cattlemen's Association, and he will make the initial presentation. Brad Wildeman from Saskatchewan is a feedlot operator and chairman of our Foreign Trade Committee.

    There are a number of people here with us today as spectators, such as representatives of the Canadian Angus Association; we certainly welcome them. Some more of our people may be attending. Arno Doerksen, chairman of the Alberta Beef Producers, will be joining us a bit later, and I'd ask that he be able to sit at the table as a witness and be questioned.

    At this time I'll call on Dennis to make our presentation.

    Mr. Dennis Laycraft (Executive Vice-President, Canadian Cattlemen's Association): Thank you, Stan, and I certainly want to bring greetings from our president, who has been travelling across the country on this issue. He was unable to be here today as he was required to attend to some immediate business at home that he had been unable to work on for the last two weeks.

    We greatly appreciate the opportunity, Mr. Chairman, to discuss the unprecedented crisis our industry is facing. We thought perhaps it would be useful if we gave a little background on the industry itself.

    We are made up of 92,000 beef cattle producers, and we account for about 22% of Canadian farm income or $1 out of every $5 that flows into Canadian agriculture. We represent about $7.6 billion in annual farm cash receipts.

    Over the past 15 years we have grown to be the largest agricultural exporter to the United States and the third-largest exporter of beef and beef cattle in the world. We now export close to $4 billion annually, which represents between 60% and 70% of our production.

    That all came to an end on May 20, at least temporarily. That means that each and every day the border is closed, we are losing $11 million worth of exports. As well, there was product that was en route that was rejected and is either being returned or stored temporarily. Total export losses to date since May 20 are over $236 million.

    To put the meat industry in perspective, you should know it's the fourth-leading manufacturing group in Canada, with industry shipments of $13 billion. It's quite significant; it is the largest manufacturing group in the prairie region of this country. Almost 44,000 production workers are employed. It is the largest sector in the Canadian food manufacturing industry. Now, that's all of the meat industry; it doesn't break out the beef cattle sector, but certainly our industry is a very large component of that.

    It's difficult to get actual employment information at the production level, but there was an interesting study done that will give you an idea of the economic impact, as you start to move down to the local communities, of a large feedlot of 22,000 head. A study done by Serecon Management indicates that it's expected to inject between $3.2 million and $3.6 million into the local community. In addition, it creates anywhere from 23 to 28 person-years of employment, most of those found, again, in the local community, which is typically in rural Canada. Even the smaller feedlots were noted to make a significant contribution. The sort of provincial/national impact apart from gross sales is around $4.1 million to $4.6 million.

    If you take a look at this across the country, you'll find that with close to three and a half million head of fed cattle capacity this works out to about 4,000 person-years of employment, predominantly found in rural Canada. The cow-calf, purebred, and backgrounding sectors add significantly to these totals.

    We feel this is a matter of enormous concern, one that will obviously impact the Canadian economy and will have its greatest effects on rural Canada and in particular the prairie region.

    Here's the crisis we face. At the outset of the positive diagnosis of BSE in one animal on May 20 we indicated that if the ban on exports, particularly to the U.S., remained in place, the situation would reach a crisis level within three weeks.

    We initially had some breathing room because our marketings were what we call very current. We had been in fairly good market conditions going into this, selling cattle as soon as they were ready, and that meant there were not as many cattle to go in at a lower weight. Of course, each week adds to that weight in the number of cattle that are ready to go to market.

    But we are now in week three and are reaching a critical stage for our feedlot sector. Fed cattle supplies are no longer current, and the fed market is barely moving, with volumes in most cases too low to establish price relevance. In effect, our entire marketplace has been non-functional for this period of time. The feedlot sector is entering into a liquidity crisis that is unprecedented in Canadian history; it clearly was not market-driven and was completely unexpected. Immediate assistance is needed to ease this crisis and to help restart the market.

¹  (1520)  

    To give you a sense of what we're facing in the market, we estimate that the Canadian fed cattle supply that will need to be marketed will be approximately 260,000 head in June and 270,000 head in July, then tapering down to 205,000. Currently our plants are running at 40% capacity or approximately 30,000 a week, which means we're going to be processing around 130,000 head of cattle in June when we have 260,000 head ready to go to market. As this moves forward, this problem builds into larger and larger proportions. We will need to process cattle at near or full packing plant capacity in order to get through the large supply of cattle that are now in the system and that will need to be marketed in the next 60 days.

    This indicates that an emergency response strategy will need to address the pricing uncertainties that have paralyzed the Canadian market and to ensure that product throughput can be maximized to prevent capacity constraints. If the export ban continues beyond next week, the feedlot sector will face severe and potentially irreparable damage, which in turn will push both the packing and cow-calf sectors into crisis within 180 days or less. The impact will quickly escalate from hundreds of millions of dollars to billions if the border does not open quickly and the feedlot sector collapses.

    We are not alarmists by nature and did not seek support this past year when the 2001-02 drought resulted in record and sustained losses in the feeding sector. Substantial equity was lost during this period and left our industry precariously vulnerable. Just as the industry was poised to recover from those losses, we were broadsided without warning by this discovery of one animal with BSE.

    If our export sales are not opened very quickly and there is not timely assistance to address the liquidity crisis, we are rapidly approaching an unprecedented disaster for our industry. A quick response may cost millions; failure will cost billions.

    Clearly, as we take a look at the provisions under the WTO agreement, we see it recognizes that there is a need for emergency support in this type of disaster. A recent disease simulation exercise our country participated in has demonstrated that a rapid response is necessary in the event of this type of disaster. We hope that you will recognize the magnitude of the disaster that is building and the need to have an emergency response plan in place in days.

    With that, I'd like to ask Ben Thorlakson, who is a cattle feeder, to put into context the type of liquidity crisis he as a representative of that sector is facing. Mr. Thorlakson.

    Mr. Ben Thorlakson (Director, Canadian Cattlemen's Association): Thank you. It's a pleasure to be with you today.

