Proceedings of the Standing Senate Committee on
Agriculture and Forestry
Issue No. 20 - Evidence - Meeting of November 29, 2016
OTTAWA, Tuesday, November 29, 2016
The Standing Senate Committee on Agriculture and Forestry met this day at 4 p.m. to study the current situation involving the bovine tuberculosis outbreak in southeastern Alberta and to continue its study on the acquisition of farmland in Canada and its potential impact on the farming sector.
Senator Ghislain Maltais (Chair) in the chair.
The Chair: I welcome you to this meeting of the Standing Senate Committee on Agriculture and Forestry. I am Ghislain Maltais, and I am the chair of this committee. I would like to ask the senators to introduce themselves, starting on my left.
[English]
Senator Tardif: Good afternoon. Claudette Tardif, from Alberta.
[Translation]
Senator Dagenais: Good afternoon. I am Senator Jean-Guy Dagenais from Quebec.
[English]
Senator Plett: Don Plett. I'm from Manitoba.
[Translation]
Senator Pratte: Senator André Pratte from Quebec.
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Senator Ogilvie: Kelvin Ogilvie, Nova Scotia.
[Translation]
The Chair: Today, we have asked the Senate to give us a mandate of one hour to study the issue of bovine tuberculosis affecting the central provinces that is at risk of spreading.
We are pleased to have you here, Mr. Kochhar and Mr. Lloyd. The senators have many questions for you, and we have only one hour. The shorter your presentation, the more time the senators will have to ask you questions. Since this is an urgent situation, I would like to personally thank you both for being here. I know you are both very busy and your telephones must ring often. I would like to thank you for accepting our invitation to appear before our committee.
Before we begin, I would like to introduce two more senators who just joined us. They are Senator Terry Mercer, the deputy chair of the committee, and Senator Pana Merchant, a committee member.
[English]
Dr. Harpreet S. Kochhar, PhD, Chief Veterinary Officer for Canada and Associate Vice-President, Operations Branch, Canadian Food Inspection Agency: Good day, Mr. Chair and honourable senators. My name is Dr. Harpreet Kochhar, and I am the Chief Veterinary Officer for Canada and Associate Vice-President of Operations at the Canadian Food Inspection Agency.
I appreciate the opportunity to speak on the current situation concerning bovine tuberculosis in Alberta and Saskatchewan.
The CFIA is aware of the challenges facing the farmers who have had cattle and calves quarantined due to the CFIA's investigation of bovine tuberculosis. We are sensitive to the plight of these producers.
Agriculture and Agri-Food Canada officials are working with their provincial counterparts to put in place the AgriRecovery initiative as quickly as possible to cover the extraordinary costs associated with this event. The federal, provincial and territorial governments have a suite of business risk management programs to assist producers having financial difficulties as a result of these quarantines in Alberta and Saskatchewan.
Part of this suite is the AgriRecovery program. This framework is designed to allow for the development of specific programming to address the cost of recovery from a disaster event. The types of costs that could be covered by AgriRecovery are related to feeding and water infrastructure, additional feed costs and so on.
Producers, I assure you, senators, can also access immediate help to cover the costs they are facing under the Advanced Payments Program, which is APP.
The Canadian Food Inspection Agency has issued payments for compensation already to some producers for the animals that have been ordered destroyed. Compensation has also been paid for the claims that were made for disposal and rendering of these animals.
[Translation]
The CFIA began its investigation when it was notified in September of a positive bovine TB result associated with a cow from Alberta. The cow had been slaughtered in the United States and tested based on the post-mortem findings during the slaughter process by the USDA. This information was shared with the CFIA along with the required confirmatory test results.
In accordance with our animal health disease control protocols, the CFIA contacted the producer to share the information and started to analyze the impact of this finding on the producers in the area. The CFIA also engaged with provincial counterparts to advise them of this positive finding and worked with the industry to inform them of the find and possible next steps to respond to this case. The CFIA established regular communications with its partners in the provinces and also worked closely with producers to provide them with information.
[English]
On October 24, CFIA's Western area Emergency Operations Centre in Calgary was fully activated. Also in response, on November 7, the National Emergency Operations Centre of CFIA was activated to provide additional communication and logistical support to support this particular investigation. Communication and information was made available to all via our website.
As the lab testing results moved from one positive cow to an additional five being confirmed as positive, herd management considerations were analyzed. Accordingly, the orders for destructions were given.
Once the notification for destruction was delivered, animals were assessed and compensation payments were calculated. As of November 28, there were six confirmed cases of bovine tuberculosis. This number includes the cow that was confirmed positive at the USDA during the slaughter process.
So far, all confirmed cases are from the one infected herd. All adult animals from this herd have been tested, and the removal and humane destruction of the herd has continued.
As the investigation evolves, we have determined that there are 12 additional premises that have been deemed to be infected based on the information received regarding animal commingling and close animal-to-animal contact.
There are currently over 40 premises under quarantine, and movement controls and numbers may continue to grow as the investigation proceeds. This is not unexpected given the nature of the disease and the herd management practices.
Most of the premises, as mentioned earlier, are located in Alberta, with no more than five in Saskatchewan. These numbers may change as the investigation progresses.
Mr. Chair, bovine tuberculosis is an infectious disease that has been subject to a mandatory national eradication program in Canada since 1923. It is internationally recognized as a serious disease listed with the World Organization for Animal Health.
Livestock identification and traceability are the cornerstones of disease investigations like these, where the trace-out of the animal is largely dependent on sound records and easily accessible information from the producers.
In this bovine tuberculosis investigation, quarantine is the key disease management tool to restrict the movement of potentially infected animals and limit the further spread of the disease. Because this particular investigation involves large community pastures and a significant number of herd interactions, the need to control animal movement and to gather epidemiological information and support the tracing of animals is very critical.
I must say that the animals remain under quarantine until the investigation determines they do not pose a risk for bovine tuberculosis.
When a quarantined herd has the animals that react to the initial testing, they are destroyed, with compensation, and the tissues are gathered for confirmatory testing.
Mr. Chair, I want to assure that the CFIA has sufficient capacity to do this work, and the CFIA has both the infrastructure and skilled staff to do this work.
Effective bovine tuberculosis investigation requires veterinarians and inspectors who do two types tests of test. One is the caudal fold test, which is a skin test and is not normally done by private veterinarians who are in the field unless they are unaccredited by the CFIA.
Accredited veterinarians have experience, but during this bovine tuberculosis investigation, testing is also done with blood samples that require coordination within the CFIA laboratory and access to CFIA's online sample tracking system. For this reason, Mr. Chair, CFIA veterinarians and inspectors from across Canada are currently being used in the investigation.
We have also engaged retired CFIA veterinarians for this cause. If more veterinarians are required or needed, we would engage them in an order where we will first go to the CFIA accredited veterinarians, provincial veterinarians and the Canadian veterinary reserve.
Investigators are conducting tracing and on-farm testing of potentially exposed animals.
[Translation]
Mr. Chair, the truth is that testing in the field, on-farm, can be difficult. The logistics involved in arranging appropriate necessary transport, destruction and disposal of animals depends on the availability of third-party service providers. Additionally, animals that have been identified through trace-out activities are being tested by CFIA's district veterinarians. We also have our CFIA laboratories prepared to receive additional bovine TB samples for testing. The CFIA is now turning its attention to on-farm testing of other herds. As I said earlier, we are sensitive to what these farmers are facing.
As Chief Veterinary Officer, I commend these producers for their ongoing efforts to provide for and feed their animals during the quarantine period, even though this has meant unplanned costs. With regard to the feed issue, the CFIA has approved a proposal by the cattle industry to implement an option for a feedlot to accommodate calves from quarantined farms that are not equipped for winter feeding.
[English]
We are anxiously awaiting the identification of suitable locations by the industry. Once known, we will work with the industry and the producers to share this information and provide them with the necessary permits so that movement can happen from the feedlot. The feedlot option must make sure that the quarantine is maintained and appropriate biosecurity measures are in place.
Mr. Chair, I also want to stress that the CFIA is working hard to improve its communications with affected producers. The CFIA is establishing a case officer model so that producers have a consistent point of contact while their herds are under quarantine. My colleagues in AAFC have also identified a point of contact for industry, and this information has been widely shared.
