THE STANDING SENATE COMMITTEE ON AGRICULTURE
OTTAWA, Tuesday, March 24, 2015
The Standing Senate Committee on Agriculture and Forestry met
this day at 5 p.m. to study international market access priorities for the
Canadian agricultural and agri-food sector.
Senator Percy Mockler (Chair) in the chair.
The Chair: I welcome you to this meeting of the Standing
Senate Committee on Agriculture and Forestry. My name is Percy Mockler, senator
from New Brunswick and chair of the committee.
At this time I would like to ask the senators to introduce
Senator Beyak: Lynn Beyak from Ontario. Welcome.
Senator Merchant: Pana Merchant from Saskatchewan.
Senator Tardif: Claudette Tardif from Alberta.
Senator Maltais: Ghislain Maltais, from Quebec.
Senator Oh: Victor Oh from Ontario.
Senator Enverga: Tobias Enverga from Ontario.
Senator Unger: Betty Unger from Alberta.
The Chair: Thank you very much, senators. To the
witnesses, before we introduce you formally, this evening the committee is
continuing its study on international market access priorities for the Canadian
agricultural and agri-food sector.
Canada’s agriculture and agri-food sector is an important part of
the country’s economy. In 2012, the sector accounted for one in eight jobs in
Canada — employing over 2.1 million people — and close to 6.7 per cent of
Canada’s gross domestic product.
Internationally, the Canadian agriculture and agri-food sector
was responsible for 3.6 per cent of global exports of agri-food products in
In 2012, Canada was ranked the fifth-largest exporter of
agri-food products globally. Canada is engaged in several free trade agreements,
FTAs. To date, 12 FTAs are in force. The Canada-EU Comprehensive Economic and
Trade Agreement has been concluded, and 11 FTA negotiations are ongoing,
including negotiations to modernize a Canada-Costa Rica free trade agreement.
Also, the federal government is undertaking three exploratory
trade discussions with Turkey, Thailand and member states of Mercosur, namely
Argentina, Brazil, Paraguay, Uruguay and Venezuela.
Honourable senators, our first panel will be composed of three
witnesses. We welcome this evening, from the Canadian Agricultural Human
Resource Council, Portia MacDonald-Dewhirst, Executive Director; Mark Wales,
Chair, CAHRC and Labour Task Force; and Mark Chambers, Chair, Policy and
Programs Workforce Action Plan.
To the witnesses, thank you for accepting our invitation to share
with the committee and Canadians your opinions, comments and recommendations on
this important sector.
I have been informed by the clerk that we will have a joint
presentation from the three witnesses. At this time the chair will recognize
Madam Portia MacDonald-Dewhirst to start the presentation.
Portia MacDonald-Dewhirst, Executive Director, Canadian
Agricultural Human Resource Council: Thank you very much for inviting the
Canadian Agricultural Human Resource Council here to speak with you today about
the pervasive issues facing the industry in terms of labour shortages and the
extent to which those are impacting competitiveness for the industry.
As the chair mentioned, the agriculture and agri-food industry,
including the seafood sector, is a very large and important contributor to
Canada's economy and success. It encompasses several industries, including the
farm input and service supplier industries, primary agriculture, food and
beverage processing, aquaculture, food distribution, retail, wholesale and food
service industries. In 2012, the agricultural and agri-food systems employed
2.1 million Canadians and accounted for one in eight jobs in Canada, or 12 per
cent of the total Canadian employment. Regionally, the agriculture and agri-food
industry, including the seafood industry, is an important source of economic
activity in many provinces and contributes over $100 billion annually, close to
8 per cent of Canada's gross domestic product.
Industry stakeholders have expressed significant concern about
the immediate labour challenges facing Canadian agriculture and agri-food
businesses and the risks to their viability and growth into the future. The
agriculture and agri-food industry needs workers to remain globally competitive,
to take advantage of export opportunities provided by the federal government's
free trade agenda, and to ensure the security, safety and sustainability of food
for all Canadians.
At the Canadian Agricultural HR Council, we are focused on
researching and addressing human resource issues facing agricultural businesses
across Canada. We work with farmers and industry to fully understand and meet
the unique HR, management and training needs within the agricultural
commodities. The council works with industry leaders, governments and
educational stakeholders to research, develop and implement solutions to
challenges in employment and skills development for the industry.
We fully serve the agricultural community as a one-stop shop, a
centre for reliable agricultural research, such as labour-market intelligence,
and the access point for customizable solutions to agricultural management and
training carried to the grassroots level.
Our current research initiatives, covered in the handout you
received, include a project around supporting the advancement of women in
agriculture. This project is examining and addressing critical barriers to
advancement facing women in the industry. The purpose of the initiative is to
engage women and stakeholders within the agricultural community to develop and
implement a strategic program to support improved access to leadership
opportunities and strengthen the success of women working in the industry.
We are also working on a labour market information project, which
is about defining a labour market information supply-and-demand model that will
provide an overview of the current agricultural labour market so that we can
forecast labour supply and demand provincially, nationally and by commodity. The
project is identifying labour and skills gaps and investigating opportunities
and barriers to participation amongst population groups that have traditionally
been under-represented in the agricultural work force, and this is critical at
this juncture when we're in shortage, and those under-represented groups include
Aboriginal peoples, new Canadians and older workers, among others.
We are also engaged in a national agricultural occupational
framework project. This project is about clarifying a variety of much-needed
information about core jobs in agriculture and leveraging that information to
build meaningful support tools to assist the sector to address its labour
requirements and ensure the health and sustainability of Canada's agricultural
industry. It is an in-depth study of the exact jobs and skills involved in
today's modern agricultural workforce.
We are also related to those projects supporting the
implementation of the national workforce action plan. This Agriculture and
Agri-Food Workforce Action Plan is a recommendations report designed to address
the immediate and pervasive issue of an inadequate supply of workers currently
impeding Canadian agriculture and agri-food business operations and their future
growth potential. The effort is guided by a labour task force, which Mark Wales
is the chair of, and it is a solution-oriented forum made up of industry
stakeholders from across Canada's agricultural and agri-food sector working in
collaboration to research and prepare plans to mitigate risks to the
agricultural and agri-foods sector as a whole across the value chain. The work
force action plan presents recommendations that are practical and essential to
maintaining a strong industry value chain to ensure the safety, sustainability
and affordability of food for all Canadians and to support Canada's continued
position as a leader and significant contributor to food production for the
At this point, Mark Wales, our chair, will now give more details
about the Canadian Agricultural Human Resource Council and the Labour Task
Force, and the Canadian Agriculture and Agri-Food Work Force Action Plan.
Mark Wales, Chair, CAHRC and Labour Task Force, Canadian
Agricultural Human Resource Council: Thank you for inviting us to
participate in your study on international market access priorities for the
Canadian agricultural and agri-foods sector. As mentioned, my name is Mark
Wales. I am a vegetable and grain farmer from Elgin County in southern Ontario.
I am the chair of the Canadian Agricultural Human Resource
Council. We represent over 200 different crops and commodities that farmers
produce in this country, and we represent over 200,000 small business employers.
As well, I am the chair of the Labour Task Force, which is a
committee of our organization providing strategic advice and guidance for the
implementation of the Canadian Agriculture and Agri-Food Workforce Action Plan.
Portia has outlined the ongoing work that CAHRC is involved in.
The labour market information being researched is greatly needed at this time. I
sit on the advisory committee for the National Agricultural Occupational
Framework project, which is helping to define exact job skills which take place
on our farms and helping to provide the tools which farmers will need to hire
and retain workers. The Canadian Agricultural Human Resource Council offers
farmers the opportunity to learn about recruitment and retention and the online
tools that are better connecting workers and farmers needed by our industry,
which is clearly facing critical labour shortages.
The Labour Task Force, to which I was recently elected chair,
functions as a solution-oriented forum made up of industry representatives from
the 12 Agriculture and Agri-Food Canada value chain round tables. The task force
was originally established in 2012 to examine issues of agriculture and
agri-food labour management and shortages. The Canadian Agriculture and
Agri-Food Workforce Action Plan was researched and developed by the task force.
It is a comprehensive plan, a road map forward for the agriculture and agri-food
industry, including the seafood sector, and was released last year.