    To build on the comments of Dennis, I can add some detail on the extent of the crisis in our industry. The apparent isolated occurrence of BSE in one cow in northern Alberta is of course the source of our problem. It was not the owner's fault. It wasn't anyone's fault. It just happened.

    On May 19 we had access to world markets for our beef. In 2002 we marketed over $4 billion worth of beef internationally. As Dennis mentioned, that's $11 million every day of the year. This represents over 60% of our production in 2002. This export flow stopped dead on May 20. What a difference a day makes.

    The most critical of these markets is of course the United States, which last year accepted about 50% of our production. The loss today is being absorbed by the feedlot sector. They purchase the cattle from producers across Canada, feed the cattle for between 120 and 180 days, and then sell the cattle to the packers for processing. Without the feedlots the feeder cattle move south into the United States because we have a North American harmonized market. If you don't have the feeder cattle as the raw material for the packers, then you don't have those 10,000 employees in Alberta in the packing business, and the repercussions flow from there.

    How has this affected us in real terms? In the simplest of terms, the price of slaughter cattle on May 16, when life was relatively rosy, was $1.06 a pound. A 1,300-pound slaughter steer was therefore worth $1,378.

    Today that same steer is worth 75¢ a pound per animal, and just while I was sitting here, on the basis of information I received a few minutes ago, I realized it had moved down another 4¢. That steer is worth $975--that's 1,300 times 75¢--or a loss of $403 a head. That's 29% of the cost value in that animal on the 16th. Approximately 15¢ has been lost in the last four days. This loss represents an amount greater than the margin or equity requirements the bank requires in our cattle and feed to finance the ownership of these cattle.

    What makes this situation doubly difficult is that this blow comes on the heels of our worst year in the feedlot industry in the west. The drought in western Canada in 2001 and 2002 was truly devastating. I've been feeding cattle for 33 years. My own personal losses in 2002 were the highest I've ever experienced both in total dollars and on a per-head basis. I know from discussions with other feeders that last year was very difficult for them as well.

    To provide a more accurate assessment of this erosion of equity, I contacted the agricultural loan centre of the Royal Bank of Canada in southern Alberta and asked if they could provide figures on the aggregate value of the losses experienced by their clients collectively in southern Alberta. The RBC is a major lender in this region, holding over one-third of what they refer to as the feedlot portfolio. They reported that their clients suffered severe reduction in working capital in 2002. The average net loss over the entire year was $90 per head of feedlot capacity. On a 10,000-head feedlot this is a reduction in borrowing capacity of $2.7 million, based on a 75% margin. This represents a reduction in inventory of approximately $3.6 million per producer or one-third of their capacity of the feedlot, and I'd be happy to provide that documentation afterwards if you wish.

    Just for the record, we're seeking information from the Bank of Nova Scotia, hopefully in the same format so it'll be understandable to us lay folks.

¹  (1525)  

    The cattle industry did not seek relief last year from this difficult situation. In general we believe the risks and rewards found in the marketplace provide the signals we need. However, the occurrence of a single animal with BSE has truly placed our entire industry in jeopardy.

    I don't believe there's a better definition of catastrophe or natural disaster than a description the present circumstances. We have no alternative but to ask for temporary assistance.

    The Government of Canada is adopting a new NISA disaster program. Unfortunately, it was very inconsiderate of the cattle industry to time their crisis for this time because we are between two programs. Agriculture Canada officials and ourselves certainly concur on one point: the old NISA is completely useless for the feedlot sector. I don't think it would even supply a good meal and coffee for the receivers. But we are working hard with Agriculture Canada officials on the new program. We were in conference with them all morning to critically examine all the features of the program to see if it is in fact truly appropriate for addressing our concerns.

    If you wish, I have some further points on that, but I'll leave them at this time.

    Probably the first thing that jumps out at us is that the limits are too low. There's a total loss provision of $975,000. Last year my own personal loss, if I recall correctly--and I'm working hard to forget--was somewhere in the neighborhood of $3 million.

    This year the potential liability is far more. I'm concerned about myself of course, but I'm very concerned about a group of young feedlot producers who have put all their money on the line in purchasing facilities and expanding farms so they can develop the critical mass to be competitive cattle feeders. They are in severe jeopardy. In fact, they're toast unless we have an appropriate and timely program. The program must be substantive, it must be timely, and right now it's very important that it be understandable--something that is bankable.

    I worked through the new NISA program, and I just turned it over to my auditor and said, talk to Agriculture Canada. After six hours they had worked through some of the provisions, and through the interpreters I managed to get some small knowledge of the program.

    I think we need a program so these people who are on the edge of despair can say, I don't need to give up. We're concerned about the limits and we're concerned about the concept of negative margins. In our particular enterprises we need some adjustment on these technical considerations if in fact this is to be an effective program for us.

    I give the Agriculture people we were working with this morning full credit. They are trying hard to come up with a program that will be effective, because there's no point coming up with a program that looks good but where everybody caves on it. I don't think any existing program was designed to address a catastrophe from a foreign animal disease, and that's understandable, but let's admit it and move forward.

    I've talked enough. Thank you very much for your kind attention.

¹  (1530)  

    The Chair: Thank you very much.

    I think we'll now move to questions. I'm going to follow the normal routine but we're going to limit the questions to one question per person and short questions, and hopefully we can get concise answers. We have a lot of people to accommodate today, and we will run as long as we can to accommodate them. If you have to leave, we'll accept that, but let's try to make this as exhaustive as we can.

    I hate to limit people but I'm forced to do that today. Make your questions concise.

    Garry, you're on.

    Mr. Garry Breitkreuz (Yorkton—Melville, Canadian Alliance): Thank you, Mr. Chair; I have one question.

    The magnitude of this crisis, I think, has still not impacted on us here in Ottawa or on the government. I'm from Saskatchewan, so I have a pretty good idea; I live on a farm. We need to communicate to the people in charge of the programs, to the minister, and I presume that's what you are doing. You must continue to do that.

    What will it take to open the border? In your estimation, where do we go from here? If I get to ask one question, it is, what would you like to see the minister do right now to open up that border? Is that not the key to getting people back to normal? Am I not zeroing in on the one question?