The CFIA continues to update its website with new information and the situation about tuberculosis can be seen there using the "contact us'' email link.
We have also been holding technical briefings with the media to keep them informed on the investigation and actions to date. To help with more direct communication, the CFIA's area emergency operations centre in Calgary continues to hold twice-weekly calls with industry associations.
Also, Mr. Chair, industry liaison from the Canadian Cattlemen's Association and Alberta Beef Producers have been invited to work closely with the western area Emergency Operations Centre.
Mr. Chair, thank you again for this opportunity to provide insight into CFIA's actions in the bovine tuberculosis investigation.
The Chair: Thank you very much, Mr. Kochhar. We will start the first round of questions with Senator Plett.
Senator Plett: Thank you, chair. I appreciate Senator Mercer's indulgence in allowing me to go first. I do have another meeting in a while which will keep me away from here for half an hour or so.
Thank you very much for your presentation. I have a few questions. I know you mentioned this in your presentation, but could you reiterate where the bovine tuberculosis outbreak originated?
Dr. Kochhar: Bovine tuberculosis was actually diagnosed by the USDA in a slaughter facility while they were inspecting an animal that was sent out for slaughter. The animal originated from Canada and, once we traced it back, we discovered it was sold through Saskatchewan but originated in Alberta.
Senator Plett: So, it made a bit of a trip. If you find a disease in a herd, is the entire herd being destroyed, or are you then trying to separate animals from the herd that may or may not be infected?
Dr. Kochhar: The disease control measures that we have in place include that if there is an animal that is actually diseased and diagnosed in that particular herd, all of the animals that have been a part of that herd are ordered destroyed. They are actually tested, and during the post-mortem examination, we observe if there are any lesions, because that will give us an idea of the extent of the infection in that particular herd.
We do not, however, senator, test the calves because they do not exhibit a reaction to the test because their initial immunity doesn't allow the test to be properly read.
Senator Plett: Taking that a step further, if the disease is found at the slaughterhouse, how aggressive are you in destroying the animals at the slaughterhouse?
Dr. Kochhar: Once the disease is first diagnosed at the slaughterhouse, this means that disease has been incubating in the animal herd for a while. To go back to the disease scenario, this disease is aerosol-borne, which is when any of the nasal secretions and everything else become aerosolized, and the other animals that have had increased periods of contact with that infected animal get infected as well.
Once we diagnose the disease at the slaughterhouse, that is a reflection that there might be more disease in other companion animals in that herd. That triggers the trace-back activity. What has gone into that slaughterhouse is that one animal because it was caught during the post-mortem inspection, and then the rest of the work starts back where the animal originally originated. That is why we are tracing the herds.
Senator Plett: A number of years ago, we dealt with an outbreak of Mad Cow Disease. A fairly prominent Albertan suggested the farmer should have simply ". . . shot, shovelled and shut up.'' Are we compensating farmers and herd owners adequately enough that there is no danger of somebody doing exactly that and burying an animal?
I'll put my last question on the record for you quickly. I heard you mention only Alberta and Saskatchewan. Has Manitoba had any known cases?
Dr. Kochhar: I'll go to the second question first. Yes, it is only Alberta and Saskatchewan up to this point. No other provinces have been involved in this investigation, and our trace-out hasn't revealed any other particular province that is involved in that.
As for your first question, senator, there is a compensation grid that we have with the CFIA. It allows us to pay to the producer the cost that has been determined based on whether the animal was pure-bred and registered or just a regular animal. Their grid determines the level of compensation, which is for the animal ordered destroyed, the disposal cost of the animal and the disposal cost of the equipment or other aspects of that component.
The other aspect of that is what is referred to as AgriRecovery, and it helps them to deal with that situation. Our colleagues in AAFC, as I mentioned earlier, have programs like AgriStability and others that help the farmer to go back into that process so they do not lose money.
That is the plan for how we are right now compensating producers.
The Chair: Before we continue, I would like to present a new member to the committee.
[Translation]
Senator Gagné: Senator Raymonde Gagné from Manitoba.
The Chair: I would like to ask all my colleagues something. Since we have with us senators from Saskatchewan and Alberta, provinces where this disease is present, I wondered if the honourable senators would agree to give their speaking time to Senators Merchant and Tardif.
Some Hon. Senators: Agreed.
[English]
Senator Merchant: You have mentioned Saskatchewan and Alberta. Is this because of the movement of that one animal, or why exactly these two provinces? You said the animal had come from Alberta but was sold through Saskatchewan, or vice versa. What has happened that these two provinces are implicated? Is it all coming from that one animal?
Dr. Kochhar: Yes, that was true that the animal originated from Alberta and was sold through an auction mart through Saskatchewan, but it's the tracing-back mechanism that allows us to pinpoint where the location of bringing that animal up was. So that is Alberta.
Basically, what happens is due to the traditional herd management practices and for the cow-calf operation, where the cows are reared specifically to produce the calves which can go into the feedlot for fattening, and we're talking about beef calves here, this is where there is a lot of commingling of the animals that go to the community pastures. That is what subjects them to more of a possibility that the disease could have transmitted to other animals that have come in contact for an extended period of time with that particular animal.
If we reverse engineer, the animal was detected with bovine tuberculosis at slaughter, which means that it was in the first five years. We take five years off the day we diagnose and behind that. We go back and look at the herd of origin, which is now called an infected herd. Any animals that have comingled for that period of time in that herd are considered infected. Those that have come in contact due to an extended period of commingling due to community pasture are also then classified as infected.
Beyond that, we also have low contact, which means that some amount of contact happened through equipment, to sharing of the human population, and then we have trace-outs where they might have contact or been sold to other farms.
Given the production practices in Alberta and Saskatchewan, and the vicinity on the southeast and southwest side of Saskatchewan, that is the focal area right now. We haven't seen any instances where this has been seen in any other herds. We continue our trace-out and testing, and that's where the focus is.
At this point of the investigation, we believe it is limited to that area; however, we can never guarantee. As we move forward with our investigation, we may find other herds, other premises, but that would be the nature of the investigation because we are going five years back.
Senator Merchant: You mentioned that the calves have immunity. Do you destroy the calves, too?
Dr. Kochhar: Just to mention, the calves have built-in immunity at birth, which does not allow our tests to come out confirmatory. Instead of guesswork, we actually order the calves destroyed, because we will never be able to really confirm that it has the disease. We compensate for those calves, and then that way we are not worried about whether there was interference with the natural immunity or whether our test was not working.
Senator Tardif: I want to ask regarding the case of the cow from Alberta that was identified in the U.S. by the U.S. Department of Agriculture at a slaughterhouse. How is it that it could not have been picked up in Canada prior to it being picked up by the U.S. Department of Agriculture?
Dr. Kochhar: Canada is considered to be free of tuberculosis. However, we continuously do surveillance at the slaughterhouses.
We have our inspection staff at the federally inspected slaughterhouses who look at any kind of pathology in any of the carcasses. From there, we take the samples, do the testing and confirm. For now, we have not seen any specific indication of any of these disease symptoms in the cows that are presented for slaughter.
We do not have a program that actively starts testing these animals because we consider ourselves free, and it is not a requirement that we test each of the animals, because it is a stress to the animal to inject tuberlculin under the skin and take the blood sample, for the reason that we know that we do not have tuberculosis. So the only way we would have diagnosed it, even if it did not go to the United States but was actually slaughtered in Canada, that would be the proper place where we would have caught it anyways. Due to the system, as such, it was sent out to the United States for slaughter, and that's how we got it.
Senator Tardif: Are you saying that there is presently no system to check for TB at Canadian slaughterhouses?
Dr. Kochhar: Senator Tardif, I might make myself very clear. We have all our federal inspectors and veterinarians in all the federally registered meat establishments who are conducting that. In all of these cases, we do have that in place. But this particular animal landed in the U.S. Had that animal come to Canada and was slaughtered in the Canadian establishment, our inspectors would have picked it up. We have a robust program at each and every establishment to test for that.
Senator Tardif: There is no requirement that the animals be tested before they are shipped across the border?
Dr. Kochhar: Not if this is a country requirement. Senator Tardif, I'll give you an example. For the U.S., we have a very integrated industry. U.S. animal house status is a little different than ours. They do have tuberculosis in certain pockets; they are just managing it. We have been free of tuberculosis for a long time. So there is no requirement from the country that is importing the animal, which is the U.S. in this case, for us to test the animals for tuberculosis.
