Proceedings of the Standing Senate Committee on
Agriculture and Forestry
Issue No. 6 - Evidence - Meeting of March 24, 2016
OTTAWA, Thursday, March 24, 2016
The Standing Senate Committee on Agriculture and Forestry met this day at 8 a.m. to continue its study on international market access priorities for the Canadian agricultural and agri-food sector.
Senator Ghislain Maltais (Chair) in the chair.
[Traduction]
The Chair: I welcome you to this meeting of the Standing Senate Committee on Agriculture and Forestry.
I'm Senator Ghislain Maltais from Quebec, chair of this committee.
[Français]
I will ask the senators to introduce themselves, starting with my deputy chair.
Senator Mercer: Terry Mercer, from Nova Scotia.
Senator Patterson: Dennis Patterson, from Nunavut.
[Traduction]
Senator Dagenais: Jean-Guy Dagenais from Quebec.
[Français]
Senator Ogilvie: Kelvin Ogilvie, Nova Scotia.
[Traduction]
The Chair: Thank you very much. Today the committee is continuing its study on international market access priorities for the Canadian agricultural and agri-food sector.
This morning we are privileged to welcome the UPA, the largest agricultural union in Quebec, represented by Pierre Lemieux, Executive Vice President, as well as Marie-Ève Bourdeau, Advisor, Economics. I should point out that I have known Mr. Lemieux for many years. He is not only the vice president of the UPA, but also a major dairy and maple syrup producer. Thank you both for coming.
We must provide our Senate report on June 30 and submit specific recommendations to the Minister of Agriculture. Your presence here demonstrates your interest in the work of this committee and in the future of agricultural production. We are not examining these issues for the short-term, but rather from a perspective of 10 to 20 years, which is why your being here is important.
You have 10 to 12 minutes to make your presentation and then the senators will ask questions. We suggest that you keep your answers short so that most senators can ask you questions. I would like to inform my English-speaking colleagues that the presentation is in French only. It is currently being translated and should be available shortly.
Allow me to introduce the senators who have just joined us: Senator Lynn Beyak, Ontario, Senator Wilfred Moore from Nova Scotia, Senator Nancy Raine from British Columbia, and Senator Pana Merchant from Saskatchewan.
Mr. Lemieux, Ms. Bourdeau, you have the floor.
Pierre Lemieux, Executive Vice President, Union des producteurs agricoles du Québec: Thank you for welcoming us to this Senate committee that deals with agricultural matters, particularly in terms of export policy, with a goal to clearly understand agricultural issues.
First, I would like to point out how important farming is to our fellow producers and to all Canadians in terms of contributing to the economy and feeding the country. It is also important that, during international negotiations, we focus on retaining our food capacity right here at home. This capacity should be as diversified as possible and must meet the expectations of the society that we live in, which is not always the case in other producing areas, given their standard of living.
To preface my comments, I would also point out that government policies or guidelines, during trade agreement negotiations, should take into account domestic markets and how they operate, while at the same time considering the specific concerns pertaining to external markets. Any negotiations must take into account the practices prevalent in our country, which are based on the support provided to the agricultural sector in the form of assistance for market mechanisms. We even have laws and regulations, including laws governing collective marketing that provide for such things as the implementation of supply management mechanisms. Then there are all the policies that ensure financial support and assistance for agriculture.
First, we will talk a bit more about the restrictions in the last two negotiations that Canada was involved in, namely the TPP agreement and the trade agreement with Europe.
With regard to supply management, both of these agreements contain rather significant restrictions and could result in income losses for Canadian farmers who operate under this government support system, the supply management regulations. In this context, the Canadian government must adopt fair policies as part of its international negotiations. Yes, we recognize that the negotiations being conducted do protect our ability to export to other countries, in the sense that Canada might be isolated and excluded from agreements that other countries negotiate with each other if it did not participate in such negotiations. We have no choice but to be there.
At the same time, however, we must consider elements that are not negotiated or that we often forget to include in these bilateral negotiations. Indeed, we often forget to look at the aspects related to financial support and assistance. We tend to open access to our markets, but we forget to discuss the state subsidies provided to producers in other countries. In the last two trade agreements, the component pertaining to our products, which is subject to supply management regulations, was included in the agreements. This opens up holes and harms the industries affected. Therefore it is important that we develop mechanisms to compensate for farming income losses, when that time comes. We still have doubts about the government's capacity, will or determination to develop these mechanisms, despite their promises. We need to know that the government has the will to deliver.
You must keep in mind that we are a northern agriculture country, and that is why we are presenting a chart that shows the support provided to producers in other OECD countries in the form of direct payments and price supports. We can see that when it comes to direct support to farmers, Canada is well below the OECD average. When regulatory support is included, Canada is still the poor relation among OECD countries with respect to the total support it provides to its agricultural sector, even compared to such countries as Norway and Switzerland, whose climates are comparable to ours in terms of nordicity.
I would also remind you that when it comes to trade rules, restrictions are often forgotten in negotiations. Many of these restrictions concern product safety standards based on requirements imposed by certain countries that end up hindering trade, which would otherwise follow a more natural course.
We prepared a table showing some examples, including the 2014 Farm Bill in the United States, which focuses on financial assistance to dairy producers. If we look at the COOL requirements (certain labeling requirements indicating the country of origin) from 2008 to 2015, some were abolished, but only for the hog and cattle industries. Other sectors, especially lamb and poultry, are facing severe restrictions in terms of exports to the United States. This country is putting in place financial aid policies for the sugar industry, and some of their products are supply-managed. Each country has different rules to support and protect their crops or the more sensitive products.
In Quebec, we focus on supply management. More than 40 per cent of farming operations in Quebec benefits from supply management. Consumers disparage supply management. From their perspective, eliminating supply management policies would result in significant savings. We are therefore presenting a table showing the different prices of products that are sold worldwide under supply management, especially milk. We compared the price of milk, yogurt, cheese and eggs sold in Toronto to that of the same products sold in other cities in various countries. The table shows that our consumers, on average, do not pay more for their products than consumers in other areas under supply management. Moreover, it is interesting to note that, despite these rules, we managed to achieve savings on marketing as a whole, which ensures that our consumers have access to high-quality products at similar prices.
To conclude, competitive farming is possible when several important factors are brought into play. First, there is access to labour. Some countries have more flexible rules on access to the labour force. The U.S. is more accommodating regarding wages and benefits to unaccredited workers. So it is important to establish effective labour measures and policies that promote access to temporary foreign workers properly and fairly.
We also want to strengthen border controls. Currently, in the dairy industry, there are labelling abuses to circumvent the system. We process milk in a different way, which means that the label does not match the definition. Changes have to be made to the definitions associated with the regulations, especially regarding diafiltered milk. We must act urgently to resolve this problem.
