Good morning to the committee, and thank you for the invitation to come and meet with you today on the supplementary estimates (B) for 2007-08.
The supplementary estimates (B) for 2007-08 were tabled in the House on February 14 for Agriculture and Agri-Food Canada. The department represents $665 million. I understand the officials from CFIA will be here for the second hour.
Of the $665 million for Agriculture and Agri-Food, the bulk of the funding is related to the AgriInvest Kickstart programs, the agriculture disaster relief framework, an increase in our spending on CAIS, the BRM suite delivery, an increase in our Canadian Cattlemen's Association legacy fund, and the orchard and vineyards transition program. The remaining amount represents a transfer to and from other departments, and is offset by currently available program funding related to amounts being reprofiled to use in future years.
[Translation]
Including these authorizations and Supplementary Estimates, the total budget of Agriculture and Agri-Food Canada for the 2007-2008 fiscal year increases to approximately $3.7 billion, which approximately corresponds to the actual spending of $3.6 billion from 2006-2007.
This morning, I'm accompanied by Andrew Marsland, Nada Semaan and Susie Miller. We are prepared to answer your questions. Thank you.
:
We were thinking of seven, Mr. Chair, but we'll go with what you have.
Although we're looking ahead at the estimates, I've had a lot of concerns from producers on the family farm options program. That program was announced late. Then when producers, through their accountants, effective a year ago December 31, wanted to take advantage of that program and felt they would have at that time $18,000 available to them, the program was cancelled in midstream. In fact, I'm told--and you can tell me if I'm correct or not--that the payout to those who did qualify--those being only the ones, as you know, who qualified the year before--was only 50 cents on the dollar.
That program was a commitment made in good faith by the Minister of Agriculture and Agri-Food to producers who were in financial trouble. They basically were left miserably waving in the wind. It was a Government of Canada commitment that died on the vine, for whatever reason. What are the financial aspects around that?
I'll ask you a couple of other questions as well. I'll move into this particular budget and the announcement of $3.3 billion in loans to the beef and hog industry.
The government often fails to mention that it's basically the farmers' own money. Can you tell me what the cost of that program will be to the Government of Canada? The only real cost to the government, as I understand it, is the interest relief on the $100,000.
Finally, I'm sure you are aware that the minister introduced legislation yesterday on the Canadian Wheat Board--illegally, I might add. It is dangerous for one to make assumptions, but if the minister is making a major announcement that will change the structure of an industry, I would assume that the department, if it's being professional at all, has done the proper economic background work on the economic impact on the industry as a whole, the impact on farm incomes, and the impact on the Canadian Wheat Board.
Could the department provide to this committee the economic impact analysis that you did prior to that legislation being brought forward?
:
On the farm families options program, as you know, it is a two-year pilot program. We are in the second year of the pilot. The decision to limit it in the second year was actually not made very lightly at all and was made with a lot of stakeholder input. A lot of producers, actually, were questioning the program.
The program was designed as a two-year pilot to test it out. With the second year, and by limiting the second year to the same participants, we are still going to be able to do exactly what we had intended to do, which is to evaluate the intent of the pilot and see if it does work in terms of allowing producers with that additional money to be able to take advantage of some of the renewal programming to supplement their income in future years. So we will still be monitoring the results after the second year of the program to see if it did help, and we will be providing an analysis. We are also bringing in an external board to review all of this, so it won't be done just in-house.
In terms of the second year and the pro-rating, basically in the first year, in the Treasury Board submission and when it went through, it was already identified that the second year would be reduced by 25%. But in the letter that we sent to producers, we also told them that the second year would be reduced and that would be defined at a further date. That was at the very first point.
The 50% went out because it's a voted amount of money, so we can't exceed that amount. We have received all of our applications and we've processed 99%, so we do have some money now to go back and do the second payment. So the producers will get more than the 50%, and we will start that second payment shortly.
On the $3.3 billion of loans—and that is referring to all the changes we made with the AMPA, the Agricultural Marketing Programs Act, thanks to all your help in processing that very quickly—what that will cost us is approximately $22 million more in terms of potential defaults or interest adjustments. That is on top of the actual cost of the AMPA, because as you know from the last committee hearing concerning the livestock, a lot of the emphasis was that the program is there, but with some modifications it could actually be more responsive. So using the dollars of the two allows us to provide a more responsive program.
