Proceedings of the Standing Senate Committee on
Agriculture and Forestry
Issue 24 - Evidence - Meeting of February 17, 2015
OTTAWA, Tuesday, February 17, 2015
The Standing Senate Committee on Agriculture and Forestry, to which was referred Bill C-18, An Act to amend certain Acts relating to agriculture and agri-food, met this day at 5:07 p.m. to give consideration to the bill.
Senator Percy Mockler (Chair) in the chair.
[English]
The Chair: I welcome you to this meeting of the Standing Senate Committee on Agriculture and Forestry. To the witnesses, we thank you for accepting our invitation. We will introduce you formally, but, before we do, I'd like to introduce myself. I'm Percy Mockler, senator from New Brunswick and chair of the committee. At this time, I'd like to ask the senators to introduce themselves.
Senator Merchant: Good evening. I'm Pana Merchant, and I'm a senator from Saskatchewan.
Senator Campbell: Good evening. My name is Larry Campbell, and I'm a senator from British Columbia.
Senator Tardif: Good evening. I'm Senator Claudette Tardif from Alberta.
Senator Enverga: Tobias Enverga from Ontario.
Senator Plett: My name's Don Plett. I'm from Manitoba, and I'm the sponsor of this legislation.
[Translation]
Senator Rivard: Michel Rivard from the Laurentian region, in Quebec.
Senator Maltais: Ghislain Maltais from Quebec.
[English]
Senator Oh: Victor Oh, senator from Ontario.
Senator Unger: Good evening. I'm Betty Unger from Edmonton, Alberta.
[Translation]
Senator Dagenais: Jean-Guy Dagenais from Quebec.
The Chair: Thank you, honourable senators. The subject matter of today's meeting is Bill C-18, An Act to amend certain Acts relating to agriculture and agri-food.
[English]
Today, we will continue our study of Bill C-18, sponsored by Senator Plett, An Act to amend certain Acts relating to agriculture and agri-food. The bill is designed to modernize and strengthen federal agriculture legislation, support innovation in the Canadian agriculture industry and enhance global market opportunities.
Honourable senators, we have as witnesses today, from the Animal Nutrition Association of Canada, Graham Cooper, Executive Director; and Melissa Dumont, Director of Technical Services. From the Agricultural Credit Corporation, we have Jaye Atkins, Chief Executive Officer.
On behalf of the committee, to the witnesses, we want to say thank you for accepting our invitation to share with us your opinions and comments on Bill C-18. I have been informed by the clerk that the first presenter will be the Agricultural Credit Corporation's Mr. Atkins, to be followed by the Animal Nutrition Association of Canada's Mr. Cooper.
Mr. Atkins, please make your presentation.
Jaye Atkins, Chief Executive Officer, Agricultural Credit Corporation: As mentioned, my name is Jaye Atkins and I'm Chief Executive Officer of Agricultural Credit Corporation, a not-for-profit organization that administers the Commodity Loan Program for the provincial government and also the Advance Payments Program on behalf of the federal government and through Agriculture and Agri-Food Canada.
Agricultural Credit Corporation, also known as ACC, is the second largest administrator of the Advance Payments Program and the only administrator that today administers the program for certain commodities in every province across Canada.
ACC administers the Advance Payments Program to producers in over 250 commodities, which, due to various sizes or types, translates into over 4,000 individual product listings.
Agriculture continues to change due to increased technology, improved genetics, causes and effects of world markets, new and improved growing practices and the increased demand for products, particularly in the areas of biomass and products that are now being sourced for new and innovative uses. It is important that the ability to finance these crops and subsequent products through channels that do not overburden the producer and reflect the changing financial landscape are available to producers nationally.
In reference to Bill C-18, our organization believes that the changes brought forth with regard to the Advance Payments Program assist in updating the Agricultural Marketing Programs Act and better reflect the common and acceptable practices of today's agricultural and financial industry.
Due to the increased cost of production, particularly in the last decade, changes that are proposed will assist in maximizing the eligible advances producers may receive under the program by allowing them more flexibility in the manner in which they qualify for, secure and repay a loan.
Also, proposed changes particularly in the area of recognizing the changing of many farm operations from sole proprietorships to corporations, cooperatives and registered partnerships while still maintaining clear attribution guidelines are reflective of current financial institutional practices and more commonly reflect the changing ownership structures of many of the farms in production today. Changes such as having a new calculation to determine administrators' holdback percentages and a five-year general agreement between administrators and Agriculture and Agri-Food Canada will allow for longer-term agreements between the administrators and their financial institutions. Clearer cash repayment interest penalty guidelines and repayment without proof of sale, along with new and clearer related producer rules, will all play an integral part in the administration and increased utilization of this program.
The removal of the need to be principally involved in agriculture opens the program to many new and young part- time farmers who, when starting out, often maintain their off-farm income to supplement their fledgling farm operations. The opening of the program to ensure a requirement for administrators to have the capability and flexibility to issue on all products as a single-window access approach to the program is very welcomed by the ACC. As I indicated earlier, we at ACC administer over 250 classes of products. This allows us in particular to expand our market and better utilize the expertise we have gained in various product areas to ensure that proper adjudication and risk mitigation in the sectors are applied.
The ability for Agriculture and Agri-Food Canada to transfer the assignment of the annual general agreements to a third party in cases where there is a breach by the administrator is also recognized by the ACC as a positive way to reinforce that the program is administered correctly, fairly and in accordance with the act and the guidelines of this program.
