Welcome to the committee.
This morning, we are beginning our study of the 2019-20 main estimates with the Honourable Marie-Claude Bibeau, Minister of Agriculture and Agri-Food.
Thank you for being here today, Minister. We are delighted to have you.
This morning we have the pleasure of having at committee Mr. Chris Forbes, deputy minister of the Department of Agriculture and Agri-Food. Welcome to our committee, Mr. Forbes.
We also have Ms. Christine Walker, assistant deputy minister, corporate management branch. Thank you for being with us this morning.
We will start with the opening statement by Madame Bibeau.
It's good to be back.
I will start by saying that I appreciate the work you do at this committee. I hear about it regularly. I realize that farmers' needs are always at the heart of your discussions. I want to thank you for your recent reports on mental health and indigenous peoples in agriculture. These are issues that impact our farming communities across Canada, and we have a duty to take immediate action.
Today, we are looking at the main estimates for 2019-20. The estimates underline the government's commitment to the Canadian agriculture and food sector. Over the coming fiscal year, we are budgeting $2.5 billion to support key priorities of the sector. This morning, I would like to touch on some of these.
On trade, the canola situation in China continues to be a top priority. Last month, I met with Minister Han, my Chinese counterpart, at the G20 ministers' meeting in Japan. I expressed Canada's deep concerns about the suspension of Canadian canola exports to China and urged that this issue needs to be resolved quickly. Canada's ambassador to the WTO—the World Trade Organization—has also urged China to work with Canada on solutions.
Responding to industry, we have extended the loan limit of the advance payments program to $1 million for all producers, with $500,000 interest-free for canola producers. The regulations are now in place and producers will be able to apply for new amounts as early as June 10.
We have also worked with provinces and territories to extend the deadline for AgriStability. This will give producers a great opportunity to make use of an important risk management tool in uncertain times.
We are taking a Team Canada approach. Our working group meets once a week, bringing together the industry, the provinces and, obviously, our officials at Agriculture and Agri-Food Canada, as well as Global Affairs Canada.
On the Japan mission, I was joined by Jim Everson, president of the Canola Council of Canada. We met with some key Japanese importers to look at ways to grow our business in this key market, especially with opportunities opening up under the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, or CPTPP.
I also took the opportunity to meet with other G20 ministers, including European Commissioner of Agriculture Phil Hogan, to express Canada's concerns about barriers to our durum wheat in Italy and our pulses in India.
We continue to diversify trade for our canola and all of our great agri-food products through new free trade agreements such as the CPTPP.
There is more good news, Mr. Chair. Japan recently announced that it will now accept Canadian beef from animals over 30 months of age. This gives our beef producers full access to Japan, so they can take full advantage of the new opportunities under the CPTPP.
There is more good news for our farmers and food processors. The U.S. lifted section 232 tariffs on steel and aluminum, which strengthens our relationship with our largest trading partner. As you know, the has introduced legislation to ratify the new NAFTA. Last week, he and Vice-President Pence both expressed the aim of moving forward as quickly as possible to ratification.
The new NAFTA is imperative for our agri-food industry. The United States and Mexico buy $37 billion of our agri-food products, and we know we can grow that business even more. We are also working very closely with the United States and Mexico to take measures to keep African swine fever from our shores.
Building on our international African swine fever meeting in Ottawa last month, Canada and the United States have reached an agreement on the application of zones. This measure will allow safe trade in pork to continue in the event of an outbreak of this serious disease.
Some $200 million of the estimates will support year two of the Canadian agricultural partnership. Programs under the partnership are also helping farmers capitalize on opportunities for sustainable growth while adapting to climate change.
In agricultural science, there's $70 million to address emerging priorities, such as climate change, and soil and water conservation. To help meet these goals, our government has committed to hiring 75 new scientists and science professionals in emerging fields of agriculture, and we have launched a world-first living laboratories project, bringing scientists and farmers together in the field to conduct environmental research that producers can apply directly to their farms.