This work is an important part of our organization's efforts to
research and address critical workforce issues relevant to the agriculture
sector. Industry and stakeholder engagement is an important part of successful
quality research and a cornerstone for our organization. With over 50
implementation partners, the workforce action plan is bringing farmers and
industry, the complete agriculture value chain, together to work on a permanent
solution for what is a permanent problem.
There are many unique workforce challenges for the agriculture
industry, which are outlined in the update before you. One of our biggest
challenges is the seasonality issues associated with our industry.
The horticulture sector, which encompasses 120 different crops
comprised of fruit, vegetables, flowers and ornamental plants, necessitates a
mixture of full-time, long-term seasonal, short-term seasonal and harvest
workers. The horticulture sector is a huge contributor to the Ontario economy
and to the broader Canadian economy. Farm gate sales alone in Ontario
exceed $1.4 billion yearly from Ontario horticulture.
Horticulture is just one of the value chains that deals with
workforce issues associated with seasonality. Grain farmers have seeding and
harvesting deadlines that involve intensive workloads in the spring and fall.
Also, livestock producers in the cattle industry have an intensive workload
associated with the calving season. Sheep producers likewise have a shortage of
skilled shepherds willing to work in seasonal positions. The seafood sector is
also one of Agriculture Canada's value chain round tables. They, too, have a
There needs to be a clear recognition that there will always be a
seasonal part to agriculture and our food production that won't be able to
provide full-time jobs.
One of the most frightening things as an employer is to spend
hundreds of thousands of dollars to grow a crop, get it to harvest and not have
enough people to harvest it. The possibility of losing a perishable crop to
frost or over-maturity is always a real, daunting issue for farmers.
The other unique workforce challenge our industry is dealing with
is rural depopulation. This trend is affecting rural areas across Canada,
including Ontario. According to a research series prepared for the Rural Ontario
Institute, Ontario's non-metro economy has been declining since October of 2012.
The sector with the largest employment decline since the peak in 2008 was
manufacturing. The long-run pattern shows total employment in non-metro Ontario
has been generally flat since 2004.
There is clearly a deficit in the balance of incoming versus
exiting working-age population, which predominates in non-metro areas of the
province. Potential labour market shortages are more likely to be a concern in
The rural challenge is that our employment opportunities are in
non-urban areas, making it difficult for employers to access and attract
workers, and there are many reasons for that, for example, housing,
transportation and access to child care.
According to rural statistics prepared for the Federation of
Canadian Municipalities in 2014, the new rural challenge is to create people,
not jobs. People creation, not job creation, holds the key to growth in rural
Canada. Canada is approaching a scenario with more deaths than births, and some
rural areas are already there. To grow, these communities must attract
immigrants or migrants from elsewhere in Canada.
The Canadian Agriculture and Agri-Food Workforce Action Plan
research is indicating that a gain for the agriculture and agri-food industry is
a gain for Canadian rural development. Repopulating rural Canada with workers
wanting to work in the agriculture industry will stimulate economic growth and
jobs for all Canadians and will provide a lasting rural economic and development
Mark Chambers will now speak to the Canadian Agriculture and
Agri-Food Workforce Action Plan.
Mark Chambers, Chair, Policy and Programs Workforce Action
Plan, Canadian Agricultural Human Resource Council: Thank you very much for
inviting us to testify here today. My name is Mark Chambers, and I'm the chair
of the Labour Task Force policy and programs working group. It is
solutions-oriented group of 18 active members, and we have been working on an
update to the Canadian Agriculture and Agri-Food Workforce Action Plan. We have
been researching the critical workforce agricultural labour shortage issue,
offering short-term, medium-term and long-term solutions for agriculture and
I am the production manager for Sunterra. We're a family-owned
farming business in Acme, Alberta, so I'm a long ways from home here. On this
particular farm, we raise about 60,000 market hogs per year, and we do
value-added processing at a meat plant in Trochu.
Trochu is very rural Alberta. About 130 people are employed at
that plant. It's a huge economic driver for our rural economy. The head office
is in a town called Acme, which is about 500 people, and the value added in our
meat plant in Trochu is in a population of a town of about 700 people. It's a
large employer of the community.
We are a pork operation, but we are in agreement with the
Canadian Cattlemen's Association study, which indicates that for every worker
employed in the sector, 4.2 workers are employed in Canada, counting direct and
indirect impacts, and almost 7 workers are employed if all impacts are included.
The agriculture value chain provides a huge positive economic
impact to our rural communities. Our farm and our value-added operations support
our rural economy. We need farm workers and plant butchers. These employees
purchase goods at local stores in the rural communities. The broader employment
benefits to the Canadian economy include such things as truckers, retail meat
sales at your local grocery store and so on. Schools are being built or rebuilt,
and our rural communities are being revitalized.
As the workforce action plan indicates, there are currently over
a thousand job openings that remain unfilled in the meat sector alone. This is
because we can't find domestic labour to fill the jobs. This is being felt
through the value chain, all the way back to the farmer, meaning more grain will
have to be transported by the railroads from farm to port, if you could get the
railroads moving. If things do not improve, agribusiness will have to consider
exporting the livestock rather than doing the value-added processing here in
Canada, which means the industry is effectively transporting jobs and economic
The reality is that Canada's agriculture and agri-food industry
needs either to import more workers or to export livestock and then import
processed meat for consumers to buy at the local grocery store.
This is true for our company, Sunterra, where we are about 20
workers short in our value-added meat processing facility. Trochu is two hours
northeast of Calgary and southeast of Red Deer. Our plant is drawn from 70 per
cent domestic Canadian labour. We use workers from abroad as a backstop because
in our rural location it's extremely difficult to find more workers. Anyone who
wants to or is able to work is already working. We have an aggressive
recruitment campaign throughout Canada. I was at a job fair in Ontario a couple
of weeks ago recruiting for our business, and it's extremely difficult to get
people interested in the agriculture and agri-food industry. We do numerous
recruitment efforts across Canada like this.
Because of the changes in June last year, we are at our 30 per
cent cap in our value-added plant, so we can't hire any more workers through
what is currently known as the Temporary Foreign Worker Program. We are feeling
unintended consequences of the changes made to address the abuse of the program,
which did not come from the agriculture and agri-food community.
Lack of labour in our plant has a huge impact on our farm. I’ve
been in the barn with the workers many times in recent months, ready to ship our
pigs to the value-added plant, when we get a call that tells us they don't have
room to take the shipment because they don't have enough workers to cut the
meat. What are we supposed to do with these pigs when they are ready to go to
market? It's a nine-month process from the time you breed the sow until the time
the animals are ready to go to market.
We can't stop the pigs from procreating as they are bred months
in advance. This is just one example of how it is putting pressure on the value
chain. It is a unique value chain that is important in every step of the way.
It's another reason why the agriculture value chain needs to be considered
unique, because the productivity and success of our industry are tied to a
perishable product related both to the handling of live animals — which can be a
welfare concern if it's not done correctly — and to the safety, security and
sustainability of food production for Canadian consumers.
When Canadian domestic workers cannot be found, agriculture and
our value-added processing need a farmer-focused value chain option. When we
can't find Canadian workers by aggressively advertising and recruiting, we need
a dedicated pathway for agriculture and primary processing companies willing to
hire workers from abroad as a backstop measure and a viable pathway to permanent
residency for those successful workers.
Many opportunities for career promotion exist within the
agriculture sector, making these workers strong candidates for economic
immigration in rural communities, and these jobs are readily available today.
We have an example of how this works with a recent article, which
is the cover story in the new joint publication of the Alberta Barley Commission
and the Alberta Wheat Commission called GrainsWest. It's an example of a
migrant worker coming to Canada and permanently settling here and becoming a
permanent resident and now moving on to become a Canadian citizen.
The agriculture workforce challenges that we face are not
temporary. Industry feedback our working group is receiving provides evidence
that we need an integrated, permanent solution for a permanent problem. We need
a Canadian agriculture and agri-food workforce program.
Through extensive industry consultation over the last three
years, industry has developed the Canadian Agriculture and Agri-Food Workforce
Action Plan with recommendations to address the immediate and pervasive issue of
the inadequate supply of workers.