Certainly, the opportunity with proposed changes to allow the funding of loans on breeding animals, to have the opportunity to lend to subsidiary companies, to allow producers to utilize different forms of security along with third party guarantors, new attribution rules and new related producer rules are all items that will not only better reflect the current farming and financing landscape but from an administrator standpoint will simplify and improve access to this remarkable program.
As an organization, we are very pleased with the changes that are proposed and believe they will greatly improve our ability to administer the program. Although there are areas where we would like to see more changes, such as the elimination of proof of sales completely in all instances and a more reflective calculation of the administrators' liability based on past performance, we understand that limitations may exist to prevent this.
My request to the committee is that once approved, the new act be implemented, defined and applied consistently to all organizations that administer the program so that all producers nationally are treated equally, fairly and responsibly, that all administrators are required to adhere to the act and the guidelines set out without exception, and that all administrators are requested to meet a standard of operation and reporting to ensure the program's integrity and success.
I'd like to thank the committee for the opportunity to appear and speak with you today about this exceptional program.
The Chair: Thank you, Mr. Atkins.
Mr. Cooper, please make your presentation, after which we will have questions from senators.
Graham Cooper, Executive Director, Animal Nutrition Association of Canada: Thank you, Mr. Chair. Good evening, ladies and gentlemen. It's a real pleasure for us to be here this evening.
Just a brief word of introduction about our organization: We're the national association for the livestock and poultry feed industry, representing about 170 companies that collectively generate about 90 per cent of commercial feed production in Canada.
I should say that, in general, the feed industry is supportive of changes to the Feeds Act proposed in Bill C-18. Since 2012, our organization and other agri-food stakeholders have been involved in formal dialogue with the Canadian Food Inspection Agency on modernization of the Feeds Regulations. Several new regulatory provisions supported by industry are enabled by Bill C-18. However, there are three areas of primary interest that we'd like to bring to your attention. These relate to the feed industry's interest in amendments to the Feeds Act under Bill C-18.
First is the question of facility licensing. It applies only to extra-provincial operations, which, to clarify, are facilities that sell their production outside a province or the country and, we believe, also import from outside a jurisdiction. Therefore, we believe that facility licensing, because it is under federal jurisdiction, will apply only to those extra- provincial operations. Therefore, we caution that when the facility licensing process is implemented it be approached with some caution so that there are no unintended consequences of an unlevel playing field.
Second, on the question of preventive control plans covered in Bill C-18, the regulatory authority to require such plans is supported by the feed industry. In order for it to be effective, it must be accompanied by differential oversight, as referred to by CFIA. Facilities that make the upfront and ongoing investments in safety should be appropriately recognized within the inspection system. CFIA's field enforcement resources could then be refocused on facilities without robust preventive controls or with lower levels of regulatory compliance.
Third, with respect to proposed amendments to the Feeds Act and feed evaluation by foreign governments, the authority provided to CFIA to take into account assessments of feed and feed ingredients conducted by foreign governments is a step in the right direction. We have been working with our colleagues in the International Feed Industry Federation, principally Europe and the United States, and regulators from Canada, the U.S. and the European Union to explore ways to bring about international convergence of methodologies used for feed ingredient authorization.
Mr. Chair, it had been our original intention to address our comments only to the proposed amendments to the Feeds Act. In light of events over the past week, I think it would be remiss of us not to mention the Health of Animals Act, which, as you know, will be amended under Bill C-18, and the question of the case of BSE in Alberta.
As you know, the situation is under investigation by the CFIA. We have very few details, such as the age and birth location of the infected animal. However, several key points should be borne in mind.
First, we have been assured by the CFIA that no part of the animal entered the human food chain or animal feeding system. Some 30,000 tests are conducted on beef and dairy cattle every year, and this was the first case of BSE in Canada since 2011. The enhanced feed ban, which began in 2007, is administered under the Health of Animals Act and the Health of Animals Regulations and endorsed by the World Organization for Animal Health, or OIE, under whose auspices Canada has been given controlled risk status for BSE along with 16 other countries, principally in Europe and Latin America.
Mr. Chair, those are my opening remarks. Obviously, Ms. Dumont and I would be happy to answer questions from senators.
The Chair: Thank you, Mr. Cooper.
Senator Tardif: Mr. Atkins, you indicated that you were generally pleased with the introduction of the Advance Payments Program. However, we've heard from some farmers that as farm sizes are getting larger and production costs go up, the $400,000 limit of the Advance Payments Program may not be sufficient. What are your thoughts?
Mr. Atkins: Around that, senator, Statistics Canada indicates that the average loan size of a farm operation in Canada is around $200,000, and there are different sizes of operations. For example, I visited a farm where the producer said to me, "I have a 15-acre lake and eight wells, and my supplemental water bill is $400,000." So it doesn't fit for those operations.
When you look at the pricing of fertilizers, chemicals, pesticides, seed, fuel and all those things, particularly in the areas of the Western provinces — Manitoba, Saskatchewan, Alberta — certainly the scale of those farm operations are much larger than farms in Ontario. I know for the canola growers that size has always been a concern for them. You're dealing with a different size producer than we are.
We do have producers who would like to see that number increased from the standpoint that many of them still have to have an operating line with a financial institution as well. Certainly with the Advance Payments Program, it puts them in a bit of a precarious position in that they like the program. They like to use the program. They like the interest-free portion and the interest rate, but they still need to get that supplement, their operating loan, through a financial institution. We do run across that as well. For us, that's a smaller number than certainly in the Western provinces.
Senator Tardif: Is there a number that you feel might be more appropriate?
Mr. Atkins: Well, senator, I know that $800,000 has been kicked around. Certainly that number would surpass what we would see as a requirement.
