Of course we've seen rapid changes in market conditions, competitive pressures, price and input cost pressure squeezing the margins of several commodities, challenges and opportunities in international trade policies, increasing awareness and sensitivity of food safety issues, and increasingly environmentally aware consumers. These factors are all having an impact on how we respond to the challenges and opportunities facing our Canadian producers.
You know, one of the great things about this job is that it gives me a chance to sit down with farmers from coast to coast to coast, and I've been able to do that over the last short time. I can say we're getting some great comments from people that we're on the right track on some of these key issues. Things are getting done, and if you want to see it in black and white, you have the evidence right here in front of you in those main estimates. I think it goes right back to the fact that we have not wavered from the bedrock principle that we established from day one, and that is of course “farmers first”. If the farm gate is not strong and viable and sustainable, then none of the rest matters or can continue. It's a simple formula and it works. We're listening to farmers, we're acting on what we're hearing, and we're delivering real results.
The livestock sector told us it needed help to get through a rough patch, and we delivered. Changes to the advance payments program was by far the biggest ask by the sector, and we delivered in record time, thanks to the help of you in the opposition parties. Changes to the act made emergency cash advances of up to $400,000 per farm available for our livestock producers. Of that $400,000, the first $100,000 is interest-free. We also dealt with issues around security requirements to maintain the security for the banking sector. We took other actions to speed up cash flow to the industry, including fast AgriInvest payments, targeted advance payments, and the cull breeding swine program, which has already met more than half the target.
Farmers asked us to get older cattle moving south again, and we have done that, Mr. Chair, first through rule 2. Then when we were in Washington in March we got the good news that Mexico would provide OIE-consistent access to all breeding cattle—we've seen the first shipments move south—and further, that Canadian breeding cattle could be shipped through the U.S. to Mexico. It's working out very well.
I'm proud of how this government has delivered, ensuring greater market access for Canadian beef. I'm proud of the professional manner in which the agriculture and agri-food department and CFIA are working together and getting things done for our producers. We're getting great comments back.
Last November, the CFIA worked with our livestock industry to head off the enhanced testing for E. coli that was demanded by the United States. We got that turned around. We're making gains for livestock farmers in the red meat sector, but we won't stop there. We need to restore full access to all cattle and beef with all our trading partners.
We will continue to vigorously oppose the current version of mandatory country-of-origin labelling. Of course, that's expedited with the passage of the Farm Bill yesterday. I've raised that issue on several occasions with Secretary of Agriculture Schafer and also his predecessor. The U.S. has to make sure COOL doesn't choke the industry on both sides of the border with unnecessary segregation costs and stacks of mandatory paperwork that serve only to thicken the border, and of course that thickens it both ways. The version of COOL that is implemented must be trade-compliant under NAFTA, or as we have advised the U.S. and have continued to say, we will initiate a NAFTA panel.
Farmers told us they wanted more opportunities in the biofuel sector, and we will deliver that through Bill amendments, ecoABC, and other initiatives. Our approach to biofuels is thoughtful and reasonable—I'm sure we'll have that discussion here today—balancing the need to ensure we address the needs of the environment with the need for continued food production in this country. We need to put this issue in perspective, however. Right now, to meet our proposed mandates for biofuels would require only about 5% of our production capabilities, less than the variables caused by weather systems. That leaves 95% dedicated to our high-quality food production. We've also invested $500 million towards the next generation of biofuels using cellulosic technology.
We're boosting our food aid by $50 million, maintaining our position as the second-largest contributor to the world aid food programs. Our biofuels strategy is the right plan for our rural communities, our producers, and our environment.
Farmers told us they need access to new and better crops. We're delivering through our support of science and innovation. We've moved quickly to get rid of KVD and that's going to mean new wheat varieties will get introduced here and commercialized here in Canada, instead of the United States.
Farmers asked for workable, bankable business risk management programs for Canadian farmers, and we delivered with the new business risk management suite, thanks in large part to great cooperation with the provinces, which helped us speed up the Kickstart and cost of production payments.
Farmers asked us for a transition period to Growing Forward, to ensure we developed the right programs, and we did that, negotiating the continuity year with the provinces and territories.
I truly believe the progress we have made on this is directly due to the respectful relationship we have built with the provinces and territories, and a solid consultative process including industry.
Farmers asked us for marketing choice in barley, and we're working hard to achieve that through Bill .
We're also working on new guidelines for “Product of Canada” labelling on foods that will give Canadian consumers clear labelling information to make their informed choices. We'll give Canadian farmers and processors the credit they deserve with proper labelling on the products.
I know this committee has done a lot of legwork on this issue, and I certainly look forward to your report.
We also tabled legislation to overhaul food and product safety laws. This will not only boost confidence amongst our consumers at home that our product safety standards are second to none, it will also make Canadian agrifood products more competitive on that global market for consumers.
