THE STANDING SENATE COMMITTEE ON AGRICULTURE AND FORESTRY
OTTAWA, Thursday, November 22, 2018
The Standing Senate Committee on Agriculture and Forestry met this day at 8 a.m. to continue its study on how the Canadian value-added food sector can be more competitive in global markets.
Senator Ghislain Maltais (Deputy Chair) in the chair.
The Deputy Chair: Good morning everyone. I am filling in for Senator Griffin, who will be back for the second panel. She was delayed in another committee.
I’d like to welcome the witnesses, whom I will introduce momentarily.
I am Senator Ghislain Maltais, and, as deputy chair, I will be chairing the first half of today’s meeting. I will now ask my fellow senators to introduce themselves.
Senator Mercer: Terry Mercer, Nova Scotia.
Senator C. Deacon: Senator Colin Deacon, Nova Scotia.
Senator R. Black: Senator Robert Black, Ontario.
Senator D. Black: Douglas Black, Alberta.
Senator Oh: Victor Oh, Ontario.
Senator Doyle: Norman Doyle, Newfoundland and Labrador.
Senator Dagenais: Jean-Guy Dagenais from Quebec.
The Deputy Chair: Today, the committee is continuing its study on how the Canadian value-added food sector can be more competitive in global markets.
Joining us this morning, from Agriculture and Agri-Food Canada, is Kathleen Donohue, Director General, Market Access Secretariat, International Affairs Branch, and Lynn Renaud, Director General, Business Development and Competitiveness Directorate, Programs Branch.
Thank you for agreeing to appear before the committee this morning. I know your brief isn’t especially long, but I will nevertheless ask you to be as succinct as possible to give the senators time to ask you all their questions. Your brief is of particular interest to the committee members.
Please go ahead, Ms. Donohue.
Kathleen Donohue, Director General, Market Access Secretariat, International Affairs Branch, Agriculture and Agri-Food Canada: Thank you very much for inviting us here today. My colleague, Lynn Renaud, and I are pleased to be here.
We appreciate the opportunity to discuss the importance of the Canada brand and broader market development tools and services in the context of expanding our trade. The agriculture and agri-food sector’s contribution to GDP is growing faster than the average growth rate of the economy, making the sector a key economic driver for Canada.
In 2017, agriculture and agri-food exports were Canada’s third-highest in value after oil and gas and automotive.
With over half the value of production exported, the agriculture and agri-food sector’s growth relies heavily on its ability to export. It is estimated that 75 per cent of Canadian agriculture, agri-food and seafood exports are now covered by free trade agreements, such as the Comprehensive Economic and Trade Agreement with Europe known as CETA; the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, also known by the acronym CPTPP; and the United States-Mexico-Canada Agreement.
While the CETA and CPTPP offer unprecedented opportunity through tariff reduction for agriculture and food exporters, Canada continues to be reliant on the United States market for growth, which accounts for over 50 per cent of the value of Canadian agriculture and agri-food exports.
We need to ensure that we keep up with competitors, solidify the gains that we’ve achieved and take advantage of existing and emerging trade opportunities.
In Budget 2017, the Government of Canada announced an ambitious target to grow Canada’s agriculture and agri-food exports to $75 billion annually by 2025. As well, the Fall Economic Statement released yesterday proposes to invest an additional $25 million over the next five years to enhance the federal capacity to address situations where the Canadian agriculture producers may be prevented from selling goods in international markets.
AAFC officials will be working closely with our counterparts at Global Affairs Canada on broader market diversification elements that were contained in yesterday’s Fall Economic Statement.
The department, Agriculture and Agri-Food Canada, plays a lead coordination role with other federal departments, provinces, industry associations and other partners to, in part, gain and maintain access to foreign markets, connect Canadian exporters with targeted business opportunities, promote the advantages of Canadian agriculture and food products to both buyers and consumers, and provide industry with information and learning opportunities to understand the requirements of getting their products to market.
As a producer of high quality, innovative agri-food products, promoting Canada and its key selling points is critical to differentiate ourselves in the marketplace and generate premiums for our products.
A strong presence in our priority markets can increase visibility with buyers and consumers, reinforcing that Canadian products consistently deliver on their expectations.
The Canada brand was launched in 2006 to give the Canadian food and agriculture industry a competitive advantage through the establishment of a research-based brand strategy, marketing tools and common messaging on Canadian attributes, and so forth.
The brand was based on international research that demonstrated that buyers and consumers worldwide had very positive perceptions of Canada as a country but, in fact, they had little knowledge about our food and agriculture products. This research also shows Canada’s products were assumed to be high quality, trustworthy, clean, safe and environmentally sustainable, while Canadians themselves were perceived to be honest, friendly and good business partners.
A Canada Brand tool kit provided our exporters with tools including graphics and imagery, user-friendly guidelines, key advantage messaging and promotional items. It coordinated activities around trade shows, retail and food service promotions and media/influencer campaigns were also provided through this program.
Additional initiatives were implemented to advance the brand. This included the Canada Brand advocacy initiative, which provided a significant funding envelope of $32 million over four years to undertake comprehensive promotional strategies in key markets of interest. These included the markets of Germany, Mexico, Japan and South Korea.
The Canada Brand has since been scaled back to a basic framework where members can continue to take advantage of the existing tag line, photo bank and other tools.
We have over 700 Canadian industry entities, most of them small- and medium-sized enterprises, who are members of the Canada Brand. This also includes Canadian national industry associations.
Consistent membership applications demonstrate an ongoing value placed by Canadian stakeholders and companies in the country branding in helping them succeed in the marketplace.
As well, reports from provincial and sector partners confirm the more positive outcomes for our companies when they are positioned under a Canada Brand umbrella. Branding leverages Canada’s excellent reputation to the fullest. It links positive perspectives more directly to our products in order to enhance their profile and establish business opportunities.
An effective branding initiative can position products on the global stage, build consumer recognition for these products and help command premium prices for our products and services. They support strategic partnerships, strengthen business activities, and attract financial and investor markets. They also help us facilitate easier talent recruitment in the agriculture and agri-food sector.
In addition to the Canada Brand, the department also supports the agriculture, food and beverage sector through a number of programs and services. One is the AgriMarketing Program, which my colleague, Lynn, oversees. The AgriMarketing Program is part of the Canadian agriculture’s partnership priority of growing trade and expanding markets, which seeks to help the sector’s ambitious goal to grow Canada’s agriculture and food exports to $75 billion by 2025.
The AgriMarketing Program supports industry’s efforts to increase and diversify their sales to international markets, seize market opportunities and leverage Canada’s reputation for high-quality and safe foods. The program is delivered through two components: the national industry associations and the small- and medium-sized enterprises.
As leveraging Canada’s reputation can be an important factor in global access, the AgriMarketing Program strongly encourages participants to be members of the Canada Brand initiative. The importance of leveraging Canada’s reputation is evident in the fact that virtually all of the national industry associations that the AgriMarketing Program supports are part of the Canada Brand. These associations use the brand’s tools in many promotional and advertising activities, such as ensuring that their trade show displays incorporate the Canada Brand.
The other service that we provide is global analysis.
