Proceedings of the Standing Senate Committee on
Agriculture and Forestry
Issue No. 58 - Evidence - Meeting of November 8, 2018
November 8, 2018
Senate Committee on Agriculture and Forestry met this day at 8:01 a.m. to
study how the value-added food sector can be more competitive in global markets;
and, in camera, to study the potential impact of the effects of climate change
on the agriculture, agri-food and forestry sectors (consideration of a draft
F. Griffin (Chair) in the chair.
I am Senator Diane Griffin from Prince Edward Island and chair of the
committee. I will ask the senators to introduce themselves, starting with the
deputy chair, Senator Maltais.
Maltais: Ghislain Maltais from Quebec.
Dagenais: Jean-Guy Dagenais from Quebec
Black: Douglas Black, Alberta.
Miville-Dechêne: Julie Miville-Dechêne from Quebec.
Black: Robert Black, Ontario.
Mercer: Terry Mercer, Nova Scotia.
Thank you, witnesses, for appearing here today. I hope you don’t mind, but I
want to take care of one business matter first. Then we will go ahead with our
you had asked for the floor.
Black: We were together a couple of weeks ago when I put forward a motion
that I would like to change somewhat.
You have the
motion in front of you, and it reads as follows:
notwithstanding the motion adopted by the committee on Thursday,
October 25, 2018, the committee submit its report for its study on
‘‘Support and Compensation for Supply Managed Agricultural Sectors in relation
to the OSMCA, CPTPP and CETA Trade Agreements’’ to the Senate no later than
March 31, 2019.
You will recall
that the date was December 6, 2018. Given that we still don’t have the text
and there are still some things in flux, I agreed to make the change to
March 31, 2019.
Are there any questions or comments? Basically, it is the same motion but
the date has changed.
Black: I think it makes more sense.
Especially in light of our difficulty with holding Tuesday night meetings,
this will give us more time to make up for that loss.
Maltais: Senator Black, I commend you for delaying the proposal of your
motion, especially since the Minister of Agriculture has created three
committees on this issue. So I think it would be wise for the committee to wait
for those committees’ conclusions before we proceed. Otherwise, we would be
duplicating the work, as we will probably question the same players in that
field. We hope those committees will report to the minister by March 31. If
we then want to add something, we could always use our motion to add to the
report the minister will have tabled in the house. There you go. Thank you.
Black: I would like to reply by saying that I think there is an option to
work side by side. I would prefer not to wait until after that report. I think
there is opportunity for us to work together and maybe contribute collectively.
That is my two cents’ worth.
Some of the agricultural sectors may be ready to comment prior to others.
There is still some ongoing fine tuning. You are right that we don’t have final
information yet, so we will go with that.
There being no
other comments, we are ready for the question. All those in favour will please
The motion is carried.
We are back to
our business at hand. We are continuing our study of the potential impact of the
effects of climate change on the agriculture, agri-food and forestry sectors.
At this point I
will introduce our two guests. The guest with us in the room is Sylvain
Charlebois, Professor in Food Distribution and Policy, Faculty of Agriculture,
Dalhousie University, and on the screen with us via video conference is Evan
Fraser, Canada Research Chair in Global Food Security, Social Sciences and
Humanities, University of Guelph.
thanks to both of you for accepting our invitation to appear this morning. We
will start with the video conference. The floor is yours, Mr. Fraser.
Canada Research Chair in Global Food Security, Social Sciences and Humanities,
University of Guelph, as an individual: A little over 18 months ago, as I am
sure you know, the Advisory Council on Economic Growth tabled its report on how
to grow our economy. Among its recommendations was a very clear focus on
agriculture and food. In essense, they argued that this is an underutilized
sector and that we should strive to increase our food exports.
Just a minute, sir, we have a problem. There is no translation.
Maltais: Could the witness speak a bit slower, as the interpreters will have
trouble making it to the end of the testimony?
The interpreter is having trouble keeping up with you. Could you slow it
down a tad, please?
Mr. Fraser: We argued, well beyond setting trade targets,
that we should strive to become the world’s trusted supplier of safe and
sustainable food. If we realize that vision, it would represent a significant
shift toward a value-added food system.
Since that report
was tabled about two years ago, I have been involved in a number of interesting
dialogues, including ones with the think tank Canada 2020 that have brought
together industry, civil society, academics, et cetera, to drill into what
developing a food system based on notions of safe, trusted and sustainable would
A consensus is
emerging that we need to establish a pre-competitive Canada food brand that
would demonstrate to our trading partners that when they buy Canadian food, they
are buying the world’s most trusted, safe and sustainable. Developing such a
brand would incorporate three key things the federal government can help us
recommendation is that we need to become the global leader in standards
pertaining to safety and sustainability. Second, we need to develop the
information and technology systems, things like blockchain and other such
things, to help steward and safeguard our brand. Third, we need to market our
brand so that the Canada food brand becomes globally recognized as and
synonymous with safe and sustainable. Let me turn to each of those three
recommendations in turn.
recommendation is that we must become the global leader in standards pertaining
to safety and sustainability. Here, we have a lot to be proud of and a wonderful
foundation on which to build. We have a food regulatory system that is the envy
of the world. Similarly, our processors and farmers are global leading. We can
build on that foundation by codifying and solidifying what safety, trust and
We don’t want to
reinvent the wheel. We have great existing programs, such as the Environmental
Farm Plan or the Canadian Roundtable for Sustainable Beef. However, at present
many of these systems are fragmented and we don’t have a full-value chain
sustainability assurance system.