It is also crucial to get help for research and innovation, and get coverage against the risks associated with weather conditions, since these are factors we cannot control. To use our jargon, this would be crop insurance or AgriInsurance programs. It is also important to develop insurance programs that support markets when there is an imbalance of supply and demand, including Agri initiatives that rely on AgriInvest and AgriStability. At one time, we had higher risk coverage. However, under the Growing Forward 2 program, coverage has been reduced. We are asking for the risk coverage to be increased as it was under the first iteration of the Growing Forward program, specifically for agri- investments of 1.5 per cent. Currently, they are set at 1 per cent. We also want the assistance under the AgriStability program, which declined from 85 per cent to 70 per cent, to be increased to 85 per cent. We understand why the AgriStability program reduced its support to 70 per cent, based on allowable income over historical reference margins. For periods when incomes exceed production costs, this ensures that some money can be recovered even if prices have not reached a somewhat more critical period for farming businesses.
In short, it is essential to put in place risk coverage of 85 per cent under the AgriInsurance program and set benchmarks in terms of the financial assistance granted per business in order to provide an effective level of security to the majority of our businesses.
It is important to enter into trade agreements, especially regarding the many restrictions associated with crop and plant protection. The Canadian agency responsible should relax its rules to enable farmers to penetrate markets, particularly when it comes to state subsidies. About 75 years ago, agricultural economists compared the agricultural economy and the normal market economy. The UPA asked Université Laval to look into the problem observed 75 years ago to determine whether there are still gaps. Catherine Brodeur found that this problem still exists. We will send you this study so that you can propose recommendations for support to the agricultural sector.
The problematic aspects for faming relate to the production cycle, when it is difficult to adjust short-term production. When planting in the spring, we have no idea whether we will have good or bad crops. Since they do not know about the crops in other areas, farmers cannot make last-minute decisions concerning their seeding or production capacities.
There are also problems with perishable products. We cannot hold on to our products until the market prices or sales improve. We are unable to keep our products. Unfortunately, we have no control over the weather and disasters. These problems are likely to worsen in the near future because of climate change. Technological innovation also involves significant risks, including lower costs, increased production and lower income. This means that, in many cases, the offer comes much faster than the demand and at different rates from one area to another. All this depends on the farming community's ability to act on the offer in its sector.
As for demand, it is not true that prices are inelastic because demand is limited. Right now, when it comes to prices and incomes, there is no increase in incomes in step with demand. Farm operations are small businesses, meaning that there is an imbalance with processors, which are mostly large companies, multinationals. To conclude, it is essential that we have a good agricultural policy if we are to continue developing Canadian agriculture, and we should properly support it.
The Chair: Thank you, Mr. Lemieux. We will proceed with questions. Honourable senators, please keep your questions short. Mr. Lemieux, please be as brief as you can with your answers so that everyone gets a turn during this round of questions.
[Français]
Senator Mercer: Mr. Lemieux, thank you very much for your presentation. It was very thorough.
I'm always impressed by the fact that people in supply management come to this table and talk about their support for international trade, the TPP or the European free-trade agreement. I think it's a very sophisticated and very mature attitude that some people around the table probably didn't anticipate would happen. But I also appreciate your concern about some aspects of the agreements. I am a huge supporter of supply management.
I would say, though, that one of the problems with supply management is your comment about some people thinking that, if you remove supply management, you would lower prices; if you remove supply management, you would lower the number of farms in Canada — that's what you really do.
But one of the challenges people in supply management have is to continue to explain to Canadians the value of supply management — the fact that the Minister of Finance gave his budget the other day and didn't have a big line in there for money going to supply management. You people are financing it yourselves. That's a very real issue. Your chart, which you provided to us, shows the cost of some products — yogourt, eggs, cheese, et cetera — in various cities is very helpful, because it shows that we're very competitive — using Toronto to compare with places like Baltimore, Lyons, Christchurch, et cetera. Thank you for that.
One of the issues that has come up is that, with the imposition of the TPP and the European agreement, there are certain losses and certain risks to some supply-managed products, such as dairy. There is also the proposal that a certain amount of off-set would be made by the Government of Canada, providing money to the industry to offset those potential losses.
Are you not concerned that the money, which I'm sure will be well received by the people in the farming community, may put us in contravention of our other major free-trade agreement, the North American Free Trade Agreement with the United States and Mexico?
[Traduction]
Mr. Lemieux: Yes, we're going to continue advocating for that. I hope that our political representatives will support our efforts and help us promote and advocate for supply management. Subsidies and compensation would be well received. Actually, they're critical, and they're one of the conditions for approval of agreements negotiated between Canada and Europe and Canada and the other TPP members. I don't think it causes problems with trade. My colleague might have something to add.
Marie Ève Bourdeau, Advisor, Economics, Union des producteurs agricoles du Québec: The compensation announced by the Harper government, which has not yet been confirmed by the new Liberal government, was for CETA, the agreement with the European Union, and the TPP, so for both agreements. There's an open door with those two agreements. The compensation would cover the market losses for supply managed products. The other agreements we have signed to date have protected supply management. Under these two new agreements, we may be compensated for our losses.
[Français]
Senator Mercer: I appreciate that. It's another case of Canadians being the good guys; we continue to play by the rules.
As we know, the most important piece of equipment on an American farm is a mailbox where the cheque comes in from Washington to cover off all the subsidies that they receive. So I'm with you on that.
I do have one question. You talked about diverted products, particularly unfiltered milk. Could you perhaps explain that a little more? I may have missed something in the translation. Could you explain the difficulty with diverted products and what's really happening?
[Traduction]
Mr. Lemieux: The problem with derivatives is that there are regulations governing products that have to be regulated and the volume of product that can cross the border. For example, in our brief, we discussed quite a few products coming into Canada, even dairy products and other supply managed products, in terms of higher percentage volumes than what the United States is letting in as supply managed products in their country.
Diafiltration is a way of processing milk to change its composition so that the criteria in the regulations no longer apply. We have to improve the regulations to define diafiltered milk or the mix of proteins found within components of diafiltered milk. We have to include that definition in the regulations so that the Canadian body responsible for enforcing the restrictions at the border can act.
Right now, that gap in the regulations for products that aren't identified or defined is being exploited to import products that can't be regulated.
Ms. Bourdeau: When products arrive at the border, the Canada Border Services Agency decides which category they belong to. Products are separated into categories. There are natural products, such as milk, and processed products that are considered to be protein concentrates. Natural milk product imports are regulated at the border, and tariffs are collected, but no tariffs are collected on protein concentrates entering Canada. A significant quantity of those products is being imported.
In the past, the government had a system restricting how much protein concentrate could be used in yogurt and other manufactured products. In such cases, the Canadian Food Inspection Agency inspects the product. If the agency determines that it's a protein concentrate, it limits how much can be used in food manufacturing. Once those products cross the border, the amount that can be used in food manufacturing is limited. The problem with diafiltered milk is that the Canada Border Services Agency considers it to be a protein concentrate, which means no tariff is levied when it's imported, but the Canadian Food Inspection Agency considers it to be a milk product that is not restricted in food manufacturing. That's the problem.
The Union des producteurs agricoles du Québec would like the definitions of this product to be identical across agencies. Ideally, diafiltered milk would be restricted at the border or at least in terms of how much can be used in manufacturing.