To ensure that the sector has access to valuable market information and intelligence that can inform its marketing strategies, the department provides targeted and practical analysis, intelligence and information to the sector to improve competitiveness in global markets. This information includes tailored market research reports and data analysis, market opportunities and evolving distribution channels.
Thirdly, another service we provide is the Agriculture and Agri-Food Trade Commissioner Service. AAFC supports the sector through its internal expertise that includes 35 trade commissioners who are posed in Canadian embassies and consulates in key international markets. These positions are complemented by another 12 technical specialists funded by the Canadian Food Inspection Agency. These trade commissioners and our technical specialists are experts in navigating in-market challenges, connecting Canadian industry to foreign buyers and developing promotional strategies for Canadian agriculture and agri-food companies.
These AAFC and CFIA resources are complemented by the broader network of Trade Commissioner Services funded by Global Affairs Canada.
We also fund the in market partnership fund. This is a fund of $1.75 million, over the course of five years, that is aimed to strengthen the ability of our trade commissioners to deliver targeted agriculture- and agri-food-specific branding and market activities in priority markets. This fund focuses on activities that build upon the visibility of Canadian products internationally and increase the opportunities for Canadian companies to meet with international buyers.
Last, AAFC provides leadership through visibility at key trade shows. We support nine trade shows to promote Canadian food under a “brand Canada” banner. These trade shows represent the largest and most important events of their kind. They are tangible examples of the department’s market development efforts, operating in co-operation with both industry and our provinces. These flagship shows are supported by a program called the Canada Pavilion Program. These shows take place in a number of key markets, such as Dubai for Gulfood, which occurs in February; Japan, at FOODEX JAPAN in March; Singapore, Food and Hotel Asia; South Korea; Germany, at Anuga in October; France, at SIAL Paris, October; and finally, in China, at both Food and Hotel China, which just took place last week, and an important seafood show called China Fisheries and Seafood Expo in Qingdao, which took place two weeks ago.
In conclusion, the foundation of AAFC’s market development support to Canadian industry is collaboration with federal partners, provincial partners, as well as industry associations. This collaborative approach is improving our support to the industry, particularly to small- and medium-sized enterprises through improved efficiency, planning and delivery of our initiatives, to provide consistent services across partners, and the use of pooled resources to bolster our impact globally in key international markets.
With that, I’ll close. Thank you. I’m happy to answer any questions you may have.
The Deputy Chair: Thank you very much, Ms. Donohue. Thank you as well for participating in the SIAL show in Paris. The department was well represented. I met Ms. Leduc, I believe, as well as other officials. Having federal officials on hand at such a premier food exhibition was no doubt very beneficial for Canada’s exhibitors.
Senator Mercer: I think we should send a copy of this report to the chair of the subcommittee of Internal so she can read it and find out what she’s missing. I know that’s a political statement, but I thought those of us who appeared before the board would appreciate that.
You’ve confused me a little bit, as I work from back to front. You continually tell me how well the program is working, and then you say, “Canada Brand has since been scaled back to a basic framework.” I’m sorry, but if your campaign is really working, why are we cutting it back? I would think that it’s full steam ahead here. We have a program that’s working. We have a very ambitious objective of $75 billion annually by 2025.
If the model is working, and we have a huge target to reach, I don’t see why we’re changing something that’s working. You go on to say in numerous places that virtually all the national industrial associations use the program. It’s working. Why not keep the pedal to the floor?
Ms. Donohue: Thank you for your question, Senator Mercer. Back in 2006 to 2014, if I recall, we were given additional resources, and that money was scaled down. Nevertheless, the investments we made to build the brand image — and if you look in your packages we’ve tried to circulate to you to show you visually what that means.
We developed these graphics, and these are the graphics that I mentioned that 700 companies and associations are registered to use. You will often see if you’re in a grocery store in Japan, it’s not uncommon to see, let’s say, a bottle of maple syrup with some of this imaging tagline to promote this as a product of Canada.
Second, in the package, we’ve continued to use our promotional tag line as well. So trade commissioners around the world, in key markets, will use this banner and do promotional events geared towards retail sector buyers and consumers.
We also continue to be present at nine key trade shows around the world. When we’re at those trade shows, as you can see from the visual, we use that imaging to clearly define that pavilion as a Canada pavilion. And that helps us to be able to attract buyers who are looking for high-quality safe food, and also to be able to promote to local media and influencers. What you can see here in the top quadrant is from the Food & Hotel China show last week and SIAL.
So with the imaging we have developed, the tag line and photo bank, we continue to use that in our promotional endeavours, as do companies.
Senator Mercer: That’s all well and good, and a number of us were in Shanghai a couple of years ago and saw the Canada Brand in action. It was very impressive. That was around the time that the Chinese market opened up for Canadian beef and the minister did an excellent job. The team did an excellent job. The display did an excellent job. But you haven’t answered my question. Why are we cutting back? You say in your presentation that the Canada Brand has since been scaled back to a basic framework.
Again, it’s working. When Chrysler finds something that’s working in the sales of their vehicles, they don’t say, “Okay, let’s cut back our advertising, because damn it all, it’s working.” It seems to me that, damn it all, if it is working, you go full speed ahead.
Ms. Donohue: As I mentioned, we did receive money to do additional work on what we call the Canada Brand advocacy initiative. It was funding that we received for four years. We received $32 million over that four-year span of time. That program has since sunsetted, which was a decision of the government of the day. Nevertheless, we continue to use the tag line, the imaging and take advantage of opportunities in key markets to be able to promote the Canada Brand effectively.
Senator Mercer: Thank you. Please don’t interpret my comments as criticism. I think the brand is terrific. I think the program is terrific, and I think the department has done a great job on this. I know when I was in Shanghai, watching the minister work that crowd was really something, and I’m sure out of that came a lot of sales for Canadians and created a lot of Canadian jobs back home. Thank you.
Ms. Donohue: Thank you.
Senator Doyle: We’ve had a lot of free trade and trade agreements over the last 10-year period. We’ve had witnesses who come before us and say that it’s now time for Canada to start beefing up its assistance to the marketing efforts of these various industries, including agriculture, to take advantage of all these agreements.
Would you agree? Are they right in saying that you’re not beefing up your assistance to the marketing effort to take advantage of these agreements? This is what we hear from witnesses who come before us. Would you agree or disagree that we need to do more than we’re doing in the marketing end of it to meet the needs of these free trade and trade agreements?
Ms. Donohue: Certainly the demands are plentiful. We have targeted our efforts in those key markets where we do have free trade agreements or where we see that the opportunities are tremendous. Perhaps my colleague, Lynn Renaud, can talk a little bit about how that’s done in agri-marketing to directly support both associations and companies.
Lynn Renaud, Director General, Business Development and Competitiveness Directorate, Programs Branch, Agriculture and Agri-Food Canada: The AgriMarketing Program is $125 million over five years with the initiative to directly or specifically help the industries increase and diversify markets, both exports on the international front and to seize market opportunities as well.
The program, as my colleague identified before, supports industry-led promotional activities for national associations and/or small- and medium-sized enterprises.