There is an
emerging program called the Canadian Agri-Food Sustainability Initiative that
could provide the foundation for leadership from the federal government as a way
of establishing a governance body to codify standards around safety and
sustainability. This would be an important first step in helping realize that
vision of the advisory council’s report. It could also be built into the
upcoming food policy for Canada that is exploring the ideas of a national food
recommendation relates to creating an IT infrastructure. Once we have those
standards in place, we need to have information technology systems to ensure
that Canadian food systems are transparent and cyber secure. This moves our
discussion into the realm of cloud computing, cybersecurity and blockchain.
A good IT system
for food has two key components. First, increasingly consumers concerned about
food safety and sustainability are demanding systems to have a clear line of
sight back through the food supply chains. Things like QR codes on packaging
that allows consumers to see each step their food takes from farm to fork. As we
move into that increasingly sophisticated IT system, we will be able to do a
better job of managing problems such as food recalls when they emerge.
For instance, IBM
has been working with Blockchain and Walmart and recently tested a system to do
tracebacks for mangoes piloted earlier this year. They tested their old system,
and it took seven days to figure out the trip a mango had taken from farm to
store. With a blockchain system they were able to do it in less than two
seconds. It is this sort of thing we need to be investing in on a systems-wide
important point of having a food system backed up with a sophisticated IT
infrastructure is to better protect ourselves against cybersecurity attacks.
Think of it in this way: In the olden days, when all we were doing was trading
on price, the easiest way for our competitors to take our markets was to beat us
on price. However, if we are to develop this system based on trust, safety and
sustainability, a value-added food system, we have to assume and be prepared for
malicious hacking that tries to undermine those claims. Again, the federal
government can play a critical role in creating the IT infrastructure to ensure
that Canadian food is both transparent and secure.
With my first
recommendation, I was essentially arguing that we needed to create the standards
and protocols that would give us the empirical basis for a Canada food brand. My
second recommendation is about IT to give us the safety, security and
transparency. My third recommendation is to ensure that we are rewarded by our
international competitors for doing these things.
recommendation is that we need marketing programs. There is a consensus emerging
in the industry that affluent consumers, especially affluent consumers in Asia,
are willing to pay more for food that they trust as safe and sustainable.
In addition to
establishing the protocols and the IT infrastructures, we need to market the
Canada food brand. Again the federal government can play a key role with trade
missions that explicitly focus on Canadian agri-food as safe and sustainable and
influence their campaigns in social and traditional media. I recommend that we
consider putting the notion of Canada food brand at the centre of our agri-food
To close, I
believe that the basis of an agriculture and food system that is value added can
put the notion of a Canada food brand right at the front and ensure that our
food becomes synonymous with food safety.
world’s growing populations while dealing with things like climate change will
in some ways define the current century, but this challenge of global food
security represents a unique opportunity for your country. With our already
existing sophisticated infrastructure, our food sector, and our existing
reputation for safety and stable regulatory environment, we can build a Canada
food brand that will be used to demonstrate to consumers around the world that
when they buy Canadian food, they are feeding themselves and their families the
safest and most sustainable food the world has to offer.
I speak with a
great deal of confidence that a huge consensus is emerging in industry and among
the sector that this is a way to differentiate ourselves and build the
value-added food system you are interested in talking about. Thank you.
The floor is yours, Mr. Charlebois.
Charlebois, Professor in Food Distribution and Policy, Faculty of Agriculture,
Dalhousie University, as an individual: I believe this is the seventh time I
have appeared before this committee over the years. It has always been a
privilege to be invited and speak about our country’s future in food and
agriculture. Therefore, I am honoured to be talking to you again today.
This time I was
asked to provide comments about how to make our agri-food sector more
competitive globally. For my brief statement, I would like to address three
distinct issues: public governance and innovation, infrastructure, and global
First, on public
governance, in governments across the country food processing is often the
forgotten child in agri-food. Ministries of agriculture and food are often
pressed to look at farmgate-related issues more so than anything else. We often
resort to well-known paradigms of growing things faster and better rather than
following a demand chain management mantra like we see in countries where their
agri-food sector is thriving.
and supply-side economics have provided great support over the years but have
now become barriers for growth. To better understand future markets and to
pinpoint opportunities we need data and, to recognize its power, we need lots of
data. As a simple example, potatoes are important to our economy, but no one
seems to know what the potato industry will look like in 20 or 30 years. We need
those answers. That is just one example.