Within our workforce action plan update that we have been working
on since before Christmas, we have taken a short-, medium- and long-term
approach recommending a new integrated, permanent labour solution for the
agriculture and agri-food industry.
Number one is short-term solutions. Many adjustments could be
done to streamline the systems and processes immediately to help the agriculture
and agri-food sector successfully adapt to new policy changes. Medium-term
solution: a Canadian agriculture and agri-food workforce program, a new
streamlined program with Employment and Social Development Canada designed for
and dedicated to the agriculture and agri-food industry. Long-term solutions
include the Canadian Agriculture and Agri-Food Workforce Action Plan providing a
pathway to permanent residency for agriculture and agri-food workers with
Citizenship and Immigration Canada.
Implementation of the long-term elements of the Canadian
Agriculture and Agri-Food Workforce Action Plan: This new Canadian Agriculture
and Agri-Food Workforce Action Plan should be considered an important part of
Canada's export strategy. Our industry needs more workers to take advantage of
new opportunities offered by new trade deals. The pork industry is
export-focused. For example, 70 per cent of the product at our meat plant at
Trochu is exported to international customers. We have a new trade opportunity
with Asia associated with one of the trade deals which we would like to take
advantage of, but the lack of workers in our plant today is making that
Our working group's research indicates that implementation of the
Canadian Agriculture and Agri-Food Workforce Action Plan will help revitalize
the rural Canadian economy and its communities by creating a policy environment
which allows our industry to remain viable, competitive and a significant
contributor to the Canadian economy.
By creating a policy environment that fills our industry's
workforce needs, the end result will be productivity expansion. This will enable
rural Canada to become an agri-food engine for the new export opportunities
offered by the federal government's trade agenda. Thank you.
Senator Tardif: Thank you to all three of you for your
very interesting presentations.
Previous witnesses, as well as you, have indicated that you're
facing major labour shortages, especially in the wake of changes to the
Temporary Foreign Worker Program. The government has introduced a new express
entry system as of January this year. Has the new program resolved in any way
some of the issues that you're facing?
Mr. Chambers: In the short term, no. The express entry is
geared towards high-skilled workers. If you're familiar with the NOC code
matrix, it starts at O, A, B, C and D; so it's geared towards O, A and B NOC
codes, which are higher skills. However, in our meat plants they are considered
lower skills, even though they're not low-skilled workers. Every occupation has
a skill. So does a skilled meat cutter, but it's considered a C occupation,
which is not eligible for express entry.
Senator Tardif: What is the definition of an agricultural
worker, according to the federal program and rules, and how would a worker be
defined as “skilled” in agricultural terms?
Ms. MacDonald-Dewhirst: I'll take that question. Thank
you; it's a very good question. ESDC uses the National Occupation Classification
system. Those are the NOC codes that Mark was speaking of, and the NOC codes
classify work in Canada according to function and also level of skill. Those
codes are used to define who is applicable and eligible for the different
elements of the Temporary Foreign Worker Program, along with the National
Commodities List. That is a list of commodities that can access both the
Seasonal Agricultural Worker Program and the agriculture stream of the Temporary
Foreign Worker Program. So the answer is that it's complicated, and there are
two systems that are used to answer that. However, it's complicated not only for
those who aren't involved in agricultural production, but also for those who are
in it trying to access programs, and complicated for those trying to oversee and
manage the program. It's difficult in its nature in terms of how it has been
formulated, and partly that's because it has grown and expanded over time.
Senator Tardif: If I understand correctly, you feel that
your sector is perhaps being penalized in a sense because the Temporary Foreign
Worker Program has been effectively dismantled, and you cannot have workers
apply under the new express entry system. So there's a huge gap out there that's
not fulfilling the needs of your market sector. Is that correct?
Mr. Chambers: Yes, that would be correct. Our focus has
always been to try to focus on permanency with the use of the Temporary Foreign
Worker Program, and I think that's what Canada's new agenda is — the temporary
foreign worker has a stigma behind it — to focus on permanency, which is why
they created the express entry program. It is geared towards higher-skilled
workers, so it has restricted our ability to bring in enough workers.
Senator Maltais: Ms. MacDonald-Dewhirst, your association
is a national organization. Do you have contacts with Quebec, New Brunswick and
Newfoundland? If so, with whom?
Ms. MacDonald-Dewhirst: Yes, we do. We work with
stakeholders from across Canada, including AGRIcarrières, UPA in Quebec and the
Quebec Farmers’ Association. We also work with the Agricultural Alliance of New
Brunswick, and also the Newfoundland and Labrador Federation of Agriculture. So
we are well represented across Canada as a national organization, regionally and
also by commodities. Did you have anything to add?
Senator Maltais: Your answer is clear. I am looking over
your mandate and I am trying to find a solution to the problem I am going to
Your mandate is to be the centre for reliable agriculture
research, such as labour market information and the access point for
customizable solutions related to HR management and training carried to the
What do you think about that, Mr. Chambers? How many agricultural
workers have you found with this mandate?
Mr. Chambers: Trying to find agricultural workers in
Canada has been getting difficult over the years, and it's getting more
difficult today, because fewer and fewer people are growing up in rural
communities. Historically, if you go way back when there were farms and you
would grow a grain and have a quarter section with two or three kids growing up
in that quarter section, they would enter into agriculture, whereas today, when
someone sells a farm, it's not the family that buys it. It's taken up by a
larger farm, so there are fewer and fewer people. So that's making it a lot more
Senator Maltais: That’s what I wanted to hear you say. I
think we need to make a distinction between agricultural workers and those in
the agricultural industry. Processing represents one sector, but the true
agricultural workers are the ones putting their hands in the soil in the spring
to plant, and in the fall, to harvest, and I must say that they are not easy to
come by in Canada. Regardless of whether they are market gardeners or livestock
producers like you, this is a problem, because we end up finding more half-time
or quarter-time people. Anyone who works in this industry cannot make a living
if they don’t work throughout the year. We will not be planting raspberries
today in Canada, because it is a little chilly, and it is not the season.
How can we ensure that the person who works in the spring and in
the fall can have an income during the winter, in processing or in any other
sector, and can have a profession and full-time employment? How can we do that?
Ms. MacDonald-Dewhirst, do you have an answer?
Ms. MacDonald-Dewhirst: It's a good question. I don't know
that I have the answer, but we are working to sort out how to better enable
mobility within the industry to access under-represented groups — those who
aren't working currently in the industry — to try to bring them in and also to
help employers understand how to be flexible with the opportunities that they
offer to their workers. There are good examples of operations that try to make
full-time jobs where possible, but it's not always possible. Our climate
dictates that we have a seasonal component to this industry.
Senator Maltais: Thank you very much,
Ms. MacDonald-Dewhirst. Mr. Chambers, I would like to congratulate you. You are
a young agricultural entrepreneur. Not many like you come to see us here.
I would like to raise another point, which I think is important
for the entire country: the next generation of farmers. The next generation of
farmers is responsible for tomorrow’s dinner; who will make that work? We see
this problem in Quebec, in Ontario, in the Maritimes and in western Canada, in
British Columbia. What do we have to do to get young people interested in the
need for Canadian agriculture?
Mr. Chambers: That's a very good question, and I get very
passionate when I talk about that because trying to get young people engaged in
agriculture is extremely difficult. As I said earlier, they're not growing up in
it, but, then again, no one is growing up in the oil industry or growing up as a
carpenter. Every industry has that issue. But when you drive through town,
you'll drive past factories and these facilities, so you see them. But if you
live in a city, no one sees agriculture and what goes on, so we're not getting
any exposure. From my perspective — and we've talked about this a lot — we need
to get some type of — I don't just say agriculture — I call it food production —
how food is produced, how it's grown, whether it's a crop, whether it's
livestock or whatever — into the school curriculum because we need to expose
kids as young as possible to food production and opportunities in food. I've
been to schools. I've done presentations. I went into some classrooms. I'm from
Drumheller, Alberta, and I've gone in there with 14-year-old kids and talked
about agriculture and opportunities in agriculture. They sit there doing this
kind of stuff. You've lost them at that point; it's too late. When they're five
and six is the perfect time to get in there and start talking to them — fix,
six, seven, eight, nine — about agriculture and what goes on. My son will go to
school and tell the kids what I do on the farm. He has been to the farm with me,
and he tells them. They say, “Oh, that's just not right.” He explains to them,
and then they say,” Oh, yeah.” Then, they get it, but because no one talks about
it, they don't get it.