Farmers asked us to approach international trade with both solid offensive and defensive positions. At the World Trade Organization agricultural negotiations, we are working hard to open new markets and level the international playing field for our producers and processors. These efforts are complemented by our very active regional and bilateral negotiations agenda, where we are making real headway through our exporters.
This government continues its strong support for supply management. At the WTO agricultural negotiations, we are firmly defending the interests of our supply managed sectors.
We have demonstrated our support for supply management through other concrete actions as well. For example, we have taken action under GATT article 28 to limit the imports of low-duty milk protein concentrates through tariff rate quotas.
We are also taking action to finalize the operational section of the WTO special safeguards for supply managed goods, and we've also implemented cheese compositional standards.
Clearly Canadian farmers are succeeding in world markets. Last year Canada's overall agrifood trade hit a record $31.6 billion, an increase of almost 13% over the same period in 2006. Those market realities are reflected in our main estimates here today.
Here at home we have launched a full-court press to get the Growing Forward framework in place at our federal-provincial-territorial meeting this July. I'd like to see as many of the new programs announced as soon as possible after that.
We're constantly talking with farmers during this process because we want to get farmers the right tools for the job ahead.
Growing Forward is more than a federal-provincial-territorial agreement. It's the result of a lot of hard work and consultation with farmers, farm organizations, and others throughout the sector. Growing Forward is already delivering for farmers. It fully supports this government's strong competitiveness and innovation agenda.
Growing Forward aims to deliver important innovations, new market opportunities, provincial flexibility and affordability, improved service standards with streamlined regulations, and a competitive sector that can adjust to the changing global marketplace. Growing Forward will make the whole agricultural value chain stronger from field to port. Growing Forward is the right response to the realities and challenges facing the agricultural sector today.
Mr. Chair, with that snapshot of where we've been and where we're going, I'd be happy to open the floor to questions.
Welcome, Minister. I was just thinking when you were going through your remarks that you must have gone back and looked at some of s remarks, because they're getting increasingly long. They're long on politics and short on substance, I would say.
I'm going to ask a number of questions. If they're not all answered, the department may be able to get back to me. In your opening remarks, you went along the same lines as your parliamentary secretary so often does, leaving the impression that you're putting farmers first and listening to them. But I think the facts offer a different truth.
At a time when our hog and beef sector is in the worst crisis it's ever been in, the program came out. We support it, but a lot more needs to be done. I need to know, for that sector, are you looking at increasing the cap on CAIS, and if so, by how much? Because the crisis happened so suddenly, are you going to offer producers the option of going for either their regular CAIS or AgriStability? For those producers who have been faced with disease, will you offer the option of assuming a reference margin as if they had not had that disease? This would make a tremendous difference in the hog and beef sector. Although you're putting up to $400 million out there, the department indicated that the additional cost of these measures was only about $22 million. That, to me, is a pittance, and to a certain extent a slap in the face to the hog industry.
The potato industry is in trouble in parts of the country. In the tender fruit industry, they are tearing up their orchards and plants are closing. You're saying you're putting farmers first, but the department's farm income forecast highlights show that between 2004 and 2006 program spending was down by $1.2 billion. Here we're facing a terrible crisis in some commodities, and program spending is estimated to be down $1.2 billion. I'd like your response to that.
The last time you were here we expressed grave concern about the government breaking its word and cancelling the Canadian farm families options program, leaving thousands of farmers with broken promises and no money. I'm informed that those who were still in—the ones who were in the first year were allowed to be in the second—were paid out initially at 50¢ on the dollar. A commitment was made that the other moneys would be paid long before now. They haven't been paid, as I understand it, unless they've come out in the last two days. When will that other 50¢ on the dollar be paid? Or is it going to be less than was originally committed?
My last question relates to the Canadian Grain Commission. You will know that the labour unions put out a press release yesterday claiming that the producer protection programs will be slashed by 67%, grain quality programs will be reduced by almost half, and research programs will be cut by 60%. They're close to accurate. If you go through the estimate books, you will find $53 million for the quality assurance program for 2008-09, and $28 million for 2009-10. The grain quality research program is down from $11 million to $4 million. All areas in the Canadian Grain Commission seem to be cut dramatically. The producer protection programs are down from $4.8 million to $1.6 million. Why the slashing of spending on the Canadian Grain Commission quality assurance program, etc.?
I'll leave it at that for now, Mr. Chair.
Thank you, Minister, for appearing before the committee today.T
Since we are dealing with the Estimates, I have decided to change my approach. I would like you to remember an issue which will hopefully not be forgotten, the compensation for avian flu. I have contacted you, like I had contacted the previous minister in 2007, about the concerns of poultry and egg producers. This is a rather technical matter. The Canadian Food Inspection Agency has decided to offer $4.77 for each 21-week laying hen, whereas the Canadian Egg Marketing Board has set the value at $17.21. For a typical Canadian flock, this would represent a loss of $225,000. It would be a loss of $10 for each 25-week laying hen that is part of a flock of breeder hens of the broiler type. This change was decided by your predecessor.