[Français]
Senator Mercer: You explain it perfectly. It's not a problem we haven't heard before. It's a problem of our left hand knowing what our right hand is doing. Thank you, chair.
[Traduction]
Senator Dagenais: I would like to thank our guests for being here this morning. I don't want to get bogged down in supply management, but I need to understand something. In 2011, I was the Conservative candidate in Saint- Hyacinthe, which is kind of eastern Canada's agricultural heartland. I spent 39 years working for the Sûreté du Québec. I've met with people from the UPA, who helped me understand supply management, and I advocated for it during the election campaign.
That being said, I find it strange that, in Florida, four litres of milk costs $1.99, which is pretty cheap. Dairy products, eggs, and poultry are much cheaper than ours. Many of the witnesses we have heard from stated that it's because our products, Canadian products, are better. Can you tell us in what way Canadian dairy products are better?
Mr. Lemieux: The biggest reason is added hormones. Canada does not allow the use of somatotropin, but the United States does. It's a hormone that stimulates cows to produce more milk. This hormone is not allowed in Canada because we chose to prioritize animal well-being.
Also, the production and warehousing of milk is more strictly regulated here than in the United States. Canada's dairy producers have to comply with the proAction initiative, one of the most stringent quality and safety standards in the world that ensures the quality of the final product.
With respect to other agricultural products, we can provide a list of products used in production. In the pork sector, which is not supply managed, ractopamine is banned in Quebec.
These are some of the reasons why Quebecers have access to better-quality food products. The situation is similar for pesticides and insecticides. Many of these products have been banned in Canada for a long time, which is not the case elsewhere.
Senator Dagenais: Switching gears, sustainability and greenhouse gas emissions are very popular topics these days. A few years ago, Quebec's former deputy premier, Nathalie Normandeau, jokingly commented — I see you smiling — that cow flatulence contributes to the greenhouse effect. I'm not sure where she got that information, but I suppose she has other fish to fry these days.
Anyway, with respect to developing new markets, are you contemplating production methods that would optimize both the domestic and the international markets while taking sustainable production that doesn't increase greenhouse gases into account?
Mr. Lemieux: We certainly have plenty of environmental protection requirements that support sustainable development. That's actually one of the factors we want our governments to keep in mind when negotiating trade agreements.
Other production areas aren't necessarily as advanced with respect to environmental protection rules and regulations or to promoting what we would consider sustainable agricultural development. We want to find a way to restrict the importation of products that are not subject to the same sustainable development rules as ours because our people are working under additional constraints and we can't compensate them for the cost of complying with sustainable development rules. It's hard to recover the cost of these additional constraints in the market. It's hard to explain to consumers that these constraints affect the cost of food products. Some production methods that are not subject to environmental constraints can result in cheaper final products.
Ms. Bourdeau: I just want to add a quick comment. You asked about agriculture in general, but I'd also like to mention supply management. By definition, supply management contributes to sustainable development in that it minimizes trade-related transportation. Whatever we produce here, we try to find markets for domestically. We adjust production to consumption to satisfy Canada's needs, and that limits the amount of food-related transportation.
Senator Merchant: Thank you. I have a quick question about foreign workers. Can you be more specific about what governments should do about foreign workers?
Ms. Bourdeau: We want to make it easier for foreign workers to come work in Canada for extended periods of time, and we would like shorter administrative delays so that producers can access foreign workers. We would rather employ workers from Quebec and Canada, but they are not always available. For example, sometimes foreign workers come here to work for two types of farms because of annual production cycles. Couldn't they work on some farms at the beginning of the summer and in apple orchards in the fall? The idea would be to make it easier to transfer that workforce.
Mr. Lemieux: I agree with Ms. Bourdeau. It takes a long time to process the applications. It should take less time. We need to be flexible and have the option of finding workers who want to work in two different places so that we don't have to submit a second application later in the year. We have to allow foreign workers to work in two places, and we have to change the program so that Guatemalans can work in Canada for more than four years.
As you know, skill and training are important factors when it comes to agricultural workers. When we have to switch those workers more frequently, we have to start from scratch with training. The four-year limit has major financial repercussions on agricultural businesses.
[English]
Senator Beyak: You've answered both my questions. One was on unfiltered milk, and the other thing was on the foreign workers. But I missed something, I think, in the translation that's down to 60 per cent that must be brought back up to 80 per cent. I wonder if you could elaborate a little bit more on what you were speaking about.
[Translation]
Mr. Lemieux: Growing Forward included two programs, AgriInvest and AgriStability, that provided subsidies to producers. In the first Growing Forward, AgriInvest was 1.5 per cent, and it was reduced to 1 per cent in Growing Forward 2. The AgriStability program was 85 per cent in the first Growing Forward, and it was reduced to 70 per cent in the second. That percentage is catastrophic. The stabilizing effect we were looking for no longer exists, and the program is catastrophic. We want to raise that rate to 85 per cent and limit businesses' intervention.
The Chair: Before I give the Deputy Chair the floor, I have a couple of questions for you, Mr. Lemieux. You mentioned research and innovation. We know that the agricultural sector is very competitive and that research and innovation are as important as ever. Senator Mercer and I had an opportunity to visit Université Laval's faculty of science and agriculture and a campus in Saint-Hyacinthe. Do you think that the research and innovation these institutions are doing has an impact on the ground?
Mr. Lemieux: Yes, there are major spinoffs. Government funded research and innovation create spinoffs that help farmers maintain some autonomy. If we allow multinationals to take over the research, then farmers become more dependant, which is disrespectful of the foundation of autonomous farming enterprises whose owners are the managers. We become workers or operators who always depend on someone else. Eventually, we are left with little to no room to change our products or decide where to market our end products. That is what it has come down to. That is why we are calling for a reinvestment in favour of research and innovation in order to keep our farming enterprises somewhat autonomous.
The Chair: What you are asking for is quite clear. It is the federal government that provides a large part of the subsidies that go to the research centres and universities. We must continue to invest, to avoid having farms become dependent on large multinationals.
My second question is on statistics. Don't worry about it if you don't have them on hand. Let's look to the future, 20 years from now for example. Will arable land in Quebec still be farmed for the most part, or will there be any left to be farmed?
Mr. Lemieux: As far as Quebec is concerned, no. A certain percentage of farmland is still out of production. In the early 1950s or 1960s, production capacity was much larger than it is today. Much of the land has been reforested. The land had agricultural capacity, but farming it was not financially sound, which discouraged farmers. Indeed, Quebec has a much larger production capacity. I imagine that in other production areas in other provinces there certainly could be an opportunity to expand or make up for the farming we have lost.
The Chair: I ask because Canada will certainly have to produce more in future in order to help populations. For example, Quebec has a Chinese population that is growing right before our very eyes, as is its Indian population. There are also the TPP treaties to consider. In our humble opinion, Canada still has quite a bit of agricultural land that could be used to feed the growing population and in turn help our famers.
I have one last question. How is the maple syrup harvest this spring?