¹  (1535)  

    Mr. Dennis Laycraft: You're absolutely right. Obviously, there are some immediate liquidity issues, but there's no happy outcome here unless the border is opened in a reasonable amount of time. What we're hearing is clearly, conclude the investigation or the substantive part of the investigation as quickly as possible.

    In fairness, we believe the minister has been in very regular communication with senior officials in the USDA. I also want to commend everybody from the various parties here because all parties have been working together to try to make sure we move towards a positive outcome, and that's much appreciated.

    There are very senior USDA-CFIA discussions occurring. We know there are officials coming in, and there's a team of international experts who arrived, I believe, last night to be part of the validation process. But nothing will speed it up faster than to conclude dealing with the animals that require testing. Like it or not, the only way to do a test is to depopulate those animals and come back with conclusive results so we can hopefully move ahead with USDA officials as quickly as possible to open the border. I believe they are trying to do everything they can right now to do that as quickly as possible.

    Mr. Garry Breitkreuz: Is there any assurance that would happen? If those tests are done, is that going to open up the border?

    The Chair: He gave us the answer.

    Mr. Desrochers.

[Translation]

    Mr. Odina Desrochers (Lotbinière—L'Érable, BQ): Thank you, Mr. Chairman.

    Dear friends from the Canadian Cattlemen's Association, you said earlier that there were two programs, but it was unclear which could help you.

    You also gave some rather alarming figures on your current situation. We don't know whether the inquiry will soon be complete. Some days it seems it will be and other days not.

    My question is the following. When you spoke with the Minister of Agriculture and Agri-Food, did you ask him to set up a special fund, which could later be incorporated into the existing program and then adjusted, while waiting for the entire situation to be resolved? Since you are currently undergoing a crisis, did the Canadian government offer you a special fund to ease the liquidity shortage and help some of your members avoid bankruptcy?

[English]

    Mr. Dennis Laycraft: Thank you.

    We didn't get into the specifics of what particular fund. We did talk to the minister about the fact that we were entering into this liquidity crisis and that we would need to have a number of things happen, and Mr. Thorlakson started to talk about that. Essentially, we need to be able to respond to them within a very short period of time, and we would prefer, to be honest, to be able before the end of this week to say to them with certainty what the details of this type of program will be. At the same time, we need something clear they can go to their lenders with, where they can sit down and say, this is what a bankable amount would be in a crisis like this.

    There are a variety of options that have been discussed. We hope to have some responses to those options tomorrow. The initial indications we're getting are that it's probably easier to try to find the money within the existing framework, but at this stage it's an easier question for the government to answer than for us.

    The Chair: Mr. Eyking, one question.

    Mr. Mark Eyking (Sydney—Victoria, Lib.): Thank you, Mr. Chair.

    We have a beef operation on our farm also. We also have a vegetable farm, and we sell a lot of product to the United States, vegetables mostly.

    In the long term, should we be looking at a better deal with the United States as far as agriculture products are concerned? We're so integrated with them. We know how the Auto Pact was set up and things like that. Should we have something set up on a North American-wide scale where we as farmers can take care of this thing better than we do? I know the governments always seem to have to be involved, but should we be looking at this differently? Should we have a different structure?

    I know that's a shot in the air, but in the long run, unless we have a better relationship with both industries across the border with our systems, whether it's cattle going back and forth, this is going to be....

    We had it with the potato issue a couple of years ago; we hoped the border would open in a month or so, but it took us eight months to open it. We lost all the potatoes. We're dealing with perishable items, and that timeframe is so crucial.

¹  (1540)  

    Mr. Ben Thorlakson: I think it's an excellent point. Our cattle industries between Canada and the U.S. are to a great degree harmonized. We have expended a lot of effort over the last 12 years trying to facilitate year-round movement of feeder cattle from the United States into Canada. We have not completed that job yet, and I think if we had, we would have generated some real goodwill we could draw on at this time.

    Another aspect of your question would be, to reduce our vulnerability vis-à-vis the U.S. market, I think we have to continue to develop our markets in other countries. Mexico is an excellent market for us now; it's second-largest after the United States, and the Mexicans, as we speak, are just scratching at the door, wanting Canadian beef back in their supermarkets and in their food services. In fact, one of the largest food service customers has stopped using a certain U.S. brand name product out of protest that they are being gouged at this time, and they're looking forward with great anticipation to the re-entry of Canada.

    So I think there are a number of things we can do, including strengthening our domestic market to reduce our dependence on the U.S., but we also have to recall that when we're tough on them, they can find a way to be tough on us.

    The Chair: Mr. Laycraft, could you answer very quickly because I want really one response if we can limit it to that.

    Mr. Dennis Laycraft: It is a very important question. I've been having very regular communications with who I call the reasoned and rational cattle producers in the U.S.; you certainly hear other, extreme comments. They very strongly believe in taking a North American approach to a range of issues, and we've been involved in tripartite simulations around foreign animal diseases. We work together in meetings to try to ensure our countries work together to keep diseases like foot-and-mouth and BSE out of North America, and then there's the whole bio-security issue.

    From the cattle producers from the three countries there's a very strong will to work together and strengthen this to ensure we're building the right perimeter around North America instead of perimeters within North America.

    The Chair: Mr. Breitkreuz.

    Mr. Rick Borotsik (Brandon—Souris, PC): Whoa, I'm the one with hair.

    Some hon. members: Oh, oh!

    The Chair: Sorry. Mr. Borotsik.

    Mr. Rick Borotsik: Gentlemen, you've had conversations with government officials, obviously, and I know they've been responding fairly well to the crisis, but they haven't been responding very well with respect to the programs or the compensation.

    First of all, let me say that I honestly believe that what the government has done with compensation currently is unacceptable. It's totally unacceptable. You've told us here today that there is a requirement or a request for timely assistance for your liquidity problems, which means your cash flows have dried up and you have feedlot operators who are really suffering right now. For them to say they have to come up with a program that can be built within the APF framework with dollars that are already in APF is unacceptable.