At the time, Mr. Strahl had stated—and I remember that very well because I have his letter answering my query—that the amount of compensation for the loss of a flock would be changed in a first phase but that there would be a second phase administered by the Department which would lead to a new development in the context of the new agricultural policy, and that additional compensation would be provided after discussions and negotiations with industry and stakeholders. I would like to know what is going on because producers are still wondering about this situation. As far as I can see, there has never been a second phase.
I would like to know what the situation is and if you have followed the recommendations of the previous Minister. When he left his portfolio, there had not yet been any discussions about a second phase or, if there had been, they were aimed at one thing and one thing only, cutting the amount of compensation. You have to understand—this is not new for you—that those producers come under supply management. With the recently announced programs relating to business risk, they end up losing money. If they want to use those programs relating to business risk, they will not be able to get to any appropriate compensation.
So, I would like to know what your position is on this matter and if you intend to answer the concerns of those producers whose future might be compromised to if they cannot get any appropriate compensation in case of bad luck, that is to say in case of an avian flu outbreak. Nobody wants that to happen about we know that there has been at least one outbreak in BC.
Thank you, Mr. Bellavance, for your question.
There was also an avian flu outbreak in Saskatchewan, not just in the Lower Mainland of British Columbia. We did learn some lessons in the Lower Mainland--predominantly, that the quicker you act, the faster you can contain it. It took us a matter of hours to decide to wrap the barn and put the birds down.
There are still some ongoing discussions, as you rightly point out, on the compensatory side. Up to this point the government has always covered the cost of the animals--the birds in this case in an AI barn. In the Saskatchewan instance, we also removed the litter from the barn to help the farmer get back in business quicker than normal. As to spraying down the barn and making sure everything was done, that's generally up to the producer. In a lot of cases the industry itself steps in and helps, as it did in British Columbia. The province picked up a certain portion of the expenses in British Columbia; the Saskatchewan government did not. So it left that producer wondering what was going on.
We are continuing discussions on the value of those animals, and there's basically a double point being made. One is the cost of the actual bird or animal at that stage. We have that very succinctly laid out with some changes, after consulting with industry. Those changes came into effect last September in the latest go-round. Since that time industry has started to say we have to go further. There was loss of business, and time was lost as they re-developed to that.... A laying hen doesn't become a laying hen when it comes out of the egg; it has to be raised to that point. So they're saying there's that disconnect. How do we cover that off?
I guess I would point to the new suite of business risk management programs on the agri-recovery side, the disaster side. Possibly there's something we can work at there. Those discussions are ongoing. We have worked lately with the poultry side on the AI, the avian flu surveillance side, to make sure we are up to the standards required by other countries, not so much from an export nature but from the genetic side of poultry, and so on, that we export. We had to hit certain markers. We've had those agreements made with the poultry industry. The blood tests are beginning in the barns, as they should be. We're starting to move ahead and reopening borders, especially into the European Union where our genetics are very much in demand.
The discussions on the value of the animals at the time a barn is put down or a herd is put down are always ongoing. We'll certainly work with industry to try to come up to speed as much as we can.
Thank you very much, Mr. Chair.
Thanks for coming, Mr. Minister.
I want to begin by thanking my colleague for the wonderful compliment he gave me, comparing me to you, Minister, and that we put farmers first. I appreciate that comment sincerely, and let's hope we continue to put farmers first.
Mr. Minister, as you know, I represent a riding that has a high concentration of supply management. You visited, I believe, six weeks ago or so, and at the risk of having you blush, obviously the way you're consulting with farmers works. If you recall, the three standing ovations that you had among 250 people indicated that we're on the right page when it comes to looking after farmers, certainly in eastern Ontario.
I want to get your comments. Supply management, as I said, is so critical to my riding and to many ridings across Canada, and I think we should talk about it. The opposition has a way, it seems, of putting out some insecurity to the supply managed people. I want to go on record and I want you, if you don't mind, to come on record and explain.
I have a letter here from the five chairs of the supply managed groups. It is dated in Ottawa. It was written on February 14. Part of the letter says:
Over the past two years, the federal government, and in particular, the Honourable Gerry Ritz, Minister of Agriculture and Agri-Food, have repeatedly affirmed the government's strong commitment to stand up for supply management and to defend and deliver on the Canadian position at the WTO negotiations on agriculture.
It goes on to say a number of other things.
Mr. Minister, I would like you to reiterate to this opposition and to the public at large where we stand. We have put it in the throne speech; the, the minister, is on record as fully supporting supply management.
Would you once again please tell the opposition and the Canadian public where we stand on supply management?
Thank you very much, and thanks to you, Minister, and your officials for being here today. I will try to be brief in my questions and hopefully give you a chance to respond, perhaps in the order that I ask them.