The program is very much in demand. As of early November, we had already received 185 applications, with 51 from national associations and 136 from small and medium-sized enterprises.
There is a high demand for the program, and we are currently entering into three-year agreements with the associations. They have a strategic plan which we verify and analyze. As well, we look at how they’re diversifying their markets.
Senator Doyle: I don’t know if I’m getting the wrong impression, but our notes seem to indicate that your arm of government is short staffed. I don’t know if that’s true. In any event, if you are short-staffed, would we not be biting off more than we can currently chew with so many trade agreements? I don’t know where it came from that you’re short-staffed, but I’m just wondering, is Canada really doing enough at home and abroad to foster growth in the export market, in this case the agriculture and agri-food market?
Are you strained with regard to your staffing to meet the requirements of these trade agreements? Or is the note misleading us in that regard?
Ms. Donohue: I’m not privy to the notes that you have or where the comments were made, but I suspect that they are probably more in relation to what we call market access. While free trade agreements help reduce tariffs on goods, they tend not to deal with what we call non-tariff barriers. We have seen over the past few years increasing use by various countries to use non-tariff barriers and it has always been our position to promote a science-based, risk-based approach to standards. We advocate that multilaterally and bilaterally.
But certainly when dealing with non-tariff barriers, we require highly specialized technical people, not just within the Department of Agriculture and Agri-Food Canada but more specifically with our partners at the Canadian Food Inspection Agency. We require plant health specialists, for example, veterinary specialists to be able to do the assessments we need. This includes pest risk assessment, or to conduct audits to move forward and either maintain or open up new access for products.
I suspect that’s probably those comments were probably related to the capacity to do that.
Senator Doyle: I have to re-read a little bit here.
Ms. Donohue: That’s what I suspect it may be related to.
The Deputy Chair: I would kindly ask the senators and witnesses to be more succinct in their questions and answers to give all the senators an opportunity to ask questions. If time permits, we’ll have a second round.
Now that I’ve made that clear, we will move on to Senator Black from Alberta.
Senator D. Black: Thank you both very much for being here. As a senator from Alberta, agriculture matters. It’s our second most important industry, and we are very appreciative of the work that is done by Ottawa to assist not only beef, but grains and other products from Alberta. We appreciate that.
I have three specific and quick questions. Your goal is to hit $75 billion by 2025. Where are we today?
Ms. Donohue: We’re at $52 billion right now. That’s our current export.
Senator D. Black: You have a lot of work to do.
Ms. Donohue: There is quite a bit of work to do, but it’s always good to have an ambitious target in front of us.
Senator D. Black: That’s good to know. Tell me the top three blocks to exports in Canada today.
Ms. Donohue: Grains and oilseeds are important —
Senator D. Black: Blocks. Obstacles.
Ms. Donohue: I thought you meant blocks in terms of commodities that are high performing.
Senator D. Black: Obstacles. What are the obstacles?
Ms. Donohue: As I mentioned before, I think that our ability to manage non-tariff barriers to open up and maintain access is probably the biggest hurdle.
Senator D. Black: Can you define non-tariff barriers? What are you saying?
Ms. Donohue: They could vary. It could be how a country regulates a certain pest, for example, and how we deal with that through certification.
Senator D. Black: Thank you. So, non-tariff barriers.
Ms. Donohue: Would be key.
Senator D. Black: Number two?
Ms. Donohue: I would also say that our ability to raise our profile in key markets would be another area.
Last is small- and medium-sized enterprises, SMEs. The bulk of our industry is made up of small- and medium-sized enterprises who need support in tackling new markets. That’s where a program like Ms. Renaud’s comes into play, to be able to provide them with a bit of seed funding to help support that endeavour. That’s also where our trade commissioner service and the agri-food trade commissioner service comes into play, to help them demystify certain markets.
Senator D. Black: I’m surprised you haven’t mentioned transportation bottlenecks.
Ms. Donohue: Yes. It is one of the key areas.
Senator D. Black: Thanks very much.
Senator Oh: Welcome back. I wanted to follow up on the question from Senator Mercer. You say the first program is over $30 million. Has it ended now?
Ms. Donohue: Yes, we received $32 million over four years.
Senator Oh: When did it end? Last year? This year?
Ms. Donohue: It ended in 2014.
Senator Oh: What about your program, Ms. Renaud? You mentioned another one which was $121 million over five years. What is the time frame?
Ms. Renaud: It is 2023. This is our first year of five years.
Senator Oh: Maybe you can tell us a little bit about the latest show. What is the evaluation in Shanghai? That’s one of the biggest import/export shows ever in China.
Ms. Donohue: Yes. The department participated with Global Affairs and the Minister of Agriculture led Canada’s presence at the China International Import Expo in Shanghai two weeks ago, where he witnessed over $1.5 billion worth of sales by Canadian companies. There were also two other main events to the minister’s trip. One was the China Fisheries and Seafood Expo in Qingdao, where we have a Canada pavilion. We had 60 seafood companies from across the country present there.
Last, we were back in Shanghai for the Food and Hotel China exhibit. This is one of the largest food shows in the world where we had 82 companies present, again under a Canada Brand banner, Canadian pavilion.
Senator Oh: I saw a lot of pictures sent to me by different exhibitors who joined the program. Is the Canada Pavilion set up by your department?
Ms. Donohue: They are managed by my office, yes.
Senator Oh: You’ve done a great job. Wonderful.
Ms. Donohue: I appreciate your comments. Thank you.
Senator C. Deacon: This is my first question as a member of this committee, so I’m excited to be here. I appreciated your presentation.
As someone who has done quite a bit of exporting to different countries in the technology industry, one of the things I recognize is that free trade may be country to country, but sales occur company to company, and it’s really products versus a country that gets a deal done.
I’m wondering about how you are working within the industry itself to enable, empower and cooperate with proprietary brands within the Canada Brand, because often that’s what consumers identify with and enable those brands to be more successful. A good example in Canada would be that we see products which are U.S. dairy products but don’t necessarily say product of the United States on them. People identify with product brands. I’m wondering what you do to support our high-value-added producers in building their own product brands.
Ms. Donohue: Part of your question, Senator Deacon — though maybe I have misinterpreted it — is probably around labelling of products and the origin of products, with is outside the scope of my mandate and would be something in the Canadian Food Inspection Agency, for example.
Senator C. Deacon: But when we’re selling to other countries, we need to help our companies build their own product brands. How do you enable them? How do you cooperate with them to do that?
Ms. Donohue: In that regard, companies can apply to use this tag line and the marketing, the image bank, and so forth. They have to apply to use this, and we go through a process to ensure that the product is either grown, raised, harvested or processed in Canada, and they have to be produced in accordance with the regulatory landscape in Canada. We go through a vetting process with those companies to do so before they’re allowed to use this image mark and have access to the photo bank.
On the brand website, which they have access to, we also have tips and tools in terms of how to position their product in the market.
Lastly, we produce market research reports for key markets. For example, if you go onto the site, you will probably see something with regards to the seafood market in China and it will provide an outline of trends that we’re seeing that would help inform Canadian companies on how to best position their product in that specific market.