States, Europe and many other nations share democratized data to better support
industry, SMEs and family businesses that try to become successful. Canada is
behind when it comes to sharing and using analytics to better support strategies
and policies. Better analytics can also lead to better innovation.
One example I
could give is that Dalhousie and the University of Guelph publish every year
Canada’s Food Price Report. We are preparing our ninth edition for
December. We are using 254,000 data points, all of them coming from the U.S.
That is right: We are trying to forecast Canadian retail food prices by using
St. Louis Federal Reserve data. That is how bad our situation is in
When dealing with
innovation the sector is always forced to push regulatory boundaries. We need to
allow the sector to dare, to discover, and to go beyond conventional acceptances
in food. Compared to other sectors the agri-food industry is not known for its
ingenuity, but things are slowly changing.
coming in with different novel ideas and disrupting forces are not originally
from the agri-food sector. In fact, some of the most fascinating ideas we see
are from women leaders, people with different cultural and ethnic origins who
are now allowed to make their mark more than ever. I personally am mentoring 10
CEOs of start-ups in the agri-food sector from Halifax to Montreal to Calgary.
Nine of the 10 are women and most have unique cultural and ethnic backgrounds.
In agri-food, diversity enables conditions in order to innovate. I don’t think
that has been underscored enough over the years.
The creation of
the Protein Industries Supercluster in Saskatchewan should be celebrated. It is
forcing stakeholders that would not work together normally to think beyond what
they know and to collectively look at growth opportunities. This will generate
opportunities for many stakeholders.
I have always
believed that the first true food supercluster we have had in Canada was
President’s Choice, but the network was intended to support privately owned
brands, successful ones at that. The model just needed to be replicated in a way
that it makes market development for an entire chain a truly inclusive and more
open endeavour. This needs to be replicated for fisheries, seafood, mustard,
livestock and horticulture, to a certain extent.
The second point
I would like to raise concerns infrastructure. Our infrastructure definitely has
to be maintained forever. We are in one of the biggest countries in the world.
Without developing intermodal transportation, it is impossible to develop new
markets for the agri-food sector. An awakening has taken place over the past few
years, but we must continue to invest in port facilities, airports, roads and
The last point I
would like to raise has to do with international agreements. I commend the
current government, as well as the previous government, for signing and
ratifying those important international trade agreements with three continents.
However, few businesses are benefiting from those agreements. For example, we
are seeing the disappointing results of the new Canada-EU agreement. We must
support our businesses upstream in the discovery of our markets. I absolutely
agree with Mr. Fraser that our businesses must be supported more upstream,
so they can benefit from those agreements.
processing sector is critically important for the country’s agri-food economy.
However, the continued tensions between distribution and processing, which are
something of an “elephant in the room”, limit the sector’s chances to innovate
and to take advantage of the opportunities here and abroad. The sector needs
analytical science for a better understanding of market trends and conditions
and recognition of the sector’s real issues. Unfortunately, we don’t know much
about the future of various sectors and we are conducting few strategic
foresight studies. The lack of information for the sector is obvious, and the
way we make decisions and develop public policies must change. Thank you.
Thank you, Mr. Charlebois.
Maltais: Welcome, Mr. Fraser. Welcome again, Mr. Charlebois. The
reason we see you here often is because we need you. That it is crystal
you talked a lot about innovation. I just came back from the Paris expo, the
SIA, where innovation in agriculture was set out as a priority. When you talk
about the Canadian brand, you are right to say that we are certainly lagging
behind when it comes to that aspect, which helps us sell our products. In your
opinion — and I’m not talking about for today, but for the upcoming years — what
steps should the government take with the agri-food industry to improve the
image of the Canadian brand, which has good recognition?
We took a step
back with the free trade agreement. A solution needs to be found for that brand
to come back strong over the coming five or 10 years.
Mr. Fraser: Thank you very much for that question. I will
return to the Advisory Council on Economic Growth that said we should grow our
brand through becoming trusted, safe and sustainable. Those are the three key
adjectives that Dominic Barton and the advisory council utilized. For me,
unpacking those three adjectives gives us the roadmap for what we can do to
create food brand Canada. It is the basis upon which I am involved in a large
number of dialogues and conversations. “Trusted” has to do with transparent
information technology systems to create that clear line of sight between
consumers and producers.
We have some
great examples of that, for instance identity-preserved soybeans, a non-GMO
edible soybean for which Ontario soybean producers have created a high
value-added market, specifically feeding the Japanese consumer demand for things
like soybeans, edamame and miso. They have created an identity-preserved system
which allows the consumer a clear line back to the farmer and an understanding
of what happened at each step of the way. That is what trusted is.
“Safe” builds on
the CFIA and our regulatory environment, which is already one of the best in the
world. We need to ironclad those claims that our food safety regulatory
environment is the best in the world.
Then we have some
work to do around “sustainable.” We need to work with industry to codify
standards and branding around sustainability as a way of demonstrating to our
consumers all over the world that when they buy Canadian food, they are buying
something that is a bit special.
