THE STANDING SENATE COMMITTEE ON AGRICULTURE AND FORESTRY
EVIDENCE
OTTAWA, Thursday, April 28, 2022
The Standing Senate Committee on Agriculture and Forestry met with videoconference this day at 9:03 a.m. [ET] to examine and report on issues relating to agriculture and forestry generally.
Senator Robert Black (Chair) in the chair.
[English]
The Chair: Honourable senators, I call to order this meeting of the Standing Senate Committee on Agriculture and Forestry.
Senators, before we begin, I’d like to remind senators and witnesses to please keep your microphones muted at all times unless recognized by name by the chair. Should any technical challenges arise, particularly in relation to interpretation, please signal this to the chair or the clerk and we will work to resolve the issue. If you experience other technical challenges, please contact the ISD help desk with the technical assistance number that has been provided to you.
The use of online platforms does not guarantee speech privacy or that eavesdropping won’t be conducted. As such, while conducting committee meetings, all participants should be aware of such limitations and restrict the possible disclosure of sensitive, private and privileged Senate information.
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So with that, good morning, everyone. I would like to begin by welcoming members of the committee, our witnesses, as well as those watching this meeting on the web. My name is Robert Black, senator from Ontario, and I am the chair of this committee.
Now I would like to introduce the members of the Standing Senate Committee on Agriculture and Forestry, starting with Deputy Chair Senator Simons from Alberta; Senator Cotter from Saskatchewan; Senator Deacon from Nova Scotia; Senator Klyne from Saskatchewan; Senator Marwah from Ontario; Senator Mercer from Nova Scotia; Senator Oh, Ontario; Senator Petitclerc from Quebec; Senator Plett, Manitoba; and Senator Wetston, Ontario.
Today, the committee begins its study on the British Columbia flood and recovery efforts. With that, senators, if we have any time remaining at the end of the meeting, I would like us to proceed in camera for a very short time to discuss a few short items.
At this time I’d like to introduce our witnesses for our first panel of the meeting. Today we welcome, from Agriculture and Agri-food Canada, Francesco Del Bianco, Director General, Business Risk Management Programs Directorate; Aaron Fowler, Chief Agriculture Negotiator and Director General, Trade Agreements and Negotiations; Scott Pellow, Executive Director, Planning, Coordination and Disaster Assessment Division. From Public Safety Canada, Mauricette Howlett, Director General, Programs, Emergency Management and Programs Branch; Doug May, Senior Director, Programs, Emergency Management and Programs Branch; and from Farm Credit Canada, Michael Hoffort, President and Chief Executive Officer; and Corinna Mitchell-Beaudin, Executive Vice-President and Chief Risk Officer.
Folks, thanks for joining us. We will begin with opening remarks from Mr. Del Bianco on behalf of Agriculture and Agri-food Canada, followed by Mr. Hoffort from Farm Credit Canada. Please note that there are representatives from Public Safety Canada here as well. While they won’t be making a presentation, they are available for questions.
You each have five minutes for your opening remarks. I will raise my hand and try to catch your eye at 4.5 minutes. The floor is yours, Mr. Del Bianco.
Francesco Del Bianco, Director General, Business Risk Management Programs Directorate, Agriculture and Agri-Food Canada: I thank the committee for inviting Agriculture and Agri-food Canada to discuss the impacts of the extreme weather events in British Columbia and the government’s response. As you know, the flooding impacted producers from every commodity group, over a thousand farms, 15,000 hectares and 2.5 million livestock were impacted by the floods.
Producers have access to business risk management programs to provide support for lost income and production, and a significant amount of assistance is available through these programs.
We have encouraged producers to sign up for the AgriStability program, which can help farmers cover severe drops in farm income. Initial payments can be made available in a matter of weeks. British Columbia has agreed to increase the 2021 AgriStability interim payment percentage from 50% to 75%. With this increase, enrolled producers affected by the flood can apply for an interim payment to receive 75% of their estimated final 2021 benefit. In addition, AgriStability late participation has also been implemented for the 2021 program year. This allows producers to enroll in AgriStability until December 31, 2022.
In short, producers can also make claims under the AgriInsurance program, which insures crops against losses due to weather. Insured producers impacted by the floods will be compensated for their production losses up to the insurance coverage purchased.
British Columbian producers also have immediate access to over $60 million that is currently held in their AgriInvest accounts. This represents, on average, $19,000 per participant that could be used to offset some of the losses incurred during the flood.
To complement these programs, B.C. farmers who suffered extraordinary damages in last year’s devastating floods will also have access to up to $228 million in federal and provincial government support to help their farms return to production and support British Columbia’s food security and agricultural communities in the years ahead.
The Canada-British Columbia Flood Recovery Program for Food Security, which is being delivered by the Government of British Columbia, leverages the AgriRecovery framework and the Disaster Financial Assistance Arrangements Program, or DFAA. The program will help producers recover from the disaster and return to production as quickly as possible. Together, we have created a single window application process for producers to apply to the DFAA and AgriRecovery programs. That ensures that the process to apply for assistance is seamless and minimizes government bureaucracy in this difficult time. The program is designed to provide targeted assistance for the clean-up, repair and restoration of land, barns and animal shelters; water and waste systems; animal welfare costs, including replacement feed as well as livestock transportation, veterinary care and mortality disposal; and the loss of perennial plants not grown for resale.
The Province of British Columbia continues to provide producers with personalized service to ensure that each producer receives access to assistance to recover from this devastating event and ensure a healthy agriculture sector into the future.
Mr. Chair, AAFC officials, and our federal and provincial colleagues, will continue to support B.C. producers during this incredibly difficult time. Thank you again.
The Chair: Thank you, Mr. Del Bianco. We will move on to our next presenter, Mr. Hoffort, from Farm Credit Canada.
[Translation]
Michael Hoffort, President and Chief Executive Officer, Farm Credit Canada: Good morning, and thank you for giving me the opportunity to appear before you today.
[English]
I’m pleased to be here to provide a briefing on the status of the B.C. flood-recovery effort. I’m joined today by the FCC Executive Vice-President and Chief Risk Officer, Corinna Mitchell-Beaudin.
FCC is a self-sustaining Crown corporation that provides financing, software and advisory services designed for the agriculture and food industry. We are Canada’s leading agriculture and food lender, with a portfolio of more than $44 billion, and we serve all agriculture and food-processing sectors. We have more than 2,100 employees working out of 101 offices across the country.
In B.C., the FCC has $3 billion in loans outstanding to primary producers and another $905 million to agribusiness and agri-food operators.
Prior to the flooding last year, our team, located in Abbotsford, Surrey, Kelowna and Duncan, had been actively reaching out to our customers, as many producers in B.C. were impacted by extreme heat and drought conditions during the 2021 growing season. In the days and weeks following the devastating flooding and erosion in parts of B.C.’s interior, Lower Mainland and on Vancouver Island, the FCC worked with customers as they faced significant losses and financial hardship.
I’ve recently connected with our team in the Lower Mainland, and now, as spring arrives, the impacts are better known. Most of the blueberry plants are expected to survive, but they will not be back to full production for many years. Most dairy, poultry and other livestock operations are back to operating. The rebuilding of homes and other buildings continues, but the costs of this rebuilding are extensive, with supply chain issues and labour shortages.
There was also damage to irrigation systems when lines were filled with water in the flood and then froze. The public infrastructure damage and impacts to highways and rail transportation were extensive as well.
At the time of the flooding, producers’ ability to obtain supplies like feed to sustain their operations, materials to rebuild and access area processors was curtailed. For food processors and logistics companies that move perishable food products to grocery stores across Canada, the supply chain disruptions contributed to an already challenging situation.
Rail capacity was significantly reduced for one month after the flooding, and it continues to be impacted.
Upon hearing of the magnitude of the flooding in B.C., the FCC sought immediate approval from our board of directors to launch a customer-support program that mirrored the FCC’s response to industry disruptions caused by the COVID-19 pandemic. More specifically, we offered loan payment deferrals that could include principal and interest up to six months or interest only for a year, and to date, 34 customers on 65 loans, representing just under $60 million, have taken advantage of this offer. The volumes are concentrated in agribusiness and greenhouse operations. Loan deferrals to poultry operations are just under $5 million, dairy farms $2 million and beef operations $1.1 million.