What we find with the producers that we're working with is that — the larger ones — we do get producers that are borrowing a million dollars a year on their operating lines, but usually that's tied to different financial facilities than just an operating line of credit, in order to enhance the marketing aspect of their program. That's the thing. If you really look at it, it is a marketing program. I believe the $800,000 would surpass our requirements today.
Senator Tardif: What about the $100,000 interest-free? Should that be increased to a larger amount?
Mr. Atkins: Producers are like everyone else; they would like as much money interest-free as possible.
Senator Tardif: The Bank of Canada is doing so for everyone.
Mr. Atkins: Absolutely. Maybe we all fit into that category and I shouldn't just pick on producers. We have had producers who would like to see that. The highest I've seen is 200,000. That's the number that we get a lot of feedback on.
Does that answer your question?
Senator Tardif: Yes.
Mr. Cooper, you indicated that with the Fertilizers Act, we had to make sure it was applied consistently and that all producers would be treated equally. What are your concerns?
Mr. Cooper: You're referring to the Feeds Act?
Senator Tardif: That's right. I'm sorry, I meant the Feeds Act.
Mr. Cooper: There is a provision under the amendments in Bill C-18 to provide for facility licensing of feed establishments, feed manufacturing mills, which has not been there before. Our understanding in discussion with the CFIA, and legal counsel that they have received advice from, is that such licences can only apply to what I referred to as extra-provincial operations. There's no question that it will account for a good volume of feed production in Canada. However, there will always be a number of smaller feed mills whose production will remain within the province and indeed whose inputs will come from within the province, so they would not fall under the federal jurisdiction in terms of licensing.
For the most part, I believe I'm correct in saying that there's only one province where there's any provincial regulation of the feed and of feed manufacturing facilities.
So in terms of treating them equally, what I was referring to, without going into all of the detail because there are a lot of unknowns at this point in terms of what a licence might look like, is to make sure that the way licences are structured would not give an advantage or indeed a disadvantage to those who are required to receive a licence to operate. That's really what I was referring to, senator.
Senator Tardif: Is there a concern that not all standards are the same? I imagine there are different standards from province to province. For example, would a facility in one province be aware of the needs of another province? How does that work?
Mr. Cooper: The standards are federally regulated, so all feed mills across the country are required to comply with the standards implemented under the Feeds Regulations. So we're not worried about an imbalance. Whenever you're dealing with human nature, when there are hundreds of inspectors across the country, they're all going to see things in slightly different ways. But the hope would be, of course, in general terms that the act and the regulations will be administered equitably.
The only reason I mention the specific issue of licensing is because it's something new and it would only apply to a portion of the industry, so it just needs to be approached with caution.
Senator Tardif: Were you consulted, Mr. Cooper, in the drafting?
Mr. Cooper: Yes. Senator, we've been in consultation with our colleagues both within the agri-food sector and the livestock and poultry producers, along with the regulators, since 2011.
Senator Tardif: Thank you.
Senator Plett: Thank you to all three of you for being here this evening.
Mr. Cooper, I want to follow up on what Senator Tardif asked you and on your testimony. So you have a concern that everybody will be treated equally, but you have no reason to believe that they won't?
Mr. Cooper: That's correct.
Senator Plett: Thank you. So you basically want the minister and the government to make sure that everybody will be equal and you have every reason to believe that they will?
Mr. Cooper: In general, senator, yes, I would agree with your statement. Let me just say that at this point in time, because we're breaking new ground, we don't know what those licences are going to consist of and in fact whether conditions will be attached to them. For example, you might have a different type of licence for a feed mill that manufactures feed for different species and/or incorporates veterinary medicines into the feed. So it's possible that those mills will have a different type of licence. If that's the case, as long as it's risk-based and there's a reason for it, then there's no problem. We want to make sure that just because you're provincial versus federal in terms of your regulatory environment, you're not treated differently for those reasons only.
Senator Plett: I certainly appreciate that and I would entirely agree with you. I would suggest, and I think you would agree, that our minister has a reputation of consulting. You've already testified that you were consulted. So I would imagine that you would be both hopeful and optimistic that you would be consulted once this legislation passes.
Mr. Cooper: Absolutely.
Senator Plett: Thank you. Forgive me if I get the number wrong, but I think you said you represent about 170 different companies?
Mr. Cooper: That's correct.
Senator Plett: Give me a few names, just to give me an idea. I might know who they are.
Mr. Cooper: There are some household names like Cargill, Masterfeeds and Nutreco. There are several large companies that operate across the country. There are also a number of small independent companies that operate either provincially or regionally. So there's a good cross-section of very large, if I can use the term, sophisticated companies that have their own research facilities and so forth, all the way down to the really small businesses.
Senator Plett: Thank you.
I have a question for both of you before I ask Mr. Atkins a question. My friend Senator Tardif asked this question of the first witnesses that came here and didn't ask the question again, so I made a point of asking the question because I like the answer. Now, I may be at risk here when I ask this. Her question basically was to the first witnesses — sorry, the second witnesses. The minister was the first witness. The second witnesses were, I think, the Canadian Seed Trade Association, CropLife Canada and the Canadian Federation of Agriculture. They had very positive testimony, as you did, and she said that surely there has to be something wrong with this legislation; nothing is perfect. I'm paraphrasing here, but nothing perfect. Can you tell us what is wrong with this legislation, if there is anything?
I want to quote CropLife Canada. They had a concern and they said:
The only concerns I hear from stakeholders are the weekly calls with a great deal of concern that this isn't going to get passed on time.