:
Thank you very much for the questions.
On the AgriRecovery program, a number of smaller disasters have actually happened over the past year. Some of that also includes cover crop. There is the cover crop protection program to help with excess flooding, excess moisture. This year we have integrated that with production insurance in terms of how it gets paid out.
Also, drought assistance was announced for areas of British Columbia, Alberta, Saskatchewan, and Ontario. As you know, the AgriRecovery program is a federal-provincial program as part of the suite, so it requires both federal and provincial agreement in terms of a response. So far, British Columbia has taken us up on that, and those payments went out for the drought relief in British Columbia, primarily to the livestock sector.
Also, out of the AgriRecovery program we were able to pay direct payments for the plum pox eradication program.
An additional amount of money went to the Quebec potato nematode producers who were affected by potato nematodes, and that also is there.
:
That's exactly how it was streamlined.
What we actually did was that we took the lessons of the last 20 or 30 years from disaster relief and created a process whereby as soon as anybody—including a producer organization—says they're in trouble, that something has happened, the governments then work together and with interested stakeholders. We cannot have a one-size-fits-all approach, because every disaster is different, but we have a documented process by which we will do the assessment.
In addition, in the federal government we have already gone to cabinet to receive authorities to actually be able to spend these funds, so that we're not going through the cabinet process. In addition, recently we did get Treasury Board approval to be able to react very quickly to smaller disasters just through an order in council.
This now allows us the flexibility to react extremely fast. For example, we are currently working with Alberta on the nematode in their potato seeds. Now that their government has been elected, we will actually be working with them on March 10, and we are hoping to have something that we could recommend by the end of March. That's how fast we can do it. As you know, in the previous years it took months and months because of the time it would require.
To our witnesses here this morning, I have a number of questions. I'll give them, and then I'll expect responses.
The farm families options program was a pilot project, and we understood that it was cancelled before its completion; that was our understanding. I think we're getting some different take on it this morning. People have received a partial payment. I understand it's 50% for the year 2006. What amount might they be able to expect in terms of the full amount they would normally get? How much more can they expect to get?
Second, there was a huge amount of money allocated in that program—I believe it was $170 million, if I recall correctly, against a $550 million program—for accountants to do the work. Can you tell us how much money was expended for the servicing of the accountants who actually processed these files?
Can you give us an indication about what kinds of people and crops were affected by smaller natural disasters? How did smaller natural disasters affect the kinds of applicants? Can you give us some indication on that?
Can you also tell us your estimate of the average uptake by those people requesting funding under the AgriInvest kickstart program? Since those have gone out, you have told them, or given them, I understand, the numbers they can expect in terms of a payment. Did I hear you correctly that you have been able to tell farmers, based on the information you have, what payment they might expect? Then it would be up to them either to accept or reject it and leave it in a fund for some other future time. Can you tell us what would be the average uptake so far? You must be able to adjust that to the amount of money that you have, knowing that you have enough—or maybe not enough—to cover that. Can you give us some idea as to where that stands right now?
:
There's a requirement in the legacy fund that the Canadian Cattlemen's Association provide an annual plan in terms of the money that they want to access. There are three organizations that can access that--the Canadian Beef Export Federation, the Canadian Beef Breeds Council, and the Beef Information Centre.
They have to put together an annual plan. That plan is developed by an advisory committee that is mainly producers but also has some government participation on it. It's also vetted by the Beef Value Chain Roundtable, which includes representatives all the way from the cow-calf producer to the retail sector.
In terms of their overall, I can give you a précis of it. Their activities, particularly for this year, and they do plan to continue for the next several years, are focused on regaining their markets in Asia and Mexico, repositioning the Canadian beef exports as being a superior product, and taking advantage of the unique features of Canada, including the investments they've put into environmental measures, their food safety, traceability, animal identification--that sort of thing.