First I'd like to follow up on what Wayne mentioned in regard to the press release about the Grain Commission. It's a disturbing press release, and I'd like some comment from you on this. According to the press release, the Grain Commission producer protection programs will be slashed by 67%, while grain quality programs will be reduced by almost half and research programs will be cut by 60%.
There are three former commissioners who have statements in this release.
One says that “As Ottawa's contribution goes down, producer costs will rise.” I find that extremely disturbing and I'd like some comments on that.
The other one is that, “These cuts will undermine grain producers in their dealings with grain companies, which have never been more powerful. Canada's reputation for top quality grain will be hurt too. You can't protect producers and make these cuts at the same time.” This is former commissioner Bob Douglas.
The last quotation I have here is by Ms. Donna Welke: “At a time when food safety is a top priority for Canadians, Bill is undermining the safety of Canadian grain products.”
I'd like a comment on those statements, please.
Minister, you mentioned COOL and how we oppose this. I'm just wondering how realistic it is to go to a panel. Do we have some very specific concrete measures as to how to oppose COOL, and does this fit in with shifting our focus to not always trying to conform to trade obligations, but maybe to shift to really put Canada first and make sure we stand up and put in the right measures to protect our producers?
That also goes in line with the tree fruit industry, as you mentioned. You're saying the market will just regulate it. We're producing grapes; the logical result is that eventually we'll be a nation of grape producers and we won't have any more apples, for example. Is that a realistic goal for Canada, or should there be some government intervention to ensure that we have a safe supply of apples and peaches and all the other fruit we're noted for? That's the second one.
I will probably need you to get back to me on my last question. Can you provide the committee with a breakdown of federal grants and contributions by province for the following programs: Greencover, the environmental farm plan, the farm stewardship program, and the Canada-Ontario water supply expansion program for the fiscal years 2004-05, 2005-06, 2006-07, and 2007-08? I have it here if you need it.
Thank you, Alex. We'll get you those numbers. It's not a problem. Some of the programs didn't exist in some of those years, but we'll give you what we've got.
I'm trying to go in the order you gave them to me.
The CGC is a modernization situation. It hasn't been done for decades. I would categorize that press release as mischievous, at best. It doesn't give you the full picture. I would like to think that the CGC actually delivers for producers. Producer groups are excited and thrilled about the changes that are proposed--barring one, I guess. Having said that, the vast majority of producers in western Canada, and across Ontario, where there's a bit of overview from the CGC, are asking for these changes. They've wanted them for quite some time.
As to the funding, we're talking about the main estimates only with that. Historically the funding for the CGC has been done through the supplementaries as the programs are outlined and we see what kind of market reaction there is, how much test we need and so forth. And that will continue to be that way.
When it comes to producers' costs being driven up, I don't understand how that will happen. The biggest change from a controversial standpoint--again producers are saying this is great--is the whole idea that somehow everyone you deliver product to is insured to the point to cover you off; you know, should they not be able to carry forward they go into a bankruptcy.
Historically we've seen that program deliver pennies on the dollar. It's a false sense of security to producers that Joe Blow's grain supply can pay for the product they bought from you today when they go bankrupt tomorrow or last month or whatever. There's no way to track. Grain commodities are very flexible and very movable. One week they'll do 500,000 tonnes of wheat, and the next week none. So you catch them on the week when they...and their bond doesn't cover that expansion and contraction in a fulsome enough way. I'm not sure how you would regulate that. There are instances in the private sector that do a better job of tracking that than government has. I guess that's what we're trying to encapsulate here.
Of course, any bill that comes before the House will come to this committee, and amendments are possible. If you see there's a better way--a better way to build a better mousetrap--and producers decide that's the way they want to go, then that's what we'll put into the bill. It is a work-in-process.
I know you had Elwin Hermanson, the chief commissioner, here on Tuesday, and some of these questions were asked of him. I think he gave great answers, in the responses I saw when I took a quick look at the transcripts. Certainly we're moving forward, with farmers in control of the Grain Commission working in the best interests of producers. That's as succinct as I can be.
On COOL, we're ramping up our responses to that. The vote was finally taken yesterday. The possibility of a presidential veto is no longer on the table. With any vote that surpasses the two-thirds majority mark, the veto is then off the table and not in play. The vote was almost 75% in favour of moving forward with the Farm Bill.
The devil is in the details. I've had these discussions with the last two secretaries of agriculture and, to a short extent, Mike Johanns, when he was there. We have let them know in no uncertain terms that if this thickens the border in any way at all.... We have already seen contracts, on weanling pigs out of Manitoba, that have been reneged on because the buyer on the American side isn't sure what kind of label he's going to have to put on that product.
There's so much product that is born on one side of the line, fed on another side, and processed back again. Whose is it? If you had to have a passport for these cattle, or hogs for that matter, going back and forth, it would be stamped quite a few times.