By going back to
those three words, trusted, safe and sustainable, we can drill into and develop
game plans for each of those things based on IT, CFIA and sustainability
standards. There is a strong consensus among the people I talk to that we will
do well if we do that.
Maltais: That is why research and development at your universities are
Mr. Charlebois, you raised an issue that we see regularly on the
ground when the committee travels or hear from stakeholders here or by video
You have not
raised a factor your are very familiar with: interprovincial barriers. They are
a major problem. It is ridiculous. We are signing free trade agreements with a
number of countries, but we should have one for free trade within our country.
It is completely ridiculous that the barrier between the provinces exists in
That said, the
other problem has to do with infrastructure used by grain, fruit, beef and
potato producers. I will give you a concrete example. Prince Edward Island
potato producers are at a significant disadvantage in the competitive market
because they must pay to cross the bridge. That makes them less competitive than
New Brunswick producers.
Could you help us
find a solution to that problem over the next few years?
Mr. Charlebois: Thank you, senator. Those are two good
questions. I want to start by saying that interprovincial barriers are a
problem. I think everyone knows that. It reassures me to know that international
agreements will force us to think differently about free trade.
I have never seen
Canada as an important player. I came back form China two weeks ago, where I
participated in an international conference on beverages. That sector is doing
extremely well, but the international market is not being considered. Focus is
placed on supporting a very limited domestic market. There is no development
strategy. What reassures me is that international agreements force us to think
For the first
time, we have a debate in Canada on the provinces and the way to increasingly
liberalize the Canadian market. Most consumers don’t know this. I think that
politicizing the problem is the first step to resolving it. We are hearing about
it more and more. I feel that we will get there eventually. A few Comeau
cases may be needed, but I think we will get there eventually.
You asked another
question about infrastructure. I live in Halifax, a port city. The seaway is
incredibly powerful. There is no seaway in the West. The trade and
transportation corridors initiative is of key importance. The country must
invest more in that initiative. Canada is a very large country. It is expensive
to marshal the resources. When you go the the United States, you see that the
infrastructure is very different. They have created places with fairly
significant intermodal transport capacity, including in Chicago and Kansas City.
All that is very well framed and thought-out, and that is what I think should be
done here to help companies do business better with Asia and Europe. The
agreements are a good start, but they must be supported through a
well-thought-out national strategy
Mercer: Thank you, gentlemen, for being here. I will start with a quick
comment that I give at almost every one of our meetings. It is the issue of 9.7
billion people on the planet by 2050 and the fact that nobody collectively
organizing the answer to the question of how to feed 9.7 billion people. This
will lead to a major world crisis of some sort. There will be a couple of
million hungry or angry people. It will lead to trouble. I am hoping, in your
responses to questions, you keep that in mind that is a place where we need to
Food security is
a new term to most Canadians. When I go to the grocery store in Nova Scotia, I
don’t think of food security. I think of quality. I think of price. I also think
of the origin of the food. In recent times, I have refused to buy products grown
in the United States. I know sometime this winter I will buy some of the
products grown in the United States because of availability to Canadians because
of our weather.
How do you
explain the term food security to Canadians so that they get the picture?
Mr. Charlebois: At Dalhousie, actually, we have a new
strategic research plan with five clusters. One of them is called food security.
It means different things to different people. People are becoming more educated
about what food security means. For nutritionists and dieticians, it would mean
nutritional security. It is not necessarily to have enough to eat; it is what
you eat. Right now we are at the nexus of both dimensions.
In Nova Scotia,
by the way, insecure food levels are the highest in the country. It is a huge
concern in Nova Scotia. The public dialogue around food security is more around
what we are eating. That is why we are having a lot of discussions about animal
proteins versus vegetable proteins. What is best for consumers, the planet,
animal welfare and health?
Back in 2015, the
WHO stated concern around the consumption of process meats, for example. Last
week both Guelph and Dalhousie published a new report on meat consumption. I was
privileged to have several conversations with people around the country on this
issue last weekend. You can feel the plant-based narrative is changing
You are talking
about feeding 9.6 billion people. I would say we have the solution. We have
effective food systems. If you look at Canada in particular, we have a lot to
offer to the world. We are not taking advantage of it because we are so
commodities focused. We don’t think much about innovation.
My China trip was
depressing because the show there was six times the size of CAEO in Paris. There
were companies from Italy, Germany and elsewhere in the world, but not a single
company from Canada. I was the only Canadian there. It was unfortunate. I was
looking around. Innovation at the farmgate is important, but we need innovation
across the food chain.
Mercer: I suggest you take the testimony we have just heard and send it to
the chair of the subcommittee on internal economy because they created huge
embarrassment with their decision, not just for the agricultural sector but for
the country. Shame on them. I ask you to do that.
That is not something the witnesses need to comment on.
do you have a comment related to Senator Mercer’s question?
