Proceedings of the Standing Senate Committee on
Agriculture and Forestry
Issue 19 - Evidence - Meeting of March 5, 2007 - Afternoon meeting
PRINCE GEORGE, BRITISH COLUMBIA, Monday, March 5, 2007
The Standing Senate Committee on Agriculture and Forestry met this day at 1:31 p.m. to examine and report on rural poverty in Canada.
Senator Joyce Fairbairn (Chairman) in the chair.
[English]
The Chairman: Good afternoon, ladies and gentlemen. We are pleased to have with us this afternoon Ms. Dowswell and Mr. Patterson.
Please proceed, Ms. Dowswell.
Denise Dowswell, Little Valley Farms, as an individual: Does Canada want us here? That is the question that is being asked on our farm right now. We are a third-generation farm started by my grandfather. He worked on the place till he was 72. He worked up to the day he died; he retired the way he wanted to. Both he and my grandmother are buried on the place.
My dad has carried on the farm. He is 60 this year. We built the place up to 4,280 acres. We have fed up to 5,000 cattle. We are currently down to about 2,500 head. Our place has been built from working from morning to dusk. We start the day at 6:30. My dad and I meet before the guys come in at eight o'clock, and we work till dark. The children are all involved. There are seven grandchildren on the place, ranging from seven down to two, and right down to the three year olds ride.
We take pride in what we produce. If we will not eat it, we do not sell it. It will not leave the place. That philosophy was passed on from my grandfather. We are spending a lot of the equity built by my grandfather and father. They put a lot of sweat equity into the place. My sisters are both accountants. The reality of it is that we are paying to farm. There is no way around that. We are burning up the equity that my dad and grandfather have put into the place.
What are our challenges? Freight is a huge challenge for us. Our products need to be freighted in. We had a drought this year. We have to bring all our feed in — at $50 a tonne. Our animals all need to be freighted out. The cost of that is $50 per animal, going out. What does this mean to us? These animals are now costing us an extra $100 a year. They are not paying to be there; we are paying to have them there.
Labour is a huge problem for us also. At one time, we were able to get experienced people who came from smaller farms. For example, they knew how to drive a tractor. What do we have now? We get kids who have never driven a vehicle, who do not have driver's licence. We put training into these people. We require them to work six days a week. We have two excellent hired men, and we pay them under the poverty line. It is shameful.
I will now talk about farm programs. Are we getting huge handouts? No. We are spending a tremendous amount of time dealing with farm programs. As I said, my sisters are accountants and they help us. In terms of CAIS, we are back in 2004. We received some money for 2004, but we were then informed that we owed them money. We went back to CAIS, went over the figures again, and six months later discovered that they in fact owed us some money — so we have settled 2004. Unfortunately, we are trying to pay the bills in 2007.
We are one of the blessed families in the farming community, because we are still interested in farming. When I look around at my community and see people my dad's age who have worked their entire life — what do they have? They have a ``for sale'' sign at the end of the driveway. Young people cannot get into this. I would love to farm, but I teach two days a week because I have to. I have three children that I have to feed and educate.
The majority of people in this room get a pay cheque every two weeks. It is frustrating, because the only thing farmers in Canada need is the assurance that when they put in a year's worth of work they will actually get something out of it.
I will give you an idea of what my day looks like. On the days I teach, I get up at five o'clock and farm before I go to school. I also farm at four o'clock. When do I age verify the calves? The calves are age verified before five in the morning or after my children go to bed. Farmers are not asking for free handouts; they are asking to be able to make a living.
When BSE hit, we had in excess of 500 head of steer across the line in the United States. They went down there in March, they were on full feed, they were killed after the border closed on May 20, and those cattle were sold as American beef. Those cattle were sold in August. We made as much profit on the steers that were in the U.S. as we did for the full animal in Canada. I am talking about the exact same beef; some of them would have had the same bloodlines. Those cattle were sold as American beef, because that was before BSE, and here in Canada we were getting robbed.