In terms of the extra $2 million, it's hard to break it out because it's part of the full $7 million, half of which is government money. The other half actually comes from producer check-off.
Just spinning off Larry's comments, I have never had so many complaints about a cancelled government program from accountants as I had from that one. Accountants looked at that program and they legally, under the law, had designed their advice and recommendations to producers on how to do their accounting and whether to sell cattle in December or January—all above board, all legal—and whether they would qualify for that $18,000, or close to it. And three months after the fact the government cancelled the program.
I'm not blaming you for that. The minister has to accept full responsibility. But the accountants told me that for a government that lays out a commitment and then breaks its word and violates its word, that is absolutely wrong. He said he has never seen that happen before in terms of programs where accountants give farmers advice and after the fact it's cancelled. What the minister did in that program is a disgrace.
Let me come to the cost of production in AgriInvest. I'll read you two letters, and my question to you in the end will be on cost of production.
Letter number one is from Mary and Wayne Haugh, hog producers. They said:
Our share of the $600 million Kickstart is $287.85 for each of us. We'll try to spread this as thin as possible, but really what good is it, as it will only bring us up to the cost of production on six pigs each? Our share of the cost of production money that came in the week before Christmas was $39.39 for each of us. That equals a total help of $654.48 for our family farm.
The second letter is from Diamond X Ranch Ltd. in B.C. It reads:
In our mailbox the other day we received a check from the federal govemment for “cost of production”. Now we have, in the past three years averaged one hundred and sixty-seven head of cows to calve each spring. The check was for $316.32, which works out to approximately $1.89 per head. How do you figure the cow/calf operator can produce a calf for $1.89?
In Ottawa we can talk about the big numbers, the $600 million, which is nothing for the agricultural industry, and when we put out $1.2 billion, $1.3 billion, and $1.4 billion in the previous government it still wasn't a whole lot. The government talks about this $600 million as if it's the be-all and end-all. It is a good program, NISA was a good program, and AgriInvest will be a good program. I'm asking you this in all seriousness: How do you formulate the cost-of-production program? How do you formulate the cost of production?
In the dairy industry we have a formula in supply management. We have a formula that actually returns to producers the cost of production of the efficient producers in the industry. This one obviously doesn't. So is this program really dealing with cost of production, or is it only a name on a program to confuse the general public?
When somebody downtown hears about this program and it's announced as cost of production, they actually think, “My God, the farmer is getting cost of production”, because it's the name of the program. Is it just a name to confuse, or can you unequivocally tell me today that the cost of production is returned to producers?
[Translation]
Good morning, Mr. Chairman, committee members.
I appreciate the opportunity to appear before the committee. My name is Sandra Wing, and I am the Vice-President of Policy and Programs. The agency is dedicated to safeguarding food, animals and plants, which enhances the health and well-being of Canada's people, environment and economy.
[English]
Food safety is a top priority for the Government of Canada. It is the agency's number one priority. We develop and deliver programs and services to protect Canadians from preventable health risks and to ensure that food safety emergencies are effectively managed.
We live in an era of increased trade and globalization. Our food safety system must evolve to meet the challenges we face, challenges posed by increasing trade, consumer demands, and differing food safety frameworks among countries.
The Speech from the Throne committed the government to introduce measures on food and product safety so that families can have confidence in what they buy. Amendments will be proposed to the Food and Drugs Act to allow this to happen in relation to food.
[Translation]
The amendments will also improve the legal foundation for the Food and Consumer Product Safety Action Plan, which Prime Minister Harper launched in December. The plan is intended to enhance the safety and reliability of consumer, food and health products by modernizing our system to better protect Canadians in our global environment.
Through this approach, more emphasis will be placed on verifying that industry measures are managing risks along the food continuum. Rather than waiting for problems to emerge, the emphasis will be placed on preventing problems early on. And, in the case where problems are identified, we will be able to respond quickly and take any necessary measures.
[English]
While not specifically a food safety issue, the action plan also includes a commitment to review the government's current policies on the use of "Product of Canada" and "Made in Canada" on food labels and advertising. To make this a reality, we are working with consumers, the private sector, and our partners in government to find appropriate ways of addressing consumer calls for more information.