Emergency credit lines of up to $500,000 are also available, but there’s been limited uptake on that offer so far.
Recognizing the needs would stretch well beyond what the FCC could do with financing, we also provided a $100,000 donation to the BC Agriculture Council to help relief efforts for the industry. BCAC is a non-profit council of agriculture industry associations that advocates for the interests of the province’s agriculture and food producers.
All FCC customers in affected areas were contacted and invited to reach out to us to discuss their individual situation and options, and although the uptake on the customer support program may be limited, we will continue to work with our customers as they develop a better understanding of their impacts from the flooding.
To assist in the continued effort, we will continue to keep a close eye on the following areas: impacts to the livestock sector, recovering feed stocks, and longer-term facility repairs and rebuilds; impacts to the crop sector, paying attention to blueberry and cropland product activity; impacts to agribusiness and food processors, monitoring lingering supply chain disruptions; and overall, the mental health of the area producers and our FCC team, understanding the effect of the very stressful events of the past year.
The early days of this disaster were marked by images of the community pulling together to protect livestock and take care of their neighbours. Now, as infrastructure heavy lifting begins and the impacts are more understood, we continue to monitor the situation and look forward to more progress in the months ahead.
In closing, the FCC remains committed to supporting our customers and the broader B.C. agriculture value chain through these challenging times. Once again, thank you for the opportunity to speak to you today.
The Chair: Thank you very much, Mr. Hoffort. We’ll now proceed to questions from senators to our witnesses. As has been the previous practice, I would like to remind each senator that you have four minutes for your question or questions, and that includes the answer as well. Therefore I would ask our witnesses to be succinct in their answers.
If you wish to ask a question, raise your hand. Also, we will move to a second round if we have time.
With that, I’ll proceed to our first questions from our deputy chair.
Senator Simons: Thank you so much to both of our witnesses.
I wanted to know — and I don’t know which of the two of you or your teams is best positioned to answer this — if you have a sense yet of what percentage of farms and farm operations might just be done at this point after the drought and the floods. Do you have a sense of what percentage of farm operations are returning to production versus ones that have shut their doors?
As a follow-up question, what impact has this had that you’ve been tracking on consumers in terms of supply chain and price?
Mr. Hoffort: Thank you for the question. I could probably start with the first part of it.
In terms of farms and operations that would be exiting, I don’t have an exact percentage, but I think it would be very, very small. Most farms, given the supports that were outlined by Agriculture and Agri-food Canada, and then some of the work by our organization and the chartered banks, everybody’s really stepped up to support the farmers in the area.
For some it was absolutely more acute than for others, and longer term, that could be an outcome. But heading into the 2022 growing season, I don’t think I’ve heard of anybody who will not be able to at least kind of take a run at restarting. Then we’ll see where it goes from there.
Senator Simons: That’s very good news. Thank you.
The Chair: Mr. Del Bianco, would you like to respond to that?
Mr. Del Bianco: Maybe I could just add that the focus of our response is really to deal with the extraordinary costs to get producers up and running as quickly as possible, so the focus was to give them as much support as quickly as possible, in consultation with our colleagues from the government of British Columbia that dealt directly with each producer.
I have several colleagues on the line who may be able to speak in terms of the numbers, but our focus has been to help producers immediately to help get them up and running as quickly as possible.
The Chair: Thank you. Are there any colleagues who would like to chime in?
Senator Simons: I don’t know if anybody wants to tackle the question about what this has meant for prices and access to production.
The Chair: Can anyone respond to Senator Simons’ second question?
Mr. Hoffort: I would say it’s a great question. I just don’t have an answer for you, given all of the other factors that are happening, such as supply chain disruptions and just things that are taking place within the economy. It would be very difficult at this stage to be able to pinpoint what that would be. In oureconomic updates from our team, it’s never been an estimate that they have provided to us, senator.
The Chair: Thank you, Mr. Hoffort.
Senator Marwah: Thank you to both our witnesses.
I just want to step back and take a macroeconomic view of the floods. Clearly, the consequences have been devastating, both economically, for supply chains and around operational issues. Has there been any macroeconomic work done saying the impact of all of the floods was X billion worth of GDP? Mr. Del Bianco, you were quite clear that there were a lot of support measures that were put in place to help the farmers, and in that to inform credit as well. The support measures would have compensated what percentage of the GDP impact? Would it have compensated 10% or 20%? I’m trying to gauge how much net impact there has been on the farming industry in that area.
Mr. Del Bianco: We haven’t actually looked at our program payments as a percentage of GDP, but we could certainly provide that information as a follow-up to the committee.
Senator Marwah: All I’m trying to get is some understanding that the farmers are still X billion out of pocket or X hundred million, that the impact to them is they will have the support measures over time that will more than make up for that loss that they’ve incurred, and I have no sense. But that’s okay if you can get back to us. That would be great. I think Farm Credit Canada would also have some information from a macroeconomic standpoint. I think your people do studies on this all the time.
Mr. Hoffort: Yes, thanks for that question, and we’ll work with Agriculture Canada officials and provide a consolidated estimate if we can make that happen for you.
Senator Marwah: Mr. Del Bianco, my second question. You mentioned very clearly that there were a lot of support measures put in place, but these are all after the fact. Are there any longer-term preventive measures that can be put in place, either from a prevention standpoint, supply chain standpoint, operational standpoint that could help mitigate the impact to the extent it happens again? Or will we always look at it after it happens?
Mr. Del Bianco: In the case of the business risk management programs, they are there to support producers to proactively manage their risks through AgriStability, AgriInvest, AgriInsurance, and then we have the AgriRecovery Frameworkthat is after the fact when we’ve been able to assess the situation and provide additional support.
I have colleagues from Public Safety who represent DFAA, and others that may be able to speak to the efforts that are ongoing with regards to those costs above and beyond and the idea of additional types of investments.
Doug May, Senior Director, Programs, Emergency Management and Programs Branch, Public Safety Canada: In terms of mitigation, senator, our program, though it is a response and recovery program, where recovery occurs it does allow for mitigation enhancement top ups, and these are measures undertaken with specific repair projects to infrastructure that are designed to reduce the vulnerability of that infrastructure in the case of future events.
Things could include water-resistant materials. In the case of the farming, it could be barns; it could be other types of infrastructure.
Other types of mitigation enhancement tools we use are something called innovative recovery solutions, and again that has more to do with the relocation of infrastructure to lower-risk areas of future flooding. So there are some elements of the DFAA that look to help to provide that mitigation and prevention of damages in the case of future flooding events. Thank you.
The Chair: Thanks very much for your answer.
[Translation]
Senator Petitclerc: I don’t know who exactly my question is for; probably both witnesses.
You talked a lot about what is done, what is being done and the reaction we have seen regarding compensation, reconstruction and assistance programs. I’m wondering — and maybe it’s too early yet — if there has been an exercise to try to identify certain vulnerabilities or weaknesses in the sector. Will this exercise be carried out to identify these vulnerabilities, in order to propose possible changes for the future? Have we had time to do that? Is it too early? Will it be done in the future, perhaps?
Mr. Del Bianco: Thank you for the question.
In the short term, our efforts were to identify the immediate impact on producers to try to put a program in place to meet their immediate needs. We identified all the costs they had to deal with, and we designed a program to target the clean-up, repair, and rehabilitation of the land.
We looked at animal welfare and the costs of disposing of dead animals. The immediate effort that was made was to address any costs that producers may have incurred. We tried to help them so that they could resume their operations as soon as possible.
As for a longer-term analysis, perhaps my colleagues could answer. In our case, the measures were more focused on the immediate future, but perhaps my colleagues could answer in terms of a future analysis.
[English]
Mr. Hoffort: I could maybe offer a couple of comments on the question, Mr. Chair. When you look at what we’re up to and the scenario analysis that we’re running based on climate change and some of the potential impacts, I do think that’s the first step, and then having some conversations on what might be necessary. Our aspect would come at it more from a financial structure perspective, but I do think the mitigation and adaptation that will be necessary on farms for some of the more tail events we seem to be running into I’m sure will be a conversation provincially and federally and something that we’ll be working on, for sure.
