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Results: 1 - 15 of 169
View Andy Mitchell Profile
Lib. (ON)
Thank you very much, Mr. Chair.
Let me thank all of the committee members who are here today. I would just take a moment to compliment the committee. It has done a lot of hard work over the life of this Parliament, and I want to take an opportunity to thank you for that work. For all the producers who are watching, I'd like to thank you on their behalf as well, for all of the work that you've done.
I don't have to tell the folks at this committee that we are operating in what is a challenging and complex environment for producers and public policy-makers in respect of agriculture and agrifood. It is something I know each one of us, regardless of our political stripe, is dedicated to address and something for which we are dedicated to working toward resolution.
As the chairman mentioned, today we're going to talk a little bit about business risk management, the CAIS program, and I suspect perhaps some other things, as well. However, let me begin by just making an observation about something I know we all are aware of but that I think is worth making.
Business risk management payments by governments are at record levels today. The reality is that last year they came in around $4.9 billion. For the first six months of this year, they're at $3.4 billion. But that's a double-edged sword, so to speak. That sends two messages. On the one side, it sends the message that governments are in fact working to respond to the economic challenges that are faced by our producers, and that's a good thing. But there's another message in those numbers, and one that I think is just as important for us to address, and it is that the ability for our producers to earn a living from the marketplace is being impaired. Those payments are being made because they're having challenges in the marketplace in making sure they can earn their income that way.
I think—and I suspect I share this with the committee—that it's imperative, as government, that we address both of those important issues: making sure that we have effective business risk management programs, but also that we deal with the underlying and structural issues that need to be addressed in agriculture. That takes a multi-disciplined approach, one that really has to try to work to achieve three objectives, which I know I've outlined to this committee before, and which I, the department, and this committee are in fact working very diligently towards.
The first one is very straightforward, and that's to create an environment that allows producers to earn a living. The reality is that if somebody can't earn a living farming, they're not going to farm. If they're not farming, that's not just a problem for themselves and not just a problem for rural Canada, it's a problem for all Canadians. It's an important public policy issue that all of us need to address here in this place and right across the country.
As well, we need to ensure that we have policies that continue with the profitability of the agrifood sector and allow it to continue to make what is a significant contribution to the Canadian economy. Some 8% of our GDP comes from agriculture and agrifood. That's significant. It's a major contribution to the wealth of all Canadians, and we need to work hard to make sure that can continue.
And thirdly, we need to work hard to ensure that we can maintain the sustainability of that network of communities that exists primarily in rural Canada, that supports or agricultural industry, and for that matter, Mr. Chair, our other natural resource industries.
So as we undertake policies, I think it's important for us to keep in mind all of those things.
There are a number of things we need to deal with, Mr. Chair. One of them has to deal with the whole issue of wealth being generated by agriculture and agrifood, and making sure that wealth is distributed along the value chain. I know that's an issue this committee has grappled with. It's an issue that my parliamentary secretary, with his report, has worked on. It is something we dealt with as federal and provincial ministers at our last federal–provincial meeting, in Kananaskis. And at the next meeting we're going to be having in Saskatchewan later this month, we will deal with those issues through what is commonly called the transformative change agenda.
Secondly, Mr. Chair, it is important to deal with the issue of international trade. In my view, it is essential that we have a rules-based trading system, one that creates a level playing field for Canadian producers right across the board. That's why the negotiations that Canada is engaged in at the WTO are so critical for our agriculture industry, Mr. Chair, whether we're dealing with the elimination of export subsidies, the reduction of domestic supports by our trading partners, increased market access, or making sure Canadian producers continue to make choices about the domestic marketing machines and that we have the flexibility that allows them to make their choices, whether that means a supply-managed choice or something else.
It's also important, Mr. Chair, that we build on the traditional Canadian advantage, and that is that we are an innovative, creatively based industry, one that has consistently been one step ahead in the international marketplace. That's something Canadian agriculture is known for around the world, and that's why I believe the initiatives we've undertaken—and are in fact in the process of doing right now in terms of our science review—are critical. We need to be able to give our producers those kinds of tools.
The fourth item is the issue you've called me here for, Mr. Chair, and that's the issue of business risk management. Regardless of how successful we continue to be on those other issues, business risk management is going to be part of the agriculture industry. It's a different type of industry from what you may see in a traditionally based manufacturing or technologically based set of industries. It's cyclical in nature. That's its reality. There are challenges that are faced from time to time that create significant fluctuations in income. Having business risk management programs that deal with those is important, so there's no question that we need to continue to emphasize them.