Internationally recognized standards, which are the World Organisation for Animal Health, OIE, standards, if your country is deemed free of any of the disease, you do not have to test it.
Senator Tardif: It's interesting because there was another case several years ago where it was the U.S. and not Canada who picked up a case, not of TB but another disease, picked up by the U.S. and not by Canadian standards. I am wondering if we're vigilant enough or have enough inspectors with the CFIA to do our job thoroughly.
Dr. Kochhar: Right now we have the right expertise; we have the adequate number of inspection staff; we have adequately trained inspection staff and veterinarians at these slaughterhouses where we can pick up any minor or major symptoms of any of these diseases.
It is part of our training and disease management strategy where we focus very heavily on the diagnosis based on what we see. That's why we have very vigilant inspection staff at the slaughter establishments.
Veterinarians who do an ante-mortem exam, which is when the animal is still alive, we have a look at that so we can pick up any symptoms and separate them at the post-mortem. After that, we take the samples so we can make sure if there is any disease symptoms missed at the anti-mortem or post-mortem, we're still able to catch it.
Senator Mercer: We appreciate you being here. I know you are probably rather busy these days.
You said that Canada is considered to be tuberculosis-free, so where does it come from?
At the same time, you made reference to our good relationship with our American friends. Will this affect the ability for our animals to move freely back and forth across the border? If we remember back when we had the BSE problem, it did become problematic for our farmers to move their animals back and forth, but I'm hoping that the understanding of the integrated market that we developed then is still in effect now.
Dr. Kochhar: Senator Mercer, the tuberculosis-free status that we have enjoyed since 1923 is based on the fact that the standard-setting body, which is the World Organisation for Animal Health, Office International des Epizooties, relies on a surveillance program. This means that we have to test the animals that are of vulnerable population, which means they could have shown the symptoms. We do random surveillance testing. Once we have done random surveillance testing and demonstrated to the standard-setting body and the rest of the world that we do not have any case of tuberculosis detected in what we have tested, supplemented with our slaughterhouse information, then we apply for disease-free status, and that is granted to us by OIE.
Many diseases — for example, the other diseases of different animals — we get a kind of accreditation from the World Organisation for Animal Health that this country is free from this particular disease. That's how we got it.
In terms of the U.S., as I said to Senator Tardif in my previous answer, our relationship with the United States has been a very integrated industry, where a lot of fattening of the animals happens in our Prairie provinces and slaughter may happen in the U.S. or in Canada.
The United States does not have TB-free status. They have TB in pockets all over the United States. Let me give an example. Canada sees probably one case every five or ten years, whereas the United States may see five to seven cases a year. They are just managing tuberculosis; they are not free of tuberculosis.
For us to have a higher animal health status would allow to us continue that trade. Should there be a change during that course of time, or if we would have more cases diagnosed, if that happens to that point, we'll have that conversation with the United States. However, right now we are in very good shape.
Senator Mercer: You have talked about testing animals in Alberta and Saskatchewan. The market is integrated not just north-south but also east-west. Have you started testing in Manitoba and that large herd in British Columbia?
Dr. Kochhar: Senator Mercer, the point at which we will start to test these animals would be if there are any trace-outs or any connections to this herd. The very preliminary assumption we start with is that we do not have tuberculosis. If there is a pocket of tuberculosis that has come to light during this particular assessment, we will go and trace out the herd; and if any of that belongs to Manitoba, Ontario, Quebec or B.C., we'll surely be testing those ones.
Senator Mercer: Obviously, as chief veterinarian, you're very busy. The question that has been raised as this has hit the public is whether there are enough vets involved in helping with this problem.
Dr. Kochhar: Senator Mercer, I must assure you that we have the appropriate number of inspection staff, which includes veterinarians, actually engaged in managing this particular event. I must say that we have mobilized veterinarians from across the country — some from Quebec, Ontario and other provinces — all part of CFIA, who are well trained and well equipped to do the testing as well as to make those interpretations. We are continuing on with the same force to nail down how quickly we can have the testing done so that we can release the quarantine.
Senator Mercer: Dr. Kochhar, what are our possible next steps?
Dr. Kochhar: Senator Mercer, first we are going to test this tranche of all the herds under quarantine. We expect that in the next few weeks we will be finished with the preliminary testing. They will be sent out to slaughter or disposal. We will do our post-mortem testing and so on.
Then, as we mentioned earlier, those 18 premises that have been called the infected herd are going to have some trace-outs. We will then look at the trace-outs from those particular animals and, based on that, we will do further testing.
It may sound like this will be endless; however; this is the way we can demonstrate to the world that we are able to eradicate the disease. I must assure you that as the commingling of the animals is very limited from what is available now, we may be able to look at it from the angle of what has happened over the past few years, whether we have been able to trace those particular herds, and how quickly we can trace out and do the testing. In a few weeks' time, we should be able to do the first trials of testing.
The Chair: We have two senators joining us: Senator Oh from Ontario, and Senator Beyak from Ontario.
Senator Ogilvie: Dr. Kochhar, you have indicated that we are described as being disease-free and that there have not been very many outbreaks; however, very clearly, the disease appeared. What is the likely source of this disease? Which wild animals are in abundance in the region of the outbreak that are themselves potential carriers of this bacillus?
Dr. Kochhar: Senator Ogilvie, let me start by saying that our investigation is focusing on putting our arms around the diseased animals so that we can minimize further transmission.
Senator Ogilvie: I understand all that part. I have heard all your answers there. I want to get to the source of this.
Dr. Kochhar: The likely source may not be confirmed until we are finished with our investigation. There could be multiple possibilities, which I can list for you, but we may not be able to pinpoint the possible source until we can complete the epidemiological investigation. It could even have originated from a human who was infected with tuberculosis. It could have been by contact with another animal that had TB and was imported. It could have been through any other method of transmission, because it is aerosolized. Even, in a general situation, it could have been through contact with wildlife.
Your second question, Senator Ogilvie, is which wild animals are in that vicinity. There are multiple animals that could have been a source of the tuberculosis infection. However, over time, we have done genome sequencing, which is the DNA fingerprinting of this particular TB strain. That gives us an idea of whether this particular strain existed in Canada or has ever existed in Canada or in the wildlife. We have the information for all of that. When we tried to match that, it has never been seen in Canada. It is often origin, which is right now pointing to something that we have never seen and that is more likely a Mexican strain at this point.
Senator Ogilvie: So right now, you don't know the exact answer to the question of the DNA source. You have a suspicion that it may have originated in Mexico. If it originated in Mexico, how did it get to a farm in Alberta?
I know that you maintain ongoing surveillance around Riding Mountain National Park in Manitoba. You have two different zones there, one that you consider higher risk than others. That's due to wild herds of elk, I think it is, in that particular case.
I'll go back and maybe start with the question: The DNA indicates it may have come from Mexico. What is the carrier from Mexico that you suspect?
Dr. Kochhar: Senator Ogilvie, what we get from the DNA fingerprinting is that it is of Mexican origin. We don't know whether it came from Mexico. That particular strain was actually seen in Mexico, and that's what the fingerprinting tells us.
What is the way it reached Canada? We don't know that. That's why I mentioned, Senator Ogilvie, that we will need to do a lot of epidemiological investigation to do the trace-out and see where the animals got contact, who were the workers, were they tested for tuberculosis and was there any other factor? That will determine the answer for us. We do not have that answer yet. But the epidemiological investigation will lead us to that particular point.
Senator Ogilvie: Is that an active investigation right now?
Dr. Kochhar: That is.
Senator Ogilvie: Thank you.
[Translation]
The Chair: I have two or three very short questions.
First, if two animals in a herd of 100 have the virus, do you slaughter only the two infected animals or the entire herd?
[English]
Dr. Kochhar: Senator Maltais, with the animals that are actually diagnosed with a disease, any animal that is in the vicinity or part of that geographical location that is called a premise or a part of a bigger herd will all be destroyed. They will all be destroyed.
[Translation]
The Chair: Okay.