It will help farmers adopt climate smart technologies at a faster pace. This made-in-Canada approach was embraced by G-20 agriculture ministers at our meeting in Japan.
Environmental sustainability is also a key pillar of our new $50 million Canadian agricultural strategic priorities program.
Mr. Chair, we have a busy few weeks ahead.
We are aiming to announce the details of our investment in support of our supply-managed producers and processors soon.
That includes $2.4 billion to sustain the incomes of dairy, poultry and egg farmers as a result of the Canada-European Union Comprehensive Economic and Trade Agreement, or CETA, and the CPTPP.
As promised, we will support our dairy, poultry and egg producers who are impacted by trade agreements. We continue to work with industry to secure the long-term prosperity of producers and processors.
I also look forward to announcing Canada's first-ever food policy. There has been much enthusiasm across Canada. In fact, 45,000 people have participated in the consultations and I have had some excellent discussions on the policy, including at the recent national conference on food security. The policy sets out an ambitious vision to ensure that all people in Canada are able to access safe and healthy food through a healthier and sustainable Canadian food system. Therefore, we continue to work hard to advance the industry.
Once again, I want to thank you for your great work on some key issues impacting our sector.
I would be pleased to answer any questions you have.
Thank you, Minister. I was glad that, yesterday, in the House of Commons, we were able to find some common ground. That was quite useful.
I want to make clear that, in no way, do I question your concern for Canada's agricultural industry or your desire to protect it. No one in Canada would ever intentionally work against the industry. It is an industry I care about deeply and one we all want to see grow. In fact, I want to tip my hat to department staff. We all want to help farmers succeed and to raise the profile of Canada's products around the world.
What we disagree on, however, is the means to achieve that end.
Minister, in your opening statement, you mentioned your meeting with your Chinese counterpart. You wrote him asking for permission to send a delegation of experts to China. You had what you referred to as an introductory meeting. I didn't quite understand what you meant by that. You said you spoke at length, but you never once said what the Chinese agriculture minister's answer to your request was. Can you tell us about that?
There had been very important consultations before that. I want to acknowledge as well the work of my predecessor, Minister , of course. It has been a very interesting process, especially when we see that 45,000 people participated in this consultation. We could feel that Canadians were asking for such a food policy.
I would say that the estimates and the first phase...because I believe that it's the first phase that we have announced in the budget, and I strongly hope that it will be a lasting policy and will get into our DNA in Canada.
There will be a fund for local infrastructure. The amount that has been allocated to that is $50 million.
Another one will be working on promoting Canadian products. For the last three months, I've had the chance to meet with so many farmers, and I think we have so many good stories to tell. I want to make sure that this part of the food policy promoting Canadian products also includes getting Canadians to know more about our Canadian agriculture and the good work that our farmers are doing, getting them to better understand where their food comes from, and strengthening the trust and the pride between Canadian consumers and farmers. There will be $25 million attached to this portion.
Tackling food fraud will also be something important. Canadians told us that they worry. Even if we are confident in our actual system—I don't have any doubts about its safety—still, when there is a product that comes to us under one name, and later on we understand there are other ingredients in it, we want to be stronger on that to make sure that we buy what we think we're buying. This is something that Canadians care about a lot.
There will be some funds directly allocated for our northern and isolated communities. We're talking about $15 million specifically dedicated to these communities.
Food waste is also an important part of the food policy.
Thank you very much. It's great to be here today.
Thank you, Minister, for coming.
I have two areas.
I come from Northumberland—Peterborough South, which is a rural riding in eastern Ontario. I was glad my colleague Mr. Drouin brought up the supply management package that we have provided or are providing.
I want to talk about another thing that my farmers certainly wish they didn't have to have, or need: the risk management programs. There are a number of those programs: for example, AgriStability, AgriInvest, AgriMarketing. I know that part of your role is to meet—and you mentioned the meeting that you're going to have this summer—with the federal-provincial-territorial ministers, and there's a number of things that you have on the agenda.