There need to be a number of components to that program, and right now we do have a number. We have the CAIS program, Mr. Chair, which, in payments in its second year, has paid out $2.3 billion to date to producers across the country. In and by itself, it needs to have a complementary program, our production insurance program, which I think most producers right across Canada see as an effective program, one that is cost-shared by the provinces, the federal government, and by producers. Last year alone, governments paid something in the order of $600 million to support our production insurance.
We have our advance programs, Mr. Chair, in respect of ensuring that we can provide our producers with liquidity so that they can more appropriately choose to market their products. Following up on a budget commitment to expand that program, I announced new legislation so that it now will cover livestock and begin the process increase the eligible amounts that producers can in fact access.
Mr. Chair, there's also the issue of targeted programs. We've had to have targeted programs. For instance, in respect of BSE, we tried to deal with the disruption to the marketplace caused by a closed border. This past spring, Mr. Chair, we provided $408 million to grains and oilseeds producers across Canada, and I think that was an important investment that was undertaken. However, Mr. Chair, it's important to realize that it isn't simply one particular initiative, but a combination of initiatives that deal with the issues that our producers face.
Mr. Chair, specifically on the CAIS program, one of the things—and we've talked about it before here at this committee—is the importance to make sure that it is a dynamic program and not a static program, one that can respond to the issues and the needs of producers, and one that can respond to the issues that are brought up by producers. It's why I have three different structures, all made up of producers—whether it be the CAIS committee, or the APF review committee, or the national safety nets committee—providing ongoing input about how we can make the program as effective as we possibly can, and to suggest changes that should be made from time to time.
As you know, Mr. Chair, a number of those changes have already been put into place. We changed the cap, the total amount that can be paid under the program. We moved to covering negative margins under the program. We've included special advances that have been made under the program. At Kananaskis, ministers agreed in principle that they would eliminate the deposit requirement from being part of the program.
We also intend to introduce a targeted advance program so producers can receive money closer to the time when they're experiencing loss, and don't have to wait until the following year. We have also proposed changes in eligibility for negative margin cover for producers.
In addition to that, ministers asked officials to come together and work with the industry to look at some additional changes. One was how we value inventory. I know this committee has discussed that at great length, and it is an issue of extensive importance to our producers.
What is the linkage between CAIS and production insurance, and how should that be formulated? There's the whole issue of margin calculations and the best way to calculate margins.
This committee has also talked on a number of occasions about a suite of administrative changes to work toward simplifying the process by which producers apply for the program.
So that's a bit of an update, Mr. Chair. I'll be happy to entertain questions on business risk management, or some of those broader issues we talked about.
View Andy Mitchell Profile
Lib. (ON)
Let me try to answer all of those. I'll try to be brief; this is always an issue when I'm with a committee.
Number one, in terms of advances, to my understanding, there isn't a problem with the vast majority of advances. The money is advanced, they do their claim in the following year, and usually there's additional money that's owing. That's why it's really important for us to make sure that we have the right methodology in calculating those advances, so that we try to minimize any type of overpayment. We will continue to work on that very, very closely.
There is an ongoing debate on whether you combine within one program both income stabilization and attempts to address disasters. When we're trying to deal with some of the changes in CAIS, it's being driven by exactly that issue.
I think it's important to remember that CAIS is about dealing with the result of something. When you have a drought, CAIS deals with the impact, or loss of income. When you have a closed border, CAIS deals with the impact of that, or the loss of income. There are some causes you can deal with proactively, but with drought it's very difficult. You may be able to deal with some of those in the long term with some major infrastructure investments. With other issues, for instance those in respect of the border closing as a result of BSE, we were able to have complementary programs that dealt directly with some of the causes, as well with part of the result—and we continued to do that through the CAIS program.
So we're working very diligently to respond to producers. That's why we have the CAIS committee and APF review committee and NSNAC committee, so that we can have an ongoing set of inputs from producers about what's working and what needs to be changed. I think the evidence is that we've been quite willing to address the suggestions that are made, and have made a number of changes, and are quite prepared to make sure that the program evolves over time.
View Andy Mitchell Profile
Lib. (ON)
Certainly that's an issue. You make a good point, Mr. Miller.
Beyond that, we've been successful or able to regularize the trade in cattle under 30 months of age. But I think it's important to realize that there's some additional work we need to do: we still need to deal with the issue of cattle over 30 months of age, and we do need to deal with breeder animals. We continue to work very closely with the United States on both of those issues to try to get increased regularization of trade.