Senator C. Deacon: Within the $52 billion that you are hoping to grow to $75 billion in the next seven years in overall sales, I assume you’re segmenting out the value-added components of the market and monitoring those. That is where we will get the most value coming into Canada, where we’re not operating necessarily in the commodity business. How are you tracking that benchmarking against global competitors in that segment? To me, that data will be crucial in knowing how to respond and support.
Ms. Donohue: The bulk of our exports are commodity-driven, oilseeds being the top, and value-added products is where we’re trying to move up the value chain and trying to provide support, and improve and expand on our export capacity. I don’t know, Lynn, if you wanted to add more.
Ms. Renaud: We do collaborate with Global Affairs for market experts and the data. Under the AgriMarketing Program, every company or organization that goes under the program has to provide a report of their experience in those markets, as well as if they have anticipated sales. We take those reports from the industries and that’s how we track.
Senator C. Deacon: Are we tracking how we’re doing against major global competitors in each market segment specifically in the value-added areas of the agri-food industry that we’re intending to grow? Are we tracking that data?
Ms. Donohue: We do look at where our competitors sit vis-à-vis Canada, and we do a certain level of breakdown in terms of market segments. That would be for our key markets.
Senator C. Deacon: It says we want to keep up with competitors, one of your key statements, and in order to know if we’re keeping up or not, we need to track the data very carefully and respond to it and put in place priorities. Perhaps you can share with us some reporting in that regard, as to how we have been doing in the value-added segments of the market in particular.
Ms. Donohue: Okay.
Senator C. Deacon: Thank you.
Senator R. Black: This follows up on the two initial questions about the fact that the Canada Brand has been scaling back and I acknowledge it was a matter of resources. Given the fact that we have a number of new agreements in the coming months and years and the $75 billion target, do you anticipate additional funds being directed towards the Canada Brand and programming? Can we expect to see that? Has a request been made? Should that be one of our recommendations in order to meet that $75 billion? Should we make specific request in our series of recommendations? Do you anticipate additional funding, or has it been shut down and scaled back as to where it is to be?
Ms. Donohue: As I’ve mentioned, we continue to utilize the work that we built a few years back and that is well received and continues to be used by the sector.
Yesterday we did, as I understand, receive funding to support the implementation of an export diversification strategy. I understand the department has received $12 million over the next five years. We have to do some follow-up with the Department of Finance but we understand this money is to be used to better support our engagement with what we call international standard-setting bodies, and that gets back to the access point.
I don’t believe that branding was mentioned in yesterday’s statement, but this is something we’ll be following up on with the Department of Finance.
Senator R. Black: Thank you.
Senator Dagenais: Thank you to our witnesses. Ms. Donohue, I want to come back to the 2017 budget and the $75-billion target over five years. Yesterday, the government made its fall economic statement. Political messaging around budgets is one thing. But I don’t think it can be said that significant progress has been made. You seem more optimistic today. What did not work as planned in terms of your targets, and how are you going to rectify things?
Ms. Donohue: Thank you for your question.
As I’ve mentioned, we use a number of tools to promote Canada and Canadian agriculture and agri-food products. I do think yesterday’s announcement to increase funding will help us engage better with international standard-setting bodies such as the OIE, in the animal health area, or Codex, in the food safety area. These engagements will help us to promote a science-based and risk-based approach to these international standards and to work with our partners on the international stage to move in that direction.
Given the rise of non-tariff barriers, I think that this, in fact, is an element that will be well received.
Senator Dagenais: Clearly, trade has ups and downs. In which market would you say we’ve slipped or lost ground? Our competitors may have taken more risks or been smarter than us. What has the impact been on the sectors where we’ve fallen behind?
Ms. Donohue: I think there are a couple of things. We are seeing over the years an increase in our exports.
There’s definitely growth.
We also have, I think, set the landscape or the table in terms of some of these new trade agreements, like CETA and CPTPP. However, non-tariff barriers continue to be an issue.
In terms of areas where you might see slippage, I suppose if I were to look at the landscape and challenges, India might be a market where we’re definitely having some challenges over the last couple of years, without a doubt.
Senator Dagenais: Thank you very much, ladies.
Senator Miville-Dechêne: Good morning. I have two short questions about issues we haven’t discussed yet. They interest me given the trend towards organic products and natural eating. Further to the Canada brand, are you planning to create a sub-brand, one that focuses on organic products? I see messages like “quality is in our nature.” That’s great, but have you given any thought to creating a brand around today’s new eating habits, which we see not just in Canada, but also in a number of countries?
Ms. Donohue: Thank you very much for your question. It’s an excellent one.
We’ve just been in China. We worked very closely with Global Affairs Canada to work on a sub-brand, if you will, which was “Canada, part of your healthy lifestyle.” This was the branding that was used for the Canada pavilion at the China International Import Expo, or CIIE. I’m not a China expert, per se. My language skills in Chinese are pretty much non-existent, but I’m told that “Canada, part of your healthy lifestyle” is also a play on the word Canada in Chinese, where I guess one of the syllables refers to health issues or attributes.
In China, there’s a big concern about the health, safety and quality of food, given incidents that have occurred in the last 10 years. I would say this resonated very positively with people who came by the exhibit space but also with the media. It was a common refrain — “Canada, part of your healthy lifestyle” — and we backed that up with the products.
I think it works well in the food space, but it’s been a year of Canada-China tourism, so as part of your healthy lifestyle, come to Canada and enjoy the open, clean spaces and nature. It plays on a number of sectors we’re trying to promote increased trade with China.
Senator Miville-Dechêne: My next question has to do with the findings regarding glyphosate, the active ingredient in Roundup, the herbicide sold by Monsanto, and its somewhat scientific research, shall we say. We just returned from a trip to Manitoba, where we visited the wheat institute. We discussed the fact that Italy won’t accept exports of Canadian wheat because it contains glyphosate. How do you see the impact of the herbicide, or any other chemical for that matter, on our exports? Until the findings were published, this export barrier was seen as completely unacceptable, but the concerns are not without cause. I’d like to know Agriculture and Agri-Food Canada’s view. I know the issue is a bit controversial.
Ms. Donohue: There are a number of parts to your question. I’ll try to keep it succinct, because I know the chair is trying to cover as many questions as possible.
With regards to glyphosate, there are international standards set by Codex and IPPC, or planned health, which set maximum residue limits, MRLs. Our products, without a doubt, meet and in some cases exceed those standards. In the case of Italy, you have a situation where certain stakeholder groups have been very savvy in trying to advise or try to place doubt in the minds of Italian consumers about the health, safety and quality of our wheat, which we have been exporting now for over 80 years.
It’s important to separate the science part from the “campaign,” let’s say, that some in Italy have put forth.
Senator Miville-Dechêne: Absolutely. However, I’m referring to the new revelations on glyphosate in the States that are different. What about those?
Ms. Donohue: There was a case in August.
Senator Miville-Dechêne: More recently.
Ms. Donohue: These are issues more pertaining to Health Canada and the CFIA, but again, we are definitely well within the international standards of such products such as glyphosate. It’s something we are very focused on.
The other issue, in my mind, from a branding perspective, is how one deals with a campaign from certain stakeholder groups.