In 1972, a freeze was put on our land. At that time, they said that the cost of production was $1.42 and the government guaranteed $1.42 for the production of calves. This morning, for a calf of the same weight, the farmer would get paid $1.10 to $1.24. In 1972, it cost $1.42 to produce a calf; today, the input costs have gone up and the farmer gets less.
Now, what are some of the programs that are in place? There is the CAIS program and the CASS program — that is, the Canadian Agricultural Skills Service. I wanted to participate in CASS, but because my husband has an income off the farm I am not eligible to do that. That is a barrier to a young person trying to get into agriculture. If a farmer works on the side, he is or is penalized — there is no assistance if a farmer has a side income. At the same time, a farmer cannot survive financially in agriculture. How can you expect young people to get involved in agriculture — which has let my dad's generation down? These people are 60 years old. They have dedicated their lives to their farms — and they cannot sell them. They are trapped in their farms, and it is not because young people do not want to get into it. It is because young people cannot afford to get into agriculture, with time or equity.
The Chairman: We will now hear from Mr. Patterson, following which we will go to questions.
Dwaine Patterson, Communications, Energy & Paperworkers Union, Local 603, as an individual: First off, thank you for allowing me the opportunity to speak to this committee. I have been a resident of Prince George now for 40 years. I have worked at Canfor's Northwood Pulp Mill for the last 35 years. It is my privilege to appear here on behalf of the Communications, Energy & Paperworkers, Local 603, which holds jurisdiction at Canfor's Northwood Pulp Mill.
One of the greatest privileges of working in the newest of all the pulp mills in Canada is that I have read about two recessions in Canada, and to this point I have not participated in any of them. It is a privilege to have work. As has been pointed out here today, it is a privilege to have work that gives you an income every two weeks.
Your committee obviously understand that forestry is the backbone of this community, and a good portion of backbone of this province. Honourable senators are probably aware of the spruce beetles and the pine beetles, so I will not labour on those issues. The high value of the Canadian dollar and how it reflects itself in our economy in this territory is also something you probably know more about than I do, so I will skip over that.
How forestry goes in B.C. pretty much dictates how B.C. goes. I am looking ahead to where there will be real problems if the collective intellect in government does not recognize that we are on the cusp of a crisis in the forestry industry. We are the newest pulp mill in Canada. As such, we produce one of the highest quality products in the world, and we produce it at an extremely great rate of economy. We produce one tonne of pulp for every .4 man days that we work. Our competition produces the same amount of pulp with four man days. We are 10 times better than the people we compete with, so we are in a privileged position here in the north.
The quality of the fibre we deal with cannot be duplicated in places like South America. They can make you a newspaper; we can make you a piece of paper that you can put away for 50 years and still read it. We are not competing with them in those types of forest ventures. However, what we are competing with is the investment climate that exists in our world today, where people want immediate and gross returns on their investments. We in the forest industry need to maintain a progressive approach to managing our mills, so that the ongoing structure of finance is somehow matched with the other returns that can be found in our society.
Forest industry employment relies on the intelligent management of our resources, and that is where I look to the people who are elected for assistance. We need support systems that allow us to process the wood that we harvest here instead of shipping whole logs offshore and improving the economy for places like Japan and America and China. We need to have ventures that are brought forward in B.C. and in this area. The more people we can get involved in a secondary form of industry related to the forest sector, the more we will be able to support each other, both in agricultural and in forestry. The more people working and bringing in a monthly or bi-weekly pay cheque, the more people there will be to support our friends and neighbours in the agricultural section here.
The forest industry has suffered in the last few years across Canada, in Ontario and Quebec particularly. We have lost 10,000 jobs in the last couple years and that 10,000 jobs translates into one million tonnes of pulp no longer being produced by Canadian mills. That one million tonnes of pulp constitutes 16 per cent of the overall gross national product that was generated by pulp. That 16 per cent is in one year. We have dropped 16 per cent of our pulp production in one year. To my way of thinking, that requires a real close look at what is going on in our industry. If that is an indicator of where we are going, then it will not be long before another committee visits here to investigate why the forest sector is in the shape the agricultural sector of today is in. I would like to see some kind of formula to offset investment costs, so that we can encourage investors to come into this country.