Senator Maltais: You are a great educator, and I think we
need people like you.
My last question is more a request for Ms. MacDonald-Dewhirst. To
follow up on what Mr. Chambers told us, we will not be able to make young people
discover agriculture when they are 15 or 16.
As the CEO of the Canadian Agricultural Human Resource Council,
could you commit to reaching out to human resources at a younger age? What I
mean by that is whether you or your employees could go to primary schools in
Canada and explain to young people that agriculture does not only come from
Loblaws or Provigo, but that it comes from the ground first. They need to become
interested at that age so that, when they turn 14 or 15, it is not rocket
science when they learn that pork comes from pigs; they will know that when they
are 5, 6 or 7 years old. I think that would be a good objective for your
mission. Thank you.
The Chair: That was not a question, but a comment.
Senator Maltais: It was a request.
Ms. MacDonald-Dewhirst: It is an excellent comment. In
fact, I just delivered a webinar to the industry about how those within the
industry need to do more to get youth engaged and thinking about agriculture and
where their food comes from. There is a movement around this in the industry.
There's a recognition that more of this needs to be done. There are
organizations like mine that continue to do this work. There are organizations,
such as Agriculture in the Classroom, or in Ontario there's an Ontario education
and food organization, that are focused on this very issue. And 4-H is another
that is focused on engaging with youth, moving forward and selling the good news
that this is a great industry to work for.
Mr. Chambers: It is very important. As farmers we're very
good at producing and farming. We're very good at going out, tending to the
livestock and growing our crops. As farmers, what we fall short on is educating
people, unless they're in front of us and then we're great at showing them what
we do. But going out there and being a voice for educating people of what we do
and how we do it — this is why it is important to have an industry collaboration
like this, such as CAHRC and someone like Portia to kick us in the butt and say,
“Come on guys; we have to get out and get more people educated.” We have to get
the message out because if we don't, then this problem will get worse and worse.
We will be in real trouble because Canada was built off the foundation of
The Chair: Thank you. That was a really good comment.
Senator Merchant: I must thank you for being here, making
your presentation and educating us as well. You have a difficult task, if you
don't have workers to do the work. Ms. MacDonald-Dewhirst, I think you mentioned
that we need to make it possible for women to engage in the agri-food sector.
You did mention daycare — I don't know if it was schools. What
other barriers are there to women becoming involved in agriculture, and do you
have a lot of women who want to do this kind of work, or is it the wives of the
men who are involved in agriculture?
Ms. MacDonald-Dewhirst: That has been the history. But
that's changing. In fact, this weekend, there is an Advancing Women in
Agriculture Conference in Calgary, and more than 500 women will be attending. It
is a new conference, and we are going to be making an announcement about our
project there, that there is the need for more research in this area. It is an
We know that science students are interested in food. We know
that youth are interested in food, and we need to leverage that. That includes
women as well. That's what we're doing. We're exploring and examining the
leadership opportunities that are available for women and also providing some
supports for networking to ensure that there's a strong way that women can feel
more encouraged from one another and working in the industry.
Mr. Chambers: A couple years ago we had a woman managing
one of our farms here in Ontario. She would always give herself a hard time
because she was a woman and she was not looked at, but I tell you something —
and I'm not lying or blowing smoke — she had the best producing farm in our
whole system. It was clean, tidy and the top performer, the most efficient,
And today, she beats up on herself. She still keeps saying that
“I'm a woman.” It doesn't matter. You have a successful career and you can do a
great job. You have done a better job than any guy that's been managing a farm.
At times, we have had lots of women. It is not just a guy working for us and his
wife or something. It is women that have entered the industry. The thing to
think about in pig production is that there's a huge maternal component to it,
and women are better at that than guys are. We're just not very good in that
Senator Merchant: I was going to ask a question regarding
the difficulty that you are having with getting skilled workers. In 2011, the
government introduced a regulation limiting the period of time during which a
temporary foreign worker can work in Canada. Once a foreign worker has
accumulated four years of work in the country, he or she has to wait four years
before working in Canada again.
What did they do? Did they leave the country? Did those people
come back once you had trained them? How do you feel about that?
Mr. Chambers: Not very good.
Senator Merchant: No.
Mr. Chambers: Yes, that deadline comes April 1 this year.
That means that anyone who accumulated four years by April 1 has to leave, and
they can't come back for another four years. Now, some people in the industry,
who are considered, back to the NOC codes, who are not considered NOC code OA or
B have transitioned to permanent residency. So they can stay and become
permanent residents. For the people that are still on a work permit, it is
I will pick the mushroom industry, for example. They have got a
lot of workers that are working year-round because mushrooms are produced
year-round now. They are considered what is called a lower-skilled occupation,
so they do not qualify for permanent residency.
It is problematic for that industry because those people have no
pathway to permanency. So they have to go home after four years and be replaced
by someone else, which seems kind of ironic, because now you are just replacing
someone versus keeping that person that has taken six months to get trained to
do a good job. That is a problem.
There is also another component to it. We have the Seasonal
Agricultural Worker Program, SAWP, which has been around for years —
Mr. Wales: Over 40 years.
Mr. Chambers: — for 40 years. There's no duration cap
applied to that because that is attached to a number of bilateral agreements
with other countries and it is seen as it is needed for seasonal. There's always
going to be a seasonal component to agriculture. For those people there is no
cap, but there are certain requirements to qualify for that program. If you are
a grain farmer, for example, and you are not on the commodities list, you don't
qualify to use SAWP, so that means you have to use the conventional stream. That
person is coming to drive a combine for six months a year, help with seeding,
then combining, and then they go home. They do end up getting hit with that
duration cap. Once they hit four years, they can't come back again even though
they're carrying out a seasonal position.
I think again it comes back to the unintended consequences of
this program, which is a national program for all commodity groups, and all
industry. It has ended up hitting everyone the same. For us, it is a bit of a
Senator Merchant: Do those people come back? Can you just
keep trading them? These four-year people go home then you get another group
that you train, then they're ready to go home after four years, but you get the
previous ones to come back. Does that work?
Mr. Chambers: That's possible, yes.
Senator Merchant: It does go like that, or do they go away
and stay away?
Mr. Chambers: It is possible. They might come back, might
find something else and might not. You could potentially be training new people
all the time, which is kind of crazy, really. The focus needs to be on creating
pathways to permanency for those people.
Senator Merchant: I agree. Thank you.
Senator Enverga: Thank you for the presentation. Being a
senator, you get conflicting issues here. On the Aboriginal Committee, we have
always heard so much grief about the unemployment in the First Nations, with
some of them having 30 per cent unemployment. Have you ever reached out to those
people there and said, “There's a job for you here; we will come over here and
we will give you good compensation?” Has that ever been done on your end?
Ms. MacDonald-Dewhirst: Yes, quite a bit of work has been
done by various groups across the industry. The Canadian Meat Council and some
of the meat processing plants have specifically worked with particular areas of
the country and Aboriginal people. The council has been very busy researching
this issue. It is an important component. We need to ensure that, as an industry
that is short of workers, we are trying to find them wherever we can find them.
The industry is in such critical crisis that everybody is looking
as far and wide as possible and using interesting and innovative methods. So
yes, that has been explored and examined and continues to be a focus as we move
This issue is pervasive and critical. We have some long-term
strategies about how to shore up the labour supply, including getting youth more
interested in agriculture careers and being broader in our communications about
the industry. We have shorter-term recommendations around the need for better
and focused access to temporary workers at this point in time.
We have a full gamut, but part of that absolutely includes
accessing under-represented groups within the industry.
Senator Enverga: How successful are you in recruiting
First Nations or Aboriginal groups?
Mr. Chambers: It has been a challenge. Initially, when any
of our agricultural companies were looking for labour, we have done conventional
advertising in newspapers, and then we have gone to job fairs. It has got to the
point where some of our members have gone to the band leaders, discussed it with
them and said, “We need people. Can we get some?” The chiefs will say, “We will
get you workers,” but it doesn't go anywhere. We just don't get them.