Mr. Lemieux: Production has started in the warmer regions of Canada — we know that maple syrup is produced mainly in Quebec, Ontario, New Brunswick, and a bit in Nova Scotia. In Ontario, production is going well and the harvest promises to be good. So far, it's hard to say how much we'll end up with, but the harvest is looking good.
In southwestern Quebec, production seems to be going well and has started as far away as La Pocatière. So far, production is good and the quality of the syrup is excellent.
The Chair: Do you think the producer price will hold this year?
Mr. Lemieux: Yes, thanks to the marketing system that was put in place. However, unfortunately, Minister Paradis' comments, along with the Gagné report, do not reflect the economic reality of the maple syrup industry. Minister Paradis did not have accurate information. Canada or Quebec's market share curve was not taken at the right place in a global context. The curve was taken from 2000, when it should have been taken from the early 1970s or 1980s. Then we would've seen that Quebec or Canada's market shares with regard to the U.S. market have stabilized and not declined.
[English]
Senator Mercer: First of all, chair, you anticipated a couple of my questions. I want you to know that I visited a sugar shack this past week north of Truro, Nova Scotia. I want you to know it was busy. It was good see so many people visiting this year and purchasing their products.
That wasn't my reason to be on the list for the second round.
I wanted to go back to your discussion of research. I'm supportive of the request for more money for research, but only if you can tell me that the union and the supply-management organizations — dairy farmers of Canada, dairy farmers of Quebec, the egg producers and chicken farmers — are also stepping up to the plate and putting aside money for research. As we say, you have skin in the game here. It makes it easier for government to step up to the plate and put some money there if, indeed, the industries affected are also putting some money up.
So can you tell me that particularly the supply-managed products are putting money toward research as well as the various unions in the federations of agriculture?
[Traduction]
Mr. Lemieux: I can say that Quebec's producers are prepared to invest in research, in partnership. They are already doing so and are prepared to continue doing so.
We can send you the statistics or information about the money farmers have invested in research. You will see that in Quebec's agricultural sector, farmers or farmers' groups invest a great deal in research. What is more, a number of producer federations are financial partners of research companies, in partnership with Quebec's ministry of agriculture, with the goal of maintaining a minimum level of research to save information, transfer knowledge, and promote technology transfer.
[Français]
Senator Mercer: Thank you. If you could forward that to our clerk, it would become part of our study.
Senator Raine: I'm not a regular member on this committee, but I'm certainly being enlightened here today.
I do have one question about maple syrup. I'm wondering if there are protections in the various agreements with regard to counterfeiting the product, which was problematic and I think is being decreased because of new regulations. I'm wondering if there are sufficient protections against products being sold as pure maple syrup when they are adulterated?
[Traduction]
Mr. Lemieux: You have to understand that in the interest of protection, no foreign made maple product enters here. We export 70 per cent of our production around the world.
The problem for the maple syrup industry comes from the protection measures in place to protect sugar in different countries. That sugar comes either from sugar cane or other products. There are restrictive measures in place including taxes or extra duties to make maple syrup less competitive than other sugar products, such as beet and cane sugar.
The biggest challenge for the industry is to keep maple syrup authentic and 100 per cent maple. Often, there is a tendency to mix maple syrup with other sugar products and call it table syrup. It is incredibly difficult to authenticate the look and purity of the product.
I'm not sure whether the product is in the Codex Alimentarius to ensure that the definition of pure maple syrup is truly recognized internationally. When I was president of the Fédération des producteurs, we undertook an initiative to have pure maple syrup registered in the Codex, but I can't say whatever came of that. First we have to have the identification recognized nationally, and then we have to promote it.
The industry is directing efforts on a voluntary basis toward creating a quality seal label. Some instruments have been developed to detect whether or not a product has been adulterated, but currently it is the industry that is taking responsibility for that. Obviously, you would be more than welcome to help producers invest in putting such controls in place, if you so choose.
The Chair: Thank you, Mr. Lemieux. Senator Raine has another question.
[Français]
Senator Raine: The other thing with maple syrup is that it is the best sweetener in the world. It has a lot of natural elements in it that contribute to our health, where most other sugar products don't. So I'm surprised that it's not identified as its own product in the codex system. Is there anything we should be doing to move that along?
[Traduction]
Mr. Lemieux: As I said earlier, I'm not sure whether or not registration was finalized. We could check to see where things stand. If registration of the product hasn't been finalized, we could send you a note to let you know whether or not the product is registered in Codex Alimentarius.
You're right about the quality of the product and its health benefits. Earlier when I was talking about research and innovation, I was saying that we need to recognize the work of the Fédération des producteurs acéricoles du Québec, or the Federation of Quebec maple producers, and the producers who invested in partnership with the federal government. This is noteworthy because a lot of money was invested jointly by the producers and Industry Canada to enhance knowledge of the product and to give it a higher profile internationally with regard to its health benefits and culinary qualities.
The Chair: Senator Raine, I invite you to attend the committee meeting at the end of May, when we will be welcoming the largest maple syrup processor in Canada. I'm sure he will be able to answer your questions. If not, please submit a question to the committee clerk and we will send you the information. I should point out that Senator Raine worked on the maple syrup labelling file and it was the first legislation on the matter in Canada.
[Français]
Senator Moore: I want to follow up on Senator Raine's question. We were told a week or so ago when we had a hearing that 90 per cent of the maple syrup that is bottled in Vermont has been exported there from Canada — from Quebec, I would think. Think of that and the labeling issue. Do we require that the label that's put on, in this case in Vermont, indicates that it's a product of Canada bottled in Vermont?
[Traduction]
Mr. Lemieux: The State of Vermont is unique in terms of how it markets its maple syrup. Vermont is the biggest producer of maple syrup in the U.S. It is also the state where the vast majority of maple syrup is sold directly to consumers by producers at roadside stands, or even by mail.
It is true that it developed a 100 per cent Vermont label. When Quebec syrup is sold in Vermont, the label has to indicate that it is a product of Canada in order to differentiate between products of Vermont and Canadian imports.
Vermont imports a lot of maple syrup from Quebec because that state has a very large processor. That is the underlying reason for enhancing the marketing image of Vermont's products, as requested by that state's maple producers.
[Français]
Senator Beyak: Thank you. Your UPA website is very impressive in terms of the statistics on the number of jobs created in the agri-food sector compared to the construction, oil and gas and finance industries. Also, your website applauds Quebec's recent decision to have a strategy for agri-food and to work with the federal government. Could you tell me what the value-added would be of that currently and going forward?
[Translation]
Mr. Lemieux: On the UPA website we posted the principles that should be included in a Quebec agricultural policy. Unfortunately, or fortunately for some, because of political changes, sometimes policies are not fully implemented. To date, the Government of Quebec has been unable to fully implement an agricultural policy.
We appealed to the new government to develop an agricultural policy that would help us develop a better way for consumers to identify Quebec products and, at the same time, find a way to convince the public of the importance of supporting the agricultural community and making farming more socially acceptable. We believe that an agricultural policy that seeks to create an image and high-quality products would help make it easier for the public to accept, support, and co-exist with farming.