I then asked all other witnesses whether that was their concern, and I think with the exception of two witnesses, the testimony was pretty much the same across the board.
Would you agree that one of the things lacking here is that it hasn't been passed yet? Of course, this has tried to get us consistent with UPOV 91, and that stands for 1991.
Mr. Atkins: From my standpoint, anything that can help to make the program easier for producers is a positive in my mind. Bill C-18 does allow the flexibility to do that in changing and updating some of the regulations and guidelines that may have been correct a number of years ago, but with how agriculture has changed, they need to catch up.
Your question in regard to what's wrong with the legislation, from our standpoint —
Senator Plett: My question is: Do you agree that it should have been passed already?
Mr. Atkins: For us, we're relatively flexible as to when it gets passed. The sooner it gets passed the more positive it is from the standpoint of getting to the agricultural market. We've worked and consulted a lot with Agriculture and Agri- Food Canada, and we appreciate that very much.
With regard to this bill coming into place and being passed, we would like it passed. A year ago would have been good; three years ago would have been great. That's when I came to the organization.
Today, because of the communications we've had with Agriculture and Agri-Food Canada, we've changed a lot of things within our organization, keeping open the availability to implement this very quickly.
From our standpoint, once passed, and if this committee so approves it, we certainly are in a position to act very quickly and get it into place.
Senator Plett: Mr. Cooper, a quick word?
Mr. Cooper: Senator, let me first address the issue of timelines, if I may.
With any involvement I've ever had with new legislation or regulations over the years, it never moves as fast as you want it to. In our particular case we represent the feeds industry which, while it is important to the agri-food supply and value chain, perhaps does not have the highest priority.
The amendments to the act that governs our activities, the Safe Food for Canadians Act, have occupied an enormous amount of resources. I believe I'm correct in saying that from what I have been told by CFIA.
We began the formal dialogue in 2012. We were hoping that we would be done by now, quite frankly. However, we're dealing with a complex subject matter, and parts of Bill C-18, as I mentioned in my opening remarks, enable certain things that we have been pushing for and that CFIA has endorsed, like preventive control plans, for example. So, yes, it has taken longer than we would like. I think it's taken longer than anybody would like, but at the end of the day will it will better than it would have been if we had rushed it? Let's hope so.
Senator Plett: Again, as a follow up to Senator Tardif's question, you're absolutely right. Farms in some parts of the country are larger than farms in other parts of the country. Could we have reached a number that would have been high enough for every farmer in the country?
Mr. Atkins: That's a good question, senator; probably not. I know operations not so much that are using the Advance Payments Program, but I can tell you about operations that are using a $125 million a year line of credit. I can tell you about farm operations using $1,000. It's that wide.
When you look at the number of operations and where this program will provide the most benefit, I truly believe it is within that range we're looking at. As I said, when you get to the Western provinces, I understand their concern. I worked in Saskatchewan for Farm Credit for 15 years, so I understand that farming operations are larger out there. When you get to areas like British Columbia — there are senators here from British Columbia — where land values are extremely high and in the lower parts where it's $100,000 an acre to buy the land and grow blueberries, strawberries and other crops, they require a large operating loan because these are high resale value crops. British Columbia is one of our largest expanding areas right now with this program.
Senator Plett: We had a few farmers from Western Canada who were supportive of the program. Maybe they would have liked a larger number.
Senator Merchant: I have a question for Mr. Cooper because you brought up this most recent case of BSE, and this is of great importance to farmers. I think you said the last case was in 2011. Did they ascertain there was a correlation between the feed and the outbreak? If so, what changes were made and does anything in this act pertain to that?
Mr. Cooper: I'm going to ask Ms. Dumont to weigh in on this as well.
In terms the first part of your question, I'm not fully aware that there was a direct link made between feed and the one instance in 2011.
I do believe, however, that based on a media briefing and a briefing given to stakeholders last Friday by Mr. Paul Mayers, the vice-president of policy and programs at CFIA— and I'm sure you know him — it gave a good overview of the measures being taken by Canada to not only control but to detect. It was an excellent briefing and Q and A period with journalists and stakeholders.
I mentioned in my opening remarks that there are 30,000 tests done a year. If you do the math between 2011 and now, some 120,000 or 150,000 tests that have been conducted, so I think we can derive some comfort from the fact that there has been one additional case since 2011.
We are now waiting for the outcome of testing. Further examination is being done by the scientific folks at CFIA in a very disciplined manner, as it should be, to protect the integrity and privacy of the cattle farming sector and also the farmer or farmers involved. I don't know how many are involved. I assume it's just one person, but I don't know that for a fact.
I fully expect that once the facts are known, there will be some statement made and we can then determine whether there is a direct relationship between this outbreak and some sort of feed that the animal has ingested.
I'm not a scientist. Ms. Dumont is, so she'll correct me if I misspeak, but the incubation period for this disease is very long. I believe it is two to eight years. So it's quite conceivable that this animal, depending on its age — and we don't know its age — might have ingested this feed perhaps eight years ago. Apparently the animals are most susceptible to contracting the disease in their early months. So at this point in time there are a lot of unknowns. But the things that we do know, as I mentioned in my remarks, are that, based on what we have been told by the CFIA, no part of this animal has entered either the human food system or the animal feeding system.
Melissa Dumont, Director of Technical Services, Animal Nutrition Association of Canada: I think Mr. Cooper was accurate in answering your question about Bill C-18 and whether or not that's going to provide any changes with direct relation to BSE. The enhanced feed ban in 2007 already increased the regulations around specified risk material to ensure that BSE would not be spread through feed, and those safeguards are still in place. So at this point Bill C-18 does not touch directly on BSE.