My colleague, Corinna Mitchell-Beaudin, and her team do a lot of that scenario analysis for us and sort of stress testing at the organization level but also at the individual farm level, and there might be something there that I would say would be of value as we move forward in the future.
The Chair: Any further comments?
Aaron Fowler, Chief Agriculture Negotiator and Director General, Trade Agreements and Negotiations, Agriculture and Agri-Food Canada: I would just jump in very quickly. I have responsibility for the Emergency Management team here at Agriculture and Agri-food Canada, and that team — [Technical difficulties]
The Chair: Moving on to Senator Oh.
Senator Oh: Thank you, witnesses. My question is, to date, what strategies have the working group proposed to the Government of Canada and the Province of British Columbia to restart the movement of goods through the province? Can I also ask what is the actual percentage from the flooded area that supplies the food chains across Canada? What are the impacts when these damages reach to the other side of the country?
The Chair: Witnesses?
Mr. Del Bianco: In terms of the impact, we do know that it impacted over 15,000 hectares, 2.5 million livestock and over 1,000 farms. There were a lot of dairy farms in the area, poultry farms. I have a colleague, Scott Pellow, who can maybe provide further details in terms of some of the immediate impacts and some of the measures we took to help them resume their operations as quickly as possible.
Scott Pellow, Executive Director, Planning, Coordination and Disaster Assessment Division, Agriculture and Agri-Food Canada: Thank you, Mr. Del Bianco. What we do know is in terms of the dairy production, I think the estimate that B.C. provided us was that it was supplying up to 80% of the province’s dairy production in B.C. In regard to some of the other livestock production, such as poultry and eggs, it was mostly serving the B.C. market. So again, most of those impacts that we’re seeing at the primary level would have been impacting mostly in the region of B.C. and, again, supplying the western market on that side.
In terms of the overall supply chain, there wasn’t as much impact, say, to eastern primary and food markets there.
Senator Oh: I have not heard anything yet about insurance. Is there any flood insurance coverage for the flooding in this area?
Mr. Del Bianco: From an agricultural perspective, there is something called AgriInsurance which is more commonly known as crop insurance. It provides insurance for producers who have production losses due to floods.
With regard to flooding damages to principal properties and other areas, maybe I can turn to my colleagues at DFAA because that would be outside the scope of the AgriInsurance program.
Mauricette Howlett, Director General, Programs, Emergency Management and Programs Branch, Public Safety Canada: Work is under way to develop a broader flood insurance program. That work is being done in partnership with the provinces, the territories and industry partners. The goal is to create more affordable flood insurance programs for all Canadians that are impacted by flooding as well as to develop more viable insurance arrangements for any kind of flooding circumstance.
Senator Oh: Any estimated amount of the insurance payouts to farmers?
Ms. Howlett: From the piece we’re doing, it is more broadly based in terms of all Canadians affected by floods. Perhaps our agriculture colleagues would have numbers in terms of the farmers.
Senator Oh: Can we have that figure sent to us?
Mr. Del Bianco: In the case of crop insurance, although the federal government pays 60% of the premiums and ensures the programs are actuarially sound, it is administered by the province. I would have to speak with the province with regards to payments to date with regards to indemnities provided for producers impacted by the flood.
The Chair: Yes, may we have the figure, Mr. Del Bianco.
Senator Wetston: Regarding the flooding incident, do you expect greater consolidation of the various agricultural services in that region, having the impact that it has had?
There’s a constant need for governments to get involved and deal with the industry for obvious reasons. Can you tell me what is going on from the point of view of those in the private sector who have a great interest in returning to the agricultural or other services to a more normal situation? We understand that will require a lot more infrastructure investment.
Where are the food processors, the retailers and the financial institutions, recognizing they all have responsibilities? Have they invested or is it just government here trying to rebuild? Have they invested in this very important part of the country which, obviously, Canadians rely on a great deal?
Mr. Hoffort: In terms of consolidation as a result of the flooding, it is too early to tell. The lower mainland of B.C. has some of the most productive and most valuable farmland in Canada. With blueberries, for example, there are five-to-ten-acre operations that would be at play and much larger acreage as you get into the Sumas Valley.
Is it conceivable that there would be some production consolidation? Perhaps. There have also been conversations around the need for other options or a bit less consolidation as it relates to food and dairy processing, for example. I do not know where those would lead, but that would be another way of securing some of the mitigation potential of an incident like this not being quite as impactful — when you think of everything flowing into just a few processors, as an example. That is always economics driven. We will see where this goes. It is too early to tell on that consolidation question but it is a thoughtful one, for sure.
The Chair: Other witnesses? If not, Senator Wetston?
Senator Wetston: Besides the government, who is ponying up to try to rebuild this important area of the country as just described? From my perspective, they benefit as well. Are they at the table? I guess, chair, since I’m not hearing anything, they’re not there. But I know the witnesses are there.
Senator Klyne: Thank you, and welcome to our panel of witnesses here. This has certainly been a tragic event with a significant and extensive impact on families, the agriculture sector, infrastructure and supply chains, which also had an effect across Canada. It’s pretty clear that we’re going to be dealing with more extreme weather events which will be a concern going forward into the future. The other concern in this specific situation is that the area is in the middle of a flood plain.
Mr. Hoffort has mentioned a couple of times that it is too early to tell on a number of fronts, but surely we are looking at things in terms of cataloguing the lessons learned. I’m very interested in the lessons learned in terms of government support, relief funding, the response generally. However, I am more interested about the recovery side, the renewal and the rebuild and what we’re doing proactively, knowing that this is in the middle of a flood plain.
What did we do right on the response? What could we have done differently? What else could we have done? In terms of the renew and rebuild, I’m sure we are confronting this idea that it is in the middle of a floodplain. However, are we talking about more levies, pumps, floodgates and drainage? Perhaps these are questions for Agriculture and Agri-Food Canada and Public Safety Canada, but I’m also interested in hearing from Ms. Mitchell-Beaudin. Risk is involved when it comes to lending. How are you and other lenders rating risk in these areas on the rebuild?
Mr. Del Bianco: Maybe I can answer from an agriculture perspective. We have the existing AgriStability, AgriInvest and AgriInsurance programs so that immediate assistance was available and we made measures to make it available more quickly. We then put it in place the Canada-British Columbia Flood Recovery Program for Food Security in a timely manner, based upon all of the eligible expenses that we thought producers could incur to cover those extraordinary costs to get them up and running as quickly as possible.
In terms of what we did right, we moved quickly with our provincial counterparts to put a program in place so that producers had the certainty that they could resume operations as quickly as possible.
In terms of what we could have done differently and what else, we’re still in the process of providing support and helping producers. That is something we’ll be working on with our provincial colleagues to see how effective and how well the response went and how we could make changes.
With respect to the broader response, given our programs are designed to provide support directly to the farmers and ranchers, I’d have to turn to my colleagues.
Corinna Mitchell-Beaudin, Executive Vice-President and Chief Risk Officer, Farm Credit Canada: I can speak to the questions about risk assessment.
We would certainly evaluate risk at a macro level and want to better understand climate risk in general in terms of how the industry, and how the FCC more specifically, is thinking about the services and support we offer to the sector so they can get out in front of this.
We also evaluate risk at the individual transaction level, and so as we look at borrowers in this region going forward. It’s only natural that we’ll want to understand how management is planning for future events such as this or how they are rebuilding their infrastructure to mitigate damage from floods in the future. Many producers had proactively constructed facilities with more concrete footings so that should water issues arise, those assets would be more resilient than, perhaps, wood-based or other product-based facilities.
So constantly evaluating risk to understand how borrowers are planning for it and their ability to adjust should things arise, like this very unfortunate event in B.C.
The Chair: Thank you very much. Does anyone else want to respond?
Mr. May: Thank you. From a public safety-DFAA perspective, I had mentioned earlier about mitigation enhancements, and you were talking about dikes, levies. This would include improved road infrastructure as well following the event. So our program does work with the province in terms of looking for opportunities to build back better again in these areaswhere these events and damages can be mitigated for future events.
The Chair: Thank you very much.