Some of the companies have hired from the First Nations, but not
a lot of them come and not a lot of them stay for very long. It is a problem.
There is high unemployment, and we would like to somehow be able to work with
the First Nations in trying to get some more people engaged in agriculture
because there is an opportunity there, if we can figure out how to get it done.
The government recognizes that it is an issue, and industry knows
it is an issue, but it is a difficult barrier to cross to make it successful.
There have been some success stories, absolutely, but there have been a lot that
have not been success stories.
Senator Enverga: You spoke about teaching kids. Here in
Ontario, they're proposing more sexual education, but don't you think there
should be more education about pollination and germination? Shouldn't that be a
focus in Ontario? Is there any such drive for education to teach kids at an
earlier stage to think about farming?
Have your organizations thought about it?
Ms. MacDonald-Dewhirst: There’s lots of work in this area,
but it hasn't become mandatory curriculum as of yet. There are movements to push
that forward. Certainly, there are lots of us that would love for that to occur.
It is really important that people know where their food comes from and how
pollination is a piece of that. It is with ongoing effort that we encourage
those within the community to go into classrooms to engage with teachers.
Teachers are busy. They need help. Farmers can come in and speak to the issues
as guest speakers, offer co-op placements or tours — there are all sorts of
ideas. The industry is engaged.
Mr. Chambers: Curriculum is left up to the provinces. It
is not like you can go to the Canadian government; you have to go to each
province. As Portia said, somehow we need to get agriculture into the curriculum
so that they grow some plants; grow a garden.
When I went to school, we grew a garden. We grew vegetables, and
it was fun. But we knew how to dig a garden, and we knew where our food came
from. If we want this to be successful and to continue to be successful, the
government has to put their foot down and say, “All you provinces, this is part
of the curriculum. Now get it done.”
Senator Enverga: Has your organization lobbied, or worked,
or engaged the various provincial governments to do this for you?
Mr. Wales: One of the other challenges here is that people
need to know not only where their food comes from but also how to prepare it
once they purchase it. That's one of the challenges. For the most part, we don't
have home economics in school anymore, so kids don't know how to cook. That's
one of the things in Ontario we have been lobbying to get back into the school
curriculum. The term we use is “six by 16.” If a 16-year-old can prepare six
meals from scratch, then that would be a real achievement. It would be a huge
There is a growing movement. People do want to know where their
food comes from; they do want to know who is producing their food. In my own
operation, I grow quite a few different vegetables. We have a large
pick-your-own operation, so we have people travelling from over two hours away
to come to pick peppers, onions, garlic, and so on.
That is a new area. Not only do they need to know how it is
produced, they also need to know what to do with it, which will reduce the waste
and is better for everybody. That's something we have been promoting as well.
The Chair: Home economics was that venue?
Mr. Wales: Yes.
The Chair: Thank you.
Senator Unger: I had a comment about my colleague's
comment. I would like to quote Mr. Wales from his opening comments. He said that
our job is to create people, not jobs. I don't know if I would like to ask you
to elaborate on that. I know what you mean, though.
Mr. Wales: I will try to elaborate. When we first started
the CAHRC, one of our first projects was a labour market information study. What
we discovered was that basically there's a shortfall of 35,000 jobs nationally
in this country every year. Those are jobs that could be filled and aren't being
filled. Some crops are not being grown because, as a farmer, you know you are
not going to have anyone who is able to grow and harvest it, so you don't grow
it in the first place; but you could.
That's really what that is about. We need people. Historically,
with the immigration patterns we have had, say, probably up to the 1970s, a lot
of people emigrated from different parts of the world and came to different
parts of Canada. Many of them would end up in the rural areas and be part of
agriculture. Many went on to be farmers, or they then evolved into the broader
workforce. We haven't had that degree of immigration for quite some time. That's
really led us to the position we're in today and a real dependence on both the
Seasonal Agricultural Worker Program and the Temporary Foreign Worker Program.
We need to get away from that. We need people to come to Canada,
to live in rural Ontario and to work in rural Ontario — not only in primary
agriculture, but in processing as well, so there will be a range of good jobs.
Senator Dagenais: Mr. Chambers, you said that you went to
visit young people in a school and that they were twiddling their thumbs. Don’t
worry. I went to a high school about a month ago, and the students were
surprised. I think they had never seen a senator in their lives, because they
were looking at me as if I were an alien. I said: “Go ahead and touch me!”
Meetings with teenagers are always interesting.
We have talked at length about seasonal workers. Last summer, I
went to a dairy farm with about 4,000 cows. The producer was explaining to me
that his problem was that he had to train workers every two years. The seasonal
workers he hires can work for him only for eight months the first year and eight
months the following year. After those two eight-month periods, those same
workers do not return to work for him.
You have proposed some solutions, but what would you like the
government to do to help you? Is the renewal of contracts the problem?
Mr. Chambers: We have been meeting with government for the
last month, with ESDC and CIC, and we have been floating an idea in front of
them. We're trying to work with them on solutions, a permanent solution for a
permanent problem, and to create the Canadian Agriculture and Agri-Food
Workforce Action Plan that is specifically for the value chain in agriculture,
so from the primary side right through to the primary processing.
That is a workable, long-term solution that gives us opportunity
to access immigrant workers, bring them in and move them to permanent residency.
One component is always going to be seasonal, so it is always going to be
temporary. But there's a huge component that is year-round, that is going to
need to be permanent, so for those positions we don't want temporary workers. We
want permanent workers.
The government needs to recognize that agriculture is unique. It
is not a drive-through Tim Hortons in a metropolitan area. These are rural
locations, and it is very difficult to get people, so we need a unique program
for a unique industry that is set up to create pathways for permanency.
Something like that, where you are training people and you have
to send them home and bring someone else in and go through the process of
retraining, becomes very expensive.
Senator Dagenais: You say that the government should set
up a permanent workers program. However, I got the impression that those people,
after their eight months, are happy to go back to their country with Canadian
money in their pockets, and I think that money goes a long way for them, because
the cost of living is cheaper there. I am talking about Latin countries. It was
a good deal for them to come back to Canada for another eight months, to make a
lot of money and to then go back to their countries. Not all of them acclimatize
to our Canadian winters, which are quite harsh, like our winter this year. What
would you like the government to do in those cases? You may want to give them a
permanent worker’s permit, but does that mean that they are interested in the
offer? Or would they rather work for eight months and go back to their
countries? Their families are often left behind. The wives wait with the
children and the men come with the money. I heard this from Latin Americans.
They say that they want to go back to their countries, because they can afford a
lot of things with the money they make in Canada. They want to come back to
Canada, but they can’t do so after two years. Can we do something? Are there
solutions that would allow these people to come back for three contracts, or
Mr. Chambers: We have talked about the two components.
There is a seasonal component in which they come for a duration of eight months
max. I'm not too familiar with it, but I think eight months is the max they can
come, and they have to go home during Christmas, and that's part of that
Those people can keep coming back year after year inside the
Seasonal Agricultural Worker Program. There is no duration, and they do. They
send home. It creates economic spinoff in their own homes and communities and
different countries for their families and children, for better education and so
on. Canada is doing their part to stimulate some growth around the world and
help other countries.
If you qualify for the seasonal component, those people will
always go home, and they always can go home, and there is no duration cap.
There are some issues if it's outside of the Seasonal
Agricultural Worker Program where you do hit the duration cap, which is what
some people are facing. Then after four years they can't come back again, and
you lose that spinoff.
There is a component of this program that we have said you need
to look at for agriculture that is unique, that if they work in a seasonal
position we feel there shouldn't be a cap on it because it is seasonal. If it's
not a seasonal position and it is year-round, then there needs to be a pathway
to permanency. So there are two components to that.
Don't worry about people thinking you look like an
extraterrestrial because my kids think that of me as well.
Senator Oh: This has been wonderful information from all
of you. From which region of the world do your temporary workers come from
Mr. Chambers: For our business, we have people from the
Philippines, Mexico, Germany, Ukraine, El Salvador. There are a number of
different countries. Brazil is another.
Ms. MacDonald-Dewhirst: Jamaica.
Mr. Wales: Guatemala.
Senator Oh: In our program now, every four years they have
to go back. They go back, and they're probably going to find something else and
probably fewer than half return. If you are lucky, you might get 35 per cent
Mr. Chambers: Yes.