    What is it you're asking for? Bankable is one thing. Are you looking for interest-free loans? Are you looking for some compensation for the difference between the May 16 value of the product and the June 5 value? Give us something to work with. You can't just simply come here and say they're trying to build it within the APF, because it's not there.

    And by the way, the money's not there in the APF either, so there will have to be another funding pool. Let's get the government off their ass and get something that's actually put on the table with respect to compensation. Tell me what it is you're looking for. I'm frustrated.

¹  (1545)  

    Mr. Ben Thorlakson: Okay, here we go. We came back to our original requests because we thought it would be very quick. The loss is very easy to calculate, just the figures I put on the table initially--but it changes by the moment. We looked at a situation of taking cattle marketed since May 20 and tried to make up a portion of that difference so people could have the confidence to go on.

    We have situations today. Yesterday there was a producer in Alberta who was out of feed but could not buy feed because of course he had lost all his margin. The bank wouldn't give him any money. He couldn't sell his cattle, period. So what do you do? You have cattle with no feed, you have no money, and you can't sell your cattle. Those things are happening in Alberta today.

    So we went to governments with that initial request. They said, no can do. We came back and asked, what can you do? They said, work within this program. We wanted to look at this disaster program, and that's what we are doing now, looking at the disaster program and trying to make appropriate adjustments so it could work. Lift the limits, get rid of the caps, get rid of the negative margins, and readjust the formula for margins because it's most inappropriate for feedlots.

    The only difficulty, Rick, and you put your finger right on it, is that I'm concerned about the timeline. But if there's no option out there at all except this, well, half a loaf is better than none.

    The Chair: Thank you, Mr. Thorlakson.

    Mr. Eby.

    Mr. Stan Eby: This is just further to to Ben's comments. The discussion with the department people was taking place a few minutes ago, so we're really fresh. They have a good sense of the urgency of things. We're pleased with what we see as of this minute. Can it work? They're trying to make it work.

    The Chair: Thank you, Mr. Eby.

    Mr. Proctor.

    Mr. Dick Proctor (Palliser, NDP): I want to pick up where Rick left off.

    Everybody has been very appreciative of the transparency that has been exhibited by the government on this issue with the daily briefings we're getting. Maybe I'm missing something, but I'm seeking transparency from you folks. I would like to know, as I think Rick was asking in his question, what is it specifically you are asking for so we can measure what you are requesting against what the government eventually comes up with? We're all in this, and we all want to see a good outcome here, but we need the information from your organization.

    Mr. Dennis Laycraft: I think when you get into the issues that have been raised, you ask, are loan guarantees enough? No. Will they be helpful? Yes, but they're not a solution. If we move ahead with the programs under the APF, we cannot wait for federal-provincial agreements to be worked out where you need five more signatures. You need to move ahead without that. It can certainly be done within the context of that.

    The other thing you have to do is establish a very clear, understandable cash advance program that will immediately inject that money into the industry in a very predictable, bankable manner. When I say immediately, I mean within the next week to 10 days, which in government terms is fairly immediate.

    What do we believe the losses and the potential costs are right now? Our best estimates are that they're probably around $25 million a week, but we aren't even reaching bottom yet in terms of where our market is moving.

    The sooner we have some indications to encourage more marketing and more product throughput, the sooner our market will stabilize, and the sooner it stabilizes, the less expensive the solution will be. If it goes too long and the feeding sector collapses, you'll start a series of events that will ripple through every part of the chain of the beef cattle industry.

¹  (1550)  

    The Chair: Thank you very much, Mr. Proctor.

    Ms. Ur.

    Mrs. Rose-Marie Ur (Lambton—Kent—Middlesex, Lib.): I certainly do realize the gravity of this situation and appreciate your coming back a few times over the last few weeks.

    What exactly have you brought forward to the department that states what you want in compensation ASAP? You're saying, this is an emergency, this is what we need now and what we can live with until all the data is in, hopefully. This won't move forward until we get the borders open. It's like the chicken and the egg with open borders and compensation, but we need to move quickly.

    What direction have you given these individuals when you've made your presentation? Does it involve the same criteria for individuals who have depopulated herds as well as the ones who have feedlots, because there are two different categories here?

    Mr. Stan Eby: Definitely. Really, we need an announcement within the next day that there will be a meaningful program. The meaningfulness is being worked out. We've indicated the numbers are changing hourly on things. There has to be something meaningful to the producers that gives them confidence so we can start the industry moving forward. I think that's basically where we want to be.

    As to the numbers--you can correct me, Dennis--I wasn't involved in that whole discussion this morning, but there was serious input into how we get the dollars that are needed from the programs. Is that fair enough?

    Mr. Dennis Laycraft: Yes. There is little doubt we need to have some way of taking a look at the current level of losses and translating that into a quick way to advance money that potentially would be available through the APF or whatever other fund. To be honest, we're not here to tell you where the money should come from. We're here to indicate that there is a need to identify that and to help in the liquidity crisis, and it is going to require some type of advance in payments in order to address that.

    The Chair: Ms. Skelton.

    Mrs. Carol Skelton (Saskatoon—Rosetown—Biggar, Canadian Alliance): Thank you, Chair. Thank you, gentlemen.

    It's nice to have you here today, and I'm desperately worried about your industry. Coming from western Canada, I know just how far it reaches out into the fibre of all our communities, right to dog food and to value added for all kinds of different products. It concerns me that you haven't heard anything yet, that you haven't been told anything.

    I have one question. We're testing the second line now. Are there any more lines to be tested? It concerns me because the Canadian Food Inspection Agency isn't telling you anything more or giving you more briefs.

    I saw the cervid industry wait for five years for the Canadian Food Inspection Agency to come forward and put something on the table, and it caused us a lot of problems. I'd like to know if you're getting definite vibes from the Canadian Food Inspection Agency.

    Mr. Dennis Laycraft: We're getting direct briefings from the Canadian Food Inspection Agency at least daily, and I'm also getting direct calls from the person who is essentially in charge of the investigation. We feel they have certainly strengthened their efforts to communicate and keep us well informed.