Senator Miville-Dechêne: Thank you.
Senator D. Black: Are you able to give us an update on how the agriculture supercluster in Saskatchewan is advancing?
Ms. Donohue: Unfortunately, I am not. My apologies. It’s out of my scope of responsibilities.
Senator D. Black: Thank you very much.
Senator C. Deacon: I want to go on the obstacles that Senator Black helped you identify and bring to our attention. Thank you. Second was to raise the profile of Canada and the third was helping small- and medium-sized enterprises. I just want to keep going at the need for us to segment and benchmark the overall export data to see how we’re doing and to make that focus a key priority. If we’re not seeing how each individual sector is doing, I have to believe we could be missing some of our greatest job and wealth creators. Yes, we’re seeing overall growth maybe at the commodity end of the market, but where we’re really wanting to see an advancement, we’re not.
Please just make sure we get an opportunity to see how you’re tracking your success within that really huge growth you’re hoping to achieve over seven years — a 50 per cent growth in the market with, at this point, no resources to fund that growth. If we can at least see where the challenges are, it would be very helpful for us in making recommendations. At this point, I can’t see how it’s possible. I certainly see that there’s a need for investment. That data can be very helpful in making recommendations.
Ms. Donohue: Thank you very much for your question, Senator Deacon. The department does produce the Canadian Agricultural Outlook report, which I’ll endeavour to ensure this table has. I’ve taken note of your questions in terms of looking to see if we can pull out and extract some specific —
Senator C. Deacon: Elements with your work, your program and how you’re helping this grow. Help us find the key points within those overall reports that we could be looking at to substantiate requests. Thank you.
Ms. Donohue: I appreciate that.
The Deputy Chair: Just for your information, the committee did a study on pesticides three or four years ago after Monsanto was kicked out of a number of U.S. states. It was very productive in the southern U.S., Germany and other European nations. Despite changing its name to protect itself, Monsanto is unwelcome in nearly three-quarters of the hemisphere. It remains the worst contaminant on the planet.
This is a huge barrier for Canada, which still uses the pesticide in certain regions. It’s giving Canada a bad name. All you have to do is attend an international trade show or talk to grain importers to hear that. If you ever address the Monsanto issue in any of your reports, be generous in the cuts you make and state clearly that Monsanto isn’t helping Canadian exports, but actually hurting them.
Thank you for your input. It was very informative. We hope you’ll have the staff you need to carry out your plans.
Senator R. Black: I just want to make it known that those are your comments and not the decision of the committee.
The Deputy Chair: Absolutely, because the committee studied the issue four or five years ago. Thank you.
We now welcome Stephen Laskowski, President of the Canadian Trucking Alliance. Welcome Mr. Laskowski. I would ask that you keep your remarks as brief as possible so that senators have enough time to ask you questions. Make yourself comfortable. It’s just like being at home. Please go ahead, Mr. Laskowski.
Stephen Laskowski, President, Canadian Trucking Alliance: Thank you very much, senators. I appreciate the opportunity and will keep it brief so you can ask questions. By way of background, the Canadian Trucking Alliance is a federation of provincial trucking associations with over 4,500 member carriers from across Canada. We are a broad-based section of the industry, all sizes, regions and commodity-based, including food products.
Canada’s economic prosperity is in large part dependent upon the ability of our industry to compete for market share in the North American supply chain and do so efficiently. Our economy is multifaceted, ranging from farming and natural resource-based manufacturing and knowledge-based industries, all of which depend upon trucking.
The simple reason trucking is a dominant mode of freight in this country is that it’s flexible. It does what the customer needs and does it on time. That would certainly include the agricultural sector, which more and more is moving to high-value goods and time sensitive deliveries.
As the preferred mode as business, we rely upon a flexible economy and a workable economy. Simply put, without trucks, the economy stops. In turn, what we do need is an infrastructure system and investment plan that allows goods to get to market efficiently, both domestically and internationally.
I’ll focus on some of those key infrastructure priorities that will help the agri-products industry and frankly, the entire economy. Before highlighting a few of them, you will notice in your handouts a larger document that notes the infrastructure priorities of CTA. This document is put together by the trucking industry from across Canada. As I mentioned earlier in my notes, we are an alliance, so we ask each of the various provincial trucking associations to meet with their boards and membership to identify key pieces of infrastructure within their province that would require investment by the provincial or federal governments that would improve the efficiency of the trucking industry and, by extension, the economy. So we look at these as pure economic investments that benefit the economy.
I’ll highlight two that I’ll bring to your attention just because they seem to be hot points right now. There is one in the west and one in the east.
First is Highway 40 twinning in the Grand Prairie area. For those who are unfamiliar with that area, it’s one bridge that is causing quite the backlog in that area. It quite frankly needs to be twinned. The collision rate in that area is about 206 collisions per 100 million vehicle kilometres travelled. Currently, highway volume on that bridge is 9,000 vehicles per day with commercial traffic making up about 50 per cent of that total.
What we’re seeing is backlogs going for miles. There are a lot of forest products and oil and gas in there. I’s also a key connection between British Columbia and northern Alberta to service those communities for food products.
The other is in New Brunswick at the Quebec border. This involves the twinning of Highway 185.
The trucking industry operates in both Western and Eastern Canada on special configurations called Long Combination Vehicles, LCVs, double 53-foot trailers. These trucks can only move on certain highways that require twinning.
The major issue and the major plug in the supply chain in Eastern Canada for these products to be moving more efficiently — including food product, especially from the Maritimes, from the fisheries — is the inability of twinning of Highway 185. It’s a small investment but those products could move by double 53s, improving the supply chain efficiency tremendously from Halifax to Windsor.
Investments in our border: The electronic systems Canada Border Services Agency uses to process trade information requires upgrades to meet the demands of today’s cross-border system. The issue can be resolved by investing capital in CBSA’s IT systems. The lack of resources available to food products has had a negative impact on a carriers’ ability to meet delivery requirements and imposes extra costs on all members of the supply chain.
The hours of operation at many inspection facilities are often restrictive, forcing drivers to wait multiple hours for inspections to be completed. Drivers are forced to arrive at the border between specific time frames, causing major logistical issues and complications with hours of service requirements.
Having customs officers cross-trained to conduct multiple types of inspections can help alleviate this issue. Other solutions, such as expanding hours of operation and increasing staffing, would facilitate the timely movement of cross-border food shipments.
Other recent issues that have emerged from CFIA, where customs brokers being used by our members are seeing increasing delays in CFIA’s ability to process trade data. This increase in processing time has a trickle-down impact on all members of the supply chain, including the carrier community where drivers are forced to wait extended periods of time before their food shipments can be cleared.
It is our recommendation that CFIA review their service level requirements and IT infrastructure to ensure their ability to process trade data and meet the needs of today’s fast paced supply chain movement.
The last issue I would like to raise with the committee relates to federal excise tax refunds on diesel fuel used for anti-idling devices and other GHG-reducing technology along with devices used for temperature-controlled trailers. For the food industry, this is a significant one.