Could you talk a little bit about how you see your role and your ability to strengthen those partnerships with the provinces and territories—particularly the provinces—around those funds and how we can best deploy them to our agriculture sector when it needs them?
Last year, a new five-year Canadian partnership started.
This year, we will have an opportunity to look back on our objectives. Also, the ministers will be mainly new to their positions, not having been there for the previous meetings, so it will be a good opportunity for all of us to really understand why some changes have been brought to these programs. Obviously, I hear a lot from the producers on some of these agri programs. Sometimes they would like to go back to the previous rules, or sometimes they want to see a different type of approach. We are all thinking about it. Our teams are doing the analysis.
We are also open to new partnerships, such as bringing private partners on board in different ways. I would say that everything is on the table, but we are hearing what our farmers are telling us. Still, these programs have been developed to face the different types of challenge that a farmer can face. We can see that it's working. Considering the situation we have this year, we have seen a significant increase in the AgriStability this year. We can see that our programs are working.
Can we do better? Probably. We can always do better.
I really look forward to having this discussion and to sharing ideas. Our teams are already challenging each other and trying to make suggestions.
Certainly I hear from my farmers that they are really at ground zero with the effects of climate change. They see it every day in the work they do. So I think the review of those programs to ensure that we're addressing the constantly changing reality for them is extremely important.
I quickly want to bring something to your attention. We have something in my riding called the Ontario Agri-Food Venture Centre. MP , and I think his whole municipal council, came to visit us last summer and we had a great tour. That centre was really a creation of the agriculture community. They saw it as something they needed that wasn't there.
What they do is small-batch processing of fruits and vegetables, but there's a whole wrap-around effect with marketing, production, business supports and those kinds of things. We've seen these small producers get into not just national markets, but now international markets.
You may or may not know that we are the largest saffron-producing area in the country. Who knew? We think that saffron comes from overseas. Saffron is from my riding is now on international markets. It's in a variety of things from mustard to vinegar, etc.
Can you talk a bit about how that partnership with international trade diversification is not just an opportunity for large producers and processors, but also for niche markets? We may be able to find those niche markets that maybe we never thought of five years ago.
Thank you very much, Mr. Chair. Thank you, Minister, for being here.
I suppose one of the first comments I want to make is that an inquiry was made by to the ministry on April 9 about the canola crisis. The response we got back on May 27 said:
The Government of Canada's approach has been to defend and support our world class canola industry and our farmers. Our goal is to find a science-based solution to a science-based problem within the rules based trading system.
In that response as well there was a parenthetical comment at the end: “(can be said better)”. This was both in the English and the French version that we received.
We heard for a number of weeks that all of this has to be a science-based plan. Fortunately, we've moved off of that; it's not the talking point anymore. It's more about the actual politics associated with this.
When we look at that, we've seen Italy, India, Saudi Arabia, Peru and Vietnam—all of these countries—impose unwarranted market restrictions on Canadian farmers. There does not seem to be a response from the government on each of these things. The Western Canadian Wheat Growers Association estimates that the above list of countries represents over $4.2 billion in direct export sales annually. With the multiplier effect, it's a potential loss to our economy of about $6.3 billion.
Do you see any connection between this and what has happened in China? If we are not standing up strongly to these other countries that have come up with these non-tariff trade barriers, is that not part of the reason China looks at us and thinks they can keep doing this and not get a response? Do you personally believe that the arguments by China are true in any way, shape or form?
Okay. I think folks would be interested in knowing that.
The other thing you perhaps might want to correct is that you had said there's $500,000 without interest for Canadian producers. That, of course, is only on the canola portion associated with that. You don't need to correct it; I think perhaps it could have simply been a slip of the tongue.
Food policy is something that you spoke of. Again, it's how you spin food policy. When people start to suggest that “We can do this to Canada to make sure it has a secure and safe food system” despite our having the best system in the world.... Unfortunately, we allow other actors to come in and say that they'll maybe pay a little attention to what's happening here and pay some attention to what's happening there.
The reality is we should be standing up and saying that we do have the best in the world and that some of these comments based, quite frankly, on some rather ludicrous arguments....