    We believe it is going to be limited to the two lines of investigation; we're confident that is the case. What you typically do get is some trace-outs from those investigations. They're sort of unique to each one. We've been encouraged, and I guess credit is due to the Government of Canada. CFIA was telling us they've been told they'll have whatever resources are necessary to get the job done, and our sense is that they've been really accelerating their efforts.

¹  (1555)  

    The Chair: Thank you.

    Mr. Borotsik.

    Mr. Rick Borotsik: We're talking markets and we've talked about value. Right now there is beef coming from the U.S. back into Canada in the eastern markets. I know you have brought this to the attention of the department.

    We've seen that there's been some trace-back showing bulls have gone into the American market, but we don't know where they've gone in terms of the whole system. My question is, could and should this be used as a reason to close off the American beef coming into Canada and offset some of the beef we have sitting on the hoof right now in Alberta, Saskatchewan, and Manitoba?

    Mr. Dennis Laycraft: I guess we can both answer that. I'll say no, and Ben can answer.

    Mr. Ben Thorlakson: I don't think you open borders by closing others.

    Mr. Rick Borotsik: Ben, trust me; free traders we are. I understand that.

    Mr. Ben Thorlakson: I'm talking tactics as well as strategy here. Anyway, you want short answers, right?

    Mr. Rick Borotsik: Well, I'd like a little explanation on that. I don't necessarily disagree with you, but I know it's sitting out there in the marketplace right now, not necessarily in your industry, but out there in the marketplace. Can you tell me what your association's thought process is on that.

    Mr. Ben Thorlakson: I think we have to generate some goodwill. The decision that is made in the United States will be made first on the basis of comfort on the scientific level. After that there's a certain discretionary element that must be satisfied.

    Mr. Rick Borotsik: Where are they picking up our supply, the Canadian supply that's been cut off? Where are they getting it from?

    Mr. Ben Thorlakson: The Americans are eating more of their own meat at a higher price.

    The Chair: Mr. Duplain, would you like to ask a question?

[Translation]

    Mr. Claude Duplain (Portneuf, Lib.): Rick, do you want to ask a question? Go ahead.

[English]

    Mr. Rick Laliberte (Churchill River, Lib.): As to the communication that came to the producers from the government and the CFIA originally, is there anything aside from the daily briefings?

    I come from northern Saskatchewan. We have weekly newspapers; we don't have daily access to newspapers in some of these communities. Is there any way of opening up a communication line? Was there one created or is there a communication link that should be considered in times like this?

    I guess it's out of the ordinary. It's not in one region. You have northeastern Saskatchewan with the whole ranchers' edge there along the treeline, and it extends all the way into Alberta as well. There's this whole region that has mix-and-match communication links. Some of them have regional television and some of them have local television, but it's a mix of communications in that area. How can we best address this?

    Mr. Dennis Laycraft: I'll tell you what we see has been happening. We start off with a daily briefing that's directly to our organization. Then there's a broad industry-wide conference call, which certainly helps associations to put information out to their membership. We have a daily board meeting after that to try to inform the provinces of what's happening. The CFIA puts out a daily update on their website, as we do, and then at 1 o'clock--or 3 o'clock, I guess, Ottawa time--there's a daily briefing given to the media.

    It's never an easy question as to how you reach everybody with the message, but I think there's been an enormous effort there. I honestly can't say we can find any fault with the degree of public reporting CFIA has done on this. They have made an enormous effort, and it's certainly been described by other countries around the world as one of the most transparent processes there is.

    But if there are suggestions, particularly when we get into the more remote rural areas, we'd welcome those to feed not only into our efforts to get information out but into CFIA's, and I'm sure they would as well.

º  (1600)  

    The Chair: Thank you, Mr. Laycraft.

    At this time I would point out to the committee members still here that tomorrow morning at 10 o'clock there's another conference call. Your offices will be reminded of that.

    Now we move to Mr. Proctor.

    Mr. Dick Proctor: Thanks, Mr. Chair.

    I'm somewhat taken aback by the response you've received from the agricultural officials, who in Mr. Thorlakson's words said “no can do” in terms of another program, that the money has to come from the current APF moneys. It just seems to me so clear that this is such a unique situation that I find it hard to understand why it wouldn't be treated as such.

    My question is, what rationale have government officials given you as to why this has to be found, whatever aid is forthcoming, from resources that are already there in the ag department?

    Mr. Ben Thorlakson: It would appear it must be the fault of the Canadian cattlemen because we chose a very bad time to have this single BSE animal. If we had only planned ahead and had it after the new APF was all in place, it would have simplified our lives.

    It's my understanding that there are still negotiations and discussions going on with provinces that have not yet signed on.

    As to our suggestions on some of these issues with the program, we feel its success will lie in its simplicity and how the funding will be directed. It should be completely auditable and not open to manipulation. We all know you can't have a program that's going to embarrass the public sector in retrospect if you want it to be a successful program.

    We helped draft this program but it didn't fit the pistol. I think it was because of other issues that are out there in the adoption of APF that are beyond my intelligence and wisdom.

    The Chair: Mr. Breitkreuz.

    Mr. Garry Breitkreuz: It would be helpful if those of you who've had more experience in this could tell us, is there any historical precedent for what has happened here? Has something like this happened in another sector, like scrapie in Quebec? Wasn't that something similar? Have there not been any cases of BSE in Canada ever before? If there have, what happened when that happened? Why did the border close this time? I don't remember this happening before.

    But can you somehow sketch out for us some comparisons from any part of the agricultural industry where this may have happened, where you had a crisis develop and where the border closed. What happened and was there compensation?

    Do you understand what I'm asking you to do?

    Mr. Dennis Laycraft: Yes, absolutely. In fact, one of the issues that has come up is the question of precedent.

    There was one animal with BSE in 1993, and that was an imported animal from the U.K. It didn't lead to anything that was more than very temporary, and when I say temporary, I mean in some cases hours, a day, or a day and a half as new import permit procedures were worked out. So it didn't cause anything remotely related to what we are going through now. Quite frankly, as we indicated earlier, this is unprecedented in Canadian agriculture as far as we can tell.