Mr. Fraser: Senator Mercer, thank you for raising this.
Without any doubt, the challenge of feeding the world’s growing population while
dealing with climate change and not undermining the ecology and environment on
which we depend for life is a grand challenge.
You asked a
specific question, senator. The World Food Programme defines food security as
access at all times for all people to culturally appropriate food that allows
them an active life. If you want a simple one-sentence definition, that’s the
one I revert to. Mr. Charlebois is absolutely correct. Many people, myself
included, layer on top of that issues of sustainability, animal welfare,
nutrition and safety as well.
You are right
that this is one of the defining challenges. Like Mr. Charlebois, I am also
not pessimistic about it. We waste a third of the world’s food. With the
exception of fruits and vegetables, we already produce enough. We live in a
paradoxical situation where both hunger and obesity are rising. We face a world
where the food system, for all its many benefits, is also quite inefficient in
that distribution is poor and nutrition in some parts of the world is poor.
Those problems can be solved. They are tractable through poverty alleviation in
the developing world and through appropriate incentives for the farming system.
On the optimistic
side, we have to realize that agriculture is on the cusp of a digital
agricultural revolution that will change how we produce and how efficiently we
produce. In my opinion, it will radically reduce the environmental footprint of
When I weigh all
those things, I see the challenge of feeding 9.7 billion as one of the defining
challenges of the 21st century. I also see it as one that is obtainable through
technology and policy together.
Mercer: You are making me feel a lot better when you spoke about our system
being the best in the world and about taking more risk in agriculture.
suggested that we push the envelope a bit. That could happen around this table,
but at the table down the street, where the agriculture committee of the House
of Commons meets, there is a bunch of people who are not risk takers when it
comes to agriculture because if something goes wrong, or a mistake is made, they
will wear it. We might be able to share some of the blame too, but the results
for us are not as drastic as they might be for them.
How do we square
that we have the best system in the world with the need to take more risks?
Mr. Charlebois: Canada is not alone. Every time we talk
about agri-food issues, it gets political all the time. It’s not uncommon to see
There is a
difference in what I see in Canada versus Australia and the U.S. I was in
Australia about two months ago, talking about blockchain technologies by the
way. They actually think about the future 20 or 30 years from now. They actually
think of themselves as playing a role globally.
As Canadians, we
often look at domestic issues. We only look at present or current issues. We
don’t really think strategically, even though we think we do. As Mr. Fraser
has done, I have chaired international conferences. If you compare some of the
dialogues around the world, you will feel that Canada is trade reliant and not
trade focused at all.
Mercer: Mr. Fraser, do you have anything to add?
Mr. Fraser: I echo what Mr. Charlebois just said. I
have nothing to add.
Miville-Dechêne: Good morning, gentlemen. Mr. Charlebois, I would like
to come back to your presentation. You talked about the “elephant in the room,”
which is supply management, and about marketing boards, which you more or less
said were an obstacle to growth. Of course, you are familiar with the current
political context. Politics is also involved in this area. Right now, the
conversation is mostly focused on the situation affecting dairy producers. You
are an academic, so you are not involved in that sector. How do you see the
development of that sector in Quebec? How do you see the situation of the UPA
relative to that of the Union paysanne? There are tremendous tensions, but some
farmers make a living that way. How can things be changed?
Mr. Charlebois: That is an excellent question. Every time I
have been invited to the Senate, I have been asked to talk about all kinds of
things, but supply management is a question that always comes back. It is a
symbol that represents the heart of this issue in Canada, in my opinion. In
1972, Canada had 42,000 dairy farms and, today, it has 11,000 of them. That is a
closed club that has never really considered its role internationally. The dairy
farm has never been asked to think differently. Supply management was paramount,
and it was useful for a period of time. However, I think it has reached the end
of its useful life. The industry must think of other solutions. International
agreements force us to think differently.
Miville-Dechêne: How? People are saying that, without price protection,
producers will disappear.
Mr. Charlebois: I don’t fully agree with that. If there was
a strategic reform of supply management —
First, it would
be a mistake to abolish the quota system. Those assets are used by Farm Credit
Canada, which is a Crown corporation. Canadians are just as involved in supply
management as agricultural producers are. We all participate in that system, in
one way or another, be it as consumers, taxpayers or owners within Farm Credit
Canada. The Canadian Dairy Commission should revise the tariff formula to
encourage producers to be more competitive.
Second, I would
move forward with a new quota system to help new players tap into international
Third, the tariff
formula should be revised. All that would lead to a major sector transformation.
I think that Canadian milk, as Mr. Fraser said, is a high quality product.
The industry has innovated for us but not for others. That is the crux of the
issue. There is enough milk for everyone.
would you have something to add to this issue, which is at the forefront of the
news right now?