In terms of the breeders associations, we announced some money at the end of June, I believe it was, to try to provide them with some assistance in terms of marketing. I will take a look at the specifics in terms of the CAIS program. I believe that some of the work that we did on both the TISP and FIP should have had an impact on those producers as well, but I'll make sure that we give you a complete analysis on the range of programs, and on exactly how they impact that sector.
View Andy Mitchell Profile
Lib. (ON)
I'm at the disposal of the chair.
View Andy Mitchell Profile
Lib. (ON)
Those are a lot of questions to answer in two and a half minutes, Mr. Chair, but let me give it a shot.
First of all, I think there were a couple of issues. On the grains and oilseeds side, I think it's absolutely essential that we deal with it on two levels. One, as I mentioned at the beginning, is in terms of income support and what's being provided. Those producers do have access to CAIS, and as I mentioned earlier, we provided an additional payment from the federal government in April to grains and oilseeds producers. The majority of the money flowed shortly after that, and I think the last payment under that will flow some time in the next couple of weeks. So we understand that.
But you're absolutely right that one of the issues is that we have to deal with this in a broader context, having to do with our international trading system. It's really critical for us, as we go through these WTO negotiations, to get a meaningful reduction in domestic support levels from our trading partners, particularly the United States. I think there's a general acceptance that some of their programs are causing a depression in price through creating an oversupply in the marketplace, so it's not just a matter of dealing with the income side—although that's very important, don't get me wrong—but we also need to try to deal with one of the causes. That's why I mentioned the rules-based system at the beginning of my comments.
In terms of the BSE situation, we've provided funding in the province of Quebec through a number of different vehicles. We've provided it in respect of the CAIS program. There have been payments that have gone directly under both FIP and TISP to these producers, including the specific ones that you've mentioned. We've also provided some access by dealing specifically with older animals—and Quebec has taken us up on that offer and is utilizing that. We will continue to work to support our producers for the period of time that's required.
Our ultimate objective, of course, is to reopen the border for older animals and breeder animals, which has to be the solution to this. But we've been there for producers in the past on this particular issue, and we will continue to be there in the future.
View Andy Mitchell Profile
Lib. (ON)
On which one? I'm sorry.
View Andy Mitchell Profile
Lib. (ON)
Yes. Those changes have actually been subject to an amendment agreement, and they are in place. The change in the cap is in place, and the original intent to cover negative margins is in place.
What isn't in place is our expansion of the eligibility to take advantage of negative margins, by allowing you to have another year of negative margins. That one has been agreed to by ministers, but still needs ratification. So negative margin coverage is in place, but expanding the eligibility for negative margin coverage still needs to be the subject of an amendment agreement.
View Andy Mitchell Profile
Lib. (ON)
I will ask the officials to get that—
View Andy Mitchell Profile
Lib. (ON)
There is some stuff that seems fairly straightforward, like pre-populating the forms, so if you're going to send it out to a producer, you know who you're sending it to. There's a whole set of information on the form that can already be filled out; there's no need for the producer to do it. This is to get a better harmonization between the CAIS financial requirements and the income tax financial requirements and to just have the one item.
Those are the kinds of things we're working on to make it as simple as possible for the producer. I'm very cognizant of the importance, not only of providing the program, but doing it in a way that is as straightforward as it can possibly be for producers.
There's a balance to it. On the one side, it's public money and you have to have a series of accountabilities, but on the other hand, I think it is incumbent upon us to try to be as creative as we possibly can be in making it straightforward.
Let's be honest: our producers are busy in their operations. They don't want to be 18 or 19 hours a day in the field and then spend the last five hours doing paperwork. They've made that very clear to me.
View Andy Mitchell Profile
Lib. (ON)
Let me just clarify that. I'll let my official jump in if I do this wrong.
Grains and oilseeds producers are eligible for the CAIS program. They would go through the same type of process in terms of determining their eligibility. The issue is the extraordinary situation they face with lower commodity prices and how you respond to that. That's in part why we provided the $400-plus million in April. It was a recognition of that.
They continue to meet those challenges. How we continue to support that sector is something we're examining very closely. As I mentioned in the answer to a question, one of the basic things we need to do is to get that international trading system, so we have a rules-based system in the reduction of those domestic supports, and so we don't see commodity prices being driven into the ground. That's something we need to work diligently on from a Canadian perspective.
They are eligible for the program, and they have been drawing from the program, but there is an issue of how to deal with the very significant challenges they're facing right now.
View Andy Mitchell Profile
Lib. (ON)
You're right, and that's why we had the program and why we will continue to support them.