I was in Washington some time ago, and the American industry itself isn't for this either. They're saying it will take four to five different labels to cover off what they think may be coming in COOL. They want no part of it. The government side assures me that this will go through, but they have no way to enforce it. The problem is that it creates the frustration and angst on this side. How do we deliver it?
That's the nature of a NAFTA panel. It is going to distort the marketplace from the Canadian side in a negative way, as we grapple with how we label this product that goes back and forth. I think part of the answer is in our own labelling systems, where we get a better idea on “Product of Canada”. We're working hard on that one.
I know my time is up
Let me start with the first question and the CGC.
I'm a little shocked you feel there's little resemblance with what we heard in this committee, and from the producers and so on. If you could point to some examples where you think we've deviated from exactly what the majority of producers or majority of people were asking for, I'd be happy to address them or take a look at them.
As I said, the bill will come before this committee, and if there are amendments that come forward, so be it. We'll try to get the bill to you as quickly as we can.
I certainly don't think we're off the mark. Other than for one farm group, I haven't had anyone with any amount of negativity about this, other than for their saying hurry up and get it done. So I'd be happy to take your examples and work with them.
On the disaster situation and the two instances you talked about, we are addressing some of that in southwest Saskatchewan, working with the new Saskatchewan provincial government in partnership. As you know, all of those programs are a 60-40 split, and we try to work in conjunction with them, if at all possible.
There have been a few instances—the plum pox virus comes to mind—where we actually went ahead at the federal level, because the province wasn't coming on board. That program was offered to a couple of different provinces. Some provinces came on board and some didn't. And we went ahead and announced.
The only thing stopping us is that we're in the final negotiations on Growing Forward and the final suite of programming, getting down to the details on such things as, if a disaster expands, does the federal government's level go up, and to what extent? So we're a little bit apprehensive about stomping on toes when we're into those final negotiations.
I would hope that your provincial colleagues would come to the table. We're more than ready to be there, but I don't want to bruise any egos in these final days of negotiations on the overall program.
Thank you for your kudos at the opening there, Mr. Storseth. I guess I'd point to the fact that I have a great department around me. The folks you see here today are only the tip of the iceberg. They're all anxious to build a stronger industry. We're working ahead, we're redefining programs, we're adjusting parameters of programs to make sure they hit the target.
There's a lot of talk, and Mr. Easter brought this up, that there's less money than there was before and all that. It's because the marketplace is working. Farmers would far rather farm for the marketplace than farm for the mailbox. I guess that's the biggest difference. When the marketplace is working properly, farmers take that, they buy new equipment, they make those decisions they need to make because they know the market is there to support their movements. That's what this department has been so bullish about.
On the Wheat Board, we've never been shy in the last number of elections in western Canada—where the Wheat Board, of course, is predominant—about talking about changes to the Wheat Board, that it has to get up to speed, that it is mired in the past, it's not developing programs that the farmers feel are useful. Even with what they've been bringing forward to try to offset some of that, farmers are still not buying into them in any fulsome way. We've seen their market share deteriorate. Even with today's values of commodities, their market share is way off. We're looking at an industry that can't adapt or be flexible enough to the market signals that are out there.
So we've asked them to change. We did that through a plebiscite. In western Canada, 62% of farmers said they wanted a change. You can add the numbers up any way you want, but 37% said, no, leave it exactly like it is. That number has now shrunk to half. In our polling, in my discussions with producers, in your own consultations with your growers, that's what we're hearing. And the board's own polling is reinforcing that. They're getting those numbers as well. They have to be, because they're talking to the same people we are. We know that demand is out there.
The board is trying to adjust to those new realities, but they're still locked in on this single-desk idea, which no longer flies. We've seen other commodities go through the roof. We saw even the Wheat Board commodities' price spikes this year that were unbelievable, and we're hoping they were able to capture those. We won't know until the final payments come out almost a year from now. We'll be able to assess it at that point. We know there are some problems with the contingency fund, that they've had troubles keeping up with the marketplace, and we'll have to address those.
I had a meeting as late as Tuesday lunch with Larry Hill and Ian White, after they met the committee here talking about the next steps forward. I've given them some direction. We're keeping it out of the media because we've found over the years that we've gotten further dealing directly than we have running it through the media filter--no insult to my media friends here at the table. But we have to get this done. Farmers are demanding it. The Wheat Board understands that. It's a matter of how we get there. I will be attending their meeting coming up at the end of this month, to continue these discussions. We'll try to come up with programming that will address that barley freedom for this crop year.
It's an excellent point. The Canadian Federation of Agriculture brought that forward some time ago and are promoting it. The Ontario Federation of Agriculture has picked it up, as has the Quebec UPA. We're moving as far as we can as fast as we can on that idea.