A gentleman this morning spoke about research that is being done in Norway. We had investors from Norway here a few years ago looking at putting in a 5,000-tonne-a-day mill — equivalent to the three mills that exist here today — into Prince George. The costs of rebar and cement forbade them from coming into this area. The raw resources are here, the fibre is here, everything exists here — including transportation systems. Everything we need in order to encourage investors to come into this section is here.
I am hoping Senator Mercer will take this as uplifting — because I am certainly not here to cry the blues.
Our industry is not in rough shape, but we need to look at where we are at and realize that we have the potential to be in very bad shape very quickly if we do not continue to be progressive. If the forest industry fails in this region, it will not fail for lack of raw materials; it will fail because government, be it provincial or federal, failed to direct that raw material to our own people to use for the purposes of making an income. If it fails in this region, it will not be for the lack of quality labour; it will be because industry and government failed to support the cause of creating quality labourers. If it fails, it will not be because of lack of visionaries; it will be because we failed to see the problem in time to rectify it.
We need to look at what has gone on in Ontario and Quebec, at the failing of the mills there, and take some real imaginative thinking to the table with us when we decide what we are going to do with the forest industry in this area, because I am afraid. I want the forest industry to be here for my grandchildren. I have absolutely no fear that I am going to make it. I can stumble twice, and I will be retired before the forest industry gets the last bail of pulp dried out, but my grandchildren need a place to work and live.
The blue collar tax bracket is very high here, one of the highest in the world. In order to keep that resource and to keep it coming, we need assistance to maintain and create secondary industry. Maintain the existing industry and hopefully create some secondary industry in this area.
Thank you for the opportunity to speak to you. I hope we can reach a conclusion whereby through more dialogue with the investors, the labourers and government we can come to a conclusion that will assist this area to continue to move forward in the forest industry.
The Chairman: Thank you very much, Dwaine. We will start the questioning with Senator Peterson, followed by Senator Mercer.
Senator Peterson: Thank you, Madam Chairman, and thank you to both of you for your presentation.
Denise, I can almost feel the pain you are experiencing in making your presentation today — and you are not here looking for charity or for handouts. You are just looking for honest pay for the work you do, something that is certainly not unreasonable. We have come to a juncture where the current situation has to be corrected — because it would be my hope that you and your husband and eventually your children could carry on the operation that has been in your family for some time.
To have to pay to work is almost impossible to comprehend. The rest of country has to be able to understand that somehow — and this committee will make every effort from what we have heard to try to correct that, because it is just not right.
Senator Mercer: Denise and Dwaine, thank you both very much for being here. We all echo Senator Peterson's comments — we can feel that pain.
Dwaine, what you have done is try to raise the flag a little early, so that this committee has the situation in the forestry industry on its radar. We are very much interested in what is happening in the forestry industry; the industry varies significantly from coast to coast, and this is very big business here.
In my province of Nova Scotia, it is still big business. There are three major pulp mills in my province, but it is managed differently; it is much smaller. We cut off pretty small woodlots to supply those mills.
You made several references to investment costs. How do you see government helping to put a progressive approach to investment for the forest industry? How do we do make this better?
Mr. Patterson: I honestly do not know; I am not an economist. What I was looking at and what I was hoping was for some imagination to be applied here, where a investor could hope to have a reduction in costs or taxes, whatever was necessary, and then to have that metered over say a 15-year period. In other words, instead of being hit by the immediacy of having created a multimillion dollar pulp mill, being taxed on it immediately, have that mediated to a point where it would be more affordable and therefore the profit would be more balanced to the front end as well as to the later years.
If I understand correctly from the managers and staff I had communication with at the mill, after about a 10-year period, they experience a lot better return on the same product, simply because they have now written off all the costs associated with that. What I was hoping for was something along that line, where, instead of waiting for 10 years for them to experience that cost, they could lose some of that after 10 years but gain some at the front end to encourage investment.
Senator Mercer: Now, there are four mills in Prince George?
Mr. Patterson: Technically, there are three; Northwood is comprised of two separate mills that are side by each in the same building.
Senator Mercer: You are at the newest mill?