Senator C. Deacon: Thank you, witnesses. It’s nice to see you again, Mr. Hoffort.
The Office of the Superintendent of Financial Institutions, or OSFI, and the Bank of Canada came out with a report in January to say that slow action on climate change will increase the volatility in the Canadian economy and our economic and financial risks. I think this tragic event is a great example of that in real time.
The fact that there was inaction on the Nooksack River or the Nooksack dike, $30 million to expand and increase the size of that dike in the U.S., has caused damage of a billion dollars or more in Canada and huge disruption to families, operations and food supplies, as we all know.
I want to drill in further into Senator Marwah’s question and ask about process changes that will help us to identify and deal with these vulnerabilities in advance rather than, as the old farm saying goes, “closing the barn door after the horse has already bolted.”
From the perspective of each of your organizations, could you please talk about what your plans are for changing the process, so we have a more assertive and aggressive way of dealing with these risks in advance? Why don’t you start, Mr. Hoffort.
Mr. Hoffort: Thank you for the question. I was just trying to digest all the angles we’ll be coming at this from.
From a reporting perspective, all Crowns will be adopting Task Force on Climate-related Financial Disclosures, or TCFD reporting, which really identifies your risk side and then what you will do about it in terms of transition to the future. At the organizational level, we are in the process of lining up with that and doing the work that’s necessary. Doing a scenario analysis is a part of that, as is understanding what would happen and what we would want to get out in front of.
That drives into our core services, whether it’s sustainable finance options or having loan designs. We have some flexible features right now which were designed just for the current status as it relates to the ups and downs of weather and market and so on for customers and how those mortgages could be adjusted. That will have to be more robust in a future world. As my colleague Ms. Mitchell-Beaudin mentioned, just looking at what customers are up to and what we are doing from a knowledge perspective to make sure that they have taken action on the mitigation front of things.
I think you will find it will be organizational and customer-based, and really trying to get out in front of some of these things that we can do on farms. More infrastructure-based things, that would be more provincial and big federal responsibility. I’m sure there will be some action there, too, but I wouldn’t be the right person to comment on some of those things that are taking place.
Mr. Del Bianco: With regard to the business risk management programs, they are really there to provide support directly to producers in times of need. They are not designed for proactive investments, with the exception of AgriInvest where producers can use those monies to make investments on farm.
We do have AgriInsurance, though, which is an insurance program. The premiums are actuarially sound, and so those premiums are forecast to increase as we see these global changes and increased volatility. We’ve had record indemnity payments in the last year and forecast the premiums will increase in future years.
The Chair: Thank you very much. Mr. Fowler had some technical difficulties earlier, and so he’s emailed his response.
Canada has a high degree of self-sufficiency when it comes to food production, but the risks and vulnerabilities facing Canada’s food supply chain are significant and have been brought to light by recent emergency events.
The Government of Canada is committed to helping the sector adopt practices to improve resiliency and productivity through research and innovation, through targeted agricultural programming and updates to existing emergency management framework strategies and networks currently in place.
We have strengthened these emergency management networks in light of our experience with the pandemic and subsequent emergency events, including the B.C. floods. This reflects broader Government of Canada approaches to emergency preparedness and emergency response. For agriculture, this has included reconstituting a food-sector network that connects the federal government with industry representatives across the full scope of the agri-food value chain, from the farm through processing, through distribution and retail. We will continue to support the resilience of the food supply chain in Canada for future emergencies.
Thank you, Mr. Fowler, for following up on that. It is much appreciated.
Senator Cotter: I have a comment that’s a bit of a question, and then a genuine question, if I may.
With respect to this tragic development and occurrence in British Columbia, the heroism of individual citizens to help each other was incredible. It made me proud to be a Canadian, and I very much admired the work of the farmers and others who came to each other’s aid. It was really uplifting in the face of tragedy.
My second comment that might be a question — perhaps it’s for you, Mr. Hoffort — is that as you were describing the take-up of the FCC types of supports, my impression was that the take-up was limited. I’d be interested in your comment on that and whether or not that’s because there was a lot of resiliency already existing in this sector in southern British Columbia, or maybe the programs that are available aren’t quite tailored enough to need.
My genuine question that builds on the comments of others is probably for everybody, but I thought of it in the context of Farm Credit Canada.
As we see climate change presenting significant problems for us that will not be immediately overcome by other measures, the risk management question seems to be really large for financiers, as well as for individual farmers. I’m wondering about the degree to which Farm Credit Canada is thinking of that in a big way, that we have to rethink risk management because we will face these challenges in other parts of the country going forward as well.
Mr. Hoffort: Thank you for the question. I’ll turn the second part over to my colleague.
In terms of the uptake on our customer support program, that’s not uncommon in terms of what we would see where there are other disasters that take place across the country.
If you think about it, in this scenario there was some immediate support from the Government of British Columbia to address overland flooding for house repairs, and so people would have taken advantage of those programs.
Next would be looking at what happened on their farming operations. Our colleagues from AAFC have explained the insurance programs and some of the other things that would have been drawn upon first.
Oftentimes, adjusting your balance sheet — whether to defer some payments or to take on new credit to round things out in your response on an individual operation — we would see people take their time before they would make that type of decision. I wouldn’t read too much into the fact that uptake is light so far. We expect that it would increase.
The reality of the nature of the operations within the British Columbia environment and Lower Mainland is that, because of the high value of these farms, they often have financial resiliency that they would take advantage of first and then they would move into using their creditors for some of it.
Where we need to step up, we are. However, we won’t roll out this program for several months, and not until 2023, I would envision. We’re expecting to learn more as August, September and the fall harvest months take place to really understand what we’re up against. I’ll let Ms. Mitchell-Beaudin answer the next question.
Ms. Mitchell-Beaudin: Thank you, senator, for the question. I couldn’t agree with you more. The topic of climate risk management and mitigation is a significant topic for all risk professionals right now, as well as the task force for greening the government. Significant investment is under way to advance how all financial institutions and risk practitioners think about the transitional as well as the physical impacts associated with climate change.
I believe fundamentally that agriculture — and producers, more specifically — are the ultimate environmentalists. They are inherently invested in the resiliency of their operations. Often these are family farms with long-term views attached to them. Yet there are more frequent significant events, like the devastating situation we saw in B.C. So planning for that, understanding different practices, and supporting the sector — like the FCC is embarking upon — to better understand how to mitigate these risks differently because of their increased frequency is something that we’re significantly investing in and looking at.
Senator Mercer: Thank you, witnesses, for being here. I will try to be quick so we can get some of the answers in.
There must be other areas across Canada at a similar risk and in the same spot as the B.C. farmers. If so, how do they avoid a disaster like this one?
We have talked about risk management, and perhaps Ms. Mitchell-Beaudin will have a comment on this.
It seems to me that we should all be made aware of the areas that may be at risk. What can we do to mitigate that risk in advance of a similar situation?
Mr. Hoffort: Absolutely, B.C. is not the only location in Canada that sees significant weather variability, and potentially at a more frequent rate. A lot of the crop insurance programs within the Prairies, for example, are highly participated in. One of the most important programs from a risk-mitigation perspective is the BRM, or business risk management, programs that are available, as well as AgriStability. It varies across the country.
Federal-provincial adaptable programming is available and is something that takes place. An update is happening in the summer on that front, and also for organizations like ours to ensure we have programming that matches the needs of customers so they do not find they are having to bear the brunt of this all on their own. That is our objective.
Senator Mercer: I live in a province that is susceptible to hurricanes every year. The damage that happens is significant, not just to agricultural crops but also to our fishing industry.
I am very happy with the response you’ve had so far in British Columbia, but I’m anxious to know that we’re prepared for future disasters in the rest of the country as well.
Ms. Mitchell-Beaudin: As a financial institution, we very much manage our resiliency so that we can step in and support producers that are going through a challenge such as the one in B.C. Should something happen in your area, we stand ready to lean in and offer the same kind of support or different tailored support, given the situation. We owe it to producers to bring them the knowledge that we learn from the B.C. situation so they can adapt their own operations as they see fit, given their unique situations.
Senator Mercer: Is that tailored to help the provincial governments respond to infrastructure that might be needed in various areas in the country?