Mr. Fraser: Mr. Charlebois is the expert on this
issue. My only concern with criticisms of supply management is that as we
proceed to imagine how the industry will evolve in the rapidly changing
technological and trade environment of the next 10 years, we don’t throw the
proverbial baby out with the bathwater.
dairy farms that I know in Ontario, where the average herd size is approximately
125 to 150 cows that are being milked, those are typically well-managed farms
with very high animal welfare standards and a relatively light environmental
When I travel
through the States and visit farms that maybe milk between 2,000 and 15,000 cows
in the U.S., I see rapid consolidation that can happen there and the massive
environmental pollution associated with enormous dairy herds. I am cognizant of
the fact that although our system has resulted in significant consolidation and
a drop in the number of farms, as Mr. Charlebois said, it has not resulted
in the consolidation you see in Colorado or California. I am nervous about that
policies we think of in the future, we need to be mindful of the environmental
footprint of farming and the animal welfare issues, both of which are better
handled at the 150-cow scale and are really problematic at the 1,000-cow to
10,000-cow scales. If we abandon or move radically away from supply management,
I worry that we’ll start seeing consolidation at the scale that we see in the
U.S. That makes me nervous.
Mr. Charlebois, do you have a quick comment?
Mr. Charlebois: Very briefly, Madam Chair.
To come back to
your question, there is hope. For example, fairlife and Coca Cola have invested
millions of dollars in Peterborough, Ontario, to build a new factory to market
fairlife in Canada using Canadian milk. The agreement was negotiated between the
Dairy Farmers of Ontario and Coca Cola recently to help the association become
more competitive. That is reassuring.
I would like to
remind you that, in 2013, Chobani wanted to build a factory in Kingston,
Ontario, and create 1,000 jobs to produce Greek yogourt. Chobani tried to come
to an agreement with the Dairy Farmers of Ontario, but that agreement never
materialized. Five years later, we see that the situation is changing. Dairy
producers know it.
What worries me a
lot, however, is Quebec, or the Union des producteurs agricoles, where there is
no openness. That is really worrisome.
Miville-Dechêne: Thank you.
Black: Getting back to the topic at hand, I would mention, as we go through
our recommendations, that the banking committee has looked extensively at the
interprovincial trade issue. You might reference that, and you might look at the
work we did on the Northern Corridor, which addresses Dr. Charlebois’
concerns about infrastructure.
identified a tremendous opportunity for Canada. It’s well agreed. If we can
start to play a major role in agriculture internationally, it’s a great boon for
you have indicated three points of concern. Can you tell us, please, how you
think we are doing on each of those three matters?
Mr. Fraser: In terms of our ability to synthesize,
aggregate and set global standards for sustainability and safety, I think we are
doing okay but a tremendous amount needs to be done. Industry is organizing
itself to do it but could definitely benefit from a shot in the arm and some
leadership by the federal government.
Black: What does a shot in the arm look like? Be precise and be specific,
because we would like to hear how we can be of assistance.
Mr. Fraser: For instance, under the auspices of a food
policy for Canada, there is a consideration that the federal government set up a
national food policy council. That would be a good move. It should be given the
mandate to codify existing sustainability and safety standards and to ensure
that they are the most rigorous in the world. That is very tangible.
On my second
point with regard to information technology infrastructure, we are falling
significantly behind. Places like Netherlands and Israel are doing a much better
job at allowing data to be pooled and aggregated so that intelligent decisions
can be made and data analytics can be derived. Industry is way far ahead, and in
this regard we are behind.
perhaps the auspices of a national food policy council or the Canadian
Agricultural Partnership, we need to establish national standards for pooling
and aggregating agricultural data. This picks up on one of Mr. Charlebois’
points. There is a very strong role for federal leadership to help ensure that
our data is handled in a way that is safe, transparent and cybersecure.
That is a very
very big issue. It is one that industry is talking about. However, I don’t think
the incentive to pool data, make data consistent and put consistent
cybersecurity infrastructure around it is in the best interests of individual
industries. That will have to come from the federal government.
We have a huge
reputation upon which we can build for safety and sustainability. I am nervous
that we don’t have an ability to protect that, which relates to my second point,
but in terms of global appearances and global perceptions we are far ahead. For
whatever reasons we can trade on our reputation, but we had better build on the
first and second points if we don’t want to have our good reputation sullied.
That is my third point.
Black: Mr. Charlebois, would like to build on that and on your striking
point that there is no data in Canada when you are trying to do food
Mr. Charlebois: There is data in Canada. It is poor
Black: We have to fix that. How do we fix that?
Mr. Charlebois: If there is one message I would like to
leave you with this morning, it is that we are literally flying in the dark. We
don’t know what is going on. Lots of companies have a lot of data.
I meet with
people at Sobeys, Loblaws, Metro and Costco in Seattle, and they have a lot of
data. There are two problems: They don’t share the data or they may not know
what to do with it. There is no place in Canada, not even at StatsCan. We are
forecasting food prices for the next 12 months. The reason that our forecasting
is getting better is that we don’t use Canadian data because it is not
Black: What do we do about that?
Mr. Charlebois: We need to get better at it.