Co-existence is becoming increasingly difficult for farmers. We have some limitations that some people are having a harder time accepting, such as odours and noise. People forget and are distancing themselves further and further away from the agricultural community, and the farming population is getting smaller within the general population. Consumers are more and more removed from the impact or inconveniences created by farming. We would like there to be a farming measure to address this, in order to validate our products, have the role of farmers as food providers acknowledged, and provide financial support within the sector.
In Quebec and in the rest of Canada, farming is the largest primary industry and, together with processing, agri- food is the primary economic sector in terms of both its monetary value and its capacity to create jobs. The challenge is to make agriculture as noteworthy and accepted by the public as the aerospace industry has been. Unfortunately, when we talk about good quality jobs, we never think about a job in agriculture. What's the difference between being an agricultural engineer or an engineer at Bombardier? The jobs are similar with similar rates of pay. How is the agronomic contribution of an agricultural professional any more or less important than the contribution of any other professional in any other economic sector? No one would ever say that there are good jobs in agriculture and yet there are so many. With policies and directives like these we will be able to help the public feel more accepting and proud of agriculture.
The Chair: Mr. Lemieux and Ms. Bourdeau, I would like to thank you for your valuable testimony. I'm sure you saw that senators were interested. We will definitely take your comments into account, and we await the study that Ms. Bourdeau will be sending us. We hope you have an excellent sugaring season, and that UPA members also have a good farming season this summer
[Français]
Thank you, ladies and gentlemen. Today, we receive the Ontario Federation of Agriculture with Don McCabe, President.
Before beginning, I ask senators to introduce themselves.
Senator Mercer: Senator Terry Mercer from Nova Scotia.
Senator Merchant: Good morning. Pana Merchant from Saskatchewan.
Senator Beyak: Lynn Beyak from Ontario.
Senator Moore: Good morning. Wilfred Moore from Nova Scotia.
[Traduction]
Senator Dagenais: Jean-Guy Dagenais from Quebec.
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Senator Ogilvy: Kelvin Ogilvie from Nova Scotia.
[Traduction]
The Chair: I am Ghislain Maltais from Quebec. I am the chair of the committee. Mr. McCabe, I would like to welcome you to the committee and I give you the floor.
[Français]
Don McCabe, President, Ontario Federation of Agriculture: Thank you, Mr. Chair and distinguished senators, for the opportunity for the Ontario Federation of Agriculture to present before you on the topic of international market access.
I'd like to introduce who the OFA is and then move into a brief mention of the topics I would like to mention and then run through those and look forward to your questions.
First off, who is the OFA? The Ontario Federation of Agriculture represents 36,000 farm families, farm members, across the entire province. We are a proud member of the Canadian Federation of Agriculture. We have the opportunity to represent farmers who are part of the number one industry in Ontario, and that's agriculture.
The number one industry of Ontario means that it has the greatest number of jobs that are going on out there and a $34 million contribution to GDP coming from our province, and our region is about 25 per cent of the output for the country in the area within which we farm.
Within our province, our premier, Kathleen Wynne, when she was the agriculture minister, chose to throw down a premier's agri-food challenge to us and we welcome that challenge. I'd like to use that statement that was made at the time of bringing 120,000 jobs to the Ontario economy by 2020 as one of the levers for this presentation because, at the end of the day, the reality of today's economy is it's all intertwined. It's the issue of economics. It's the issue of the environment. It's the issue of social jobs, and all of those three add up to sustainability.
In order to achieve that sustainability, Ontario farmers, along with Canadian farmers in general, require level playing fields, whether it comes from our programs or our access to the markets that are directly outlined here.
Finally, the issue of sustainability again comes up. Those are the three areas I'd like to touch on now.
Number one, on the issue of programs; I know that you have all heard this before. It's our job to repeat the message because it is so important and it's the issue of constantly being able to stay current and keep moving ahead on issues of research and having that research also be manifested in the market tools that we're able to move our goods with.
Underneath the issue of programs, infrastructure is also vitally important. Within the Province of Ontario, as an example, we only have 20 per cent of our area of the province serviced with natural gas. That is an issue for us in the form of looking at energy. The need to get that aspect of infrastructure built up is vitally important.
We note that the budget that was released earlier this week has put some money out for rural broadband Internet. We welcome that initiative. But we also need to make sure that it is delivered and brought to bear because, in today's world, not having broadband Internet is totally unacceptable.
Of course, there is the usual issue of bridges and roads in there, but that one is fairly self-explanatory.
When it comes to programs, business risk management is vitally important. If our competition is being served by their governments, we require the same to keep that playing field level. It's not that we want more. It's the issue that we need to be level, and we need to keep an eye on how those things work through. On the same issue of programs, when you want to go to international market access, it doesn't hurt if you actually clean up your own backyard. And we have some interprovincial barriers out there that are causing grief for some producers to be able move ahead. That's one example that may seem very small, but it's realistic. It is very difficult currently for pheasant owners who are producing in the province of Ontario. They can ship a day-old chick to British Columbia. They cannot find federal inspection to be able to get the appropriate movement of that marketed product out easily into the marketplace.
I'd like to move on to another program that was introduced under the last government of regulatory cooperative council. The U.S. being one of our largest markets, it is absolutely imperative that it be moved now into greater agreements, whether or not it's with the North American climate change issues that we're looking at. But we need to make sure that we level the playing field there on the best science being looked at at the best times to ensure that the input products are still with us.
Finally, I know this committee is well-versed in the recent trade agreements that have been signed, and those are obvious links to what opportunities lie ahead. At the same time, we cannot work those trade agreements if we have non-tariff barriers suddenly show up. By that, I wish to touch on things such as the type of inspection or the issues of GMOs, those sorts of things.
At the end of day — this brings me to the final point for the committee — is the issue of sustainability. I was in Paris for the conference of the parties meetings. We have multi-national companies that are located all over the world. We are making claims to be able to bring forward issues of greenhouse gas commitments through the so-called value chain to achieve the world's goals. I would really like to think that that value chain exists, but, when I watch things now being done to make brands more proactive for their own personal issues of whether we need cage-free eggs — and I don't know where you find meat that doesn't have hormones in it naturally — and so on and so forth, I know that we have to make sure that we start getting these things leveled out because it is going to be a race to the bottom as opposed to a race to ensuring that we are feeding the people that are expected to be here by 2050 and maximizing Ontario resources. As Prime Minister Trudeau put it in Davos, Switzerland, Canada is full of resourceful people. I wish to stress to this committee that I have known no more resourceful people than the people who are managing our resources today in the Canadian economy of forestry, farming and fishing. Bottom line, if we're not starting those resources, I don't need a service industry to service here. I look forward now to your questions, and I thank you for the opportunity to present today.
Senator Mercer: Mr. McCabe, thank you very much for being here. We appreciate your time and your presentation. You talked about type of inspection and GMOs. Could you expand on both of those a little more? Tell me about the type of inspection you are referring to and that you would like to see either imposed or changed. And GMOs, perhaps you could elaborate a little more on that, too.