Ms. Mitchell-Beaudin: We wouldn’t typically engage in provincial infrastructure knowledge conversations. However, I know that many of our employees on the ground level would interact with different officials to share those learnings.
I’m not sure if Mr. Hoffort or others have a comment on the provincial government and how we share information there.
Senator Simons: I have a quick question for Ms. Howlett. As Senator Klyne said, a lot of these farms are built on a floodplain, in the Sumas area in particular. Oftentimes, when things are flooded in the floodplain, we recommend that people move from the floodplain.
Given the number of farms in question, what kind of recommendations is your department looking at for how to mitigate emergencies in the future?
Ms. Howlett: Thank you for your question, senator. A task force on flood insurance and relocation has been established. The work is under way and the task force is looking at options to be able to potentially relocate residents who are in high-risk areas. The work started in January and it is anticipated they’ll have a report ready by this spring or early summer in terms of recommendations.
The National Adaptation Strategy is also under way in terms of looking at society as a whole and ensuring that we have plans and mitigation strategies in place in order to adapt to these climactic events that are happening with increased frequency.
The third piece, senator, that is important to highlight is that we do have a National Risk Profile so that we can be proactive and aware of what’s to come across the country and then be able to put strategies in place to address those.
A few different pieces are under way that will help to create that way forward and ensure we can better get people out of harm’s way as these events occur more and more frequently.
Senator C. Deacon: Maybe it will be best for written responses to come in.
Thank you for that, Ms. Howlett. This is starting to look forward to mitigation and prevention in the future. I continue to be struck by the fact that a $30-million dike extension in the United States would have saved Canada, farm families and Canadians $1 billion or more in damages.
I would like to have from each of you — if you could send this to the clerk — a summary of what you are recommending being done and what you are doing as organizations to ensure we identify these risks in the future and that we are putting in place proactive measures to mitigate those risks so that we’re not chasing the horse once it has bolted from the barn. Thank you.
The Chair: Thank you, Senator Deacon. A great question to end with. We will look forward to receiving those written responses.
I want to say thank you to Mr. Del Bianco, Mr. Fowler and Mr. Pellow from Agriculture and Agri-Food Canada; Ms. Howlett and Mr. May from Public Safety Canada; and Mr. Hoffort and Ms. Mitchell-Beaudin Farm Credit Canada.
I want to acknowledge that Mr. Hoffort is retiring in just a few weeks’ time. After 30 years at Farm Credit, he will be missed by his team and many across Canada.
So we wish you well, Mr. Hoffort.
Again, to all of our witnesses, thank you very much for joining us today. Your assistance with this study that we’ve just started is very much appreciated.
We will move forward with the second panel now.
For our second panel, we will hear from Mayor Henry Braun from the City of Abbotsford. We have him on the screen. From the Fraser Valley Regional District, we have the chair, Jason Lum.
Thank you for joining us today. We will begin with opening remarks from Mayor Braun, followed by Mr. Lum. You each have five minutes for your opening remarks.
Henry Braun, Mayor, City of Abbotsford: Honourable senators, thank you for inviting me to join you today.
I’d like to start by acknowledging that today I am located on the traditional territories of the Semá:th, Màthexwi and Leq’á:mel First Peoples.
In November 2021, the City of Abbotsford experienced one of Canada’s most costly flooding disasters. We endured consecutive atmospheric river events dumping record rainfall.
When the Nooksack River in Washington State breached its bank, the water headed straight toward the City of Abbotsford. The Sumas Prairie flood covered an area of approximately 90 square kilometres. To put that in perspective, it covered an area the same size as the cities of Saint-Jérôme, Quebec or Guelph, Ontario.
It forced the closure of Trans-Canada Highway 1 and significantly affected the movement of goods, services and people. This is the main artery between British Columbia and other provinces. Nine dike breach and erosion sites required attention, with the largest being a 110-metre wide stretch. Over 3,000 people from more than 1,100 properties were evacuated, and we saw the loss of several hundreds of millions in property, livestock and agricultural operations.
We saw farmers helping farmers moving livestock and poultry as quickly as possible, some dragging dairy cattle by their necks through the water with boats and jet skis as the waters continued to rise around them. Senator Black, as someone who was heavily involved in 4-H Canada, you could imagine how heartbreaking it was to see cows and calves drowning.
Within a matter of days, the devastation created years of work for our community. Twenty-one landslides occurred, multiple water mains and 13 bridges were damaged, and 84 sites along 165 kilometres of road required repairs. Endless debris of all types imaginable were strewn across Sumas Prairie on road rights-of-ways, in ditches and watercourses. Before evacuation orders could be lifted and people could safely return home, over 3,000 Rapid Damage Assessments were conducted by Canada Task Force 1 on each home, barn and structure. At this time, just over 250 people remain in temporary lodging as they make repairs to their homes. To date, the city has repaired 167 out of 300 damaged infrastructure sites, but we have a long way to go. We are working with the city’s insurance provider to assess the damage of 59 insured sites.
In April, to ensure future protection for our community, the city developed four long-term mitigation options for Sumas Prairie. Options that would meet the provincial diking standards range from nearly $2.5 billion to $2.8 billion, and they include improvements such as raising dikes, adding a new $700 million pump station and enhancing the existing Barrowtown Pump Station along with the potential of making a designated floodway. Currently, the City of Abbotsford is seeking public input on these options to inform our plans and discussions with senior levels of government.
While meetings with federal and provincial government leaders have been positive, we continue to request funding and support for our long-term solutions and infrastructure needs as we expect these costs to be in the billions. Downloading the cost of infrastructure needs and required maintenance to local governments was, in my opinion, a monumental mistake and is something that needs to be addressed.
Local governments simply don’t have the means to deal with this when we receive only 8 to 10 cents of every tax dollar collected. We need large sums of money over longer periods of time if local government is expected to do this. We need to take immediate action to implement a solution within our municipality so that our community is not as significantly impacted when significant weather events occur again.
Abbotsford has the most productive agricultural land in Canada, and on a per hectare basis is a top agricultural producer. Roughly half of all dairy, chickens, turkeys and eggs that are consumed in British Columbia come from Abbotsford in addition to many other very important products like blueberries, raspberries, strawberries and a whole host of cold crops.
We can do without a lot of things, but food isn’t one of them. If we want to minimize the impact of future floods and if we value our food security and want to protect our food sources, we need to rethink infrastructure investments and prevent a greater disaster that may be just around the corner. Thank you.
The Chair: Thank you, Mayor Braun.
Jason Lum, Chair, Fraser Valley Regional District: Good morning, Mr. Chair and honourable senators. My name is Jason Lum, and I’m the chair of the Fraser Valley Regional District. The Fraser Valley Regional District includes six member municipalities, which Abbotsford is one of them, and eight unincorporated electoral areas. The total population of the Fraser Valley Regional District is about 350,000 people. It is just under 14,000 square kilometres.
For context, the FVRD is responsible for emergency response and recovery for the unincorporated areas only. The incorporated municipalities would have their own emergency response, which Mayor Braun spoke of.
Our geography is very complicated. It includes major rivers, floodplains, mountain streams and many steep slopes. In 2021, the atmospheric river resulted in multiple simultaneous emergency incidents — highways and road closures that disrupted supply chains, stranded travellers and created serious challenges for evacuation across the region.
Tracking the eight electoral areas, there were over 60 distinct emergency incidents requiring us to issue over 27 evacuation orders. These orders and alerts affected over 2,000 properties and happened in nearly half of the FVRD electoral area’s population. In total, some 400 structures experienced flood damage and 10 homes were completely destroyed or deemed unsafe to return.
As a result of these events, the Fraser Valley has a new risk profile. We recognize there is an increased overall risk due to our changing climate, and these events have permanently changed. Weakened slopes and stream channel capacity has been reduced, making many of our communities continue to be vulnerable.
The FVRD electoral areas face challenges that need federal, provincial and regional solutions. This is a very large land area with a very small population and therefore a small tax base. There are also complex jurisdictional overlaps. Much of the Fraser Valley Regional District is managed by the province, and there are many large Crown land parcels.