Senator Merchant: Sometimes we see problems in poultry. You're not just cattle; you're also poultry. Is that similar? Are those incidents that have come up in recent years related to feed as well?
Mr. Cooper: You're talking about the avian influenza in British Columbia?
Senator Merchant: Is that what it was the last time? That's a different thing?
Mr. Cooper: Yes, it's a completely different thing.
Senator Merchant: Not related to feed?
Ms. Dumont: It's not related to feed, no.
[Translation]
Senator Dagenais: My thanks to our three guests.
The purpose of Bill C-18 is to amend federal legislation and to increase competitiveness and innovation in the agricultural sector. Once passed, this bill will be able to enhance trade and grow Canada's economy.
My question is for Mr. Atkins. How do you think Bill C-18 will encourage competitiveness and innovation in your sector?
[English]
Mr. Atkins: Thank you, senator. I believe we're having the Agricultural Marketing Programs Act changed to better reflect what's occurring in the agricultural sector, the change in ownerships and in the way people are producing our food. One of the areas we see that has been approved by Agriculture and Agri-Food Canada is biomass products such as switchgrass and miscanthus that are now being used in areas such as car headliners or the foam areas in the back fender wells.
Our program finances those industries or producers where what I would consider commercial financiers, being the big five, for example, do not really appear to be overly enthusiastic about taking on that additional risk. The Advance Payments Program allows us to take on controlled risk while still providing the proper adjudication and market analysis and everything else. It allows us to position ourselves to understand that industry a little better. It's not a supply-managed industry. As a result, people aren't that eager to look at those types of industries that may be, and I do consider them to be, fledgling industries that, without the ability to finance them, probably wouldn't develop.
Senator Campbell: I'm not a normal member of this committee. Some would say I'm not normal in the first place, but that's beside the point.
The question I have goes back to BSE and the turmoil that this one case of BSE caused. I guess it is to Mr. Cooper: Can you tell me what the effect of that one case has been on our trading relationships around the world?
Mr. Cooper: I don't have any direct knowledge, senator, but I did hear today — and I believe this is correct — that South Korea has put what we hope and expect will be a "temporary" ban on imports of Canadian beef.
What we were told in the briefing last week was that as soon as the Canadian stakeholders — i.e. ourselves and the media — were briefed, the authorities at CFIA were going to get on the line with our major trading partners around the world. I assume that happened. So far, we've heard only the one situation.
Senator Campbell: Just for everyone watching, it should be noted that over the past 18 months millions of cars from South Korea have been recalled. I think it's incumbent upon us as government to ensure that the public gets what's going on here, that the government, in fact, maybe has a little talk to South Korea about what our trading relationship looks like. If we don't do that, everything we're discussing here — the updating, the modernizing — is for naught because someone can shut us down in a heartbeat for what is essentially nothing.
Thank you.
Senator Tardif: This is not a particular question, but, perhaps just generally, I want to get your feelings on the minister's ability to make regulations through the Governor-in-Council and whether you have any concerns about changes to the different acts, whether it's the Feeds Act or the Fertilizers Act? How do you feel about that particular ability that the minister would have through the Governor-in-Council, meaning that there would be no public debate necessarily?
Mr. Atkins: Given the closeness with which we've worked with Agriculture and Agri-Food Canada through various meetings and various communications, we certainly feel very comfortable that they are aware of what works for the producers and what works for the administrators in putting this program together. I believe the minister requires that ability because things do change.
Senator Tardif: Absolutely.
Mr. Atkins: The only thing that doesn't change is the fact that there is going to continue to be change. From our standpoint, under the Advance Payments Program and the Agricultural Marketing Programs Act, we feel that that's an extremely important condition to have, to accommodate or facilitate any changes that may occur down the road in one year, six years, who knows.
Senator Tardif: How do you feel about the fact that the minister can now be part of the mediation process if a debt is not paid?
Mr. Atkins: Given our history dealing through Winnipeg and dealing with Agriculture and Agri-Food Canada with collections and those types of areas, we feel that sometimes that's the best way to do it. My belief is that it's the best way to have that involvement. It is the Canadian people who support the government, who promote the program. So I believe the government nationally representing the fairness that goes along with that I'm quite positive on, to be honest with you.
Mr. Cooper: It's frankly somewhat of a two-edged sword in our case, and I'm sure we're not alone in this. If a regulatory change is necessary by order-in-council, presumably it would end up in the gazetting process — and I believe I'm correct in that — so we will have an opportunity to participate in dialogue there.
Thinking specifically of the Feeds Act and regulations, incorporated in the current regulations are a number of very lengthy, complex and frankly quite impenetrable tables of various ingredients, component parts, quantities and so forth that must be met.
The intent under the new rules as enabled by C-18 is to incorporate by reference certain things where necessary.
Senator Tardif: That's right.
Mr. Cooper: For example, a relatively routine change could be for a newly approved ingredient used in Europe and the United States that has been screened in Canada and is now available for use in Canada, whereas before, it technically could not be incorporated into the law of the land. If it's incorporated by reference in some way, we would be able to expedite that process.
Senator Tardif: You may not know it because with incorporation by reference it would not necessarily be published in the Canada Gazette.
Mr. Cooper: That's correct. Our hope and expectation is that before those sorts of things happen, the regulators would consult with us as the industry representative. I believe I'm quite comfortable in saying that I don't think those types of changes would be made without our knowledge at least. Certainly, the consultation we've had over the past four years would indicate that there is a genuine desire to make sure that the primary stakeholders under the Feeds Act along with the people that represent the livestock producer groups have all been involved in the development of the new regulatory framework.