Senator Oh: Yes. So what would be the best recommendation?
Would it be for them to stay up to 10 years before they can apply for permanent
Mr. Chambers: No, no. I think if it's a year out position
and they want to stay, we need to create a permanent pathway for them to become
permanent residents and stay.
I think the four-year cap is fine because that gives you four
years to become a permanent resident. If your English language isn't that great,
employers provide ESL classes to help these people get a better English language
level so that it qualifies.
That four-year duration cap was fine if there was a pathway for
permanency. For example, in our sector we can have a NOC code C, which is a
skilled livestock person. If you are a skilled livestock person, you can apply
for permanent residency through a provincial nomination program, and we have had
a lot of people do that. Within the meat industry, they are a lower National
Occupation Class, a level C, but there have been some agreements made with the
provinces calling that semi-skilled, so they have been allowing them through the
provincial nomination programs as well.
It has worked very well, but they have to check off the boxes.
Their language has to be at a certain level and so on and so forth. They have
been able to transition, but the problem is the lower-skilled occupations that
don't have a pathway to permanency, and employers don't want them sitting here
for 10 years in limbo. Do they live in Mexico? Do they live in Canada? Where are
they living? If we can have a pathway for those people to become permanent
residents, that would be the best solution.
Senator Oh: I think for the long run in Canada I still
prefer school education.
Mr. Chambers: Yes.
Senator Oh: Train them up for the long term. That's the
only way to solve the long-term problem.
Mr. Chambers: That's right, because we have got the
short-term issue right now, and the medium-term issue we have to supplement. But
if we can grow our own farmers, that's by far the greatest option.
Senator Beyak: I agree with our chair; you are an
excellent tag team. Thanks for your presentation.
You have shown that you have a great perception of the problems
that were in the Temporary Foreign Worker Program and why changes were made but
that you weren't a part of it. I'm glad to see your action plan and how you are
working cooperatively to address that part, but I'm interested in how we got to
Was it a gradual process? Was it more acute the last few years?
Are family farms getting smaller, fewer kids following in their parents'
footsteps, bigger crops, more immigrants moving to the cities instead of the
country? Can you pinpoint anything specific and how we can help you fix it with
Ms. MacDonald-Dewhirst: You had a great list going there.
You had your finger on it. Our population is focused in urban centres. Although
we have an agricultural history in this country, people are moving away from the
family farms. Farms are becoming bigger and not so driven by families anymore.
Fewer kids are staying on the farm; they're moving away. We have the seasonal
nature, and that component is an impact, so there are lots of reasons why. It's
a physically demanding occupation, and frankly, Canadians are pushing their kids
to be knowledge workers, so there is less of a push by the Canadian public for
their children and young Canadians to go into the agricultural industry.
All of that is impacting, along with immigration policies that
are bringing in different kinds of workers. Mark mentioned that the immigration
policy of the 1970s was very different than it is today, and that has an impact
That's why we have a proposed workforce action plan with the
short-, medium- and long-term solutions that really target what we need to be
doing in the long term to fix this issue so that we can maintain a healthy and
vital and vibrant agriculture and agri-food industry. We want it to grow and to
prosper, and to do that we have to invest in young people and get them excited
about these careers, but we always will have this other conundrum where it's
seasonal, physically demanding and difficult to get people to do the entry-level
Senator Beyak: Thank you for that. I think Senator Oh is
correct about the education component, because kids get very excited. I worked
on a farm as a girl, and I loved it. Congratulations on what you're doing and
best of luck with it because we all appreciate what you're doing.
The Chair: As we conclude the first panel, the last
question will go to Senator Unger.
Senator Unger: Just a short question: I'm wondering how
well you pay. The reason I wonder is that, for example, I know that tree farmers
have young university students and high school students going off to the
mountains to plant trees in areas that are not always that safe, and it's like
seasonal work for them. They go, they get paid per seedling that they plant, and
there never seems to be a shortage of them.
In Alberta, I'm very well aware of Sunterra. I think you need to
locate perhaps closer to Edmonton, because southern Alberta is certainly a
hotbed of activity.
I know the challenges. Alberta is a province that does teach home
economics. I have two grandsons, and they both have taken it and really enjoyed
I'm just curious about your pay scale. Is that a factor? I don't
need to know the amount, but is that a factor in this?
Mr. Chambers: A couple of comments, I guess. The first one
is about locating closer to Edmonton. We can't pick up our farms or plants and
move them. They are where they are, and they need to be in a rural location. To
give you an example of that, there was a meat plant just northeast of Calgary,
near Balzac, a small town, and it closed several years ago. It's just trying to
reopen right now. Harmony Beef purchased it and put $20 million into that plant
to revitalize it, and they're having problems with the City of Calgary. They
don't want it in their backyard. It's located closer to an urban centre where we
can try to get labour, but then you run into this problem where Calgary doesn't
want it there. The cities are saying, “Go out in the middle of nowhere,” so then
it creates the problem again of not having the labour. The location component is
that agriculture will always be rural; it will never be anything but rural, and
that's just the way it's going to be.
As far as wages go, we're competitive. The meat industry varies
on the skill level. Right now, we're advertising because we need workers on our
farm. We're advertising a starting wage of $16.25 an hour. People keep saying
the industry is suppressing wages, but it's not suppressing wages. It's not a
wage issue because I always come back to if it's all about wages, why was the
oil sector looking for people when they were paying $30, $40, $50 an hour? If
it's all about money, there should be no one on farms, and the oil patch should
be full, but it's not about wages. It's about what people want in life. Some
people want to live in a camp. Some people want to be home every night. Some
people want to work inside. Some people want to work in a team environment. It's
about people's quality of life and what they want out of life. It's not all
about wages. It's not pay more, pay more. That's such a short-term look at
We spend a lot of time on HR in our company and what people want
for part of their job. When you talk about pay, that always ranks way down at
the bottom because I can pay you today, and, yes, you'll be satisfied today, but
after three weeks that becomes the same. Then you want more and more because
it's not rewarding. It's about what you get every day.
The Chair: Thank you. If there is a message you're giving
us as a team, it's certainly the education side and where we should be going in
our schools from ages 5 and 6 to 16.
Thank you very much. On behalf of the committee, we appreciate
Honourable senators, we will now move on to the second panel.
Honourable senators, our witness now is Bruno Larue, full
professor at the Faculty of Agricultural and Food Science of Laval University.
Mr. Larue holds a PhD in agronomy from Iowa State University. He is a professor
with the department of agri-food economics and consumer sciences at Laval
University. Mr. Larue has held the Canada Research Chair in International
Agrifood Trade since 2003.
Mr. Larue, thank you for agreeing to appear before our committee.
The floor is yours. The senators will ask their questions afterwards.
Bruno Larue, Full Professor, Faculty of Agricultural and Food
Sciences, Université de Laval: It's a pleasure for me to be here.
I was told I have seven minutes to talk about four different
topics, so I'll try to be very fast. The first one has to do with expectations
of Canadian agricultural and food exporters and market access. Like any other
exporters, agricultural exporters would like to have markets as free as possible
of obstacles to trade in agriculture. Unfortunately, there are a lot of
obstacles to trade. Tariffs tend to be higher than for non-agricultural sectors.
If you look at Table 1, you'll see that the average agricultural tariff is
higher than non-agricultural tariffs. There are also usually fewer goods that
enter free of taxes in agriculture than in non-agricultural sectors, and most
countries have their highest tariffs on agricultural goods, what we call tariff
peaks, tariffs that often go as high as a few hundred per cent. Regional trade
agreements, like NAFTA, for example, and other trade agreements that Canada
signed, allow Canada to go around some of these high tariffs. If you look at our
list of trade agreements, Table 2, you'll find that a lot of our trade
agreements are with countries that the United States has trade agreements with.
This is not a coincidence. Every time the U.S. negotiates a trade agreement with
a third country, their exporters have preferential market access, so it's
important for Canada to negotiate trade agreements with the same countries so
that our Canadian exporters face the same sort of preferential access.
So, in some cases, we were quick on the draw. With the Europeans,
we managed to negotiate our trade agreement faster than the U.S. The U.S. is
still in the process of negotiating, but, for example, with South Korea, we were
lagging. Because of that, our exporters of meat products face higher tariffs in
that market than their U.S. rivals do.