Many residents in our electoral areas are concerned about forestry and agriculture on these areas and how they impact the frequency of landslides and flooding, potentially endangering properties and threatening personal safety.
For our farming community, the aftermath of these events has underscored the importance of food security for British Columbia and Canada. The Fraser Valley is home to 2.4% of the total land farmed in British Columbia, but 14% of the farms generate almost 40% of the provincial gross annual farm receipts. Almost 3,000 hectares, or 42% of the Fraser Valley’s agricultural land reserve, is vulnerable to flooding.
Following these catastrophic events in November, the prospect of the spring freshet coming up in a short number of months is truly alarming. In the worst-case scenario, the agricultural losses of major freshets will exceed billions of dollars in damage to crops, building and equipment. Flood mitigation and resilience are essential, and we must act swiftly to implement strategies that will be necessary to protect and adapt.
Our approaches to climate change need to be holistic, investments need to be made to ensure that infrastructure is strengthened and we also need to look at our farming and forestry practices to ensure they are enhancing the landscape resilience and that consideration is given to practices that will ensure continued food security.
Thank you for the opportunity to present to you today.
The Chair: Thank you very much to our witness. We’ll now proceed to questions from senators. Again, I’ll remind you that each senator has four minutes, including the question or questions and the answers.
We will start with our deputy chair.
Senator Simons: Municipalities, including rural municipalities, really are on the frontline of the response to climate change. I also serve on the Senate Transportation Committee, which is holding hearings right now about resilience in our transportation systems. We met yesterday and heard a witness from the Federation of Canadian Municipalities who spoke about this issue.
So I wanted to ask my question of each of our witnesses today. Mr. Lum, you know very well we have local and municipal, and provincial jurisdictions that are, constitutionally, creatures of the provinces and don’t have as much capacity to negotiate directly federally. So, how do we come up with a coordinated response that respects the fact that municipalities, large and small, are on the frontlines — the first responders — to this kind of crisis to give them the resources and the jurisdictional powers they need to cope with these disasters in real time?
Mr. Braun: Thank you, Senator Simons, for that question.
The City of Abbotsford actually did a very good job of responding to the flood.
However, we have to go back 100 years if we really want to address this properly. Half of Sumas Prairie was once a lake over 100 years ago. What happened was the federal government decided to drain that lake and create the most productive agricultural land in Canada. It promoted the sale of those lands to farmers. There are multi-generational farmers there today.
Dikes were built. Those dike out there on Sumas Prairie were built after the 1948 Fraser flood, which was a disaster, to say the least. Those dikes have not been looked at much since then. We had a flood in 1990, and there were studies, there was an international task force, and the Americans and Canadians worked on what to do with the Nooksack, but no plans ever came out of that.
This time I, as the mayor, and our council were determined to put plans forward for work that should have been done after the 1990 flood.
So we are very much alive to what is going on. Those dikes need to be seismically constructed, they need to be raised and we need to create options 3 and 4. If you don’t have that information, I’m happy to send it to senators so that you are aware of what we are proposing.
We know what needs to be done. We don’t need any more studies. We need action and money. Money we don’t have as local government, and that is a problem.
Senator Simons: If you could send us that information, that would be very helpful.
Mr. Braun: Thank you.
Senator Simons: Mr. Lum?
Mr. Lum: Thank you, senator, for your question.
One thing that would be very helpful — and I know that my colleague Mayor Braun would agree — is that, in order to really hear from local government, you really need to have us at the table. There is a cabinet task force that is happening right now between the Province of British Columbia and the federal government. We’ve been invited to present to some of that cabinet, but as far as creating long-term responses, you really need to have local government representation directly at the table.
Because we’re creatures of the province, as you mentioned, it is often determined that the province will look out for our best interests. At this point, having a strong voice, or having strong local government voices, directly at those tables would be very helpful.
But Mayor Braun is correct. The studies have been completed. We’ve been involved in multiple studies over the years at the local government level and, jurisdictionally, the provincial and federal governments seem happy to provide money to do the studies, but it’s follow-up action that needs to be taken. It is going to be in the billions of dollars.
I mentioned a little bit in my comments that the thing that keeps me up at night right now is what happens in the next couple of months on the Fraser River. What happened when the freshet hits, and what happens to the dikes all along the Fraser that are currently substandard and don’t meet the requirements?
Senator Simons: I will ask a foolish question. When you say “freshet,” can you explain that to us?
Mr. Lum: It’s a spring melt flooding a river. Basically, it’s all the water that comes down the Fraser River and into the ocean. We have a dike infrastructure system all along the Fraser River, and what happened on the Nooksack is going to be a cakewalk compared to a major Fraser River flood in British Columbia.
Senator Klyne: You’ve somewhat answered my questions here. I just want to begin by welcoming you both. This has very much been a tragic event and continues to be haunting in your memories, I’m sure. I do not know what words to offer to that, but I will tell you that much of Canada was praying for you, and their prayers are still with you.
There is certainly the here and now that is being dealt with, much of it on a reactive basis. I do not want to dwell on that. I would like to talk more about the future and the recovery in terms of renewal and rebuilding. Perhaps we need to look at this one — the hackneyed words “build back better” are not sitting well with me. On this one, it should be “build forward better” in terms of looking forward.
In both of your opening remarks, you talked about things that are going to be done, things you are looking at and things you are considering. Of all of the things you have listed, discussed and you mentioned to Senator Simons, what things do you really want to resonate with this committee and those watching this viewing, but that will also get back to the decision makers, the policy-makers and those with the infrastructure funding? What is the solid message that needs to get back there in terms of “building forward better”?
Mr. Braun: I’m happy to go first.
We need money to invest in upgrading our dikes to protect the farming community. The farmers and the supply management side of it — they are reinvesting — but there are a lot of farmers who are asking me, “Who is going to do what we should have been doing 30 years ago to protect our investments on that prairie?”
The only way we can protect them in that bowl is to build those dikes to the current standards, which they are not. The Sumas dike was a 1-in-50-year event dike, and it should be 1 in 200. Our options 3 and 4 do that. It is a 17-kilometre dike.
We know what needs to be done, but with property tax money, we cannot build with or invest in $2 billion. That would be over 10 times our current tax requisition, so we need help on the financial side.
I do believe that both the province and the federal government, and the ministers I have been dealing with, understand that and are prepared to move. So we have a plan, and we’re in public engagement. I’m guessing we’ll have that report back to both levels of government within six weeks.
The Chair: Thank you, Mayor Braun. Mr. Lum?
Mr. Lum: Thank you.
What we need is a long-term, stable, predictable funding source covering flood infrastructure. We also need a clear jurisdictional boundary on who is going to be responsible for the continued operations of maintenance after the capital works are done.
It is going to be a range of things in the range of solutions that the City of Abbotsford has put forward, but there are going to be a range of solutions that are required all across the region. Some will be infrastructure — traditional infrastructure like dikes that Mayor Braun spoke about and pump stations — but some will be what you heard from earlier witnesses, where we are going to have to make tough decisions around are the places that we are building really the places we should be building?
Now, that is difficult to say after the fact when we have programs that established the most fertile farmland in the valley. But there are going to be difficult decisions to be made all around, around where we build, where we continue to build and how we protect it and how we are able to proactively invest in that protection.
The Chair: Thank you very much.
Senator Oh: Welcome, witnesses, to the committee. According to British Columbia’s agriculture minister the flooding resulted in, “. . . some instances of [soil] contamination.”
What initiative has the Government of British Columbia taken to evaluate the impact of agricultural soil contamination? Any feedback from the municipal and regional district level about this?
Mr. Braun: I’m happy to answer that. Thank you, Senator Oh, for that question. The city itself has tested all the lands that we own, in our parks and other facilities across Sumas Prairie. We have not found any contamination.
The agriculture minister of British Columbia tells me that they are testing the soil in the farms, especially in what we call the Sumas bowl or the former lake bottom. And I am not privy to whether or not there are any results yet, but they will be coming shortly, I’m sure.
The Chair: Thank you.
Senator Oh: Mr. Lum?