Senator Tardif: I would hope that was so, but there is no certainty necessarily in the law.
Mr. Cooper: I understand.
Senator Tardif: Thank you.
Senator Plett: I have one question for Mr. Atkins. We've had some 20 witnesses. All have been supportive of the bill with the exception of two. One of them was an individual representing himself and no group. The other critic of the bill was Mr. Boehme from the National Farmers Union. I'm interested in how many people are supporting it because we want to do what Canadian farmers want. We asked people how many people and organizations they represent. My question to Mr. Boehme was exactly that. I asked him this a few years ago when he testified in front of this same committee when I sponsored the Wheat Board bill, which was also Bill C-18. I asked him at that time how many farmers he was representing. He could not give me a number. When he was here a week or two ago, I asked him if he had an opportunity to count the members since we passed the Wheat Board bill. Ironically, in the three years he had not been able to get a number. I suggested to him that his number might be under 200. The only thing he could assure me of was that it was more than 200.
Ironically, his one criticism of this bill, and I suppose that of the 200 and some farmers that he represents — and I assume they would be the smaller farmers — is the cash advance program. Most farmers have been supportive of that, very clearly, and of farmers' privilege.
The National Farmers Union seemed to think that farmers weren't responsible enough to decide whether they needed money. I'm not sure who should do that. He said that it would only get them into trouble because they get in too much debt and so on and so forth. I'm sure they would get into debt if they go to the banks.
I would like you to tell whether the farmers that you represent like the cash advance program or whether they would hold to the National Farmers Union's opinion that we should somehow regulate how much money a farmer should be able to borrow.
Mr. Atkins: To clarify, the ACC has 19 member organizations. Please excuse my rounding of the numbers, but I believe there are 215,000 commercial producers in Canada. We represent about 201,000. Certainly, organizations like the Canadian Federation of Agriculture, Flowers Canada Growers and the Canadian Nursery Landscape Association all bring those numbers up extremely high. So we have a large number of members.
Senator Plett: Amazing that you know the number.
Mr. Atkins: It's always good to know who your bosses are, senator, and not ever to forget that.
Canola is a lot larger and deals with more producers. We started to grow the Advance Payments Program in other provinces. Historically, we've done between 1,500 and 4,000 loans annually just on this program. Depending on the year, with $8 corn, producers don't feel they need quite as much money; with $4 corn they do.
We're not a Fanny Mae. We go through a credit analysis. We go through an adjudication process that is relatively seamless to the producer. We do a lot of work with Agriculture and Agri-Food Canada in determining pricing because we have 300 different classes of products and three, four thousand products to price through. We do a lot of that homework today.
With the Advance Payments Program, we're lending 50 per cent of the value of the end market value. We're very comfortable with that. Producers are no different than any other business. Some will get into problems and will work with the appropriate authorities to get into that or get out of farming.
However, we do an adjudication process on those farms. We have a deal. We will provide you the Advance Payments Program and your end of the bargain is to pay it back. When we look at our arrears rate, historically ACC runs at about 0.4 of 1 per cent. Each year we submit about 13 loans to Agriculture and Agri-Food Canada for the guarantee out of the 1,500 to 3,000 that we do. Our percentage of arrears is the lowest, I believe, of any financial institution. I haven't heard of anyone's lower than 0.4 of 1 per cent.
The Chair: Thank you to the witnesses from the Animal Nutrition Association of Canada and the Agricultural Credit Corporation. We thank you very much for sharing your opinions and comments.
I'd like to share information with all committee members with respect to clause-by-clause consideration of Bill C-18.
Is it agreed that the committee proceed to clause-by-clause consideration of Bill C-18, An Act to amend certain Acts relating to agriculture and agri-food?
Hon. Senators: Agreed.
The Chair: To assist us with any technical questions, the chair would also like to share with the senators that we have departmental staff available. Could we ask for the departmental staff to come forward to the table, please? Is it agreed, senators?
Hon. Senators: Agreed.
The Chair: Thank you very much for being here and for your technical and professional advice. Without naming all of them, I will put on the record that we have with us representatives from Agriculture and Agri-Food Canada, from the Canadian Food Inspection Agency and from the Department of Justice.
Honourable senators, we will now proceed to clause-by-clause consideration of Bill C-18.
Honourable senators, with leave, is it agreed that the committee be allowed to group clauses by the headings identified in the bill with appropriate names? For example, if we go to the Table of Provisions, the sections will be called in the following order: Clauses 2 to 51, clauses 52 to 61, clauses 62 to 72, clauses 73 to 83, clauses 84 to 98, clauses 99 to 112, clauses 113 to 119, clauses 120 to 140, clauses 141 to 152, and clauses 153 and 154.
If it is agreed that we consider grouping the clauses, the chair will now respect any comments. Or if it's agreed, we will go section by section. Are there any comments from senators?
Hon. Senators: Agreed.
The Chair: Thank you, honourable senators.
Shall the title stand postponed?
Hon. Senators: Agreed.
The Chair: Shall clause 1, which contains the short title, stand postponed?
Hon. Senators: Agreed.
The Chair: Honourable senators, shall clauses 2 to 51, under the heading "Plant Breeders' Rights Act," carry?
Senator Tardif: Mr. Chair, I have some amendments that I would like to bring forward in regard to that section. I believe that amendments are being distributed.
The Chair: In that particular section, senator, how many amendments do you have?
Senator Tardif: Three.
The Chair: We have three amendments.