The Government of Canada is also committed to a new way of managing tax dollars to ensure every dollar spent delivers results for Canadians. A key element of this new approach is to conduct strategic reviews of all program spending on a four-year cycle.
In the fall of 2007, the CFIA was one of the 17 initial departments and agencies that undertook a comprehensive reassessment of its programs. As a result, the agency put forward a series of reallocation proposals that could more effectively support government priorities.
[Translation]
As outlined in last week's budget, savings realized through these initiatives will be reallocated to higher priority and higher performing programs. This will enable us to better manage emerging health risks, and ensure the quality and safety of food that Canadians purchase.
Another initiative that we are working on is the Government of Canada's Paper Burden Reduction Initiative, which aims to reduce the paper burden on businesses by 20%. As a key partner, the agency will be identifying areas where administrative and paperwork burden can be reduced. The recent budget confirmed a deadline of November 2008 for achieving these reductions.
[English]
Before I talk about our operating budget, I would like to touch on BSE, a significant issue that we have been dealing with for some time now.
As you know, the first case of BSE in Canada resulted in the closing of many important markets for Canadian beef, cattle, and bovine genetics, but in the four years since then, 33 markets have reopened to Canadian exports, either partially or fully. I'm pleased to say that Canadian exports are now substantially at the levels they were pre-BSE.
Canadian industry remains strongly committed to gaining full access for Canadian beef, cattle, and genetics in all markets. The government continues to work with industry to pursue this objective by all means available. These efforts include ongoing bilateral discussions with potential markets and regular representations in multilateral fora such as the World Trade Organization.
In these efforts, the CFIA leads the work on technical market access negotiations, including organizing incoming and outgoing missions, providing technical information on BSE and Canada's BSE-related measures, and issuing export certificates.
I'll turn now to the agency's operating budget for 2007-08, which has increased by approximately by $17.8 million. This money will help us to deliver on our mandate in the following ways.
First, a large portion of the money, $16.7 million, is for a one-time retroactive payment resulting from the engineering and scientific support group reclassification.
The agency will be receiving in supplementary estimates (B) $575,000 to implement the consumer product and food recall advertising campaign. This two-year campaign will invest a total of $4.575 million, and is aimed at increasing Canadians' awareness of consumer product and food recalls. It will also point Canadians to the website where they can subscribe to the agency's food recall e-mail list serve.
We will be getting a $586,000 transfer from Public Works and Government Services Canada. This amount represents savings due to a relocation of CFIA staff into Health Canada facilities. The agency's decision to consolidate staff will increase the efficiency and use of federal government space.
As well, $15,000 will be transferred to Environment Canada. This money will go toward increasing aboriginal participation in science and technology careers in the federal public service.
Finally, $12,500 will be transferred to the Canadian Institutes of Health Research for avian influenza pandemic preparedness research, the goal of which is to strengthen our knowledge base and enhance our capacity in pandemic preparedness research.
These additional funds, which bring the agency's appropriations for 2007-08 to $627.9 million, will help us continue to successfully protect Canada's food supply and safeguard human, animal, and plant health.
Thank you.
:
Thank you, Mr. Chairman.
I thank the witnesses for coming here today.
I have three questions. The first one is on our inspectors themselves. From hearing from my constituents and from some personal experience, there is no doubt in my mind that inspection standards have got tougher since BSE. I make that comment because over 30 years of shipping cull cows, I've never personally had an animal condemned. The odd time you may have an injury--a shoulder or a back leg or something--and you expect that for whatever reason, but I know of lots of incidents involving a dozen or fifteen cows. I know of one example in which four cows were condemned out of that load. The whole cow was condemned. I'm quite aware of the load. There was one that did have one injured leg.
Where I'm leading with this question is that the load was actually sold to four companies, but one inspector condemned all four animals. My question is basically whether records are kept on every inspector--on how many cows per thousand it is, compared to the next guy on the line. I'd like to see those figures, if possible.
Second is the report that was asked for by this committee last fall in order to do an initial review for the minister on inspection fees at slaughter plants and border crossings and what have you. I understand the first part of that study has been done. I'd like to see the results and maybe hear a general summary today.