The federal government removed provisions in the 2016 budget that took away the tax except status for the fuel used to generate and cool those devices, a decision CTA has been urging Ottawa to reverse since. According to Natural Resources Canada, these devices save trucks idling 3 per cent a year, and as it relates to food, it keeps food safe. It keeps it either cool or at the proper temperature.
Removing the federal excise tax exemption from fuel used to operate these devices will not help incentivize green fleets, and it also deals with other issues related to taxation.
With that, I’ll end my presentation and open it up to the floor.
Senator Diane F. Griffin (Chair) in the chair.
The Chair: Terrific. Thank you. We have a number of senators prepared to ask you some questions.
Senator Dagenais: Thank you, Mr. Laskowski, for your presentation. You did a good job of explaining how important infrastructure is to the trucking industry. I am from the Montreal area, where the situation is anything but fun for truckers. The region is like a parking lot for them. The vehicles just sit there. They say that what makes a country and its economy strong are its roads and infrastructure. That’s clear in the U.S., which has five-lane highways with two lanes exclusively for buses and trucks. It might be time to upgrade our infrastructure.
I have two issues I’d like to discuss. First, as we all know, the federal government will be introducing a carbon tax countrywide, despite the opposition of certain provinces. The tax will no doubt affect your members as far as the cost of diesel is concerned. Could you describe for us how the carbon tax will impact your industry? If it costs you more to operate your vehicles, consumers will be the ones footing the bill. It could undermine your ability to compete with our neighbours to the south.
Mr. Laskowski: With regard to the carbon tax, you’re correct. The trucking industry has a system in place with regard to its customers. Trucking freight is priced two ways: There is a price to move the freight, and then there is a second component called the fuel surcharge. As the price of fuel moves up, that surcharge increases. That cost is negotiated with the customer, based on a percentage.
So indeed, when a carbon tax comes in federally, that will have an impact on the fuel surcharge and between the carrier and their customer. Ultimately, it will be passed on to the consumer.
Senator Dagenais: Now I’d like to discuss the workforce. Unless I’m mistaken, your industry is facing a labour shortage. What are the problems you’re dealing with and how should they be addressed?
Mr. Laskowski: That is a major issue in our industry with regards to access to labour.
There are multiple issues here. One, the industry itself has to improve our outreach to young people to come into our sector. Part of our strategy is to improve the professionalism of trucking by calling for mandatory entry-level training across Canada. Currently, many provinces have no standards that are required to be met prior to challenging the test to drive a tractor trailer. We believe that needs to change, and that you need mandatory entry-level training across Canada to qualify to run for a truck; hence raising the professional status of the industry.
We believe all our drivers are professional. That is our firm position. But to make a change in the eyes of the public is a needed step. It’s also a needed step, as many people are retiring from our industry, to raise the bar to make sure we remain a safe industry.
The other issue relates to immigration. Currently, trucking is not deemed professional or skilled from a federal standpoint. That severely limits our ability to bring in people who want to come to Canada to drive trucks for Canadian fleets. We as a nation need to change how we look at that and how we determine who comes over to Canada and works at that. We want to work and continue to work with the federal government on how to bring hardworking people, who would make great Canadians and great contributors to our industry, to Canada.
Senator Doyle: You touched upon what I was thinking about: the nationwide shortage of truckers and what’s happening in that area. When I was on the Transport Committee a couple of years ago, we heard of autonomous, driverless trucks both for short- and long-term hauling.
I don’t know if that’s turned out to be a fantasy or is something that’s going to be pursued, but I was wondering if the fear of autonomous trucking could be part of the reason for the nationwide shortage of truckers. Young people are looking and saying, “We could be taken out of the market any time because of automation,” and it’s not a good future for a young person to get into. What do you think of that?
Mr. Laskowski: Senator, you hit the nail on the head. First of all, the research going into autonomous vehicles is fantastic, but what it’s doing in the short-, medium- and long-term, quite frankly, is making truck drivers safer. It’s making the vehicles safer. But always remember that it’s driver assist. Advanced braking systems, advanced warning systems — all of which is going into autonomous vehicle research — are now making their way into the modern truck, which is making the modern truck and the modern truck driver safer.
The Canadian Trucking Alliance is strongly advising that when anyone speaks to the media about autonomous vehicles, they be very cautious around saying that truck drivers will be displaced. It is having a chilling effect on the labour market.
Senator Doyle: Is it really?
Mr. Laskowski: People are saying your exact same words: “I hear you’re going to have autonomous vehicles. Why would I want to come to your industry?” That’s not correct. In fact, the way we see this new technology is a way to attract young people. Trucks have a lot of technology in them. They’re becoming more and more like the cockpit of a plane. The driver is going to have even more skills down the road.
Again, it’s always the word “driver” and “driver assist.” Just to add to that, senator, there is more to being a truck driver than driving a truck. The driver does a lot of added value to the supply chain, especially in the food industry. That driver is an extension, not just of their trucking company but of the supplier they’re working for to ensure all customers and products are handled properly, delivered properly and marketed properly, in some cases.
Senator, I’d bottle up your statement and play it aloud because it’s very important. It’s a wonderful thing the Government of Canada is doing with regard to researching autonomous vehicles and pushing it forward. There is so much good coming from this, from a public safety and efficiency standpoint. We just need to be very cautious in explaining exactly what it is we want as the outcomes of this in various areas.
Senator Doyle: As a result of all that government would be truly involved in the autonomous end of it. I don’t see government at the moment developing any kind of special recruitment and training programs for truckers. Maybe I’m wrong. Maybe they are, but I see no evidence of it so far.
Mr. Laskowski: I think Minister Garneau, who has been a wonderful transport minister, has a vision here about training and national. It’s a difficult position for Transport Canada when it comes to trucking, because although Transport Canada has federal oversight over our industry for federally regulated carriers, it does so in partnership with the provinces.
I think sometimes you can take the lead, but you need others to work with you. With regard to the training aspect of it, that comes down to licensing standards which has been a provincial authority. With the results of Humboldt and what came out of that, it became very clear, and I think Minister Garneau, Transport Canada and the provinces are working together. Perhaps early in the new year we may hear something.
Senator Doyle: Okay. Thank you.
Senator Maltais: Mr. Laskowski, I am a senator with the upmost respect for the trucking industry. I am from northern Quebec, which relies entirely on the trucking industry from a supply standpoint. We have mining and forestry there.
Over the years, we’ve seen numerous improvements to truck safety and security. Trucks are safer and drivers are much better trained. Not just anyone can drive a truck these days. Drivers have to take essential training. Truckers are often blamed for ruining the roads, which is partly true given the number of wheels on their trucks and the cargo they carry. Trucking is an indispensable mode of transportation. Truckers deserve the respect of all road users.
Increasingly, cities are building ring roads so that truckers who don’t need to unload cargo can bypass the area. That’s the case of Highway 30 in Montreal. In certain places out east, truckers are at a disadvantage, especially in Prince Edward Island, where they have to pay fees that increase transport costs and lower profits. Does your alliance plan to seek some fairness for truckers and transporters who travel to Prince Edward Island, because they are at a disadvantage in relation to the rest of the provinces?