Mr. Charlebois: I have tried to reach out to StatsCan and
partner with them to better understand how they collect data in general. It
hasn’t been clear. We don’t know exactly how they actually assess the situation
in the marketplace.
with the methodology would help, so that we, as universities and researchers,
can actually help StatsCan to better collect data to help the industry.
To me, the
democratization of data is critical. It’s great to collect data, but it also has
to be shared. The USDA and FDA publish information on agri-food every day in the
U.S., so that we know pricing, what is going on with commodities, and how
climate change is affecting commodities.
There is a lot of
guessing and intuitive-driven decisions going on in Canada more so than in the
Black: Would you say that this committee should recommend our looking at the
U.S., Netherlands and Israeli models?
Mr. Charlebois: It’s a mix of different things. I am using
the U.S. as an example, but when you spend time in Europe you realize they are
concerned about sustainability because they don’t have space. They are
confronted with similar problems we have but 30 years ahead of us. We can learn
from them. The one way they do it is with an analytics, with data.
Black: Dr. Charlebois, you mentioned CETA and the fact we need to
support them in proactive ways. Can you be specific? What specific things does
government need to do?
Mr. Charlebois: Government?
Black: I think it was during the French portion of your presentation that
you said government needed to be more proactive when you were talking about a
shot in the arm. What shots in the arm?
Mr. Charlebois: Those were Mr. Fraser’s words,
actually. In terms of helping and supporting industry, I am a big believer that
industry and trade groups can make a difference.
It is narrative
and more of a mentality shift that need to happen. We are always playing defence
in Canada. When we look at CETA, we look at the products that can potentially
reach the market, but we don’t think about how to sell to Europe. It’s more of a
You are asking me
what government can do. It can build awareness, encourage companies to look
abroad and set up missions.
Many small- and
medium-sized businesses can’t afford to go to Europe to meet clients. I have met
many people in Europe who are looking at Canadian products. Selling Canadian
cheese in Italy may not be a good idea because the quality is pretty strong and
the level of competition is high. However, there are opportunities elsewhere in
Germany and France where Canada could benefit greatly.
these discussions and brokering relationships between industry and targeted
markets are where the government could play a much larger role.
Black: I have another question for Mr. Fraser and Mr. Charlebois.
We have heard lots about animal versus plant proteins in our fact-finding
missions and from witnesses here.
I gather from
your discussions that we are moving to plant-based proteins. How do we play that
out with our Canadian livestock producers? What do we say to them?
Mr. Fraser: That is one of the most interesting questions
facing food discussions right now. I’ll say a few things, and then directly
answer your question.
play a vital role in many sustainable agroecosystems because they cycle
nutrients and provide all sorts of valuable ecosystem functions. Second, there
are probably a billion people on the planet, many of whom are poor, that depend
on animal agriculture for income or for their livelihood. Third, consuming
animal products is culturally, culinarily and nutritionally important all over
I am in no way
advocating a cessation of animal agricultural. That said, Michael McCain, the
CEO of Maple Leaf Foods, recently bought one insect-based and two plant-based
protein companies. They have started to move heavily into plant-based protein
and alternative proteins. I was teasing Michael by asking, “What is the hot dog
guy doing buying an insect company?” He said, “Evan, the future is less but
higher quality meat.” That’s almost a direct quote, and that’s the mantra I
think we need to hold on to.
It’s that animal
agriculture is going to go away. It’s that it will reduce as a portion of our
overall diet for sustainability, health and simple market reasons, all tied
together. Industry is bringing on new alternatives that consumers are finding
really exciting. The demand for the newly branded President’s Choice cricket
protein exceeds supply.
The industry as a
whole has to realize that their total volume will shrink, but their profit
levels can be maintained if they adopt a higher value-added product by marketing
as organic, free range or free from. Another successful product launched by
Loblaws is their “Free From Meats” program.
The industry will
have to transition to a high-value, low-volume model, and you are getting that
from no one less than the CEO of Maple Leaf Foods.
Mr. Charlebois: This summer I toured six cities in Alberta:
Vermilion, Red Deer, Edmonton, Calgary, Grande Prairie and Lethbridge. I saw a
lot of cowboy hats. These people are really concerned. They know what’s going
on. They know that annually Canada is eating 94 million kilos less beef this
year than in 2010.
What should we
do? My message to them is very simple and consistent with what Mr. Fraser
just said. In Canada most agri-food producers see their commodity in isolation.
They don’t see their product as part of a portfolio of ingredients. I tell them
to befriend the enemy and to consider beef as part of a portfolio of
ingredients. It is okay to tell Canadians that perhaps cooking meatloaf with
lentils and beef is not a bad idea. When I say co-existing, that is what I
I would like to have the recipe.
Mr. Charlebois: It is a good one.
Bernard: I thank both of you for being with us this morning. It is always
nice to see a fellow Dalhousian.
My first question
picks up on Senator Doug Black’s question in terms of data. What are the
specific barriers? What is stopping us from not only getting the data, but
getting the right kinds of data? What is in the way?