Mr. Lum: Thank you for the question. Again, we know that the Province of British Columbia is undertaking some of that work. They have not let us know what those results are. I can say, anecdotally — and I live in an area that was evacuated, so I was evacuated along with my wife and my two-year-old child. Some of the farms in that area, anecdotally, when I speak to the farmers they are very concerned about some of the contamination that they are finding. They had flotsam and jetsam, large fuel tanks that moved during the flood and were deposited in the middle of some of their fields.
Again, that is not official but that is kind of speaking to the farmers who are my neighbours and who brought up some of those concerns.
The Chair: Thank you very much.
Senator Petitclerc: I had questions on the “building back better” aspect of things, but you have answered that very well and I thank you for that. You have also answered the importance of having you both as important stakeholders to be at all tables. Again, I want to thank you for that.
I am going to ask a simple question. I am interested in knowing, because you are on the ground and you are connected with your people, and we know that there have been a number of programs, reconstruction, that are going on, whether federally, provincially or both together. So how is that going? How is that being delivered? Are things efficient? Is it going well? Are you satisfied? Anything you can tell us about the delivery of those programs and compensation and all of that?
Mr. Braun: Thank you, Senator Petitclerc. I’m happy to take that. I have said all along that I’m very pleased with the response of both levels, both federal and provincial governments. The farmers — now, there are different farmers out there and they are in different circumstances. Some farmers, especially on the dairy and poultry side, are in full production. I’ve even heard of a couple of farms that were not impacted that much in Sumas Prairie because they were on higher ground where they are actually dumping milk already because they are over quota.
The blueberry farmers and the soil-based farmers, that’s a different story, especially on the blueberry side. I see a lot of buds out there right now on Sumas Prairie for mature plants. I think they are going to survive. The ones that were one and two years old, they look like they are dead to me. They will have to be replanted, and those farmers will have no income for at least four or five years because that is when a first crop comes in.
However, having said that, the blueberry farmers are telling me that they now have to wait to see what the production will be of the plants that survived, because if the production drops 40%, they are going to lose money. So they may end up, even though the plants survived, the mature bushes, they may have to replant those.
But generally speaking — there are exceptions — the farming community has told me that they are very pleased with the city’s response and the help that they are getting from the province and the federal government. But obviously it cannot come fast enough when you are in a position where you have just about lost everything.
The Chair: Thank you. Anything from Mr. Lum?
Mr. Lum: Thank you for the question. As Mayor Braun said, I think that it depends upon the size and scale of the operation. Certainly, I’ve heard from some of the smaller farms who were leaseholders, some of the market gardeners who were doing food crops who were not covered by insurance because insurance was much too expensive for them so they were not able to participate in that program. And then a lot of the programs that were coming out, they did not qualify for. So I have heard about challenges around smaller farms.
There are also farms where you do not have agricultural status or you have not taken an agricultural tax status, that you didn’t qualify for some of the disaster assistance that was put forward, but in general I think I agree with Mayor Braun’s comments that the farmers are very happy with the assistance that is being provided, any assistance that is being provided. But there are still farmers waiting, so the quicker the better.
The Chair: Thank you very much.
Senator C. Deacon: Thank you, Mayor Braun and Chair Lum, for your presentation to us today and for the answers that you are giving to our questions.
I’m worried that government priorities can be, at times, fickle and that when three levels of government are involved, they can often be competitive. I want to learn from the realities of your tragedy in your community and ensure that we can prioritize the prevention and mitigation of risk into the future through any number of ways that we can maybe create a registry of infrastructure projects that are urgently needed; annual reporting on the registry. What are your recommendations so that other communities don’t go through what you folks have had to deal with and it is a national problem? Do you want to start, Mayor Braun?
Mr. Braun: Yes, thank you. Thank you for the question, Senator Deacon.
Local government just has to keep advocating with the provincial and federal government for work to enhance our dikes because these dikes were built in the 1950s and they are made out of sand and gravel. They do not come anywhere close to the current provincial standards. It is great for senior levels of government to create new standards, whether it is on dikes or building codes, but sometimes we need the financial money to do the actual work, and that is where the rubber hits the road. These are not just tens or hundreds of millions of dollars to do what our forefathers did in the early 1900s or the mid ’50s. We need substantial funds. Since I’ve been the mayor, every opportunity that comes along where we’re dealing with the dikes on the Fraser, and the Nooksack, we have been advocating to senior levels of government for help. We cannot do this by ourselves. Unless this changes, we’re going to see this again.
As Chair Lum has said, I’m worried about the Fraser this year because we have kind of the same conditions as we had in 1948, a cool spring and lots of snow up country. When that stuff starts to melt, all we need is five or six days of 30-plus-degree weather in May and June, followed by a heavy dump of rain, and we may see something that we haven’t seen since 1948 on the Fraser. That will impact everybody from Hope downstream to the Georgia Strait, and that will be 20 times more damaging. That’s where we need the help.
Senator C. Deacon: That is very specific to your community, and I value that tremendously. How do we, then, have a list of those across the country? Your community and others show that it’s against federal standards. The federal government started in the first place. Action hasn’t been needed. The damages will be X more, as we know now. How do we elevate those types of projects, like yours, through a registry or reporting mechanism? Have you thought about that and ways that perhaps we could help to advocate for that preventative measure into the future? That’s really where I’m focused.
Mr. Braun: The Fraser Basin Council has also been working on this for 20 or 25 years, but there doesn’t seem to be any action that comes out of these committees or task forces. I come from the private sector, so it seems to me that we’re just creating committees to study this, that and the other thing, but there is no political will to do something.
Senator C. Deacon: I would love to find a way that we can help so that you’re not alone in the woods, that there is that national voice. Chairman Lum, do you have anything to add to this? You can’t be alone on this.
The Chair: Very, very quickly.
Mr. Lum: You’re hitting on something that is incredibly important and would be very valuable. The magic behind all this is to get all of the communities to communicate together and agree on a set of regional priorities. That’s where the difficulty is. Mayor Braun stands up and advocates for the city of Abbotsford. I’m advocating for the city of Chilliwack or the Fraser Valley Regional District. The reality is that a major catastrophic flood in any one of those areas across the valley will affect us all. If a dike breaks upstream, that water doesn’t care about where our municipal boundaries are. We have to start thinking regionally about this. If we can get together a regional list of priorities and get it forwarded to the federal and provincial government, then I think we’re going to be able to get somewhere. If we can do our work and make that happen, then what we need is a clear commitment from the federal and provincial government that you will fund it.
We’ll do the work to work together. Indigenous communities have been left out of the conversation right now. They have to be at the table right now and working alongside our communities to create that regional prioritization, and then the orders of government can come together and help fund it.
The Chair: Thank you very much. We do hope to hear from the Indigenous community on this study down the road.
Senator Wetston: I want to follow up on the questions of Senator Deacon and Senator Simons originally.
A few years ago, in the Senate, I had an opportunity to speak on a matter of more authority for municipalities, and I know Senator Simons has discussed that. It seems that there is a considerable distance between the traditional structures of government and the constitutional locations of responsibility and authority, and the new reality of how large-scale public policy problems like climate change and issues we are discussing today are addressed by different levels of government.
You all talk positively about discussions, cooperation and flexibility. I’d like to further discuss this with you by asking you what new governance approaches you might consider, including communities, with enough institutional authority to generate revenues, which is what you need, and capacity to regulate on key issues, which you also need, that might have a significant impact on the issues that you’re addressing.
I raise those two issues, because in the event you do your studies and you come to a conclusion, you’re going to need money. I think municipalities need to have revenue raising possibilities with their own, and the ability to address these kinds of issues with the authority to do so, because it impacts your citizens directly.
Any comments, Mayor Braun or Mr. Lum?
Mr. Braun: Absolutely. Thank you for the question. It’s very near and dear to my heart.
The BC Urban Mayors’ Caucus, of which I am a part, has been advocating for a new fiscal relationship with senior levels of government. We cannot rely on the grant application. That’s like a lottery. You might get one in 50. You can’t do any long-range planning because we have no idea of what kind of funding we are getting from senior levels of government, so I agree with you. That conversation needs to happen. If we can raise our 8 to 10 cents per dollar of every tax dollar to 33% and do a one third/one third/one third, you probably never will hear from me again because we can do it ourselves.
The Chair: Thank you. Mr. Lum?