Alberta has done quite a bit of work on this as well. The unfortunate part is that no one has a model that shows us how to implement it without attracting countervail. We're all cognizant of this as we go into this global marketplace. Some of them are nuisance suits, but some of them are legitimate, and AgriFlex is problematic from that standpoint. We'll certainly keep working on it, though, no doubt about it. I think there's something to be had there.
We are in this go-around putting flexibility in the non-business risk envelope, the growing forward side, all the companion programs. We are putting the flexibility in there, so that the provinces can make the decisions.
Some like the training more than they like the environmental programs, more than they like the farm stewardship. We will allow the provinces to make those decisions. So we've gone as far as we can with the flexibility concept, in conjunction with the provinces, on the non-business risk side.
You are mixing issues a little bit when you say “flexibility” and “ad hoc” in reference to an animal or disease disaster and the actual business risk side. They are two separate things. Certainly the disease side is always ad hoc.
We try to be proactive as much as we can, and the role of CFIA is changing more and more from reactive to proactive. We see this in a lot of the farm-gate testing, farm food safety. We're trying to get ahead of the curve to mitigate a lot of this before it happens, testing ahead. We know there are hot spots. We saw it with the anthrax that has broken out in the last couple of years. We saw it with the TB around the park in Manitoba. Those programs will always have to be ad hoc, because there's really no way to know how big and how bad it's going to be at any given time.
Still, we're trying to get away from ad hoc on the farm sustainability side and business risk side. We want the provinces to know what's coming and we want it to be affordable for them. We want the producers to know what they can count on. If we need to expand those programs, that's what we will do. That's what we did in the livestock sector. We adjusted programming to make sure that the money flowed in a way that was more favourable to the livestock sector.
To your first question, and your response on that, part of the problem with the way any department throughout the federal government is set up is that there's no capacity to roll over unused funds from year to year. You can draw ahead and so on like that, but there's no annual rollover capability. So if you didn't use all the money this year, you can't just roll it over into the next year and say, “Look what we have” and build to the future. There's a little thing called Treasury Board guidelines, and the Auditor General gets really antsy with that. So that's a bigger question to be addressed, and I certainly don't have any problem making that argument. If it takes legislation to do it, I know I'd have your support to do that.
On the WTO, we are getting down to the final nitpicky details as to what's going to happen and how it's going to happen. At the same time, we're seeing more and more of the countries shifting over to the NAMA, or non-agricultural market access. We've seen countries like Japan, which has been quite vocal on sensitive products and in our camp on some of those issues, now go quiet as we get into the non-agricultural. It is a very industrialized country, and it's looking to protect its auto sector and its turbines and a lot of its technology on that. So it's gone quiet on agriculture to try to keep its powder dry for those final negotiations. It's getting very interesting. I'm getting updates from Steve Verheul, whom you all met, and I think he's doing a fantastic job. He's gotten commendations from Pascal Lamy and from Crawford Falconer, the big boys around the table over there who are driving this or keeping it between the white lines.
I think we're going to see some movement. I'm very concerned when at the same time we're struggling to get WTO agreements, we're seeing the U.S. Congress pass their Farm Bill, which flies in the face of everything we're trying to do over there.
They're saying one thing and doing another. They're in an election cycle, so it's sort of the silly season. We'll have to wait and see what their take is around the table. There's still talk of a ministerial yet this spring. It keeps getting delayed. Crawford Falconer was supposed to have come out with another text. His third was supposed to have come about two or three weeks ago. It's still not out. Now there's talk it may come out next week or the week after that, but, of course, every time he delays, it delays the ministerial or the possibility of one.
If we don't have something nailed down by summer break, it's going to be very problematic trying to reinvent it in any positive way come fall, with the American elections. When you take one of the major players off the table, that's going to be very problematic. We don't want to lose the gains we have at this point, because I think Canada is forging ahead and coming through looking very good and very positive.
The SM5 are there and are briefed every day as to what's happening, what's going on, how we move forward. They are starting to whisper about being constrained by the November motion, that we all honour and we all obey. We may have to see something addressing that before the final result, but I've said it's up to the SM5 to make that call. If they decide that they want to see us move away from that motion of zero-zero-zero, and don't sit at this table, or don't sit at that table, it's their call, because we're going to honour it, the same as you are honouring it, the same as Liberals, the same as the NDP are honouring that motion. But if the SM5, at the end of the day, decides that we should have some changes on that, it will be their call, and of course we'll have to expedite that through the House.
Unfortunately we've lost our minister. I was going to ask him some questions, because there were statements made this morning...and I realize we're dealing with CFIA, but we'd still like the department here.
He made comments about peach orchards coming out and being replaced with grape vineyards. We recently had an announcement of a plant closure in the Niagara region, the last fruit processing plant in eastern Canada. Nothing east of the B.C. border is left in Canada. That same plant is also a sister plant of a plant that was closed in my riding.