Mr. Laskowski: As I mentioned earlier, we are a federation of associations, so I have not heard from the Atlantic Provinces Trucking Association about this specific issue. I will go back to the Atlantic Provinces Trucking Association and ask them what their position is on this matter, and I’ll report back to this committee.
Senator Maltais: Do truckers receive standardized training across British Columbia, Alberta, Ontario, Quebec, New Brunswick and Nova Scotia, or does each province do things its own way?
Mr. Laskowski: I’ll answer it this way: From a provincial standpoint, there is only one province — actually, last night I believe Alberta released their document and I don’t know if it takes effect today — where a standardized, mandatory entry-level training floor has been set. It’s only in the province of Ontario. I believe late last night Alberta released theirs, and I believe it may be in effect as of January 1 or maybe even immediately.
When I mentioned Minister Garneau, Transport Canada and the provinces, I believe they are working on some oversight and the ability to set a national floor with regard to standardized training. That would be great for public safety and our industry.
I want to assure, senators, that that’s just the floor. All the good carriers — and the vast majority are good, safe carriers — will take those drivers and put them through their own advanced training systems. The problem, senators, is there is a small percentage in our industry who do not take compliance, or their obligation to the public regarding road safety, seriously. It is the goal of the Canadian Trucking Alliance to work with Transport Canada and the provinces to develop enforcement regimes that focus on those carriers to either have them change their ways or remove them from the industry.
Senator Maltais: Thank you very much.
Senator C. Deacon: Thank you, Mr. Laskowski, for your excellent presentation. When I’m driving on a highway, I view trucking as a skilled labour, and I think the point you’ve made is a very important in terms of getting the message to the Minister of Immigration, so thank you for that.
I’m splitting trucking into deliveries for consumption and export, in my own head. I gather in deliveries for consumption we’re three days away from empty shelves in most grocery stores, so it’s pretty crucial to feeding Canadians.
I really want to focus on exports to market. You identified increasing delays for the CFIA and their ability to process trade data. Would that be for imports into Canada, and does that also affect exports from Canada?
Mr. Laskowski: Overall, I’ll answer it this way and give you a long-winded answer.
The CTA tips its hat to the Government of Canada. Without the Government of Canada, the Gordie Howe Bridge does not happen. Yesterday, we heard in the Fall Economic Statement significant investment in Regina to the North Dakota border to make sure that they’re twinning it. That would be a significant improvement for the market and that’s a lot of agriculture going that way.
The Government of Canada is making significant progress and steps to improving the physical infrastructure of the north-south border, which is great news. But then there are what I will call the nuts and bolts of the border: the technology, the hardware and software. Increasingly you have to understand that you can make all the physical changes, but if you’re not modernizing the border as we move to less paper for both the security and process standpoints, then you have problems.
We have some concerns and issues about the need to modernize our border from that standpoint. It’s not just the CFIA. It’s the CBSA; it’s our systems. We need to look at reinvesting in our border systems, hardware and software, to improve the efficiency of border movements.
Senator C. Deacon: This is the digital backbone to enable the very efficient management of border crossings for every single truck. I have to say, I’m most concerned about trucks leaving the country with high-value goods on them. That’s where I’m focused if we slow down. Your point is well taken.
How is this impacting our exports of high-value goods out of Canada in the agri-food industry right now?
Mr. Laskowski: The Americans have the same challenges we have. People always say it’s U.S. CBP or CBSA at the border. It’s not just those two agencies. There’s Agriculture, USDA, and some of the food agencies are splintered into splinters. This is both in the United States and Canada. They’re not 24-7 some of these agencies; the supply chain is.
What happens, especially on the weekends, is that, as a truck, if you don’t arrive on Friday before the five o’clock closing time — the border is always open and everybody is fine — but those individuals leave. If those individuals leave before your truck gets there, you’re sitting until Sunday night or Monday morning. That’s a problem. As an investor, whoever is looking at that, that’s an issue.
For all the billions and trillions both of our countries are spending, for those types of issues, I used as an example, it’s kind of silly.
Senator C. Deacon: Absolutely. I’m grateful for the candid response.
Mr. Laskowski: What we ask for is cross-training. Couldn’t an officer who’s doing the primary or secondary inspection be trained to have access to this? If it is such a specialized factor — in food it may be — maybe the cost associated with having someone there and the value, maybe people in the supply chain and government need to sit down and figure out a way to do it.
Senator C. Deacon: Thank you. I appreciate that.
Senator Oh: I just want to follow up on the question the senator asked. Is there no automated clearance system: a green light, trusted driver, trusted company?
Mr. Laskowski: There is. Both the Government of Canada and the United States are working hard at doing that, but for the security of the supply chain, both for products and overall what I’ll call security, there are always going to be random inspections, always. Even if you are in what we call our CT patent fast, which are our preferred secure customers, you will always have random inspections.
In the food industry, especially with all the health alerts, depending on what it is, it’s beyond just security checks. It may require random inspections of the food products. There may be recalls they need to check to make sure. That requires certain agencies and individuals with other expertise.
Our goal and hope is that not only do we increase the software and hardware, but we have people who, when those alerts or those inspections are triggered, there’s actually someone there to do the job.
Senator Oh: You talked earlier about how safe the trucks are today with our modern technology, but safety on the road is still the person behind the wheel.
Mr. Laskowski: Yes, it is.
Senator Oh: With marijuana legalization, how do you control drivers and make sure the road is as safe as it was before?
Mr. Laskowski: With regard to marijuana?
Senator Oh: Yes.
Mr. Laskowski: First of all, the Canadian Trucking Alliance’s position is that marijuana use for commercial drivers should be zero tolerance, meaning any presence found in any driver beyond — they don’t have this test so I’ll explain it this way: Zero tolerance, from a legal standpoint, for alcohol from a commercial driver standpoint is a reading of .02. That allows a driver to take cough syrup, because cough syrup has alcohol in it, so it wouldn’t produce a false positive.
When I say zero tolerance for marijuana, whatever that reads, .02 is what we’re standing for. The problem is we don’t have a reading for that yet. We’re still struggling in that area. So that is our position.
We also support mandatory drug and alcohol testing for all commercial drivers or people in safety-sensitive positions, which I think we can all agree that a commercial truck driver is a safety-sensitive position.
Any truck driver who operates into the United States is in a mandatory drug and alcohol testing program because that is the law in the United States.
In Canada, we are asking the Government of Canada to introduce the same requirement, so mandatory drug and alcohol testing on a random basis for commercial truck drivers.
Senator Oh: That hasn’t taken place yet?
Mr. Laskowski: It has not. We are still discussing it.
Senator Doyle: Discussing what?
Senator R. Black: Mandatory random testing.
Mr. Laskowski: Transport Canada is reviewing it.
Senator Oh: Thank you.
The Chair: Thank you. I have a couple of comments or questions. I really appreciated how direct your presentation was. You’ve got some very specific recommendations. That’s helpful to us.
It’s interesting that you’ve picked a couple of highways that need to be upgraded. I’m very familiar with the one running to the east, of course. I do agree with you. It is a dangerous highway, 185, especially under winter conditions.