Mr. McCabe: Thank you for the question, senator. First, let's deal with the inspection side of things. Within Ontario right now, we have both federal and provincial abattoirs available, and, for provincial sales, you need to go to the provincial abattoir. I'm not too sure how food safety is enhanced by putting a federal label on it. At the end of day, let's make sure that we are reaching the best standard of consumption no matter what. Therefore, it has brought us to another level of trying to deal with another bureaucracy.
Right now, my example around the issue of pheasants means that one of the producers in that marketplace has told me she cannot expect to increase her business because CFIA is not in a position to address the building codes or whatever else. When they first came to see her they had to rewrite the book because they were so out of date.
The reality is that this is also why you can move day-old chicks of pheasants to British Columbia but you can't send a finished, frozen pheasant for someone's meal. This doesn't make sense. At the same time, if this is a barrier within our own province, why am I looking to move out of it? That is detrimental to a province and country as rich as ours.
On the issue of GMOs, I need to stress that I wish to respect the cultures and needs of other countries. By the same token, this cannot be used in terms of a negotiated agreement to halt the issues of trade between these countries if it's already been identified and dealt with. The reality is, from the OFA's perspective, GMOs and biotech are necessary tools for us to be able to continue to move ahead and bring the best products forward for people in general. The long history of employment of GMOs within our food system is clearly evident, and they have been there for many years. If you go back in time and look at some of the examples that exist there of how we figure out how to use rennet and all the rest of it, the bottom line is it's still all biotech.
At the end of the day, we need to ensure that when we're having a dialogue with our trading partners we resolve these issues and that they don't pop up later to halt what could have been a promising opportunity.
Senator Mercer: Your answer on inspection is timely and important, because in smaller provinces like Nova Scotia our federally inspected plants have closed. All we have are provincially inspected operations and so that means all of our farmers can only sell products within the province. Our markets are closed, even markets as close as our neighbours in New Brunswick or Prince Edward Island. If there is a market there, we have difficulty because we don't have the inspection.
There is a need, and perhaps the committee should look at that in the future, to create some continuity in inspection so that an inspection is an inspection is an inspection, as opposed to requiring a Maple Leaf or a Trillium on the label in Ontario's case.
The other issue is genetically modified organisms. It strikes me that you're right, we need to respect other people's cultures and needs, but by 2050 there will be 9 billion people on this planet. Someone has to feed these people. The current technology can be increased, but one of the quickest ways to increase it is with genetic modification. I don't think we're putting this in the proper context, the need to be able to produce food.
Other than genetically modified organisms, what other changes do you see that could help increase production of agriculture generally across the board as we respond to these 9 billion people?
Mr. McCabe: First and foremost, I think we also need to put on the record, sir, that our food system has 40 per cent waste in it. I guarantee you, as a farmer who buys at retail, sells at wholesale and pays the trucking both ways, I'm not interested in wasting anything, and I need to be able to move it to the marketplace. That probably tells me there is a whole lot at the other end of the consumer spectrum where there is food being wasted. It's not with intent; it's just that it is a problem.
As we move forward here, it's the issue of now looking at a more holistic system to accommodate these needs and that brings me back to the issue of the need for natural gas. Natural gas coming in from fossilized sources is not a problem. The opportunity of putting natural gas back into a pipeline coming from renewable, natural resources is when you don't have the pipeline.
The opportunity is to put in anaerobic digesters, for example, to help take whatever waste is there, but at the same time minimizing that waste straightforward. The general public today in Canada is extremely blessed. It's always around Valentine's Day, roughly, that we're seeing that the average family of four has gotten their food paid for in this country, and that includes Galen Weston's shareholders.
Farmers are paid for within the first few days of January. That means we have a tremendously productive and efficient system here to get the job done, but the general public is still asking for more and more when it comes to issues from agriculture. It's not that we're not willing to give. The reality is that someone has to pay for this. The issue then is to maintain our tool box with as many opportunities, because all of this builds to get to 2050.
I'm not the least bit worried about feeding a population in 2050, provided I have the tool box filled and built for today. We have to take a look now at the issue of greenhouse gas emission targets being promoted by various provinces. Within the Province of Ontario we're moving toward the 2030 target.
I will store that carbon dioxide in my soils and it improves organic matter, but recognition of that is vitally important. While I'm storing that organic matter I will deal now deal phosphorus. That phosphorous is headed for Lake Erie and growing algae. I wish to stress that a 40 per cent reduction of phosphorus in that lake is plausible. But saying it's a 40 per cent reduction on farmers' fields is an error. It's not a reduction on farmers' fields. I paid for that stuff; I don't want to go to the beach to visit it. I want to be able to have a good crop.
Again, the reality is I need the tools to bring this stuff together. That means getting the programs to talk and for things to work together. Agriculture, environment and natural resources departments, no matter where they are, we need much better soil mapping and digitized soil maps to allow us to start using the precision agriculture equipment coming forward to maximize again this opportunity for 2050.
Senator Mercer: Thank you, Mr. McCabe, for that for that answer. I'll now know why I see farmers in their Speedos at the beach.
Mr. McCabe: I would go to a different beach if you see that.
[Traduction]
Senator Dagenais: I am going to focus on economic issues.
We know that different agreements signed by Canada with the European Union and the TPP, result in international trade that fosters exports and brings with it financial risks for agriculture. Do you have payment guarantees? For example, when a producer gets into exporting, the buyers are often halfway around the world or in the United States. How do things go? Have you ever had nasty surprises with respect to payments?
[Français]
Mr. McCabe: Thank you for the question, senator. I think it's a very timely, good question. The direct issue that falls out of this one is that we have allowed a guarantee of payment to lapse between Canada and the U.S. Sitting here, the exact name of that program is not coming to me, but the horticultural industry is exposed on being able to guarantee payment on those products.
When it comes to the grain and oilseed side — and I can only speak to the province of Ontario — when I pay check- off for corn, soybeans and wheat I know that a very small portion of that is going to help build a fund so that if the elevator or industry partner that I sold my product to there goes into default, that I can apply and see, possibly, some return for my exposure on that particular issue. It's not a guarantee of 100 per cent, but there is something there.
The bottom line is that this is an area where improvement is needed and it's an area in which, I think, the federal government can play a better role, because, of course, the federal government is at the front line of whatever we do when we move things internationally.
I do remember a few years ago — back in the mid-2000s — for a shipment of wheat to get to India if you found out that somebody had not ensured it had been properly cleaned, it would be turned back. Those sorts of errors should not be a reality in today's world. It's the issue of having absolute clarity of what needs to be in that boat and not allow for downgrading to occur just because something was found.
[Traduction]
Senator Dagenais: We are discussing economic issues. Not all problems originate abroad; some are homegrown. We know that sometimes there are interprovincial barriers that can hamper the agri-food industry. The committee report must be submitted by the end of June. Therefore, do you have any recommendations for us that could be included in the report and that would help you address the most important problems? I believe you do, and I suspect there are problems between the provinces.