Mr. Lum: I think Mayor Braun covered it pretty well. I would be very open to hearing any options that are out there that empowers local governments to have more control over their fiscal futures. If you think about municipalities having challenges, think regional districts have even more. We’re almost fighting the fight with one arm tied behind our back. Regional governments have even less authority and funding when it comes to our ability to raise property taxes.
The Chair: Thank you very much for the question and the answers.
Senator Cotter: I’ll follow up on the questions that we have just been exploring. First, as I said to earlier panellists, the work of your citizens in this tragedy was exceptional and heroic. It was uplifting for people who were not directly affected. I wanted to thank you for the kind of inspiration that you and your citizens provided to the rest of us pulling for the solutions that you’ve been achieving.
This mostly might be a question for you, Mayor Braun. I served as a Deputy Minister of Municipal Affairs in Saskatchewan for a number of years. We amended the framework for municipalities, particularly in cities, to create more of a natural person authority, which tended to empower greater opportunities for revenue generation — not nearly I think what you need. I’m interested in what the framework is in British Columbia for you now, the degree to which that flexibility is constrained by provincial legislation and whether there are opportunities for that to be expanded or loosened up to create the opportunity for solutions that you and Mr. Lum have just been speaking about.
Mr. Braun: I would welcome such a change. Currently, that doesn’t exist here. We are a creature of the province by statute. There’s only so much that we can do. This will be a big body of work, but I think it needs to happen. Our current property tax structure was created over 100 years ago. It doesn’t work in today’s environment, which makes us beholden to senior levels of government to help us on the infrastructure. Furthermore, 60% of it, resides in urban centres. Yet we’re supposed to manage that 60% of infrastructure with 8- and 10-cent dollars. That has to change.
I’m not familiar with Saskatchewan, but now that you’ve told me about it, I’m going to have our staff dig into that because I want to know a bit more about it.
Senator Cotter: If I could just add that Senator Wetston and Senator Simons are right that the constitutional framework is kind of a straitjacket here. We’re not likely to see a dramatic change in that. It was constructed at a time when even cities were minor components of our economy. As you just pointed out about where the infrastructure is — that story has almost completely reversed. Inside the envelope of that straitjacket, I think we need to find ways that we can encourage or advocate for the modifications that can assist your needs.
Mr. Braun: I agree 100%. Thank you.
Senator Mercer: Mayor Braun, you haven’t mentioned the gas tax transfer that was put in place a number of years ago. Could this be part of the solution, by increasing the gas tax transfer to municipalities?
Mr. Braun: You are correct; we do get gas tax transfers. I think for the city it’s $4 million or $5 million a year. But you would have to significantly increase the gas tax, which creates a whole other issue for people, because there is only one taxpayer.
There has to be a better way to fund infrastructure so that cities can plan for the future. We’ve just finished a 25-year financial plan that lays out in some detail what this city has to do. I don’t know how cities do it if they don’t have a long-term financial plan. It’s funding that’s the holdup. Yes, it’s complicated.
Senator Mercer: I don’t think we need to increase the tax. I just think we need to split the tax a little better and get more money into the hands of municipalities that desperately need it.
The other issue is that there is an infrastructure fund that people have been critical of because it hasn’t been used. Has the federal government made it too difficult to access the infrastructure of funds that are there to help?
You said 17 kilometres of dike need $2 billion of repair. This is urgent, and I think it needs to happen quickly.
Mr. Braun: I couldn’t agree with you more. This is urgent. I’m not aware of any applications we’ve made to that fund, but I will find out. We apply for every opportunity, but sometimes it almost costs as much — well, it doesn’t cost quite as much, but there’s a lot of effort that goes into these applications: $200,000, $300,000, sometimes $400,000 on a big one. Nine times out of ten the answer comes back, “We’re oversubscribed. Sorry, we can’t help you.”
Senator Mercer: Thank you.
Mr. Lum: Senator Mercer, I think the challenge with the gas tax is that you have a diminishing pool of money as people shift how they drive and the vehicles they drive. Relying on just that gas tax as it shrinks will be a bit of a challenge for communities. For regional districts, that pool is even smaller than municipalities, and it often comes with certain restrictions attached to it in terms of what we can spend that gas tax money for.
I think that’s a challenge, and then it could be contrary to policies of other orders of government that are pushing people out of single-occupancy vehicles and into electric vehicles or public transit. While the gas tax is an option and we are very appreciative of it because it is consistent, it is not something that I think we can completely rely on.
In terms of looking at opportunities around a new fiscal framework and the amount of infrastructure investment that needs to happen, back in the 1960s, when the majority of this infrastructure was built, it’s all coming to the end of its life. I would put forward that there’s a fair sense of urgency that we tackle this challenge because it is starting to fail. Flood infrastructure is a part of that infrastructure, but a good portion of the other infrastructure that was built in the 1960s and early 1970s as well.
Senator Simons: I wanted to come back to the actual cost of this for your various communities. I presume at this point you have people who have lost their jobs because they were working in the agricultural sector. You have people who have lost their businesses. What has been the medium-term impact on your regional economies and, frankly, on your regional tax bases? We’ve talked a lot about the challenges you’ve had finding revenues. I can only presume that it will be a tough tax season for a lot of people in your region.
Mr. Braun: Thank you, Senator Simons. We just finished our tax requisition for this year, and it will be 3.49%. Sumas Prairie represents 20% of our total city. We’re the fifth largest by population. We are the largest geographical city in the province. We are a very resilient community, and people are back up on their feet.
I haven’t heard many complaints. They know we need now to address our infrastructure. I have heard no complaints about the 3.49% tax increase. Yes, there are people who have lost their jobs, but there are other safety mechanisms to help people in that position as well. Generally speaking, we are in pretty good shape in Abbotsford overall.
Where we need help is to protect the farmers who are reinvesting right as we speak. They are doing that on the premise and hope that this time federal and provincial help will do what should have been done after the 1990 flood, and actually the flood of February 2020, Super Bowl Sunday. We also had water coming across from the Nooksack.
I think it was Senator Deacon who mentioned that he couldn’t understand why the $30-million dike replacement on the U.S. side didn’t happen. Part of the reason — and that’s why the Americans haven’t been moving — is that it just shoves the water further downstream and will flood out other downstream communities like Ferndale and Bellingham, which is a much larger city.
The relief valve on the Nooksack is on the right bank and it heads straight to Abbotsford, because it’s all about gravity from there.
Mr. Lum: Thank you, senator, for the question about the people and the real effect it’s having on our citizens.
The regional district is very challenged geographically. I mentioned in my opening comments that we have a handful of homes right now that are considered total losses, and I will talk about a couple of them.
A couple of them actually received property tax bills for a property that doesn’t exist anymore. It’s washed into the river; it’s gone. Because of the geotechnical challenges and the slides that are above them, a number of properties were assessed last year in the millions of dollars — because you know that property assessments have gone through the roof in the province of British Columbia and elsewhere — and are now worth nothing. Those folks are left stranded with no options right now.
One of the challenges with British Columbia’s DFA, or Disaster Financial Assistance program, is that it doesn’t offer buyout opportunities on some of these properties and there’s a cap of around $300,000. We have raised those concerns respectfully with the provincial government around changes to the Emergency Program Act and changes to Disaster Financial Assistance. Those are things that need to happen, in my opinion. If you want to protect our citizens’ livelihoods who have been through multiple traumatic events — fires, heat domes and then floods — you need to look at those programs and ensure that we don’t have strings attached to them so that people are left with nothing. I really appreciate your question and the concern.
The Chair: Thanks very much.
Gentlemen, thanks for sharing your passion and emotion on this issue. It’s truly evident. We do appreciate your participation today, and your assistance with the study is very much appreciated.
I would also like to thank our committee members for their active participation and very thoughtful questions.
I often forget about thanking the Senate interpretation and logistics staff here in the committee room. We really do appreciate everyone’s support in the room.
At this time, I’d like to suspend for a minute. We will go in camera for just a very short time.
Gentlemen, thank you again very much.
Mr. Braun: Thank you, Senator Black. It was a pleasure.
Mr. Lum: Thank you.
(The committee continued in camera.)