Senator Tardif: An amendment to clause 2, an amendment to clause 5 and an amendment to clause 50.
Senator Plett: Why aren't we getting all the amendments right away? She introduced them already.
Senator Tardif: They're coming, I believe.
Shall I proceed, chair?
The Chair: The chair will now recognize the motion in amendment to clause 2 on page 3. Would you please read your amendment, senator?
Senator Tardif: I will read the amendment, chair, following which I would like to then go on to the amendment on clause 5. There is a link between clause 2 and clause 5.
I move:
That Bill C-18 be amended in clause 2, on page 3, by adding after line 7 the following:
""end-point royalty" means a royalty payable to the holder of the plant breeders' rights on harvested material as a condition to an authorization conferred under paragraph 5(1)(h);".
An amendment in clause 2 defines the term "end-point royalty." If you look in the bill itself — it follows where we are describing and giving definitions of terms — I note that there is no definition of the term given in the bill. An amendment is needed to deal with the concept that has been discussed but is not included in that language in Bill C-18.
Because of the addition of an amendment brought to clause 5, I will read the amendment in clause 5:
That Bill C-18 be amended in clause 5, on page 7, by adding after line 9 the following:
"(3) The end-point royalty rate on harvested material grown from harvested material to which the rights referred to in paragraphs 5(1)(a), (b) and (g) do not apply pursuant to subsection (2) may not be higher than the end-point royalty rate on harvested material grown from sold propagating material from the same plant variety.".
The amendment in clause 5 prohibits, and I'll put it in simpler language —
[Translation]
Senator Dagenais: I understood "line 9."
[English]
Senator Tardif: I'm sorry, it's that "Bill C-18 be amended in clause 5, on page 7, by adding after line 9."
The amendment in clause 5 — I'll say it in simpler language — prohibits higher royalty rates on harvested material grown from farm-saved seed than the royalty rate on harvested material grown from sold propagating material. This amendment follows the suggestion made by Mr. Holmes from the Canada Organic Trade Association. He said:
COTA strongly recommends that the bill include language that makes explicit that any EPR can never be greater for saved seed than it is for purchased seed.
These amendments do exactly what Mr. Holmes asked us to incorporate in the legislation. This is to prevent prejudice to farmers who choose to save, stock, condition and reuse their seed for propagating purposes on their own holdings. This amendment ensures a balanced approach between the plant breeders' right and the farmers' privilege by using language that makes it explicit that a potential end-point royalty that could be collected from saved seeds are not higher than royalties collected from bought seeds.
That is the purpose of the two amendments. In order to bring forward amendment 5, a definition of end-point royalty was included as an amendment to clause 2.
The Chair: Therefore, in clauses 2 to 51, the chair has recognized amendments from Senator Tardif. Are there any amendments that a member had planned to move earlier in this clause? If so, I will now deal with them before taking up this amendment. If not, this is the amendment I will consider.
Senator Tardif: I'm sorry, chair. I have an amendment to clause 50.
The Chair: You have another amendment to clause 50?
Senator Tardif: That's correct.
The Chair: When we arrive at the section of the bill where clause 50 is located, I will recognize that amendment.
We have two amendments, but we will proceed one at a time. Are there any comments on that amendment? If not, the chair will ask the question. I'll ask three times, please. Are there any comments on the amendment?
Senator Tardif: May I make further comments?
The Chair: You can make further comments and then if there are no further comments, the chair will call for the vote.
Senator Tardif: Honourable colleagues, Bill C-18 states in clause 5(1)(h) that there's an authority "to authorize, conditionally or unconditionally, the doing of any act described in any of paragraphs (a) to (g)." The word "conditionally" allows for any type of royalty to be implemented. It opens the door to end-point royalties. Different witnesses spoke on the possibility of end-point royalties becoming a reality.
The minister, when asked about it, said "that would all have to be worked out in an agreement." Mr. Gray from the University of Saskatchewan said, "I think it's a real possibility that we're going to have end-point royalties." Mr. Banack of the Canadian Federation of Agriculture said, "It creates a legislative framework from which end-point royalties models can be developed through regulations." Mr. Wickett of the Western Canadian Wheat Growers' Association stated, "This legislation allows for an end-point royalty." Mr. Van Tassel from the Fédération des producteurs de cultures commerciales du Québec said, "Canada will probably have certain ways of having end-point royalties." I mentioned Mr. Holmes already.
We've had different witnesses appear before us saying that end-point royalties will occur. It's a question of a few years. Some have said five years, others said 10 years. Why not make it explicit in this bill? We have an opportunity to render explicit and create a more balanced approach by making sure that on a farmer's saved seed, he does not have to pay greater royalties on that than for bought seed.
The Chair: Are there any other comments on the amendment? If not, it is moved by the Honourable Senator Tardif that Bill C-18 be amended in clause 2, on page 3, at line 9.
[Translation]
That Bill C-18 be amended in clause 2, on page 3, by adding after line 7 the following:
""end-point royalty" means a royalty payable to the holder of the plant breeders' rights on harvested material as a condition to an authorization conferred under paragraph 5(1)(h);".
[English]
Is it your pleasure, honourable senators, to adopt the motion in amendment?
Some Hon. Senators: No.
Some Hon. Senators: Yes.
The Chair: Who is in favour? Who is against? Therefore, the amendment is defeated.
Now the chair will recognize Senator Tardif's amendment to Bill C-18, in clause 5 on page 7, by adding after line 9 the following.
I would ask Senator Tardif, please, to move her amendment.