The point I'm making is if government really has a commitment to sustainability in agriculture, and if we believe...because I met yesterday with a gentleman who is now, contrary to what the minister said this morning, pulling out his pear orchards and replacing them with peach orchards, early peaches so that he has a continuum of work for his helpers, his workers. They had come to the table and asked government, including province and fed, for help, but there was no help from anyone, yet we are there for other industries in this country when they need help.
I think it's a shame we have lost the last plant in southwestern and perhaps in all Ontario, certainly in eastern Canada. These people, this particular individual has lost $300,000. Even after the government assistance of $1,600 an acre is factored in, he's still losing $300,000. The peaches he's tearing out had just come to their fifth year, prime production life.
I'm just wondering, really, what commitment--and this is not a partisan statement, I think government has failed in these areas for many, many years. When will government come to the sense that Canada's food production is important, that we look after this as much as we look after any other industry in this country? Because people can't go on continuing to do this kind of thing.
A private operator, I'm told--I have no numbers, but people have told me this--came up with $15 million in private money to keep this plant alive, but no government was willing to step up. I think this is a disgrace and I think it needs to be known that this has happened.
What is the response of government to this kind of thing? Because the talk is everywhere that this has happened, and I think you're aware of it.
Perhaps I can begin to respond, and my colleagues may wish to supplement my response.
I can't really comment on the specific cases you raise, but it's clear a whole range of factors are in play that are really challenging the sector and its ability to succeed. The committee is very familiar with them, from the rapid appreciation in the dollar to the rise in input costs to new global competitors.
I guess as we've gone through the discussions on the Growing Forward framework, we've had a number of rounds. A whole range of these issues have come up. It's quite clear, as one would expect, that there's no one simple solution, but it's also clear, from what we've heard, that there has to be a focus on competitiveness issues, on innovation, on issues that impinge on the ability of the sector to compete, whether it be regulatory costs and so on.
So I think what you see in the Growing Forward framework, the consensus that has been developed between the federal government and the provinces, based on a lot of very detailed consultation with industry, is that you need a framework to address these issues, a long-term framework that goes to fundamental competitiveness issues: the role of innovation in that sector and the factors that affect competitiveness.
I realize that's not a simple answer, but I don't think there is a simple answer to address these issues. I think it requires collaboration and partnership and looking thoroughly at all those issues in the context of a collaborative framework.
Good morning. Thank you for being here today.
In the general context of your work, preparing the Estimates is probably your most exacting role. I do not doubt that you are extremely accurate and rigorous when you prepare the document to ensure that MPs will not find any errors when it is tabled in the House. Unfortunately, I did find some, which I found quite surprising. In various places, the French and English versions do not match and I wonder which one is correct.
At page 12 of the French version, and it is also page 12 in the English version, before the penultimate paragraph, there is a box indicating some expenditures for 2008-2009. The amount is $3,194,300,000, compared to $3,721,600,000 for 2009-2010. However, in the English version, the year is 2007-2008.
On the next line, the French version indicates: au fait que l'exercice 2007-2008 comprenait les postes budgétaires de 2006 but the English version indicates:“including budget 2007 items.
Which is the right version? Are there many parts that are correct in one version and incorrect in the other? I would like you to tell us what are the correct years.
The government's renewable fuel strategy has essentially four prongs. One is the establishment of mandates for minimum levels of ethanol and biodiesel in multi-fuels. The second is the establishment of support for the growth of the biofuel industry in Canada to meet that. The third relates to farmer participation--the ecoABC program--and the fourth is the sustainable fuels development fund, the $500 million fund. So I think the $2.2 billion you referred to is those four parts.
In terms of farmer participation, that's a core part of that, and the ecoABC program assists them in developing the equity to participate in the development of plants.
I think the issue you raise about food supply is clearly the one that has drawn a lot of attention, and a lot of studies are being done on the implications of what's driving the challenges around food supply, the recent spike in prices. I think what we've seen--as this committee is very much aware--is a long-term decline in prices, since at least the 1970s, for most commodities, but populated by spikes every so often. Every few years there's a spike in prices, and usually there's a supply response that brings prices back in line with that trend over a period of years.
When you look at what's driving the current increase in prices, the current spike, there are clearly a number of factors at play both on the supply side and the demand side. There is a very low stocks-to-use ratio in most products, and there is increasing demand from countries like China and India as changes in the nature of demand shift towards meat and so on. There are a whole host of factors at play and there's a debate about the relative weights of those.
But I think when you look at what we need to meet those mandates--in terms of world supply--it represents I think about 0.1% of production. We are price takers in Canada, so the prices are established on the world market for most of these commodities, and what Canada does has very little effect, as we found over the years when prices have been affected by a number of factors on the world stage.
Thank you very much for taking your time to be here.
My first question is for the folks from the CFIA.