We've had a study and witnesses here when we were talking about analyzing public perception as far as food is concerned. With regard to front-of-package labelling, as you know or you've probably heard.... Whether or not you actually believe that yogourt is something we should be afraid of, that would on the front-of-package labelling.
We also hear of situations as far as GMO is concerned. When you have a list—as was mentioned by one of our witnesses—of genetically engineered maple trees, durum wheat, Hunt's tomato sauce, Himalayan rock salt, engineered tea, coconuts and genetically engineered bacon, the comments that are being made are ridiculous. People say to put that on the label. All it does is scare people.
When you were talking about a food policy, I'm wondering if our food policy shouldn't start by saying, “This is the very best we have and these comments by outside sources are being made solely to protect their own investments”. They are not doing it to protect Canadians.
As a general rule, meetings at a G20 gathering are always very important. Of course, there's always a formal agenda laying out the main themes, which I already talked about.
On the sidelines, however, quite a few multilateral and bilateral meetings take place, so I had an opportunity to speak with the European Commissioner for Agriculture about Italy's shunning of Canadian wheat. We also talked about African swine fever, which is a major concern for us. We don't have the disease in Canada, so that opens up opportunities for our farmers.
I also met with Argentina's minister to discuss the possibility of exporting canola there. I attended a special meeting with U.S., Mexican, Argentinian and Brazilian representatives. We spoke mainly about the importance of a unified continental front to support decision-making and adopt evidence-based international trade rules so we can face the big issues together.
I had numerous opportunities to assert Canada's position and initiate or continue dialogue with other countries, either bilaterally or multilaterally.
Minister, thank you for sharing details about your G20 meetings.
I, too, think it's important to cultivate relationships with other countries in order to get results. Unfortunately, we haven't seen much in the way of results thus far. Canada seems to be having a tough time getting issues resolved. None of the problems you mentioned has been fixed. What's more, Canada hasn't been able to protect its farmers' interests, and therein lies the rub.
The government seems to do a lot of talking but isn't so adept at finding any solutions whatsoever. That is the exact opposite of what Canadians expect. That's why we want ministers to speak to one another—so they can work together in a coordinated way. We want the Prime Minister to stand up for Canadian farmers on the world stage, rather than letting his ministers travel around and talk to people willy-nilly. We want these issues resolved.
Minister, we examine multiple issues, and I could've asked you countless more questions. If you were willing to stay another hour, I'm sure that would do it.
I'm going to turn to the animal transportation regulations, which have drawn considerable feedback. The new rules are slated to come into effect early next year, but your department is in the midst of a study that won't be finished by then. Why don't you object and demand that the regulations not come into force until the results of your department's study are available?
It's good to have the department here so we can ask a few other questions and perhaps look through a few different things that we didn't have a chance to speak to the minister about.
A Statistics Canada report just came out a couple of days ago. We often hear glowing things about how the Barton report is going to make it so that agri-food exports reach $75 billion, and how great that is going to be for agriculture. There is always a lot of money in farming, but it doesn't necessarily get to the farmer. I think that's really the critical part because, according to the report by Statistics Canada, the realized net farm income of ag producers fell 45% in 2018, which followed a 2.8% decline in 2017. That's been the largest percentage decrease since 2006.
It takes into account inventory, pricing and volume and so on, but one of the key things is the increases in costs for farmers. There are rising feed costs, and interest and labour costs and new regulations that we see being added to small business. We also see changes as far as taxation is concerned. Of course, we see the one that I tend to talk about a lot, which is the carbon tax.
The costs associated with this continually add up. Prices go up for the farmer; income goes down for the farmer. The comment was made earlier about climate change. Producers are the first ones to recognize climate change, but they're also the first to speak out against a carbon tax as a solution for that. There is a need for real solutions. The knee-jerk things that we do.... Of course, that was done when we thought the U.S. was going to be engaged in some sort of North American carbon pricing, so the way in which we were trading around the world would have something like that included in it. We also saw countries that were our competitors, like Australia, saying that they'll give it a try. It didn't take long for them to make that change.