Mr. Charlebois: First, funding is a big one because to
collect the right data takes time and resources.
I will give you a
simple example. Are consumers going to the grocery store more or less often
today than five years ago? How much time are they spending in the store? How
many stores do they visit on a regular basis? We did a study recently but we
were just measuring perceptions. To assess these things takes a great deal of
time. That is one barrier.
The other barrier
is access. As soon as you start dealing with food companies, they are very
protective of their data. They are scared. I write case studies on a lot of
things. I recently wrote case studies on Maple Leaf, Sobeys, Monsanto and Ben
& Jerry’s. I can go on. Every time the first person you talk to after the
CEO is an attorney. That is the reality. Once you conduct interviews, you are in
a boardroom with counsel and the person you want to interview. It is difficult.
Those are the two barriers.
Bernard: This question also is for you, Mr. Charlebois. In your remarks
you mentioned the need for innovation and said that you were mentoring 10 CEOs,
nine of whom are women and are reflective of a lot of the equity and diversity
in our country.
attention paid to the value of having more diverse leadership in the sector?
Does that make a difference in terms of driving innovation?
Mr. Charlebois: It does. To me, it is really a must. You
are starting to see change but I don’t think it is happening fast enough.
Michael Medline,the CEO of Sobeys, and I recently had lunch together. He
actually had an opportunity to be a CEO in many different sectors. What I said
about the fact that the sector is not innovative were his words, actually. He is
not a grocer. He is not from the food sector. He has been CEO of Sobeys, the
second largest food distributor in the country, and he sees problems.
I ran a live case
study with him in the MBA class at Dalhousie recently. He brought in his seven
top executives, and three of them were women. I would argue that 10 years ago
all of them would have been white men. When you look at Sobeys now, it is more
innovative than before.
In processing, it
is the same. The 10 CEOs deal with different products that are not getting the
attention of the establishment, as I call the main grocers like Walmart and
Costco. They can’t afford price lists or SKU fees. That’s a problem. To give
these new ideas a chance, you need mentors, support and frankly more flexibility
closer to the consumer from grocers.
Bernard: Thank you.
Dagenais: The benefit of being the last person to ask question is the
ability to revisit issues we have discussed. You got my attention when you
talked about Quebec and the UPA. Supply management has been talked about a bit.
Unless I am mistaken, you said that supply management, without being abolished,
must be harmonized and modernized. We can’t be using a 35-year-old agreement
without making any changes to it.
You got my
attention by saying that Quebec’s silence was worrisome. Why is it so
Mr. Charlebois: Thank you, that’s a good question.
This is a very
polarized debate, whether people are for or against. No one cares about what is
between the two. How can a logical model be developed? The UPA is a union
monopoly that projects its ideas, thinking that the union represents everyone.
However, Quebec dairy producers can read and know what is going on. Not to
mention any names, but what is happening with Mr. Bernier’s argument is
that abolition of the system is being advocated without providing an alternative
path for the future. Yet these are family farms. Supply management cannot simply
be abolished all of a sudden. A framework is needed to give those people hope,
and that is what they are trying to do. Some producers are reinvesting in their
farm, but there is still no vision.
Monday, I will be
at McGill to participate in a debate with the UPA, at Macdonald College. I am
looking forward to it, but 10 years ago, such a debate on supply management in
Quebec never would have taken place. Today, they are starting to invite me, and
that may be a source of hope.
Dagenais: I would have liked to attend that debate.
Mr. Charlebois: In Ontario, in British Columbia and in
Manitoba, a lot of debates are being held, but not in Quebec.
Dagenais: I would like to come back to transportation infrastructure. You
said that the issue with Canada is its vastness. How can the cost of
transportation harm Canada’s industry and prevent it from being competitive in
international markets? Transportation is expensive when our products are
exported. Does that impact the competitiveness of our industries?
Mr. Charlebois: Yes, absolutely. It is a matter of access,
and it goes both ways. We want to sell, but we also want to buy. There are often
technologies that cannot be developed here in Canada and that should be
purchased at a lower price. It costs a lot to bring that technology here. The
more we invest, the more effective we make railways, the better it will go. Do
you remember the grain backlog in the West a few years ago? That was extremely
expensive. Not much was said about it, but it was a disgrace. That shows you
that we have a problem in Canada, especially in the West. In the East, the
seaway is taken for granted, but it is amazing, and it helps the East be more
competitive. The same thing is needed in the West, especially for the Asian
market, as that is where phenomenal economic growth is happening.
Dagenais: Perhaps pipelines should be created to move the grain.
Mr. Charlebois: Instead of gas, yes.
Dagenais: Thank you very much, Mr. Charlebois.
I apologize to the couple of people who wanted a second round, but we are
past our time by close to 10 minutes. In the second part of our meeting today we
were to consider a draft report, and I am not sure we have enough time.
I would thank our
two panellists. Obviously, there was a lot of interest in your presentations. It
has been great to have you with us today.