Mr. Patterson: Yes.
Senator Mercer: So one would assume that the other three are not as efficient as yours. The efficiency is quite staggering.
Mr. Patterson: I am actually at two, sir. Northwood is comprised of two mills that are side by each. Basically, our A- line, which is our new line, is much more efficient than the old line. However, we can cross over pulp from one mill to the other and basically our pulp is exactly the same coming out the back end, so our quality is still the same.
Senator Mercer: Is there a need to offer an incentive for the mills that are not as efficient? Is there something we should be doing to make it easier for people to retool those older mills, to make them as efficient as the new one?
Mr. Patterson: This unfortunately is a problem that will have to be dealt. Foresight tells us that these 100-year-old mills are going to fold. The fortitude to say tough luck it is your turn is going to be in the hands of people who are going to have to answer to an elective for making that decision. I am not going to be that guy, so my job is easier.
Senator Mercer: Denise, including family, how many people work on your farm?
Ms. Dowswell: We have two hired men that help us, and then there are my three sisters. My dad was blessed with four daughters — and six granddaughters. He has only one grandson. Along with the two hired men and us, my dad works full-time. He works from six in the morning till dark.
Senator Mercer: Your sisters work off the farm as well?
Ms. Dowswell: They work off the farm, and they help on the farm also.
Senator Mercer: But your dad does not?
Ms. Dowswell: My dad works on the farm every day, yes. That is a big concern to us, because dad is not taking a wage but we could not hire someone to do what he does. How do we pay for dad to retire? When his dad retired, we were able to keep the farming operations going. That is a huge concern to us as well.
Senator Mercer: You say you are excluded from certain programs because your husband works off the farm, which changes your family income. The trouble with the taxation system is that it is designed to cover everybody. To tailor make the taxation system so that it accommodates your situation is a difficult thing for government to design. I am looking for a hint as to what could the government do to address that. Could the government exclude your husband's income from the calculation? Would that be the answer?
Ms. Dowswell: Exactly. Excluding spouse's income — and for myself personally that would make the difference. In order to feed my children, I need to bring in only $25,000 a year. However, I cannot buy cows or make sure that I have $25,000 a year and guarantee that I will be able to feed my family. That is all I am asking. I am supplementing my family income, but with farming I cannot guarantee that I will be able to feed my kids at the end of the year.
Senator Mercer: This is small consolation for you, but you are not alone. We have heard the same story everywhere — perhaps not as passionately as you have put it, but we have heard the same story. The solutions are tougher.
Ms. Dowswell: What worries me is that when I go to these farm meetings many of the people are dad's age, and there are very few that are even interested in it. The few people that are left that have a passion — their hearts are getting taken out of it. That is what is happening. The people in dad's generation are 60 years old, and they want to be able to pass the farm on to the young people, but something needs to happen.
Senator Mahovlich: Denise, I have six grandsons. I was wondering if this summer they could work at your farm?
Ms. Dowswell: Sure.
Senator Mahovlich: I would be glad to send them there.
The Chairman: Take him up on it.
Senator Mahovlich: Your parents are 60 now. Do they plan to retire on the farm? Is their plan to stay on the farm until they are 80?
Ms. Dowswell: Yes, that is their plan.
Senator Mahovlich: Will your father work until he is 80 years old? Will that be his retirement age?
Ms. Dowswell: That is his retirement. That was my grandfather's retirement. When we saddle up, we move cattle. The other day, we had 11 horses saddled up.
Senator Mahovlich: Did your dad look after your granddad?
Ms. Dowswell: Well, my granddad passed away. My dad rides, and all of the grandchildren ride, and I ride with my sisters. We will look after each other. All we are asking is to feed our families.
Senator Mahovlich: The government should come up with a better policy, better rules for farmers, so they can have a life.
Ms. Dowswell: Many of the farmers want to retire on their places.
The Switzerland government has a transition program, to help the family retire on their own farms, just as their wishes are, but Canada does not have that. Canada is competing against countries like the United States — which looks after its farmers. Switzerland looks after its farmers. The Europeans look after their farmers. What I have heard is that Canadians just are not hungry enough, that they do not know what it is like to starve.