You may not get time to answer the third question, but I hope somebody else here will follow up. I'd like to be clear on that $16.7 million that was basically paid to the inspectors. I'm not clear on this. Were they not inspectors before, and now they are, so we're giving them another $14,000 or $15,000? I need that clarified some more.
I'll throw those three questions out there.
:
I'll do questions one and three.
On consistency and enforcement, I believe you're talking about humane transport regulations. That's what we enforce at CFIA, humane transport regulations.
We do about 30,000 inspections a year at sales, barns, we do roadside blitzes in cooperation with the police forces, and a lot of these inspections are done at slaughterhouses and abattoirs, big and small. Of those 30,000 inspections a year, there are records of what inspectors look at. There are about 200 administrative monetary fines issued per year on humane transport. So we have all those records on how that is done.
We have a quality management system that provides clear guidelines to inspectors on how they're to conduct their business, how they're to do their inspections. The system allows for a checkup on how that's going, how inspectors are doing, to make sure they're consistent in how they approach their work. There's always a challenge in a big organization all across Canada to get consistent approaches on all programs. We have had some challenges, but we've been able to bring a lot more consistency, and we've actually put a lot more effort, in recent years, on humane transport.
Shall I go to question three?
:
Thank you very much for being here and for taking the time.
Ms. Wing, you mentioned in your report that you're looking at the policies of Product of Canada, Made in Canada. As you are aware, our committee made a recommendation that “Product of Canada” labelling should have 51% content and not just the cost of production. Are you recommending to government to adopt that? Is that the line you're following, and will we see that implemented in Canada? That's the first question.
The other concern is that I notice this government seems to have the philosophy of deregulation, privatization, pulling out of certain programs. You mentioned there has been $113 million earmarked over two years for food safety, and yet there was a concern I raised, and I guess others raised, a few months ago, that the CFIA was one of the 17 initial departments that were doing a reassessment of programs. My concern at that time was whether this will have an effect on food safety.
So I would like to know if any inspections have been cut. Have we moved to some voluntary inspections in certain areas? Conversely, are we hiring more people to deal with the food safety that Canadians are becoming more and more worried about? In other words, does your budget earmark that we're going to hire more qualified people to ensure we have more programs in place to really look at that safety aspect that is a concern to all?
The concern is this. Are we doing enough and are we actually doing more by having professional people there on behalf of us to inspect?
As Ms. Wing identified, paper reduction is a major goal for the coming year. I'm sure it has been in the past, for your own sake as well as for the sake of the people you deal with.
I have two case studies that I would like to use that perhaps would serve as an example of what would change. The first is a process for a farmer who's been trying to develop a new product for export to the United States. He's received an almost instantaneous green light in terms of his product—it's a jam—in the United States; there are no problems. But in Canada he still has not received the go-ahead from the CFIA in spite of numerous.... Well, the paper buildup on this file has been extraordinary.
How do you see the fast-tracking of product development for export, or even domestic consumption—because I'm sure the product would also be utilized in Canada—as part of your paper war?
The second one is an incident that still has not really been fully resolved. During the drought two summers ago, farmers in northwestern Ontario were compelled to get their hay from Minnesota, and there was only one source. Of course, a farmer can't take the entire load all at once. He has to go back and forth with a vehicle of limited capacity. Each time, he would be compelled to have that hay inspected, pay the fee, and have the American inspector travel several hours to do the same thing.
When we can see the situation in the field, how is the public service going to be able to adapt so that you can actually understand what is happening to producers and farmers in a reality situation, as opposed to “These are the rules, so can you please just follow them?” Maybe six or seven of your ranking officers were involved, and no one could come to a conclusion that would be reasonably commonsensical.
:
In fairness to my colleague Sandra, she's only been with the agency a short period of time. Some of these things go back historically, and Gord and I have been around for a while.
I think the agency is quite proud of what we've done in our fairly short history of ten years. You asked about the last five years. I think one of the big improvements we've made is that although issues don't come out about....