A lot of the so-called sensitive sectors in agriculture are
protected by tariff rate quotas. Basically, a tariff rate quota allows a certain
volume or quota of imports to enter a country at a very low tariff rate. Any
imports above that are taxed, usually at a very high rate like those tariff
peaks I was talking about — 300 per cent or 400 per cent. Basically, it's almost
impossible to export over these sorts of quotas.
In the case of the agreement with the Europeans, we were
successful in negotiating tariff-rate quotas with the Europeans for soft wheat,
beef, corn and pork. In exchange, we increased the quota on cheese. So there
will be 18,000 tonnes more European cheese entering into Canada. Overall, I
think we did pretty well in these negotiations.
Non-tariff barriers are also very important in agriculture. There
are restrictions on food additives and maximum pesticide residue limits. There
are also restrictions on how we are supposed to structure our slaughterhouses.
There are all kinds of restrictions that are fairly complex and can block trade.
Luckily, in the WTO and also in regional trade agreements, we try to harmonize
these kinds of norms and standards. One of the biggest benefits of the
Canada-U.S. trade agreement that we implemented in 1989 — signed in 1986, I
think — was the recognition of national inspection. So, for exporters of beef
and pork products, basically that meant that products leaving Canada didn't have
to be inspected again once these products had crossed the border. So that
greatly facilitated trade.
But still, there are some irritants on that front, like the U.S.
law on country-of-origin labelling that essentially discriminates against the
export of livestock products like beef cows and hogs that are to be slaughtered
in the United States. A lot of U.S. slaughterhouses prefer not to deal with
Canadian imports, even when they're cheaper, because there is too much
paperwork. We won two panels of the WTO on this issue. We are expecting a third
one because the U.S. every time says that they're trying to respond to the panel
decision, but, basically, they're dragging their feet. So we're hoping that we
will win. If we don't, then we'll most likely impose retaliation measures.
There are also embargoes that hurt us. You probably heard that in
February a cow was suffering from the bovine spongiform encephalopathy. I know
the term in French. In English, I'm not so good, but the acronym in English is
BSE. Anyway, the last time we had such an event was 2011. It's not as if we have
a huge problem. These things don't occur very often. As soon as it was
announced, the meat from that cow never entered the food chain. Six countries
decided to close their market for a single case, and the meat was never
Things like that hurt our industry. It's mostly Asian countries
that closed their markets. As a whole, they didn't make a huge amount of trade,
but they were considered markets where we wanted to grow. So that was a setback.
Of course, there are political issues, like the Russian embargo. That mainly
hurt Quebec pork exporters because Russia was the third-largest market for
Canadian pork exports, after the United States and Japan, so we had to scramble
to find other markets. When you're exporting meat, you have to be fast.
Of course, if we could progress at the WTO, markets would open,
not just a few markets at a time, like we do with trade agreements, but a whole
bunch of markets. If Canada could use its weight in negotiation, that would
certainly help. There's also the Trans-Pacific Partnership that we're in the
process of negotiating that would open markets but also create more congestion
on the U.S. market. So it's not only good news for our exporters.
In terms of sustainability, environmental health and animal
welfare issues, farmers are increasingly adopting agro-environmental practices
or what we call best management practices, so they are very sensitive to
environmental issues. Because we've done studies on that, we know that they know
that they benefit from adopting such practices, and what they are doing also
helps their neighbours and family. It's the same with food processers. They are
very concerned about that, as well as about health issues and animal welfare
You probably heard not too long ago that McDonald’s U.S.A.
decided not to buy chicken from suppliers that would use certain antibiotics.
That was a major move — a bold move on their part. In terms of antibiotics, a
big issue is the cross-resistance. On that front, we've got a lot to do. I would
say that is the weaker side of our approach on sustainability.
On animal welfare, I mention a case in California because
California adopted a new law in 2008 about giving more space for each bird in
cages. Unfortunately it sort of backfired on them because a lot of farmers,
instead of investing in new cages, decided to put fewer birds in each cage. As a
result, production declined and prices have gone up.
Other states are suing California also because they are not
allowing eggs from other states. So it's one thing to pass regulation; it's
another thing to live with the consequences.
In terms of food security, diversity and traceability, in terms
of diversity, food is no different from any other sector. Consumers want
diversity. People don't want to always eat the same thing. It's normal that we
import and export a lot of goods, especially processed goods. A lot of
companies, like Maple Leaf, are moving in big ways into further processing, and
that's not by accident. That's where the margins are. Nowadays, if you go to a
grocery store you'll see rows with nothing, but also rows with seasoning already
on them, different flavours and brands. That’s exactly what international trade
theory says: If you create an environment where people can have market access,
they'll develop new products to bring diversity.
It's not by accident that we are exporting a lot of food product,
processed product, but we're also importing a lot of processed products.
In terms of food security, the best way is to have an open
border, and our big distributors are pretty good at sourcing goods from
everywhere, including the domestic market, and of course to be productive. In
order to be competitive, we don't have to be a net exporter at all levels of the
marketing chain. In Quebec, the second-largest exports are chocolate products,
right behind pork meat and ahead of maple and soy products. Of course, we don't
grow cocoa beans.
Likewise, if we look at exports from Western Canada, they export
a lot of primary products to be processed elsewhere, like wheat, like canola, so
the canola is not necessarily crushed here. We see more and more of that sort of
supply chain. For example, the auto industry where they source parts from
everywhere, and different countries are exporting and importing cars. We see the
same sort of thing happening in the food industry.
Regarding traceability, it's a tool. It's a useful tool because
the quicker we can identify the source of a problem, the quicker we can solve it
and limit the damage. Unfortunately, the research shows that consumers are not
willing to pay for it. So it has to be paid for by the industry, and then how do
you split the risk and the cost? That's difficult. To some extent, that's why
there's more and more vertical integration to deal with those sorts of thing.
But traceability is certainly part of a broader risk management strategy.
On competitiveness and productivity, if you look at Figure 1,
you'll see the trade balances for crops, livestock, processed products and
beverages. The biggest surplus is for crops, and then we have lower surpluses
for food products and livestock products. We have a deficit for beverages, so I
guess we're drinking too many imported wines. In terms of total exports, of
course, food exports are the largest.
In terms of productivity, if you look at Figure 2, you have
several countries. The country that has the highest level of productivity growth
between 1962 and 2011 is Brazil. That's not surprising. They have a lot of land.
They have water. They have a great climate, the know-how and good entrepreneurs.
The largest meat processor in the world is a Brazilian firm. They're the ones
who bought XL Foods in Alberta after the problem with XL Foods. Canada is in the
middle of the pack. We're behind China. I don't think China can sustain that
sort of productivity growth. They are facing water constraints. They have
tremendous pollution problems. They're going to have to address these issues. So
I don't think they can sustain what they've achieved in the last 20 years. The
U.S. and France are ahead of us. But overall, we're doing a lot better than the
U.K., India and Argentina, which is also a competitor. They export beef. They
also export wheat, like us.
In terms of the processing sector, we have firms that are leaders
in their industry; Saputo, Agropur and dairy products are doing very well. Maple
Leaf is a very large firm, highly competitive. We're doing really well except, I
would say, in dairy where we have the third-highest production costs in the
world. Our processors are now investing everywhere except in Canada. So they're
investing in Australia, the United States and South America.
That's all I have prepared.
The Chair: We have about 15 minutes left before Mr. Larue
has to leave. Senator Tardif will start, followed by Senator Maltais.
Senator Tardif: Professor Larue, thank you for a most
interesting presentation and thank you for sharing your expertise with the
Mr. Larue: It is a pleasure.
Senator Tardif: In the document provided to us, you said
that Canada needs to start negotiating agreements with other countries before
the United States. You gave the example of meat exports in South Korea, where
the Americans have an advantage over Canadian exporters. What is the impact of
this advantage on Canadian exports, and how can we set ourselves apart from the
Americans to reduce their advantage?
Mr. Larue: The best strategy is to negotiate with them. If
I remember correctly, in South Korea’s case, we had started to negotiate before
the Americans, but then the negotiations dragged on, and when the Americans
approached the South Koreans, they ended up taking up the whole space.