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Mr. McCabe: I agree. There are definitively problems between the provinces. As was pointed out, the issue was in the Maritimes that it doesn't make any common sense. If we can put a bridge between Prince Edward Island and New Brunswick, I'm not too sure why we can't move food across that same bridge.
Part of this comes back to how we got to this stage that somebody thought there needed to be a provincial versus federal regulation. In my past, once upon a time, I did a degree in chemistry and I can guarantee you, senator, that there is only one carbon atom on the periodic table. I just happen to like the green ones because I grow them, and I don't need the black ones that are from underground.
But now, that's me trying to make a distinction of no consequence. When you have inspections that have been put in place here, that are halting — again, why someone could have bought a basket of apples in Nova Scotia and then driven through New Brunswick to take them back to make a pie in Charlottetown doesn't make sense. Again, I am defaulting to the issue of plain common sense being applied to a regulatory system. Right now, the ultimate end of that is that it's a barrier to the necessity because the first and foremost issue that needs to be respected here is that if farmers are not making money, they are not able to take care of the environment and they are not able to offer jobs to others. Sustainability is all about profit, planet and people. It has to come in that order. If you are not making money, you cannot take care of your farm and you cannot then look to have others assist you and for them to make a living.
[Traduction]
Senator Dagenais: I have one last question, Mr. Chair. I would now like to discuss seasonal labour, or just labour, period. Last year, I toured a dairy farm where the labourers were from Guatemala. They had four- or six-month contracts, which they had to renew every year. It seems that there were problems with the contract renewals for foreign workers. I am not aware if you had the same issues in Ontario. I don't know whether the situation has changed, but are there solutions that the government could implement to avoid delays with contract renewals for foreign workers and, at the same time, to avoid labour shortages?
Sometimes the foreign workers have to be trained. When workers have had two or three contracts in Canada, they have been trained and know the job. However, if new foreign workers have to be hired every year, they have to be trained. I don't know whether the situation has improved, or if you would like to make some recommendations to the government to solve at least part of the problem.
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Mr. McCabe: I would highly recommend that the Senate take a hard look at this issue because, again, it's back to the need of having labour. For agriculture, it's a very timely issue because when the harvest is ready, the harvest is ready. It has to be brought in at the appropriate time. At the other end, when it's time for planting or other management practices to be employed to ensure a crop, you need the labour to do it.
I do wish to make a distinction here in that I believe there are two programs available on issues of bringing workers into this country. There is the temporary worker program, which has had the most attention in the press. That is the one in which the Royal Bank and McDonald's happen to be involved also, and I think it has impacted agriculture because of how other industries chose to work underneath that. We need to get improvements into that program to create the opportunity for workers to come in to assist farmers moving ahead, because it's back to the issue of buying at retail, selling at wholesale and paying the trucking both ways.
The reality is Canadians are not interested in working in the conditions of the Canadian farms. It's not the issue of health and safety. We are more than willing to make sure that workers are not put in harm's way. The reality is, though, that the hours are long. It sometimes means broken weekends and all the rest of it. It's also the level of remuneration. We are not able to pay as well as some other sectors out there, so the reality, again, is that the seasonal worker program has been working very well for about five decades, as I understand it.
The temporary worker program is one that has caused grief, and is now causing issues for farms to be able to keep the necessary employment in place. It does need attention. We also need to, again, respect the workers who are coming in who also need time to go back to their families. They will go back with a much better future by having an opportunity to work on Canadian farms.
Senator Beyak: Thank you very much for your down-to-earth and straightforward approach to this subject. I'm always impressed at home how many people watch the Senate Agriculture Committee. We all have to eat, and we learn new things every day.
You mentioned Davos, Switzerland. You said you would like to think that there is a value chain, but you're not sure how well it's working. How much is your input sought and what tables do you sit at to make sure that it does happen?
Mr. McCabe: Well, the Ontario Federation of Agriculture has been involved in numerous tables, usually at a provincial level. The Canadian Federation of Agriculture attempts to engage itself in areas of the greatest concern on the issues of the day. Part of that is by reaching into the World Farmers' Organization, so that becomes an opportunity for venues like the United Nations where they will limit, just out of necessity, how many people can make it there. We try to reflect our voice by putting it through other venues to build it larger and faster.
On a personal note, I have been following the climate change issue back from the initial days of Kyoto, so I have been a participant in certain conferences and party to meetings. It has been in the last couple of years that I have seen a major-league up-movement by multinational corporations to be engaged here. They recognize the writing on the wall that carbon will be priced on a global basis. They also recognize that it's a way of looking at inputs, supplies and dealing with costs.
The bottom line is that if they can get a lower-cost product coming in the door, they have more room to manoeuvre in their own territory.
Therefore, when you have very large companies that can now dictate back down to the other suppliers before them, soon the only place left to absorb that is at the land base. That's why we attempt to ensure that, whether there're issues of bio-diversity, issues of greenhouse gases or these other initiatives, when the sustainable development roles of the United Nations are put out, we have to make sure they are going to work.
At the end of the day, you need to take a hard look at the world's definition of farmer and understand clearly that it is not even close to what North America is about. The issue here that I'm referring to is that, worldwide, you have about 500 million farmers. Their average holding is less than a hectare. Seventy per cent of them are women. When the significant other passes on, they are out of land tenure, period.
Now take a look at North America. I spoke to a group on Saturday, and I mentioned to all the grandfathers in the room who are farmers: "You're about to retire. When your grandfather retired, 50 per cent of the population in Canada was still farming. Now, when you retire, it's 1.4 per cent. If there are only 1.4 per cent of us, we have got a lot of stories we need to tell; we need to tell them in a hurry.''
I say that because the reality is that we are doing a better job of managing the landscape than we have ever done before. We're looking at opportunities now with precision agriculture to move it to a sub-centimetre level of ensuring that we manage our resources, and we look to the best genetics and we move it ahead.
Now try and take that message to the United Nations, where they want to deal with poverty and they have to deal with all the issues that are there, and you have a whole bunch of people telling you that you're a nasty, no-good whatever because you're using the tools of modern technology.
The bottom line is that we need to ensure that our voice is heard wide and far. I haven't given you an exhaustive list, because I'd otherwise be here for much longer.
Senator Beyak: Thank you for your insight on this, and for telling people how important forestry, farming and fishing are. We all have to eat, and you have really articulated it well.
Senator Merchant: I, too, like the way you're presenting things, because it's very clear. You have good knowledge. I appreciate very much what you're saying to us this morning.
I'm going to a different side now. The consumer today — I don't know if they are educated in a different way, if they are better educated or if they have a little more money to spend. But organically grown products seem to be gaining in popularity, although they are a little more expensive or may be much more expensive — I'm not absolutely sure, because I don't always buy them. I sell them, not buy them.
You mentioned the cage-free hens, I think. There seems to be a lot of attention paid — we see things on television. Things come to us in different ways these days about animal welfare.
Can you tell us how farmers deal with these issues? Some consumers seem to be prepared to pay $7 or $8 for a dozen eggs. How much of that really goes right down to the farmer? Is this a difficult issue for farmers to deal with — the demands of consumers? Do they get remunerated for the extra effort they have to go to in order to please the consumer?