People are confused sometimes about our regulatory frameworks and so on, but I think we've done a better job of reaching out to our stakeholders. I think we consult better. That's very important, because we do important work for Canadians, and it's important that our main stakeholders understand where we're coming from.
We've done a better job in terms of using our inspection resources. We've modernized some of our inspection programs. We've moved to outcome-based types of programs. Rather than being very prescriptive and saying “That wall must be so high and it must be painted white”, we're saying “This has to be clean, and it has to be a suitable environment for manufacturing food”, and that kind of thing.
I think it's a constant challenge, but we're always modernizing, trying to be as efficient as possible, use taxpayers' dollars as efficiently as we possibly can.
It's really good to be back here with old friends. Some of us are on a couple of committees together, so we can't seem to get away from each other. But it's good to be here, and it's always good to talk about this issue. I'm sure everyone is excited. André looks thrilled again to be here talking about the Wheat Board. But if Mr. Easter has a fixation for it, there's nothing we can do about that.
Just to address specifically the motion today, we want to make the point that the government has certainly respected the court decision, as we have with all other matters. We are adhering to section 47.1. The intent of this legislation doesn't have anything to do with the issues that Mr. Easter is speaking about. It simply changes the government's ability to regulate, and it's within the right of the minister and certainly the right of any member in the House to bring forward legislation to deal with that. So I was a little disappointed yesterday that, before he'd even seen it, he was up on his feet ranting about it and taking a position that is not in the interests of western Canadian farmers.
We've attempted to consult with the board. I was at a meeting, actually, when we sat down with the leadership of the Canadian Wheat Board and tried to talk specifically about this issue. The board themselves came out later and said they didn't feel that they could continue to have discussions. So certainly the minister has been more than open to sitting down with the industry and with the board and talking about this issue. The board doesn't seem to be as willing to do that.
With regard to the plebiscite, clearly Mr. Easter can pretend that we didn't have a vote. But we had a vote, and 62% of western Canadian producers, almost 30,000 of them, spoke and said they do want to have some marketing choice. Certainly that percentage would be higher now, it's obvious, and those of us who are on the prairies can see that. Even the member for Wascana seems to have shifted his hardline position to begin to become a little bit more reasonable on his position. We welcome that and welcome him bringing his caucus along to that position as well.
I think, rather than calling upon the minister here, we really should be commending the minister for the way he's handled this file and actually for the fact that he's adhered to most of the things that are mentioned in the motion here. Clearly we're upholding the court decision. We're going along with that. Both decisions have been made and we've respected them. We're adhering to the ability of the minister to change legislation. There's nothing improper about that at all. We have consulted with the board, and we've also had approval by producers and a vote authorizing that. So I think the opposition parties need to understand the widespread interest in change in western Canada.
If they'd been at the rally on Saturday, they would have seen that. We had well over a hundred supporters for change out. It was interesting. There were about ten or so pro-board supporters out, and I understand a good number of the pro-board supporters had to actually leave because they had to get back to their jobs in the city. They had brought in a number of people who may not be farmers but who had shown up, and then when one o'clock came, they had to get back to their jobs.
I know from conversations I heard after the rally that a number of the people who were carrying pro-board signs were not farmers, because they were having discussions about that very fact.
I would appeal to the opposition parties to realize that farmers are looking forward to change. They want change. We've acted appropriately, and as importantly, we've acted to support western Canadian farmers.
That said, I would like to call the question.
An hon. member: A recorded vote.
:
I have just one last comment, Mr. Chair.
The fact of the matter is that the consultation or previous plebiscite held was not on this specific proposal, and in terms of the minister's statement on this legislation, there's only 13.8% support in that plebiscite or consultation for this position.
I would say this—and this is what would really clear the air, Mr. Chair, and we'd welcome this—that if the government would go out and hold a new plebiscite on a clear question, do you want the single desk or not, it would settle this issue. If the government thinks it has support, then do it. Hold the plebiscite the way that it's supposed to be done under the law, and whether it's for or against barley under the board, we would welcome that decision.
So if the parliamentary secretary and the minister think they have that support out there on a clear question, then just do it, and we wouldn't have to argue here.
So I would agree. Call the question.