Senator Mahovlich: There is no EU for farmers.
Ms. Dowswell: No.
Senator Mahovlich: It is not an easy situation.
In terms of the forestry industry, 30 years or 40 years ago in Montreal there was a furniture company by the name of Vilas. I still have a piece of Vilas furniture. I bought a nice Vilas kitchen set when I got married. It was made in Shawinigan, or in one of those Quebec towns; it was made of beautiful maple. Vilas was bought by Molson's, but in two years it was closed. It was a tax writeoff. They were making beautiful maple furniture. People were not encouraged to get into furniture making — which is a problem with our laws. It was a tax advantage to Molson's to have this writeoff.
In terms of a second industry here in Prince George, say a furniture company like that, is that what you are talking about?
Mr. Patterson: What I am hoping to see involves all of the garbage wood in the forest, wood the pine beetle and spruce beetle have killed. There is so much fibre going to waste out there; we must utilize it somehow. I am hoping it can be used for the new pellet stoves that are being touted as an alternative heat source. For example, if we could set up pelletizing units here in town — that would be a great resource.
One of the dimensions that would assist our community — and I am certainly not thinking of my own resource at this point. My boss will not agree probably with what I am about to say, but if people with a tree farm licence were forced to act responsibly towards all the fibre that is on their tree farm, we would gain probably 30 or 40 per cent value out of that tree farm. There will be an additional expense, which would have to be shared by the tree farm licence holder and the beneficiaries of bringing that fibre out of the bush. A little imagination would go a long way toward figuring out how that can be done, where we can all profit.
Senator Gustafson: Dwaine, you seem to indicate that there is some nervousness about the industry. When we were in the Maritimes, and again at Prince Albert, we were told of closures and trouble at older plants. I understand your concern that your plants stay stable.
You make 2-by-4s first, and then you use the pulp off of that; am I correct?
Mr. Patterson: The majority of it would be the residual from having made dimensional lumber. However, that will change in the near future, because the wood that is dry that is standing out there now in the forest will only be acceptable for dimensional wood for about three to five years, depending on how much bark has been taken off by the bugs and how much it has been infected. If the wood is standing, it will remain quality wood for pulp purposes for 25 years. If it is down on the ground, it will not be any good for pulp purposes. However, if it is in a standing dry mode, it will be good for dimensional wood for three to five years, after which it will be too dry and brittle to be cut into 2-by- 4s. Logistically, we would be looking at chipping that wood down whole and putting into the pulp process.
There is another dimension that I will just mention. The blue dye in these bugs kill trees. Everyone thinks it looks nice, but it is a fungus. We are only now starting to investigate the potential of the harm to individuals. These trees are being brought into the mill, where the wood is being chipped; the fungus is going into the air and people are breathing that stuff. Ten or 15 years from now, we may be sitting here discussing the blue lung of the forest industry, similar to the brown lung or black lung in the coal industry. However, for now, we have to proceed with the knowledge we have, which is that we need to get this stuff out of the bush.
Senator Gustafson: Denise, you gave us a very good picture of what is happening in agriculture. It is so serious. More and more farmers are losing heart. There is an emotional attachment to a farm — I know it. My grandfather farmed. My father farmed. I farmed. My boys are farming and my grandchildren run tractors. It is not just a matter of dollars and cents. It is far beyond that. It is hard to explain it. The people I served in Assiniboine riding for 14 years were rural people. I really believe they are the salt of the earth. You have displayed that here today, and you have certainly given this committee a lot to think about, along with the other couple that appeared here. Certainly, we will not forget this quickly. The challenge is to communicate it to the powers that be. Thank you both for appearing.
Ms. Dowswell: Thanks for having us.
Senator Mercer: I want to put a quick question to Denise — one that we did not cover earlier when we were talking about the beef industry.
I understand there is no slaughter facility in British Columbia. You have to ship your cattle to Alberta — which goes back to the extra cost of freight. Has there been any discussion of establishing a slaughterhouse in British Columbia to handle the beef here as opposed to shipping it across the mountains.