Things dragged on with Canada because the automotive industry and
the meat industry were lobbying in opposite directions. The beef and pork
exporters wanted to sign an agreement quickly, but the automotive industry was
far less keen on the idea of opening up the Canadian market.
The ideal is to do what we did with the European Union. We must
hurry to sign agreements before the Americans get serious about their
negotiations with those countries. Otherwise, we are at a disadvantage. In some
cases, there is a tax difference of 10 per cent to 15 per cent, which can be
Senator Tardif: Between 2006 and 2014, 143 food processing
plants closed down. Does the closure of those plants reflect a lack of
productivity and competitiveness on their part?
Mr. Larue: That can vary from case to case. The plants
that shut down in Ontario made more noise. In the case of the Kellogg plant,
productivity may have been an issue, but there is also a question of consumer
habits changing. People will often have yogurt for breakfast instead of cereal.
Young people have different eating habits from older ones. They no longer may be
eating three meals a day like other generations. They snack a lot. They might
eat five or six times a day and not eat full meals. They often eat in front of
their computers or when they are checking their smart phones. Eating habits have
Senator Maltais: I would like to thank Mr. Larue for
appearing before our committee. I am always happy to receive people from my
city, especially people of your calibre. Congratulations on your work on free
A lot of free trade agreements are being signed or will be signed
in the near future, so this will not end overnight. Canada is being called upon
to produce more in terms of food. A lot of people from all over the world don’t
eat three meals a day. In other words, improving our production means
industrializing it to the extreme. Would you not like to have a nice little
provision that would allow us to import the workforce permanently?
Mr. Larue: The workforce is a problem, not only here, but
also in a number of other countries. For instance, the United States has a lot
of foreign workers. In addition, some regions such as in California are dealing
with water problems, which we don’t have. They are dealing with closer
competition from Mexico. We are not the only ones with workforce problems.
Vegetable producers need foreign workers.
Workers in plants no longer make the same salaries as before. For
instance, jobs in packing plants used to be very well paid, but we had to adjust
to the U.S. wages. I think it was in 2007 that there was a significant
adjustment in Quebec for the Olymel plants, I believe, and all the other plants
jointly negotiated new labour contracts. The workers had to accept wage cuts of
about 30 per cent. Incidentally, an Olymel plant is now on strike, which harms
exports. The workers are trying to make up for past losses.
Clearly, they also factor in the exchange rate. One of the things
that is really helping us right now is the exchange rate with the U.S., because
most of our exports go to the U.S. When I was talking about the export of
chocolate products from Quebec, 98 to 99 per cent of those exports go to the
U.S. When the Canadian dollar drops, we catch a big break.
Senator Maltais: Thank you.
Senator Dagenais: Thank you, Mr. Larue. I am thinking of
two large chocolate exporters in Saint-Hyacinthe. I can’t remember their name,
but they are major exporters. There is —
Mr. Larue: Barry Callebaut.
Senator Dagenais: That’s the name I was looking for. I
would like to go back to the Canadian dollar that is at 79.99 cents right now.
It has gone up a little. I often go to the U.S. for personal reasons, so I
experience this on a daily basis. Some producers say that the drop of the dollar
can improve exports abroad. Others claim that we must not develop our
competitiveness strategies based on how weak the dollar is. We are hearing two
different stories. What do you think about that?
Mr. Larue: If we look at the evolution of plant wages, the
adjustments were made at the beginning of the 1980s in the U.S., but not in
Canada, where that was done much later because the dollar was very weak. I took
a sabbatical year and I spent it in the U.S. when the dollar was at around
65 cents. I was being paid in Canadian dollars and living in American dollars.
Senator Dagenais: That’s not easy.
Mr. Larue: At that time, the dollar made up for higher
wages in our plants and productivity problems. Since the lock-out in some
slaughterhouses — in 2007 I think — processors took that opportunity to
modernize their plants, which made it possible to increase productivity. We
can’t expect the dollar to stay down and to continue to go down. If oil prices
go up, the dollar will definitely start going up again. We cannot rely on that
factor only. At one point, the dollar went up significantly, which prompted our
exporters to diversify their destinations. Our pork exports, among others, now
go to about one hundred countries. In the past, we were only present on the U.S.
and Japan markets. We had taken large segments of the market in Russia, which
undermined the embargo. However, exporters were expecting that. They don’t rely
on the exchange rate only. They know that things can change and that it is very
difficult to predict the future of the markets.
Senator Dagenais: I would have another question. You
mentioned McDonald’s, which is considering selling antibiotic-free chicken. I
know someone who has a chicken farm in the Quebec area. We were talking about
the Saint-Hubert chicken chain, which is one of their biggest clients. Mr. Léger
said that poultry producers act a bit like lords, because they are protected by
supply management. The producer I mentioned said that if he wants
antibiotic-free chicken, he can obtain it. However, we should not forget that
antibiotics prevent salmonella contamination of food. I would like to know what
you think about this.
Mr. Larue: McDonald’s restaurants purchase chicken without
certain antibiotics; you have to make a distinction. In my opinion, the total
elimination of antibiotics is not realistic. That is what veterinarians think. I
am not an expert on this. Antibiotics are used preventively, and probably far
too much so. So certain improvements need to be made to deal with disease
outbreaks, among other things. The chicken production cycle can be very short.
If there is only about a week left in the production cycle and an infestation
occurs, the chickens have to be treated before being sent to the abattoir. In
situations like that the producer does not really have a choice. According to my
discussions with veterinarians, the regulations differ from one province to
another as to the use of antibiotics. Some measures should probably be put in
place in this regard.
Senator Dagenais: Thank you very much, Mr. Larue, this was
Senator Enverga: Thank you for the presentation. You have
a publication about the GI, the geographical indicators. I know we will have
trade between the EU and Canada. Is it advisable for us to have the same GI
protection system? How would it affect us?
Mr. Larue: Traditionally we had the same position as the
U.S. — that is, we didn't have geographical indicators. We didn't have
protection for that because we were using, basically, copyright laws. If you
wanted to use a term, you could buy the copyright for it. For example, in
Canada, the designation “Parma Ham” is owned by Maple Leaf Foods. The Italians
from Parma that wanted to export Parma Ham could not export Parma Ham. I think
they had to call it Ham No. 5 or something like that, which was a bit crazy.
We recognized certain terms and certain geographical indicators,
but at the same time, we're allowing some terms that were very close to be used
by our processors that had been using these terms. We're hoping to develop more
product. We have a few, so some firms are hoping to build new marketing
strategies around designations of that kind.
Personally I don't think that it was a big — it took a long time
to arrive at an agreement on this, but I don't think there was a major loss for
The Chair: I have something before we leave, honourable
Mr. Larue, you mentioned that the United States is also facing a
labour force challenge. How does this compare with Canada, and what mechanisms
could be stepped up in North America to increase production?
Mr. Larue: For workers, clearly some jobs are harder than
others. In California, for instance, strawberry producers complained that peach
producers were stealing their workers, because it is less difficult to pick
peaches off trees than to bend over to pick strawberries. However, when workers
are paid the same amount, they will of course prefer to pick peaches rather than
They have the same kind of problem. For processing plants, the
training of workers is another issue. In certain cases, some workers have
developed manual dexterity because of experience. For some businesses it is
clearly important to try to keep their workers after having devoted time to
their training, and they would like to avoid having them stolen away by
competitors. Certain processors have spoken to me about that in the past.
However, generally speaking, we are doing a lot of work. For
instance, we try to make sure young farmers receive a minimum amount of
training. Now they are practically forced to have a college degree, three years
of training, which means a CEGEP degree in Quebec; in other provinces, I think
these are two-year programs.
The typical farmer these days is someone who is better able to
adapt to new technologies. They are very connected people who follow the markets
on the Internet. A lot of ground has been covered in that area. These are people
who use software for their accounting. Most of the time now, a farm is a
multimillion dollar enterprise. Not only do farmers have to be good agronomists,
and have good general knowledge in veterinary medicine in some cases; they also
have to be good managers. In this regard, there has been a lot of improvement.
The Chair: Mr. Larue, thank you very much. You have given
us a lot of information, including a whole chapter on the international
situation. We thank you.