Mr. McCabe: First, I would like to offer my definition of "consumer.'' I thank you for the opportunity to address this issue, senator.
First, there is a thing called a consumer who will walk into a grocery store, take a look, see that these apples are 2 cents or 5 cents cheaper and suddenly go to them and not realize that they're Washington state apples they just bought, ignoring B.C. or Ontario apples.
At the same time, a citizen walks back out of that store, hops into their car and now wants to complain about ethanol being in their gas while they are busy roaring home with a corn-fed beef steak in the back, needing to stop at the liquor store to pick up whiskey to go with it.
The reality that I see is that consumers and citizens are one in the same. They just don't act — I'm getting very tired of 140-character tweets where 139 of those characters are wrong. They are supplied by one individual.
Now, at the same time, let's look at the power of a tweet. A gentleman started the issue up about French's ketchup and suddenly exposed Loblaws on the issue of sales. Suddenly, in a few days, Leamington tomatoes are back in vogue, and there is an opportunity to bring jobs back to Ontario, so on and so forth. Social media is a humungous driving force.
But I would also stress that there is a small portion of people who are working in that arena who want to use activist goals. At the end of the day, if we are going to look at cage-free, for example — and I am no expert; I defer to the egg farmers of Canada and Ontario to bring me the best information. But the reality is that we have chickens that have now been bred specifically for the cage environment. They are very pleased to be in that cage environment, because now they are not being preyed upon by their fellow occupants in a loose-pen situation. The actual proof of this is to look at the productivity and how we have brought forth more eggs off of a smaller land base and with fewer resources to get there.
I am not here to deny opportunities for consumers to have choice of organic, because I, too, am personally growing soybeans, and I have contracts for this fall to plant identity preserved soybeans. If I follow all the rules to get that product through, I will receive a premium for that. But that's identity preservation; that is not organic.
On a personal note, I would never grow organically. My land likes to be productive. It wants to use all the tools it can have.
The bottom line is that I feel that consumers are entitled to choice, but consumers also have to understand the cost of their choice. The reality is, again, that this country is going to be one of six in the world that is left able to actually export to the rest of the world. So I hear lots of clamour around food security, but when you have got the cheapest food basket in the world and your mouth is full and your car is still full of gas, please don't holler at me.
Senator Merchant: I did not holler at you.
Mr. McCabe: You did not. I'm referring to a minimal amount of activists who are attempting to be the hair on the tail of the dog and attempting to wag the dog. Somebody needs to ensure that we go back and take a hard look, because the reality is, if you want antibiotic-free, what was the death loss that allowed everybody else to be antibiotic- free? We didn't use this stuff because we wanted to. We weren't out to poison the world. We were out for animal welfare. We were out to ensure those animals had the best life possible.
That issue, then, of harvesting them means that they have had productive lives. To now interfere with their opportunity to do that by not helping them get over an issue through medication or better housing is an insult to that animal's being, because somebody else thought they knew better.
Sorry, it's a little bit of an open nerve.
Senator Merchant: That's fine. Thank you very much.
Senator Ogilvie: I wasn't going to touch on the antibiotic issue, Mr. McCabe, but since you mentioned it, I will make a comment. There is a major distinction between the veterinary use of antibiotics and the large-scale uncontrolled use of antibiotics in food for growth promotion, supposedly. That's where the issue is. I'm not going into it today; we studied it in detail. It would require some discussion.
I want to get to the GMO issue. I agree with you entirely with regard to the unfortunate attitudes around this issue. It's my understanding that grains and other basic agriculture food products shipped to Europe are classified in at least two distinct categories. The first is for transformation into food directly for the table — perhaps grains that will be processed for flour that will go directly on the table — the second category is animal feed. Is that the case? Is there a distinction made between grains shipped to Europe for animal feed verses grains shipped for the table relatively directly?
Mr. McCabe: I believe you are correct, senator, but I'm no expert in that area.
Senator Ogilvie: You can't answer a question on what was going to be my follow-up, which is that GMO restrictions are not placed on animal feed but they are for products that go directly to the human food chain.
Mr. McCabe: I would accept the premise that you're offering. I would add immediately that when I'm combining a field of corn, I know what contracts I have to fill. I also know that when that transport truck of grain is leaving my farm eventually, at the end of the day, the reality is that it does not matter because why would we disrespect an animal and think that another animal, called a human, is better? If it's no good for that mammal, why is it not good for this mammal?
Senator Ogilvie: Obviously, sir, that's where I was going with the question. I'll back off from it since I don't want to make an assumption on which we draw a major conclusion. I was hoping you could answer the product categorization directly. I'm not going down that road any further.
Mr. McCabe: My hesitation to be direct, sir, is because of the issues of changes that are there, and it's also back to the issue of the multinational. If the food is going in there already processed, that also can be looked at as a category. Again, things are in flux, sir, as I understand. I apologize that I cannot address the issue directly.
Senator Ogilvie: Not at all sir, we're on the same side of this. We want to have our facts straight before we draw a conclusion. That's why I'm not going to pursue it any further.
Senator Moore: I agree wholeheartedly with your comments with respect to interprovincial trade. I'm from Nova Scotia. I don't know why we can't do this trading across our country. I probably should know the following but I don't: Do you know whether or not there is free interstate trade in the United States?
Mr. McCabe: Well, there are 48 states attached and two more that are out there. I believe there is predominantly a free movement of goods, but I believe history has caused some barriers to the movement of certain things. My understanding when it comes to agriculture goods is that it's pretty free and open.
Senator Moore: If you export something to the U.S. from Canada, can it go between states tariff-free?
Mr. McCabe: I believe it's all tariff-free. There is the issue of ensuring proper inspection, so certain loads need to go directly to the destination. You can't just start a bread run or a milk run routine and stop and let some off here and some off there. You have to honour the sovereignty of the United States by allowing a national inspection, which just makes good sense. After that, things can move.
[Translation]
The Chair: The Standing Senate Committee on Banking, Trade and Commerce is currently studying internal barriers to trade in Canada. That is really illogical. We sign free trade agreements with other countries, yet we are unable to develop trade between provinces. If you have the opportunity to appear before that committee to share your views, it would be greatly appreciated.
[Français]
Senator Mercer: I really appreciated the style of the presentation because it was frank and straight to the point. That's normally what we get from people who are in the agriculture business. Mr. McCabe, your presentation today was very useful to us and we appreciate that.
I also want to encourage you to do something. When you go home, if you realize that you forgot to say something, it's not lost. Send a note to the clerk of our committee and it will be relayed to us. We would appreciate your thoughtful comments on this subject because we're going to be at this for a while. Thank you.
Mr. McCabe: I thank you, senator and your colleagues, for the opportunity to be here. I'm fairly certain I wasn't invited for my looks. I'm thankful for the opportunity to bring information that you found valuable.
The Chair: Thank you very much, Mr. McCabe. This committee is adjourned.
(The committee adjourned)