Ms. Dowswell: There has been, and different ones have been tried. We were involved. There was a small slaughterhouse in Terrace; we would ship eight to 10 steers to them a week. They got a contract with the ferries; they were putting the meat on the ferries. It was going well, until Tyson and Cargill, seeing a business opportunity, offered them free hamburger. They put them out of business. What Tyson could kill in a day, it takes all year for the small plants, and unless there is a market they squash these small plants.
Senator Mercer: So the big three are Cargill, Tyson and XL Foods, and they engage in predatory pricing.
Ms. Dowswell: They totally took that ferry market. They were basically giving them the meat just to get it back.
Senator Mercer: Is not the ferry market controlled by the Government of British Columbia?
Ms. Dowswell: Should be.
Senator Mercer: The ferries are owned by the Government of British Columbia.
Ms. Dowswell: Yes, they are. If it were regulated that, say, the hospital used our meat, or if there were a definite market there, yes, that would help us. What is happening to the smaller slaughter facilities is that they are being crushed.
Senator Mercer: Yes. We saw evidence when we were doing our hearings on the BSE crisis of some new facilities opening in Canada. I come from a province that has no slaughter facilities and no federally inspected facilities. We saw a cooperative for the Maritime provinces. Has there been any talk about cooperative, using the existing cooperative?
Ms. Dowswell: There has been, and there was even talk with the Save-On-Foods meat manager. However, the toughest part is staying competitive with Extra Foods and all of the other stores. Save-On-Foods say they cannot commit to this; if it is producer-owned, we will buy from you, because we have to make sure that people are coming to buy our meat, because if they can go to Extra Foods or somewhere else and buy it cheaper, they will.
Senator Mercer: One of the single biggest problems we have is that food is too damn cheap in this country.
Ms. Dowswell: Exactly.
Senator Mercer: However, it is also, as I told somebody earlier, difficult for governments to tell people that they are not paying enough for something they absolutely have to have, so the solutions are fairly complicated, and I do really appreciate both of your presentations today. As Senator Gustafson, said we will not be forgetting this for a long time.
Senator Gustafson: I just want one thing on the record, which is that these cattle we are talking about are probably the best cattle in the world. I have toured the Kansas feedlots. They have Canadian-penned cattle and Mexican-penned cattle, and these are the best cattle in the world, in this whole country. For whatever reason, the further south you go the poorer the cattle. I want it understood that we are talking about an industry here that is a prime industry worldwide, the best in the world.
Ms. Dowswell: The rations for our cattle are all balanced and computerized. There are days where we do not stop for a lunch break, but the cattle get their breakfast and lunch. We are very proud of what we raise, and we raise it properly and we take pride in that.
Senator Gustafson: If you ever get a chance to look at those feedlots in Kansas, take a look and you will see that that is true.
Senator Mahovlich: A supplementary here on the cost of food. I think we are paying enough for food, but I do not think the funds are distributed properly.
The Chairman: Just one question, Denise. I thought there was a plant that was going to come up in British Columbia. Am I correct on that?
Ms. Dowswell: One in Prince George has recently become federally inspected — but the funds are still not going back to the producer. The difficulty is that the markets are still set by the big boys, so they are not paying any more for the cattle. The cattle are still on the older market. That is what I think is the toughest part farmers are facing, that is, that the market is still controlled on that top end. They are still paying those market prices for cattle.
So, there is one in Prince George, but so far it has not come down to the producer. They are slaughtering 12 to 18 head a week — that is their capacity.
The Chairman: You have done us a great honour by sharing so openly your concerns and your wishes. I think everyone at this table wishes we could snap our fingers and it would all happen. Please stay in touch with us; let us know how you are doing.
We also thank you Dwaine for attending here and becoming part of our study. We have a reputation, this little committee, of fighting on, and we will continue to do that, but again we would be very interested in knowing how you are doing.
It has been a very good day here. When we go on these trips, we learn, and we learn from you, which helps us, I think, be better at what we do. You both certainly have done that today. We wish you all the very best.
Thank you, colleagues. You have been delightful as usual.
The committee adjourned.