    Where there are precedents are other places around the world where major events like this have happened. Now, the Government of Canada and our industry travelled around to those to take a look at what had happened and what should have been done. One of the clear things that came out of that was that the failure to address these particular financial problems caused the whole financial impact to be significantly greater than if there had been a program that could have addressed them quickly. So timing really is absolutely crucial.

    Some very good work has been done, and we have someone coming who participated in that process and who will hopefully be here soon. If not, we could forward to you the recommendations that came out of that.

    That's probably the best precedent, because I cannot think of another problem of this magnitude, with the absolute paralysis of a market to the extent it has happened to us over the past 16 or 17 days.

º  (1605)  

    The Chair: Thank you.

    Mr. Laliberte, do you have a question right now?

    Mr. Rick Laliberte: I was going to follow through on the same question.

    You said had this incident happened at any other time or if we were ready...what should we be doing right now? Aside from us looking at compensation within the existing funds, should there be a special fund created for this? Is that what you are asking for? You started a few paragraphs by saying, lift the limits and readjust the margins, but that's stickhandling around the edges. What is it you need?

    Mr. Dennis Laycraft: Right now we're in between programs in Canada, which is one of the complications. The disaster program that was there before more or less expired at the end of March, and we're trying to get fed-prov agreements around the new NISA that include the disaster component.

    It's very clear that what we need is a disaster component in the safety net program that enables the delivery of timely financial assistance when it's necessary. It's very clear from experience around the world that when you have this type of disease event at this magnitude, you have to respond quickly to address the various liquidity issues in the industry. Regardless of what you call it, it's really a matter of how you establish--and it's hopefully something you'll never have to use--a program that can inject the necessary assistance in a fast and bankable manner.

    Right now we fundamentally don't have that immediately available, and that's always a problem for government. As far as predicting this financially is concerned, these things can go beyond what I would call the normal nature of any safety net program

    The Chair: We want to go to the other side. We'll come back to you, Mr. Laliberte, unless it's a follow-up and really short.

    Mr. Rick Laliberte: Yes, it's a follow-up.

    I'm just trying to analyze how you could interpret this as well, because it could cut both ways. If we announce a new project, it means we weren't ready for it. If we say we can handle it within existing programs, it's a message to the international community that we can handle these things. Maybe there's a message to be read into that.

    Mr. Dennis Laycraft: That may be a broader issue than the issue our feedlot sector is particularly worried about. I can understand what you're saying, but on the other hand, at this stage the crisis is escalating rapidly. That may be a better issue for the post-mortem. What we need is some action here rapidly.

    The Chair: Mr. Borotsik, you're up next.

    Mr. Rick Borotsik: As I understand what we've heard, this has been focused more on the feedlot operators right now because they're at the end. They have fat cows there, and they have to get rid of them. If not, well, it's costing you $2.50 a day to feed them and you don't have feed. We've heard that, we've focused on it, and now you're talking about proposals for some sort of compensation program.

    I really haven't gotten too excited hearing what you've been telling me because I don't have anything to take to the department or the minister.

    Dennis, you said that if we don't deal with the feedlots right now, it's going to start reverberating back into the system. Then it's going to affect these other guys, the cow-calf operators, because they can't sell their calves to the feedlot operators. It's going to go back--or it's already there.

    When you go to the table with the department, are you looking at simply a compensation package for the feedlot operators, or are you looking back into the system as well? Are you going back to the guys who have cattle in the field but can't sell them to you guys to finish them off?

º  (1610)  

    Mr. Dennis Laycraft: The discussions are certainly not restricted to the feeding sector, but the most immediate requirement is for the feeding sector. In most cases with cow-calf producers--with perhaps the exception of some cull cows they market this time of year, which can wait longer right now--most of their production is sold in the fall.

    Mr. Rick Borotsik: But there are a lot of these cow-calf pairs, and they're going down; there's no market for them either. Are you looking at them for compensation?

    Mr. Dennis Laycraft: Yes. As we take a look at the entire disaster program, we're suggesting this obviously has to be looked at, but in terms of the need for cash advance, there are two things we need immediately. Obviously, it's to address the liquidity crisis and get the market up and operating. Once the market gets up and operating, then there is a place these people can sell those cow-calf pairs. But until it starts to operate, there is no place to sell them.

    The Chair: Thank you, Mr. Borotsik.

    Welcome to the table, Mr. Doerksen.

    Mr. Eby, do you want to add something?

    Mr. Stan Eby: Yes, I do, to round out that answer to Rick. Last week we had a round table discussion here in town with all industry sectors. There was a major plea from the rendering industry for assistance big time. They have problems.

    What the feeling around that round table of all industry people was, make your investment where the biggest hurt is and it'll go both ways in the industry. The packers said, get the producers moving cattle to us and make them comfortable moving cattle; if the renderers don't pay us for it, we'll take it off the price of the cattle. If the feedlot guy is making some money, I'm sure he'll buy my backgrounded cattle at a reasonable rate; then I'll go to the cow-calf guy, and this will work both ways from that. That's the way the market has operated in the past.

    The Chair: Thank you, Mr. Eby.

    Mr. Proctor.

    Mr. Dick Proctor: Thank you.

    What is your assessment of the fact that it was learned yesterday that several bulls went into the United States from the herd the one cow came from? Do you think that this is going to make life more difficult, or will it in fact shorten the period of the testing and everything that's required? Do the cattlemen have a sense of that?

    Mr. Dennis Laycraft: I'm not sure we'll have a true sense of that until we get an indication from the USDA. My personal feeling is that it shouldn't have a significant bearing on it. Over the past number of years we have literally had millions of head of cattle moving back and forth. The indications U.S. officials are giving in their reassurance to their industry are all positive signals so far. I think, like everyone else, that they'll be very content.