Senator Tardif: Honourable colleagues, I move:
That Bill C-18 be amended in clause 50, on page 25 —
Senator Plett: Excuse me, chair. Should we not vote on both of these before she goes to 50? Or did we vote on both of these?
The Chair: No, we will take it one at a time.
Senator Plett: Then she should go to her second one. She's now going to her third one.
Senator Tardif: I'm sorry. You're correct. I thought we had done both.
The Chair: The chair will recognize the second in group 2 to 51.
Senator Plett: She already read it, chair, and I think she made her argument. I think we can go right to the vote.
The Chair: Do you have any additional comments to make, Senator Tardif?
Senator Tardif: Not on the amendment to clause 5.
The Chair: The chair recognizes that there is an amendment. It is moved by the Honourable Senator Tardif that Bill C-18 be amended in clause 5, on page 7, by adding after line 9 the following — shall I dispense?
Senator Tardif: Yes.
The Chair: Is it your pleasure, honourable senators, to adopt the motion in amendment?
Some Hon. Senators: No.
Some Hon. Senators: Yes.
The Chair: Those in favour will please identify to the chair. Thank you. Those against the amendment motion will identify to the chair.
The chair recognizes that the motion in question is defeated.
Thank you, honourable senators. We will now move to clause 52.
Senator Tardif: I have an amendment before you move to clause 52.
The Chair: This is clause 50?
Senator Tardif: Yes, it's clause 50 on page 25.
The Chair: The chair recognizes a third amendment by Senator Tardif.
Senator Tardif: Thank you, chair.
Honourable colleagues, I move:
That Bill C-18 be amended in clause 50, on page 25, by replacing lines 13 and 14 with the following:
"50. (1) The portion of subsection 75(1) of the Act before paragraph (b) is replaced by the following:
75. (1) The Governor in Council may, after consultation with the advisory committee, make regulations for carrying out the purposes and provisions of this Act and, without limiting the generality of the foregoing, may make regulations."
This amendment adds the words "after consultation with the advisory committee" at subsection 75(1) of the act. Therefore, the Governor-in-Council may make regulations but only after consultation with the Plant Breeders' Rights Advisory Committee.
Many witnesses expressed that they expected to be consulted for any changes in the Plant Breeders' Rights Act, especially for any restrictions to the farmers' privilege and regulations that would allow end-point royalties.
At paragraph 4 of page 2 of the supplementary brief of the Canadian Federation of Agriculture, it was stated that regulations underpinning the Plant Breeders' Rights Act should include a requirement that any amendments to the farmers' privilege must be made in consultation with the committee and should include an explicit mandate to inform related definitions and interpretations within the text. This amendment would clarify that the Plant Breeders' Rights Advisory Committee be consulted on any changes through regulation.
I know we've heard from many witnesses their desire that discussion be continued. The Plant Breeders' Rights Advisory Committee could do it very well and would allow the desired consultation indicated by many. I can give examples, if the committee so chooses, of other witnesses before us who expressed the desire for consultation. This would make it explicit in the legislation.
The Chair: Thank you, senator.
Are there any other comments on the motion in amendment? If not, the chair recognizes that clause 50, on page 5, be amended by replacing lines 13 and 14 as specified by the mover.
Is it your pleasure, honourable senators, to adopt the motion in amendment?
Some Hon. Senators: No.
Some Hon. Senators: Yes.
The Chair: The chair would like senators in favour of the amendment to please identify themselves. And senators against to identify. Therefore, the motion is defeated.
Honourable senators, shall clauses 52 to 61 under the heading "Plant Breeders' Rights Act" carry?
Hon. Senators: Agreed.
The Chair: Carried.
Shall clauses 52 to 61 under the heading "Feeds Act" carry?
Hon. Senators: Agreed.
The Chair: Carried.
Shall clauses 62 to 72 under the heading "Fertilizers Act" carry?
Hon. Senators: Agreed.
The Chair: Carried.
Shall clauses 73 to 83 under the heading "Seeds Act" carry?
Hon. Senators: Agreed.
The Chair: Carried.
Shall clauses 84 to 98 under the heading "Health of Animals Act" carry?
Hon. Senators: Agreed.
The Chair: Carried.
Shall clauses 99 to 112 under the heading "Plant Protection Act" carry?
Hon. Senators: Agreed.
The Chair: Carried.
Shall clauses 113 to 119 under the heading "Agriculture and Agri-Food Administrative Monetary Penalties Act" carry?
Hon. Senators: Agreed.
The Chair: Carried.
Shall clauses 120 to 140 under the heading "Agricultural Marketing Programs Act" carry?
Hon. Senators: Agreed.
The Chair: Carried.
Shall clauses 141 to 152 under the heading "Farm Debt Mediation Act" carry?
Hon. Senators: Agreed.
The Chair: Carried.
Shall clause 153 under the heading "Transitional Provisions — Agricultural Marketing Programs Act" carry?
Hon. Senators: Agreed.
The Chair: Carried.
Shall clause 154 under the heading "Coming into Force" carry?
Hon. Senators: Agreed.
The Chair: Carried.
Shall clause 1, which contains the short title, carry?
Hon. Senators: Agreed.
The Chair: Carried.
The Chair: Shall the title carry?
Hon. Senators: Agreed.
The Chair: Carried.
Shall Bill C-18 carry?
Hon. Senators: Agreed.
The Chair: Carried.
To witnesses and officials, on behalf of the committee, I thank you for being at the table to assist the committee.
Honourable senators, is it agreed that the bill be reported to the Senate?
Hon. Senators: Agreed.
The Chair: Agreed.
(The committee adjourned.)