Here we have farmers who recognize that yes, there may be some great ideas as to how they can expand, but they aren't going to be the ones to benefit from this unless we can find a way to look at the cost side of this as well.
Perhaps, Mr. Forbes, you could speak to some of the things your department sees as concerns as far as the cost side for our agricultural producers is concerned.
Why don't I take a stab at that? Thank you for the question.
I think you accurately portrayed the net income numbers for last year. It was driven by a range of cost increases. Some of those—interest rates, obviously, and the cost of carrying debt—rose a little bit last year. We do have programming between the Farm Credit and ourselves to financially support people looking to borrow.
On some of the other costs, I would put forward a couple of points. I would start with our research agenda writ large, which is actually about how to find, if you will, more productive ways such as improved productivity of our crops—making them more drought tolerant and adapting to some of the changing climatic conditions, so we can maintain the productivity and in many cases reduce some of the input costs associated with running a farm.
If I think about other aspects, on our programming side we have innovation programming that would work for the extension of innovative, on-farm practices, whether it is the practices themselves or the equipment and tools that are available. These are some of the things that would be out there that would tackle some of the cost increases and try to improve sustainability.
The one other thing I'll mention is labour, which is obviously big—both in terms of availability and cost. You raised that, Mr. Dreeshen. We work closely with our provincial colleagues and with the sector to look at better understanding labour market conditions and what we can do to improve access to labour, predictions about labour and how provincial and federal programming can work together to support the sector.
Chris, it's great to see you again, and Madam Walker, welcome.
As you know, Chris, the agriculture committee has been studying the African swine flu outbreak. To use a very vernacular phrase, this could be very, very bad. In China, depending on whom you speak to, a third to half of their livestock hogs have been culled or will be culled. It's expanding into Vietnam. There are concerns about it in Hong Kong. There are isolated cases in other parts.
We've been studying the issue here at committee, and I believe the department has also been looking at it and dealing with international stakeholders. One, are we prepared for this? What are we doing to make sure we don't have it here in Canada? And two, if it does come here—God forbid—what will we do in response?
I now want to move to transportation, quickly.
In terms of the transportation of livestock, there's 99.6% compliance. It's like the front-of-package labelling.
Mr. Komal, I was surprised to hear you say that that given that we are an exporting nation, we actually need to make sure, in terms of our transportation standards.... Yet we're going to put front-of-package labelling on many of our cuts of beef and pork, and on our dairy products. It seems to me that if we're going to be an exporting nation, we have a conflicting message here. To our consumers in Canada, we're saying, “Oh, be careful, this is not healthy. This is not good”. But we're going to send delegations around the world, through our free trade teams, saying, “Listen, we've got the safest food in the world. You should be buying it.”
Is that not a contradiction, in terms of policy, for the government?
We are going to approve the votes in the Main Estimates, 2019-2020.
Pursuant to Standing Order 81(4), the committee will now approve the votes in the main estimates ending on March 31, 2020, less the amounts voted in the interim estimates and agreed by the House on Monday, January 28.
Do I have the unanimous consent to dispose of all of these?
Some hon. members: No.
The Chair: We don't, so we'll vote on each one individually.
CANADIAN DAIRY COMMISSION
Vote 1—Program expenditures..........$3,772,890
(Vote 1 agreed to on division)
CANADIAN GRAIN COMMISSION
Vote 1—Program expenditures..........$4,846,955
(Vote 1 agreed to on division)
DEPARTMENT OF AGRICULTURE AND AGRI-FOOD
Vote 1—Operating expenditures..........$571,622,434
Vote 5—Capital expenditures..........$40,505,291
Vote 10—Grants and contributions..........$418,975,000
Vote 15—A Food Policy for Canada..........$19,000,000
(Votes 1, 5, 10, and 15 agreed to on division)
The Chair: Now, shall I report the main estimates to the House?
Some hon. members: Agreed.