    I'll feel a lot more comfortable as soon as the investigation and testing are completed and substantiate what everybody's saying. The bulk of the investigation should hopefully conclude by the end of this week, and that's the indication everybody is working towards.

    The Chair: Mr. Proctor.

    Mr. Dick Proctor: I'll just follow up, then. If that is the case and the tests continue to prove negative through to the end of the week, obviously it would be your hope that the border would open immediately, but what is your indication? Once those tests are completed, do you think the USDA will say, fine, we're open for business?

    Mr. Dennis Laycraft: Certainly, the indication we're hearing down there is that once the investigation is concluded, there may well be a staged type of access into their market. They'll start with what is quite broadly recognized as really no-risk or minimal risk livestock, namely the younger livestock. That's our expectation.

    The Chair: Thank you, Mr. Laycraft.

    Ms. Ur.

    Mrs. Rose-Marie Ur: Do you feel that once the tests come back on those five bulls that were identified in the United States, it will hopefully be the end of our looking for a positive response to the tests for BSE? Do you think that will be the determining factor for moving on the compensation package?

º  (1615)  

    Mr. Dennis Laycraft: The sense we're getting is that they've essentially gotten the tests back on line one; they're getting close to getting all the tests back. As soon as they get the tests back on line two, that will effectively wrap up the bulk of the investigation. Only the USDA can really give us the final answer on that, but we're hopeful that it will satisfy them and the international community who are coming over to take a look at this. By Monday, I think, the international observers who have come over will hopefully give us a good indication that yes, that is the case.

    Mrs. Rose-Marie Ur: Are the banks allies in the situation here? How much are you dealing with the banking industry at this point?

    Mr. Stan Eby: We've had brief discussions with the Canadian Bankers Association, and they've indicated support for their clients in this.

    As to how that plays out, Ben, you've been involved with some of them. How do you see that?

    Mr. Ben Thorlakson: They've given us a letter of support. I believe they're understanding and that they won't take any untoward action, although they have interests to protect. If there is to be a program, certainly it will reduce the human anguish if we can get it on the table. Then the bankers as well as everybody else will know where they stand.

    Mr. Stan Eby: I'm going to ask Mr. Wildeman for a comment on that.

    Mr. Brad Wildeman (Chair, Foreign Trade Committee, Canadian Cattlemen's Association): We've been working with them pretty closely, updating them on a regular basis. I think that's right, that they're trying to be patient, but it's important for this committee to understand that for a lot of the smaller producers who are out there, including the ones Ben referred to, young people who have tried to build into this industry, this is the time of year when their operating lines are the fullest. They buy calves in the fall, they use their own produce off their land to feed them, and now it's payday. As I said, the operating lines are full, so at some point it's going to become very difficult for those banks to figure out what to do when there's no margin left. They can be patient, but there's a point where they simply can't be patient anymore.

    I think Ben said today he already has a couple of cases in Alberta where the time clock has run out. I've had that call as well. I've had a caller from Saskatchewan where it's exactly the same thing: my silage pit is gone, my barley is gone, my operating line is full, and this is the end. Unless the bank is prepared to extend credit above his existing limits, which is highly unlikely, that's the end of the road for these people.

    That's the important thing, the timeliness of this. We simply need to get some assurance from the lenders to allow them to do what they need to do.

    The Chair: Mr. Proctor.

    Mr. Dick Proctor: I have a question from a constituent, so bear with me for a minute.

    How many cattle have been slaughtered to date as a result of the one positive ID?

    A voice: About 1,700.

    Mr. Dick Proctor. So what happens? The animals are slaughtered and the brains are tested. My question is, what has happened so far to the meat and the carcasses of those 1,700 animals that have all tested negative?

    Mr. Dennis Laycraft: My understanding is that the animals from the index herd, the herd where the diseased animal was found, were taken to Lethbridge and incinerated. The other animals that were tested were moved to Moose Jaw; the plant there is able to handle larger volumes. As soon as they have tested them and the tests come back negative, they'll be rendering parts of those animals and then moving the other parts of the animals into a secure landfill site.

    Mr. Dick Proctor: So even though they've all tested negative, none of that food is entering into the system other than through rendering.

    The question of the constituent is, what's the rationale for that? If the animal is testing healthy and you have to hang meat to cure it or dress it before you market it, why can't it be marketed after it's tested negative?

    Mr. Brad Wildeman: One of the significant reasons is that even the mode by which they've euthanized them is not standard. They're euthanized with a barbiturate. It's a lethal injection, so this meat wouldn't be approved. But for any CFIA investigation and any of those types of depopulation, it's my understanding that the meat is never allocated.

º  (1620)  

    The Chair: Mr. Borotsik.

    Mr. Rick Borotsik: Dennis, you uttered a word that kind of sent shivers down my back, and the word was “precedent”. When you were sitting and talking to the department, you said that word came up. Now, that can work two ways. Are they saying that if there is any kind of compensatory program put forward, it's going to set a precedent for the future, or are they saying there is nothing we can gauge this by in terms of past precedent?

    Quite frankly, this is a one-off; we've never, ever run into this before. That word is a bureaucratic word that simply sent shivers up and down my back because it's something they can use to say no; they can say, this will set a dangerous precedent.

    That's a crock, quite frankly. Now, which way are they using this word?

    Mr. Dennis Laycraft: It was forward.

    Mr. Rick Borotsik: Oh, goody. That really scares me.

    Mr. Dennis Laycraft: But I had indicated something earlier. I'd mentioned, with respect to precedents from investigations done in countries around the world that had gone through similar events, that we had someone who had participated in those exercises. That was Mr. Doerksen here, and if you'd like, he could give clearer detail as to what recommendations came out of those to address this type of financial crisis as part of the emergency response to those foreign animal disease outbreaks.

    Mr. Arno Doerksen (Chairman, Alberta Beef Producers): Thank you, Mr. Chairman.

    I did participate in considerable simulation exercises as well as take a trip to the U.K. last year to look at what worked and what didn't. First of all, I want to commend the delivery of the message to the public that happened with regard to this situation. Clearly, that was one of the things the U.K. didn't handle well. Second was the transparency of the message, and our government has handled that very well.