Here is my second question. We learned last Saturday that a dairy farm in Quebec had an animal infected with tuberculosis. Naturally, the farm was quarantined. Is it the same bacillus of unknown origin that we are finding in the West? The cows have not yet been slaughtered, but they are in quarantine. Tests are being done regularly to monitor the situation. Would the same compensation that you paid for herds that were destroyed out West apply to this farm if it turns out that it is contaminated?
[English]
Dr. Kochhar: Senator, to my knowledge, there is no farm in Quebec that has been quarantined for the purpose of this investigation. As I mentioned earlier, senator, the only farms are in Alberta and Saskatchewan. However, just to make it very clear, we do place animals under quarantine for various other reasons while we are doing some investigation, so it may not be related to tuberculosis. However, the reason we compensate is that if for a particular reason we believe that this animal is a source of a disease and needs to be depopulated or has to be destroyed, when we order the animal destroyed, we will certainly pay the compensation.
[Translation]
The Chair: Thank you for your answer. The press often exaggerates the facts and, in this case, not being a veterinarian, I trust what the newspapers report.
I have one last quick question. What do you do with the slaughtered animals, and who slaughters them?
[English]
Dr. Kochhar: The process of destruction is through slaughter. Those animals that have been tested and have actually reacted at the first time during the test, we put them in one category. Those that have not reacted to our test are returned negative and put in another category. Those that are reactors are subject to increased post mortem. We send them to the slaughterhouses where we have our presence of inspectors and veterinarians. We look at each and every animal that is slaughtered and their post mortem examination very carefully to see if there were any indications of disease.
Senator, this is important because not all reactors will have disease. They have just reacted to a test. It doesn't mean they have disease. Disease is confirmed once we actually look at the post mortem examination of that animal.
These are then destroyed, they are slaughtered, and the meat goes to rendering or other purposes. For those animals that are free and no disease symptoms, haven't reacted, they go through a normal slaughter process.
[Translation]
The Chair: Thank you, we are very pleased with the clarifications you are giving our committee because we need specific answers so that we can relay them. I personally thank you.
Senator Dagenais: I am aware that you are taking all the responsibility for the things that need to be done to stop the problem, but surely you are aware that it will create some fears among Canadians about consuming beef. Fortunately, this was not widely publicized.
Would you be able to reassure Canadians about consuming beef, if needed, to tell them that, given all the measures taken, they can consume Canadian beef safely? I am also thinking about the United States that, with their protectionist measures, might have a tendency to want to close the border to Canadian beef, if necessary.
[English]
Dr. Kochhar: Senator, let me assure you that this particular situation doesn't warrant any of those aspects where we should be worried about the safety of the food. That is the reason precisely, Senator Dagenais, for actually testing the animals. Those that have even the smallest degree of reaction are taken out of the food chain completely. We do a thorough analysis and we do not allow them into the food chain.
We never say it is a zero risk, but there is a negligible risk at all, if any, that this could be a public health issue. Beef is safe to eat. This is not a food safety concern.
Our colleagues in the United States have been in regular contact with us. Actually, we have been in regular contact with them for multiple reasons. We have discussed this at various fora and meetings. There is no such intention in terms of any of those reactions that would say, given the nature of the investigation and the progress of the investigation, that there are any concerns that they would go the route of stopping the trade or limiting the access of beef that flows out to the United States.
I can assure you that is how we are proceeding right now.
[Translation]
Senator Dagenais: Thank you very much for your answer.
[English]
Senator Gagné: If I understand correctly, bovine tuberculosis can be transmitted to humans. Is there a cause for concern about potential spread to humans? If so, what is the process around testing humans who have been in contact with the herd or the specimen?
Dr. Kochhar: Senator Gagné, tuberculosis is a zoonotic disease, which means it can be transmitted from animals to humans and humans to animals, so yes, that can happen.
What is the worry in terms of the folks who have been in contact with these herds? As I mentioned earlier, this disease is a result of prolonged exposure to an infection. A human being who has been in close contact with the animal that has been diseased and is actually emitting the bacteria through their nasal or other secretions — that is the reason a human being would get any of the disease.
For that particular reason, we're doing this investigation and we're working with the provincial health authorities and the Public Health Agency of Canada. Right now, we can say with confidence that, given these animals are beef animals — they are cow-calf operations out in the pasture — we don't see much risk at this point that this could have affected any of human being. However, the public health provincial authorities as well as the Public Health Agency of Canada are in the process of making sure that if there are any symptoms or testing that has to be done of these particular folks who have been in contact with these animals, that can be done. That's continuing on. We have engaged them from the very beginning.
Senator Tardif: It's my understanding that — if I'm correct — 40 cattle operations in southeastern Alberta and southwestern Saskatchewan are being quarantined and 10,000 cattle will be slaughtered. This is a very serious problem. Given the time that it will take to do all of the testing, could provincial or local veterinarians be used to accelerate the process? Meanwhile, farmers are suffering during this quarantine process, which could be a very lengthy one.
Dr. Kochhar: Senator Tardif, I must assure you that CFIA is putting in resources, which means that we have had the appropriately trained veterinarians and other staff that are doing the testing. I want to stress "appropriately trained'' because there are the two tests we are conducting. One is doing the blood sample and the second is the caudal fold test. It is the veterinarian in me coming out when I explain that it is an injection of the antigen under the skin of the animal.
People have to be trained to both administer the test and read the test, and CFIA veterinarians are very much trained to do that. We also have the federal authority to do that. Provincial veterinarians, for one reason, may not be trained for that, but we do have another category of our veterinarians who are accredited by CFIA who do these tests regularly. They are trained for that, because these are the people who we use for export certification to U.S. and Mexico to provide export certification.
Right now, we have enough resources dedicated so that the limiting step is not provision of our inspection staff or veterinarians who can do the test. Should there be a need, we will certainly involve the provincial veterinarians and accredited veterinarians who are local. But right now, we do believe that in the next few weeks, we will be able to conduct all the tests. We're doing it as quickly as possible.
I'm very cognizant of the producers and ranchers who are facing this issue. That's why we have been working very closely with industry associations to create that particular feed lot we are talking about where we can quarantine the rest of the animals and continue their testing and so on.
I must assure you that we are putting a lot of effort into that.
[Translation]
The Chair: Unfortunately, our time is up. The Minister of Agriculture for Alberta will be joining us in a few minutes.
Gentlemen, I would like to very sincerely thank you for the explanations you have given. They will be very helpful to us. The agriculture committee fulfilled its mandate thanks to your explanations. We appreciate it very much. I hope you will be able to put an end to this disease as soon as possible.
The Standing Senate Committee on Agriculture and Forestry is now resuming its study on the acquisition of farmland in Canada and its potential impact on the farming sector.
[English]
Today we have by video conference Hon. Ralph Eichler, Minister of Agriculture, Government of Manitoba; Dori Gingera-Beauchemin, Deputy Minister, Ministry of Agriculture, Government of Manitoba; and Patty Rosher, Director, Boards and Commissions, Government of Manitoba.
Thank you and welcome to the committee.
Mr. Minister, do you have a speech to open the discussion?
Hon. Ralph Eichler, Minister of Agriculture, Government of Manitoba: I don't have one that I distributed, but I have a verbal one that I'll present to you.
The Chair: Okay, thank you.
Mr. Eichler: Thank you for inviting Manitoba to provide input on regulations and views on the acquisition of farmland. Last time I spoke to the committee, I stressed the fact that Manitoba has a large landmass, with a diverse production base and agricultural sector that generates 6 billion in cash receipts. That information is critical when we discuss how Manitoba addresses the acquisition of farmland.
Manitoba regulates the acquisition of farmland through two acts. The first one, the Farm Lands Ownership Act, has been in effect since 1988. The goal of the act is to preserve farmland for the ownership of Canadians for agricultural purposes and to support development of strong rural communities. The Manitoba Farm Industry Board, an independent body appointed by of the Lieutenant Governor-in-Council, is responsible for administering the act.
The act limits speculation by limiting foreign ownership of interest in farmland to a total of 40 acres. Non-Canadian citizens and organizations fully or partially owned by non-Canadians can apply to the Manitoba Farm Industry Board for an exemption under the act to take an interest in more than 40 acres of farmland. The board reviews each request for an exemption under the act separately and considers factors set out in regulations to the act, such as whether the applicant and the proposed taking of an interest in farmland is in the public interest or of significant benefit to Manitoba. Requests for exemptions are reviewed under the act.