One of the things we've historically done as the federal government is to respond to the needs of our producers. Quite frankly, over time, those needs have been different. We've had to face a BSE situation, we're facing low commodity prices, and we've faced droughts. The Canadian government has been there for our producers.
View Andy Mitchell Profile
Lib. (ON)
Let me address that in a couple of ways.
First of all, I think it's important--and I know everybody in this room knows this--that agriculture is both a federal and a provincial responsibility. Both governments bear a responsibility in respect to supporting agriculture.
On the CAIS program, or APF in general, not just the CAIS program, there was an agreement signed by the provinces and the federal government that detailed exactly the contribution levels for each government. That agreement will come up for renewal at some point in time. I suspect there will be a number of suggestions on how that can change, both in terms of what would be covered, and the provinces may have issues they want to raise in terms of cost-sharing.
With respect to assistance, the federal government has in fact from time to time been there with programming to provide support to our producers where the provinces have not provided that support. The federal government has from time to time done exactly that.
In terms of the situation in Manitoba, we have worked with the Manitoba government in trying to deal with some of the issues they face. Some of our standing programming deals with that. Under production insurance, the excess moisture component is paying out to producers. For those who weren't even able to get on the land to put in a crop, and for those who were able to get on the land but the crop was destroyed, the normal stream of production insurance has been able to assist them. One of the things we did--and we worked with Manitoba--was very quickly get the advance up to 75% so that money could get into the hands of producers now, while they were experiencing the difficulty, as opposed to later on.
So there have been a number of initiatives on that. I worked with the agriculture minister from Manitoba in respect to those issues and others.
View Andy Mitchell Profile
Lib. (ON)
Very quickly, our primary initiative in Manitoba right now has been those programs I talked about. There are specific programs in place to deal with some of the issues that producers have faced. The production insurance is designed to deal with the flooding. The CAIS program is designed to deal with going beyond that, the kinds of income losses.
You're right, the minister and I have had discussions: okay, it's one thing to deal with the impact, but let's look ahead and see what we can do to try to prevent this type of thing from happening in the future. And we are continuing to have those discussions with Manitoba. They go beyond simply an agricultural side, because they also involve the broader issues of infrastructure and the types of infrastructure that are in place. It's a broader discussion than just agriculture.
On the equity, we've put that in place. It came on stream about three weeks ago. It is accessible now.
View Andy Mitchell Profile
Lib. (ON)
Mr. Anderson, that's a broader-based discussion that I know you've engaged in since at least as long as I've known you to be in this place, and it's your view of the impact that the Canadian Wheat Board has on the marketplace. I think that's part of it.
The whole issue of how we deal with inventory and how it's set has been an in-depth discussion that's taken place by the CAIS committee. They're making a number of recommendations to us as governments on exactly how we ought to do that. Specifically on part of your question, I'm quite prepared to have a discussion with my colleague, the president of the Wheat Board, who has the direct responsibility for that. But in terms of inventory there has been really a significant in-depth discussion about that. One of the challenges in dealing with inventory—and I know members around this table are aware of this—is that although over the long term the option that you choose should level out over time, whatever option you choose in the short term is going to be advantageous for some and not for others. It's also going to have a different impact as to whether you are in a situation where prices are increasing or whether prices are declining.
So there's a great deal of complexity in dealing with the whole way in which you relate the inventory evaluation in the CAIS calculation, but I'm quite prepared to deal in detail with your issue.
View Andy Mitchell Profile
Lib. (ON)
Let me answer that in a couple of ways. First of all, I think we've demonstrated pretty clearly we're not waiting for the review to be completed before we're undertaking changes. There were three specific changes that were put in front of ministers in July in Kananaskis, and ministers agreed that they make good sense and that we will proceed on them. They're in the process of getting a ratification of the amending agreement. That includes the elimination of the deposits, something I know you were much in favour of. It has to do with expanding the eligibility for negative margins, and the whole issue of having a targeted advance program that is designed to get the money into the hands of producers far more quickly. Again, I know It's something this committee has asked for.
We're not waiting until we get a final review out of the APF review committee. We're working on those changes on an ongoing basis. In addition to that, the CAIS committee is making some additional changes, which we will take up as ministers within three weeks at our next federal-provincial meeting to take a look at some of the suggestions that are being put forward. I agree with you, I don't want to wait until the never-never plan. There are issues that need to be dealt with right away, and we are dealing with them.
On the 2003 CAIS amendments, I will get back to you. I want to review exactly where we stand on that. I will, if you don't mind, Mr. Chair, table a letter to the committee. I think it's a critical issue that's brought forward, and I will give it my direct attention immediately.
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