    There's another range of activities that completes the process, and that is compensation and instilling confidence in producers. That's where we're talking about an unprecedented animal health disaster or crisis, and that's what we're facing here. There isn't a precedent for this.

    We aren't looking for something that's long term; this is to focus on an animal health disaster. One of the things we clearly outlined in analyzing the situation and in preparing for what we all hoped would never happen was that if our borders were ever closed as a result of an animal health disaster, the federal government would need to be there for producers, specifically because we'd choke on our product. There's no other country in the world that has faced a situation like this, exporting the percentage of production we do, so this is critical at this point.

    If you look at what happened in the U.K., you'll see that things started to fall apart for them when producers lost confidence. We're at a timely point right now, I think.

    The Chair: Thank you, Mr. Doerksen.

    Mr. Breitkreuz.

    Mr. Garry Breitkreuz: The ramifications of what's happening with this BSE crisis are even going to reverberate through the grain sector. I come from an area where there are a lot of cow-calf herds that keep the grain farmer alive--my own brother, for example. This has ramifications beyond.

    In my hometown of Yorkton there's a small packing plant, Harvest Meats; it's part of the Fletcher chain. They're not able to export pork products to the U.S., and I don't understand why that is. They have taken all beef products out, yet they still cannot get the borders open to pork products.

    What I'm saying is that the ramifications of this, the fingers of this, go way beyond. I am almost in the position of asking you, what other questions can we ask? I'm at the end of what questions can be asked. How do we get things going here again? There's no precedent for this as far as I know; that border is really locked up tight.

    The United States doesn't seem to be moving in any direction, even to ban animal proteins. Are we going to start ensuring this never happens again? I don't know if this is the point to discuss this, but there you have a couple of things to mull over. I'd like to ask you, what else should we be asking?

º  (1625)  

    Mr. Dennis Laycraft: Let me just offer a few comments on other things that are happening as part of the round table. We have a number of different working groups that are going to be looking at whether there are certain procedures right down to animal identification and trace-back and other things we'll work on, and they are all going to be developing reports over the next 30 days to go back to the round table.

    Obviously, the most immediate issue is the question of dealing with the financial crisis so we can avoid a major meltdown in part of our industry. The obvious question on the table is, since this probably requires cabinet to address it in order to move the financial requirements ahead, will that happen? I don't know if there's any way of avoiding that.

    The Chair: We'll move to Mr. Proctor.

    Mr. Dick Proctor: Thanks.

    I just want to go back, Mr. Laycraft, to when you said the next week or 10 days was critical. This is our second meeting of the agriculture and agri-food committee today. Now, without putting anybody on the spot, I might say there were some rumours around this morning from, shall I say, usually reliable sources that we were going to hear some details of a compensation package this afternoon at 3 o'clock, when we came here. Obviously, that's not the case.

    My question is, do you think that we will get the details of a package worked out in that week-to-10-day period you're saying is critical? Are you optimistic?

    Mr. Brad Wildeman: I think it's critical that we hear something, and I don't think it'll be two weeks from now. What the industry said was that we'd have two weeks from the time it was announced. Because the industry is very current, we could wait and try to assess what would happen and then what kind of compensation would be appropriate.

    That time is behind us. We have producers who have ready cattle today but are backed up. We still have an industry that's slaughtering cattle at a much slower pace than we're finishing them at. We're continuing to back the product up.

    Producers don't know what to do. They don't know if they should be selling now or if they should be holding on. There's just a lot of uncertainty out there, and I think Arno spoke to that. When you have uncertainty, you have producers doing silly things.

    We hear talk about things within the APF--and all the members may not share this with me and my group--but cattle producers and in particular feedlot producers don't understand old NISA or new NISA because we've never been in it.

    What they need to hear is whether there's something they're going to get quickly. Can they understand what it is and can they take it to the bank? If we don't do that, we're going to have a crisis hitting us and we're going to have things we just don't want to see in our industry, things that are going to hurt us for a long time.

    We need to have something very simple, understandable, and quick that meets the need. Second, I think we need to focus on getting this industry going and getting these cattle slaughtered, or we're going to create even a greater problem.

    The Chair: Could we have the last question, Mr. Breitkreuz, a very short question. We must adjourn.

    Mr. Garry Breitkreuz: There is nothing else for feedlot operators to fall back on. You don't carry any other kind of insurance, do you? There's no other avenue you have besides coming here? I have to be clear on that.

    Mr. Brad Wildeman: It's important to note that we've been talking about this to the governments, both provincial and federal, for a number of years. I can remember writing letters and making presentations on the need to establish a natural disaster insurance of some kind for things like this eight or ten years ago.

    We don't need safety net funding. We've turned it down every time we could. Instead, what we need is help to develop our industry. If you want to help us, put money into natural disaster because sooner or later we're going to need it.

    I guess we're here today saying, we need it, we told you so, and what can we do about this?

    The Chair: Mr. Eby, last words.

    Mr. Stan Eby: Once again, thank you for your indulgence today. We need a strong statement from the minister that there is support for the industry, and we need it right away to restart this industry. If you can deliver that message, please do so. The details are being worked out, which we've alluded to, but we need a strong, timely message from the minister that there is support for this industry.

º  (1630)  

    The Chair: Thank you, members.

    We want you to understand that this committee takes this issue very seriously. Many of us around this table are farmers. While we're not all beef farmers, we understand the implicit costs to you and the reasoning behind your strong arguments today for a quick solution to it.

    I will deliver that message personally to the minister. I've already spoken to him today. I know they're working on it, and hopefully we can deliver some sort of message back to your community by tomorrow night. I'm not making that a commitment, but it's a commitment to you that I will try to see something expedited in that time period.

    Thank you again Mr. Doerksen, Mr. Thorlakson, Mr. Eby, Mr. Laycraft, Mr. Wildeman, and all others who have come together today. We share your frustration, obviously. We are the ones who need to come to the cause, and we will do that. Thank you very much.

    The meeting is adjourned.