Secondly, Manitoba regulates the use of land through the Planning Act, in effect since 2006, which made it mandatory for municipalities to adopt a development plan. Under the act, development plans must identify agricultural lands and set out where and under what circumstances non-agricultural development should occur, using the provincial land-use policy as a guide. The provincial land-use policies are adopted under regulation of the act and set out goals and interests for land use and development in Manitoba, including agricultural policy. The intent of the agricultural policy is to protect agricultural land for present and future food production by minimizing fragmentation of the land base and protecting agricultural lands from encroachment by other uses. The province has approving authority for all of the development plans and amendments.
The 2015 Farm Credit Canada Farmland Values Report indicated that overall average national values have continued to rise since 1993. Manitoba experienced the highest average increase among the provinces, at 12.4 per cent, following a 12.2 per cent increase in 2014 and 25.6 per cent in 2013. This rate of increase has declined significantly since 2012 and 2013.
Crop production land has been mainly purchased by local producers expanding their operations as they bring in the next generations of farmers to the industry.
Many factors contribute to the increasing value of Canadian farmland. The following is a summary of the observations we've made in Manitoba. High commodity prices, profitability and improvements in productivity are driving factories affecting the price of farmland in Manitoba.
Increased crop receipts have improved the ability for established operations to add additional land to their operations, particularly as young farmers enter the industry to take over from the previous generation.
Low interest rates have reduced the cost to borrow. This allows farm operations to afford payments for higher priced land out of their cash flow. Rising land values increase farm equity and provide lenders with security to advance funds.
There exists a very competitive environment between large, established operations of 5,000 acres or more when competing for additional parcels of land, who are known to bid up prices aggressively.
Land around major and growing urban centres surrounding Winnipeg is under pressure to be used for urban development. The interest in rural-residential large lots drives up the price of farmland near these towns. Corporate ownership of farmland is common, both through family-operation corporations and numbered corporations. Lack of a provincial and national land-ownership registry identifying farmland owners makes it difficult to determine control that may come in the form of private agreements for down payments and financial arrangements.
While the price of Manitoba farmland has rapidly increased, it is still priced lower than in Ontario, B.C. and Quebec. The return on investment from rent and price appreciation makes it an attractive investment. We have had interest from institutional investors, such as pension plans and investment groups, in buying Manitoba farmland as an investment. Generally, our farmers are not supportive of this particular practice, and we do not have any evidence to indicate that this is driving up the price of land.
Municipalities in certain areas of the province have concerns that conservation groups have contributed to the price of farmland increases. When farmland is purchased for conservation purposes, it results in a change in land use, which is beneficial for environmental purposes but does reduce the land available for agriculture.
The following are some of the biggest concerns we hear from our producers: Young and beginning farmers find it difficult to purchase farmland at the current price levels. Commodity prices in crops and cattle have softened and that, along with the potential for increased interest rates, has raised concerns as to whether farm operations will be able to continue to service their debt obligations in the short term.
There is a lack of data available across provinces that identifies who owns our farmland, what it is used for and how that usage has changed. As our population grows, there is increased demand for residential development on lands around urban centres. There is potential for the purchase of farmland for speculation for future development. Fragmentation of land-base leads to increased potential for agricultural land to be used for non-agricultural uses. Manitoba sees 500 requests yearly for subdivisions of land in agricultural areas.
There is also the debate between utilization of land for agricultural food production growth versus conservation uses.
The rapid rise in farmland prices has resulted in increased taxes to farmers. The province provides support through municipal tax, portioning for farm use and school tax rebates.
Food security and the impact of climate change are concerns. There is a limited supply of farmland suitable for producing food if Canada is contributing to feeding the world's population, estimated to grow to 9.7 billion by 2050, and it is important to protect those areas of land that are suitable for producing food.
While we have some challenges and concerns regarding farmland acquisitions in Manitoba, I also want to present you with some possible solutions.
Addressing the issue of rising prices and making any policy changes on farmland acquisition must be based on practical evidence, while at the same time minimizing red tape.
Increased support from both the provincial and federal governments to allocate more resources to collect comprehensive data on farmland ownership, farmland use and changes to use would help to identify the need to protect our farmland.
We believe a national tool to evaluate policy outcomes by tracking farmland usage would be beneficial to all provinces. Each province takes a varied approach to land use planning, and we have much to gain if there's better alignment and understanding among us. We are currently in the planning stages of the next federal/provincial/ territorial agricultural framework; perhaps we can weave in funding to support research to identify where the provinces stand on land ownership and usage and give us a better knowledge to be used for elective land use planning.
In addition, ongoing assessment and development of programs that will assist young and beginning farmers in purchasing an initial land base would be beneficial.
That summarizes the reasons farmland values are increasing, our challenges and the solutions we believe would be helpful to improve land use planning nationally. Thank you for the opportunity to present this information to your committee.
The Chair: Thank you very much, minister.
Senator Mercer: Welcome back to the committee, minister. We appreciate you being here.
You did not spend a lot of time talking about urban development but you did mention it in passing. What effect has it had on prices for agricultural land in the Winnipeg, Brandon and Portage areas of the province?
Mr. Eichler: Brandon and Portage have had some increases in land values close to the proximity of those centres, but not to the extent of Winnipeg. As you know, CentrePort is a large part of the base where we're trying to encourage investment for those sectors, whether it be through imports or exports and, of course, attracting those new opportunities for growth in Manitoba as well.
Senator Mercer: You also did not spend a lot of time talking about the land transfer between parents and children. I think one of the issues, of course, is that our average farmers' age is moving up, and many farmers are having difficulty finding a way to economically transfer the land to their children, both from a tax point of view and that of providing for their own retirement. Has this been an ongoing problem in Manitoba?
Mr. Eichler: Yes, it has. Succession planning is a very integral part of making sure that the farm is able to stay in the next generation, as well as to be fair to the other siblings involved. We know that it has been an issue. There are some tools in the toolbox, if you will, to assist producers in that way, but probably not to the extent to where it's always necessarily affordable in order to have those plans in place. This pits one child against another and, of course, makes it difficult to maintain the farm so it's viable for the rest of the family that takes it over.
Senator Mercer: I'm sure all those discussions around certain farm dinner tables are very interesting and probably very heated.
You did talk, however, about an increase in support from both federal and provincial governments. How do you define that increased support, particularly that which you see coming from the federal government?
Mr. Eichler: Typically, we've become adjusted to or have expected a 60/40 split, as that is the way we've had them set up. As to how that rolls out dollar-wise, we would be interested in those discussions not only now but into the future as we move forward. Typically it's a 60/40 split.
[Translation]
Senator Dagenais: Thank you, Mr. Minister. We know that young people sometimes have difficulty in obtaining financing to acquire good land that is already coveted by speculators. Have you had to intervene in any way to help young producers to get mortgages?
[English]
Mr. Eichler: In Manitoba, we have a department we call Manitoba Agricultural Services Corporation, of which we're very proud. We do assist young producers with a reduced rate of interest in order to purchase some of that land. We've seen a bit of an increase in the number of young producers. We all know that things haven't changed as much as we'd like to see with young producers taking on those risks right off the bat, but certainly we know that it is very supportive for the youth to become involved.
Having said that, we've still seen, with a number of producers, either both husband and wife working off the farm or at least one of them doing so in order to meet the financial demands of that particular family and, of course, the farming operations.
[Translation]
Senator Dagenais: What measures should we consider to prevent the purchase of farmland for speculative purposes? Some witnesses have told us that farmland was sometimes coveted by pension funds as an investment. Could some measures be taken to counter the purchase of land for speculative purposes?
[English]
Mr. Eichler: As I stated in my presentation, that is a concern for us, of course, in making sure that the land stays where we're able to produce agricultural food and products. That is important to us.
We're hoping for that discussion to continue once this presentation is finished and, of course, with the possible solutions that may come as a result of the outreach from this particular committee.
Do I have the answers for all of that? No, I don't but, certainly from a broader sense we realize that it is an issue that certainly may come forward. It has not been a big issue for us here particularly in Manitoba.
Senator Gagné: Welcome, minister. I'm very happy to have you here at the committee.