I'm just looking at my notes here, and in the financial resources, if we look at 2008-09 and 2009-10, there seems to be a significant decrease in the budget. I am just wondering; it seems there is more need for strong regulation from our CFIA with the scare of products coming in. Are we decreasing the number of inspectors? Are we farming out services that were done by the government before? That is of concern to me.
Maybe I'll just give my other questions first, and then hopefully we'll get back very quickly.
With regard to barley, wheat, the Wheat Board, I'm still not sure if there is or has been a socio-economic study with regard to market choice. If so, is it happening? Has it finished? If so, can we get the results? I'm still not clear on that.
The third question is with regard to biofuels, on this investment that you mentioned is $2.2 billion. Is it realistic to assume that, for example, part of this money could go to a company like Husky Energy, which in all probability will be importing corn from the United States to fuel the plants? In other words, our money will be going to this big company that will be bringing in subsidized corn. Hypothetically, is that possible?
I will stop there with those questions.
Thank you, Mr. Chair. I have four questions and I'll run through them. I also have a fifth, if we have time.
First of all, thanks to the CFIA for the cost comparison. We haven't had time to go through it, but there's a lot of meat in the issue there, I believe.
I earlier asked the minister about the farm families options program and I'm wondering if any of you folks can give me an answer on that. The commitment was made when the 50¢ on the dollar was paid out. Where is the remainder of that, to pay it up to 100% of what was originally committed, and when can we expect it? That's question one.
Question two you may not be able to answer. I am wondering if the gag orders placed on the board of directors of the Canadian Wheat Board are still in effect. Has there been any consideration by the department to provide compensation for the firing of Adrian Measner--it was a government decision to do so--to compensate the board for that? What might the calculations be?
Third, the minister mentioned increasing food aid. Am I correct, though, that under the new arrangements, under the new announcement, none of this product has to be Canadian? How does that compare with American food aid? I understand American food aid has to be American product, so what's the relationship in Canada?
Finally, to the CFIA, as we know, the hog and beef industries are in huge trouble. There are two major areas in the beef sector that are a problem. There's the 30-month-aged cow decision. On inspection of cattle, if your animal is 30 months old or has the teeth, then immediately the price of that product drops massively, to be in fact worthless. Can that be changed? And if not, why not?
I'll read you what a producer...I mean, a little common sense would go a long way. A producer loaded cattle in Prince Edward Island the other day, drove 30 miles to the plant in Borden-Carleton. On the way to the plant, the animal broke its leg. It was put down the next day--in other words, thrown in the rendering tank, because the new regulations won't allow the slaughter of hurt or injured animals.
This was a perfectly good beef animal with one broken leg, and the animal was destroyed and the farmer took a substantial loss. Why is that necessary? When the animal went on the truck, it was in fine condition--in fact, it walked on the truck--but the animal broke its leg. I'm wondering why there can't be a little common sense in the system to ensure that the farmer gets a little bit of money out of that.
Mr. Chairman, within the food and consumer safety action plan, we have allocated the funding on a proactive basis and have developed work plans against several priority areas.
The first is in terms of active prevention, including better understanding of food safety risks, with investments over time to allow us to better analyze, with other partners—Health Canada, and the Public Health Agency of Canada, and globally—information gathered through the marketplace and through our sampling and testing programs on how we can become most effective in expending those moneys for the best protection of Canadians and global consumers. And we'll be working with industry to minimize food safety risks, so that we can adjust our program to be less prescriptive and have less oversight, recognizing that industry has their quality management-based systems and their production for bringing quality food to the marketplace; and working specifically to better identify importers and foreign authorities, and to work offshore as well, to make sure that product arriving at our borders meets Canadian standards.
We will also be investing also in the area of “Product of Canada” labelling, which has been discussed extensively over the past period of time by this committee. We have allocated money for that, both in terms of consumer outreach and awareness, as well as enforcement verification activities, as those are adjusted.
The second major area is in targeted oversight, specifically looking at import food safety, working with the Canada Border Services Agency and others in terms of the timing and the types of blitzes that we will be taking to verify against our surveillance objectives and residue monitoring plans to ensure that our requirements are being met. And we'll be enhancing with industry the identification of those high risk foods that potentially carry a greater risk into the marketplace, issues that would affect babies, young children, or aged populations that may be even more compromised
Finally, Mr. Chairman, the third area is rapid response. Again, I think Canada has a world-class food recall system that does identify risks when they are identified in the marketplace. I think it's worthy to note for the committee that the vast majority of our recalls are on a proactive advisory basis, in the absence of actual confirmation of human health requirements or impacts; but at the same time, we'll be working with industry to identify hazards that may somehow have worked through the system, to get them out of the marketplace before they become public health risks.
Finally, Mr. Chair, the last area is broader-based communication with consumers, recognizing again that food safety is a shared accountability, starting with inputs and producers right through the system to distribution and retail, while recognizing consumers' role in food safety as well.