The problem we have here is that over the years, some provinces have lost their railways. Newfoundland and Labrador no longer have a railway, nor does Prince Edward Island. We’re absolutely dependent on trucking and, of course, shipping by water, but the only means of land-based transportation is trucking.
Another senator has been heavily promoting the problem we have in Prince Edward Island with the Confederation Bridge and the high cost of crossing that bridge. Senator Maltais has already alluded to that.
One of the problems here in our country is we’re so far flung that out at the edges, sometimes it’s a very expensive business to be getting products. Still, Canada is a country, and I don’t know how we’d get by without the trucking industry, to tell you the truth. We wouldn’t get by.
One concern I had was regarding training. I’m glad you are very much in favour of a mandatory minimum, especially for new entrants coming in. I think it’s probably a good idea for retraining for people who have been in the industry for a while. You made a very good point about how the technology is changing in vehicles. Senator Doyle referenced a study done by another committee moving more toward automated vehicles and self-driving. There are a lot of changes afoot.
One drum I beat every so often is I’m very concerned about the literacy level in our country. It will be even tougher in the future to find drivers who will be adaptable to all the new technology.
I’m not asking a question. I’m just restating some of the things that other people have brought up that I think is important. Thank you for your pointed recommendations.
Senator Dagenais: I want to revisit the border crossing issue. My question is very straightforward. Do the delays you told us about happen when you enter or leave the country, in terms of our neighbour? Are the delays the same on both ends?
Mr. Laskowski: Senator, they’re about the same. Delays are experienced on both sides of the border.
Again, I think both federal governments have — there was recently an announcement at the Lewiston-Queenston Bridge this week, I believe, expansion of money. More and more, both sides of the government have recognized how important the local ports are and how it’s important to make sure there are enough cues and all the rest of it.
There needs to be recognition that as we build more physical infrastructure we need to make sure we have the right labour, staffing and IT resources to support this modern infrastructure.
Senator Dagenais: Food security is a key issue in the agricultural sector. What are the main challenges your companies face when it comes to food security and trucking?
Mr. Laskowski: Senator, with regard to food safety, many are in HACCP-type programs, which are best practices for how to handle, store and transport specific commodities and/or they are involved with their customers directly. When I went back to my point about a truck driver not just being a person who drives a truck but who understands the product and the commodity and what’s done to it.
Truck drivers are true professionals in the sense that they just aren’t individuals who operate a big piece of machinery on a public highway safely; they’re also key to the supply chain — in this case food — product getting to market and consumed by people or used by companies in a safe and responsible manner. They play a key part. That comes through education and training.
Senator Dagenais: Thank you very much.
The Chair: I recently had a meeting with some people from the livestock industry. They’re shipping cattle, and made the point that drivers who are driving livestock, or livestock is riding in their trucks, are a special breed of driver. They’re dealing with live animals, and there’s the issue of humane treatment of animals.
But they’re looking at the concept of trade-offs. Drivers have to rest after a certain period of driving, but if they’re resting, then the livestock are sitting on the truck. Drivers resting an undue length of time could be seen as an animal health issue or as cruelty to animals.
Could you give me your perspective on this issue? Is there any appetite for asking for a regulation change that would allow drivers who are driving livestock, if they’re close to their destination, of being able to drive a little longer? I know now with electronics, keeping track of how long a driver is driving, they don’t have the flexibility they might once have had in this regard.
Mr. Laskowski: You’re very well-informed, senator. Livestock carriers are some of my most fun carriers to deal with. I love those guys. You’re 100 per cent correct. That is one of the most challenging sectors to find drivers because those drivers are highly skilled as it relates to handling animals, whether it’s hogs, cattle, sheep, chickens or lamb. You’re not hauling a TV set. The animals react differently; so you have to handle the truck differently. It’s highly skilled.
As it relates specifically to your question, I’ll give you the short answer. There’s no good reason that livestock carriers can’t abide by the current hours of service using electronic logs and still hauling livestock. I’ve met with dozens of livestock carriers on this point. You have your hours of service rules, and you have your animal welfare rules, and I’ve asked them to show me where the conflicts arise because I needed to be educated. Senator, no one could show me a conflict.
Where the conflict lies, to be very honest with you, is not with the carriers, drivers or animals, but certain customer demands. Certain customer demands need to come to the reality that livestock needs to be moved within the animal welfare rules and the trucking hours of service rules.
Senator R. Black: When you say “customers,” is that me as a primary producer who is asking you to take my animals somewhere, or is that the processor — Better Beef, Cargill or both?
Mr. Laskowski: It could be one or both.
Senator R. Black: Thank you.
The Chair: I’m interested in your answer in that there isn’t an incongruity between the two sets of rules. Because this is a big country, and it’s awfully hard sometimes to get animals transported without unloading them and giving them a rest period too. If an animal is going to get injured on a trip, it usually happens with the loading or unloading as opposed to when they’re actually on the vehicle.
Mr. Laskowski: Senator, believe it or not, I really did spend a lot of time on this one. I’m glad you asked the question.
I’ve met with many livestock carriers, east and west, who are running electronic logs and who run various patterns. They’re law-abiding, and they say there are no issues.
Taking a step back — and this isn’t toward the livestock carriers or any in the industry, just general — the supply chain, before the advent of electronic logs, looked at the hours of service rules seriously, but there was a “but,” and I’ll leave it at that. Electronic logging devices have taken away the “but,” and I think it’s a good thing. Now product, whether it’s livestock or television sets, needs to be moved legally and properly because, at the end of the day, for the safety of whether it’s animals, the drivers or the public, that driver behind that wheel needs his proper rest. This may require some adjustments in the supply chain distribution system, but if we are all committed to public safety then those adjustments need to be made.
Senator, I would welcome, and I’ve asked suppliers and carriers to show me incongruence with the hours of service rules and animal welfare rules, and I have yet to get one.
The Chair: I’m glad you’ve been asking.
Mr. Laskowski: I’ve been asking. I will say this. I’ve heard people tell me, no, we can’t do it. So I’ve asked people to explain it to me, and I’ve yet to receive anything.
The Chair: Thank you.
Senator Doyle: This is a little off topic, but is the lack of available pipeline capacity today driving up the amount of crude oil being shipped by truck?
Mr. Laskowski: That’s an interesting question. I have heard different reports of that, but most of that was to the benefit of the railway sector.
Senator Doyle: What about the lower —
Mr. Laskowski: I can find out.
Senator Doyle: Lower oil prices, has that increased the competitiveness of trucking over other modes of transport?
Mr. Laskowski: I’ll say this. We hired the Conference Board of Canada to examine trucking rates and revenues. Over 90 per cent of our gains in efficiency were given back to the supply chain. It is such a hyper-competitive business that as fuel prices lower, the benefit is typically more to the supply chain members than the trucking industry. That doesn’t mean carriers aren’t happy when the price of fuel is lower — obviously we are — but the fact that is that the overall supply chain benefits more than trucking companies. I think our members would enjoy, quite frankly, keeping more of their profits.
The Chair: That’s interesting. I’d like to thank the witness. It was expert testimony that’s very much appreciated by our committee.
We’re going to take a two-minute break and then go in camera. Thank you.
(The committee continued in camera.)