I was struck by the fact that there's a common denominator related to the lack of information respecting the mapping of farmland. We have had quite a few witnesses who did mention that there is a lack of data on the use and availability of farmland, and the federal government also mentioned that they thought it would be really important to collaborate with the provinces and the territories to make this type of project possible. You did mention that there is a lack of data. How would you envision collaboration between the federal government and the Province of Manitoba to achieve that particular objective?
Mr. Eichler: That is a very good question. We're a new government, and we've been in power for seven months. We're trying to reduce red tape, not necessarily introduce more of it, so I'm reluctant to say that we need to impose more regulations on our farm families. Having said that, we do need to seek solutions to the particular problem.
I mentioned in my comments, as you said, that I'm reluctant to put a demand on producers whereby they have to register. So I guess I'm talking out of both sides of my mouth when I say that we know that there needs to be better data. How do we achieve that in a voluntary way rather than imposing it on them?
Senator Gagné: I'm aware of the fact that Manitoba limits foreign ownership to 40 acres. That's what I've understood. Is that right?
Mr. Eichler: That's correct.
Senator Gagné: Have there been any exemptions awarded to foreign investors for the purpose of generating electricity by wind?
Patty Rosher, Director, Boards and Commissions, Government of Manitoba: That is a great question. I can't recall an application that we've received from a foreign owner for that purpose.
Senator Gagné: I was just wondering, because there are a lot of wind farms around Saint Joseph and St. Leon, and they have taken up a lot of farmland.
Ms. Rosher: I'm not sure what their agreement with the landowner is. They may be renting the spot. They don't necessarily have to have taken ownership per se, but we haven't received any applications. For them to buy that land, they would have to apply to the Farm Industry Board.
Senator Pratte: Minister, I want to follow up on the data issue because it has certainly been raised by practically all of the witnesses we've had before the committee.
First I'd like to know, in Manitoba itself, what kind of data does the province have on land use? I'm sure you have some information. For instance, when an institutional investor buys some land, would you be able to know what kind of transactions happen? If there is an increase in institutional investors interested in farmland, can you follow that? I'm talking about only inside Manitoba itself.
Ms. Rosher: On the ownership side, we do have a database that starts with land titles. The owner of every piece of land in Manitoba is known, but that information isn't available to us in a way that we could do analysis on it. The development of a database for analysis would take some money and some effort, but we do have that as a starting point.
Dori Gingera-Beauchemin, Deputy Minister, Ministry of Agriculture, Government of Manitoba: In addition to that, there are regional planning authorities, which are municipalities that collaborate with each other, and under the Planning Act they provide a development plan. The development plan lays out, as the minister spoke about, the ability for agriculture and non-agriculture land. However, the municipalities are the holder of that development plan, and they are the ones who at the end of the day have the authority as to the use of that land. Should there need to be a conditional use permit for some of those pieces of land, again, that authority rests with the municipality. So there's a combination of farmland titles plus the regional planning authorities that set out the terms and conditions for the use of the land in their geographic areas.
Probably one of the things that could underpin it nationally is really technology that would allow for some very sophisticated mapping and planning across the country. There was a time when the former PFRA in the West, the Prairie Farm Rehabilitation Administration, provided great tools for mapping. We had a significant amount of professional resources that allowed us to track the mapping and the soil. That base could have been capitalized on, actually, to use it to track farmland owners as well, probably more critical now than ever, given climate change and the need for provinces to collaborate with the federal government on tools that are multifunctional and that allow us to track farmland ownership but also allow us to track the use of that land, the health of the soils and the ability to mitigate and adapt to climate change.
I think many of the jurisdictions are longing for the investment in modern technology on mapping and tracking for multiple purposes.
Senator Pratte: Minister, you said during your presentation, if I understood you correctly, that any solution to the problem of farmland prices and ownership must be based on practical evidence. You insisted on that. May I ask to you elaborate on exactly what you mean by that? What is your concern here?
Mr. Eichler: My concern is to make sure two things are done. First, that it's done in consultation with our producers, of course, as they should have a say, and second, to maintain the value that young farmers have in order to be competitive and be part of that discussion as well.
Senator Mercer: Minister, I want to go back to your opening statement where you talked about the 1988 Manitoba Farm Lands Ownership Act — I think that's what was referred to — and your limit of 40-acre ownership by non-Canadians. Was it non-Canadians or non-Manitobans? I'm not quite sure of that.
Ms. Gingera-Beauchemin: Non-Canadians.
Senator Mercer: Thank you. How effective has that been? Are there positive and negative sides to that? Has it protected Manitoba farmers, but has it also limited the growth of some agricultural enterprises?
Mr. Eichler: Good question. The 40 acres is what it's at. That's what was established and it's still that way now.
Because we haven't had much request for foreign ownership, to be perfectly clear, not having those requests, it's hard to determine whether or not there would have been loss of revenue. Most importantly, one of our priorities as a new government is to ensure our land is protected so that we can grow food, not only for Manitoba and Canada but of course on a worldwide basis as well to ensure they do meet those goals so we can feed the rest of the world with those numbers that I talked about earlier.
Senator Mercer: You also mentioned tax rebates in your statement. I'm curious as to the size of those rebates, how they're calculated, and are they limited to tax rebates on agricultural land? How do tax rebates affect those who own land in urban settings?
Mr. Eichler: Again, good question. I'll start with the farmland first because that's the one we're talking about the most here.
It's based on a simple calculation based on the assessment times the mill rate that's assessed by the school division on the tax dollars, which is collected by the municipality. The farmer pays that education tax along with their municipal tax. The formula is 80 per cent of rebate. It's capped currently at $5,000 per farmer or corporation or husband and wife or son. It could be all three. But the cap is still $5,000 based on that farming operation.
Senator Mercer: That's an education tax, is it?
Mr. Eichler: We're one of the few provinces left with education tax on farmland. As a new government, we are trying to figure out ways to assist in making sure our farmers are in fact competitive on the world market and of course with their neighbours to the east and west.
Senator Oh: Thank you, minister. Manitoba does not allow foreign acquisition of more than 40 acres of land for farmland. Would you consider any kind of joint venture in Manitoba for farming with Asia-Pacific countries? Due to the poor climates and soil condition over there, they are talking about joint venture development or acquisition of farmlands in Canada for farming for export. Is it possible to do that?
Mr. Eichler: I'll let Patty answer that one for you.
Ms. Rosher: Under our act, a foreign owner would be a company whose ownership is open to non-Canadians. If it's a joint venture, often pension plans would qualify as a foreign owner as well because they have ownership open to non-Canadians.
Yes, they would have to file an application for an exemption. Then the board evaluates each application, as the minister said, based on whether it provides a benefit to the public of Manitoba. It's not necessarily that a joint venture wouldn't be approved, but it would be considered a foreign owner and would have to go through the application process.
Senator Oh: How long would it take for the application process? Do you have to go for public hearings?
Ms. Rosher: Our panel meets approximately monthly, so it's just a matter of working through and setting up a meeting with the panel. I couldn't give you an exact timeline.
Senator Gagné: In October, a representative from the Keystone Agricultural Producers of Manitoba explained that an issue of concern for their membership has become the increase of the number of different groups, including conservation groups, First Nations and indigenous people, who are looking to purchase agricultural land for environmental or economic purposes. Do you think the Government of Manitoba should play a role in the transactions between the landowner and potential buyers? Is there a role play for the Government of Manitoba?
Ms. Rosher: Conservation groups would fall under the foreign ownership policy. Sixty per cent of our applications every year come from conservation groups like Ducks Unlimited, because their membership is open to non-Canadians. We do have a role in reviewing those types of applications and determining whether there is a benefit to the public. If the other groups are Canadian, no, they wouldn't come to us currently.
Mr. Eichler: I might add that, as I said in my submission a couple of times, it's really important that we keep this land we have in order to produce food. That's really important to us in order to ensure that we are able to meet that demand as the world population grows. We have to have a bit of a double-edged sword where we want to make sure we have conservation in mind but, in order to be able to sustain our goals as a province and as a country, we have to ensure we meet those goals in order to make sure we have enough food to feed the world.
Senator Mercer: Minister, I'm going to change subjects a bit. I apologize if I catch you off guard. Just prior to your testimony this afternoon, we heard from Dr. Kochhar, the Chief Veterinary Officer for the CFIA. We were talking to him about bovine tuberculosis in Alberta and Saskatchewan. That's not that far away. Are you concerned with the outbreak of bovine tuberculosis in Saskatchewan and Alberta?
Mr. Eichler: As neighbours, we are conscious of the fact that when one hardship affects a province, we take that very seriously. We have TB here in Manitoba for quite a number of years in Riding Mountain National Park. We have been TB-free for how many years now?
Ms. Gingera-Beauchemin: At least three years.
Mr. Eichler: At least three. That is a significant impact on the producers, on government and the overall cattle numbers. Canadian cattlemen impact all of us, so, yes, we are very concerned when we see our neighbours have impacts that come upon them through no fault of their own. But we want to ensure we have our house in order to ensure that we keep our herds free.
Senator Mercer: Was that outbreak in Riding Mountain National Park in cattle or elk?
Mr. Eichler: In elk, yes.
Senator Mercer: I assume the answer to this question is "yes,'' but are you monitoring closely any testing happening on cattle in Manitoba? As we know, the cattle in Canada and U.S. are just as mobile as people, moving back and forth all the time. Are you monitoring that as this issue unfolds west of you?
Mr. Eichler: Yes, we do. In partnership with Parks Canada and our cattle producers in Manitoba, we take it very seriously. We want to make sure that our herds stay free, and that's why we have done testing. Government has assisted producers with a bit of remuneration — a "mustering fee,'' if you will, is what we refer to it as — for the testing, which can be very expensive for provinces.
I got the tail end of that presentation while waiting for this one to come on. It was quite interesting for me to sit and watch. But we know the hardship that comes with testing. We know the hardship that comes with government in order to be sure that we have the best interests of producers, and we're trying to rule our beef numbers here in Manitoba as well. All of that is combined. Having said that, it's going to be a challenge for us. We take that challenge seriously.
Senator Mercer: Minister, recently the committee travelled to China. On that trip to China, we heard from the people there of the very large pork market and the growing beef market that is there, so it's an opportunity that exists to expand both our pork and beef production. I wish you well on that.
The Chair: Minister and your group, thank you so much for appearing before our committee. It's very interesting for us.
Mr. Eichler: If I may, I just wanted to comment on the last comment in regards to the growing markets in China. We are very supportive of TPP, and we would love to export more markets to China and Japan — the Asian markets. We certainly concur with you, and we would love to be able to grow more food in order to export those countries.
Senator Mercer: Just to conclude, everywhere we went during our travels in China, pork and beef were foremost in discussions about what we could be exporting. Canola was also very prominent in our discussions with people there, too. We hope the market does improve for all of us.
The Chair: Thank you, minister.
Mr. Eichler: Thank you for what you do.
[Translation]
The Chair: In the second group of witnesses, we have some well-known people who are interested in agriculture. We even met them in China. First up, from the British Columbia Ministry of Agriculture, we have the Honourable Norm Letnick and Deputy Minister Derek Sturko. We also have the Honourable Oneil Carlier, from the Alberta Ministry of Agriculture and Forestry, and Darren Chase, the Government of Alberta's Director General of Policy, Strategy and Intergovernmental Affairs.
Go ahead, Mr. Letnick.
[English]
Hon. Norm Letnick, Minister of Agriculture, Government of British Columbia: Thank you very much for the opportunity to participate today. I have a short statement I would like to read. Afterwards, at your discretion, I will answer any questions that you may have.
The British Columbia Ministry of Agriculture has a mandate to work with agriculture, aquaculture, commercial fisheries and food and beverage processing sectors. Throughout my remarks when I refer to the sector, I am using the term broadly to include these four components of the industry.
Again, I would like to thank you for the privilege of speaking to you and with my colleagues to the east. Mr. Carlier and I have been good friends for years now in moving forward with Canada's agriculture in trying to expand food security in our country.
In a national context, B.C.'s sector is relatively small, although we have one of the most diverse agri-food and seafood sectors in the country, with over 200 agriculture commodities and 100 species of seafood, and the food and beverage processing sector is the second largest manufacturing industry in B.C. We strive to be number one, but we still have some work to do on that.
B.C. ranks in the top three jurisdictions across Canada for the production of key commodities, including farmed salmon, blueberries, mushrooms, nursery, floriculture, greenhouse vegetables, dairy products, chickens and eggs. The sector is showing a strong economic performance, achieving record high revenues of $13 billion in 2015 — this is an increase of almost 8 per cent over 2014 — and export shipments worth $3.5 billion to more than 150 countries.
The B.C. Agrifood and Seafood Strategic Growth Plan, which is our five-year strategic plan, outlines B.C.'s goal of increasing revenues to $15 billion by 2020.
Affordable and accessible farmland is important to us to continue to increase economic opportunities for the sector in our province. Today I would like to talk about B.C.'s approach to farmland preservation and acquisition and what it means for farmland values.
To provide some context, we have about 95 million hectares — that's over 230 million acres — in our province. Due to our natural geography and topography, most of this area is made up of mountains and forests. Only about five per cent of B.C.'s total area is suitable for agricultural production, so B.C. has set aside 4.6 million hectares of agricultural land and protected it within what we call the Agricultural Land Reserve. It's there to preserve lands for agriculture as the first priority. As a finite and valuable resource, the province decided to protect this land through a provincial policy of farmland preservation in 1973. Currently we have 32,000 hectares more in the reserve than we did back in 2001, so the reserve continues to change in size.
As an expression of this policy approach, the Agricultural Land Commission Act and its regulation identifies a series of permitted farm and non-farm uses that may be undertaken within the Agricultural Land Reserve, or ALR. For other land uses not identified in the act and regulation, land owners must make an application for permission to the Agricultural Land Commission, or ALC, before proceeding.
While B.C. does not require land owners in the ALR to actively farm the land, we have a system of tax incentives to encourage agricultural production, which fall under the mandate of a different minister and ministry. Many of these tax incentives are available to land owners regardless of where they come from or even whether the land is protected in the reserve.
There is an additional 250,000 hectares farmed outside of the ALR, so 4.6 million hectares is protected and there is an additional 250,000 hectares farmed outside of the protected area.
However, B.C. has competing land uses and pressures based on the population density and the primary location of the highly fertile agriculture land base, which is protected in B.C. under the ALR. The current total population is approximately 4.6 million people, of which 84 per cent is found in two key areas of the province. One area of population density is the lower part of the province in the southwest, which is basically the Vancouver Lower Mainland area, the Fraser Valley and Vancouver Island. The other area is in the interior of the province, in a triangular shape extending from Kamloops down through Kelowna to the U.S. border. These population-dense areas represent 10 per cent of the agricultural land reserve, but account for 86 per cent of B.C.'s farm cash receipts.
It's important to have the right protections in place to ensure a sufficient land base for agriculture, as well as vibrant communities for B.C. families to live in, for industrial development to support jobs and growth and for infrastructure like roads, schools and hospitals needed to sustain those communities.
As you will most likely be aware, Farm Credit Canada publishes an annual farmland value report. According to this report, farmland values increased by an average of 10 per cent nationally in 2015. In the same year, however, B.C. farmlands increased by only 6.5 per cent. That's below the national average and well below the increases B.C. land owners experienced in the early 2000s, which were recorded averages of 19.3 per cent in 2006 and 18.7 per cent in 2007.
A provincial average, however, can hide a lot of variation, and the cost of farmland varies significantly by region within the province. For example, in 2014, an acre of farmland in the Peace River North region, where Site C is located in the far north of our province, costs approximately $750 to $1,500 an acre, while a similarly sized parcel in Chilliwack, in Fraser Valley, which is near Vancouver, costs anywhere from $41,000 to $63,000. Meanwhile, in Metro Vancouver, smaller parcels — those less than 5 acres — average $150,000 to $350,000 an acre, while large parcels greater than 40 acres average $50,000 to $80,000 per acre.
As a result of these high regional values, some farmers in high-priced areas seek out land in others markets, which can lead to increased land values in traditionally low-priced areas due to increased market activity, causing unforeseen variability in land prices. But, to repeat, overall, our increase is below the national average.
As the committee will be aware, provinces are responsible for legislating matters of farmland ownership in the country. Provinces may also regulate the acquisition of parcels of land by non-residents of the province or non-Canadian citizens provided they do not contradict relevant federal legislation.
Unlike other Western Canadian provinces, B.C. has not enacted a foreign ownership restriction on farmland. This is because we recognize that investment in agriculture, whether it comes from within Canada or from foreign investors, can help keep agricultural land in production, maintain and create jobs, spawn innovation and increase opportunities for new entrants in order to grow the future sector.
Among some members of the public there appears to be a perception that foreign ownership may currently be negatively impacting B.C.'s farming and ranching community, and that view is looking at China. For example, some people have expressed concerns that foreign entities with unlimited means are bidding up land values to levels out of the reach of most B.C. residents and farm businesses.
There are also some who may have general concerns that the high price of land near larger urban centres is making it difficult for business expansion of farming and ranching operations in these areas, as well as for new entrants, in particular, to find lands to farm in these areas.
Earlier this year, in response to concerns about foreign investment in the residential housing market in greater Vancouver, B.C. implemented changes to the property transfer tax return form that allows us to track the country of citizenship of individuals or entities purchasing land in B.C. For those of you who don't know, we have a tax that applies when somebody transfers ownership from one person to another; we are keeping track of foreign ownership.
From the data that we have to date, foreign ownership does not appear to be a primary driver of increases in farmland values; in particular, it's less than 2 per cent from the first period in which we have been watching the data.
Rather, economic fundamentals including prolonged periods of low interest rates, consistently strong year-over-year crop receipts — we had record years the last two years for net profit for our industry — and market momentum appear to be playing a stronger role in rising farmland values. These factors are signs of a strong business environment and should be recognized as such.
We need to remain vigilant in our protection of agricultural land in B.C. When viewed as development lots, ALR lands are generally less expensive and have a larger greenspace than those available in other types of residential development projects.
Local and national media have recently picked up on anecdotal reports from B.C. citizens and local governments regarding the construction of so-called mega-homes on farmland close to urban centres in the Lower Mainland and the Okanagan Valley.
In B.C., we continue to take action to preserve agricultural land. We have a minister's standard bylaw that provides local government with guidelines on what they can do regarding zoning, siting, sizing and location of houses.
Recently there has been a great deal of focus and attention on non-farm uses of ALR in B.C. We have also recently amended our act and regulations governing the land reserve to provide clarity on those non-farm uses. Speculation on opportunities and non-farm uses may also be driving some investors to buy lands in the reserve, which may also be contributing to prices going up.
In conclusion, I would like to say that our agri-food and seafood sectors are enjoying record growth, not only in revenues but also in gross profits and net profits, following a province-wide trend of leading Canada in economic performance in general.
Although farmland values in B.C. are rising, the rate at which they are doing so is below that of many other Canadian jurisdictions as well as the rate of increase in other parts of real estate markets such as housing, and of course, as I've said already, below the national average. Currently there is limited evidence that farmland values are posing a threat to the economic viability of the agri-food and seafood sectors, as well as the security of our food supply in British Columbia and the contribution we make to all of Canada.
B.C. stands by its policy of preserving agricultural land without restricting who may purchase it in order to continue to support and encourage the growth of the sector to benefit all British Columbians and Canadians.
Thank you again for the opportunity to appear before you today and share B.C.'s perspective on the issue of farmland acquisition. If you ask me a question in French, I will do my best to answer that question in French as well. Thank you.
The Chair: Thank you very much, minister. Now from the Government of Alberta, the Honourable Oneil Carlier, Minister of Agriculture and Forestry. Welcome, Mr. Minister.
Hon. Oneil Carlier, Minister of Agriculture and Forestry, Government of Alberta: Thank you very much, senator. I really enjoyed my time in China getting to know a few senators a little bit better. It's unfortunate we have to do this by video conference, but I very much welcome the opportunity to address the committee on agriculture and about concerns around farmland.
I have framed my remarks to address the three areas you are exploring. First, there are a number of reasons behind the increasing value of farmland. It is foremost a limited resource with a strong demand from a number of interests, including increasing urbanization and competing interests from other economic activities. Margins have been good over the last few years and interest rates are low, which has improved affordability and increased demand for farmland. We know that in Alberta, only about 1 to 4 per cent of farmland exchanges ownership annually, creating a limited supply and increasing demand, which also drives up the price of farmland.
Since 2000, farmland values have had a significant and steady increase. For example, for Class 2 farmland in Alberta, the average per an acre value increased from $878 in 2000 to $3,146 in 2015, an increase of over 350 per cent.
Another key area of concern is the fragmentation and conversion of agricultural land to non-agricultural uses. Under Alberta's Land-use Framework, my ministry is monitoring the conversion of these important lands. Although from 2011 to 2015 there was a net gain of 10,000 hectares of agricultural land from public land sales, there was also a loss in 2014 of 20,000 hectares to urban and rural residential development. Of particular note is the loss of top-quality farmland, which is being offset by the release of poor-quality agriculture lands. The richest land loss is along the Highway 2 corridor in Alberta between Edmonton and Calgary.
Second, you asked us about the concerns we are hearing from agriculture stakeholders and the challenges they are facing in acquiring farmland. Over the last few years, we have received correspondence from farmers concerned about the price and availability of farmland to purchase and the impact of non-farmers, such as institutional and foreign buyers, competing for farmland purchases. There is some concern that they drive prices up, although we have no data to support that concern. We do know that institutional and foreign buyers typically rent agriculture land out to farmers to maintain their agricultural tax bracket.
Additionally, agriculture is a renewable industry, and when institutional buyers buy up the land for sale in the future, it will still be suitable for farming. This is in contrast to industries like oil and gas and mining, which use up the land's resources before moving on to a new location and beginning land reclamation efforts.
Of the agricultural lands owned and rented, we know that almost 60 per cent of farmland is owned by those who operate it and approximately 40 per cent of farmland is rented, leased or used from others.
Alberta has legislation in place regarding foreign ownership of farmland. Those purchases are typically associated with value-added operations that bring foreign investment dollars into the province.
Third, regarding possible solutions for resolving issues resulting from the acquisition of farmland, we know that farmers have a number of channels to finance purchases and programs to address farm management and managing risks. Financing is available to help Albertans who wish to purchase land to start farming or expand existing operations through all financial institutions, banks and credit unions, as well as organizations such as agricultural financial services corporations, the Alberta Farm Loan Program or Farm Credit Canada's lending options for land and buildings.
While land use decisions are made by individual municipalities, the Government of Alberta guides and supports them in their decision-making through a number of policies and plans. These include provincial land use policies, regional plans under the Land-use Framework and the efficient use of land strategy and its associated tools. Other opportunities to continue or enhance include educational opportunities, continued support for educating farmers, farm business management and risks of overcapitalization in agriculture.
With respect to beginning farmer programs, provincial and federal agencies have lending programs targeted at beginning farmers that provide a discounted interest rate and lower down payment requirement for those entering agriculture. Strong risk management programs such as crop and cattle insurance, as well as income stabilization programs such as AgriStability, offer assistance to producers in managing price and production risks and aids in managing financial risks. Tax programs such as farmland rollover, replacement property and capital gains exemptions are strong tools to assist in transferring the farm to the next generation of producers.
That concludes my comments in these areas. Thank you for the opportunity to speak to you today.
The Chair: Thank you very much, minister.
[Translation]
We will start with the first round of questions. I would ask senators to clearly identify the minister to whom their question is addressed since we have two ministers with us today.
[English]
Senator Mercer: I will confuse you all by addressing my question to both ministers. I'll start with Alberta and work my way west.
I'm interested in the percentage of foreign ownership. You both mentioned foreign ownership, but I didn't detect a great deal of control of foreign ownership. Do you have real numbers, estimated numbers or a guesstimate of foreign ownership of agricultural lands?
Mr. Carlier: Senator, my understanding is that it been very limited in Alberta. We only see, honestly, one or two cases a year of foreign ownership acquisition of farmland. It's important to note that in Alberta we have a farmland acquisition policy and if there is a foreign ownership that wants to look at farmland over 20 acres, it has to have Alberta cabinet approval.
Mr. Letnick: In British Columbia, we started to track foreign purchases through our property transfer tax change sometime this past summer. Since that time, we've been advised by the Ministry of Finance, which is actually doing the tracking, that that farmland that went through the property transfer tax involved less than 2 per cent foreign owners. So 98 per cent of the farmland that was transferred was to non-foreign owners.
We do not have in British Columbia a provision like they have in Alberta and other provinces where foreign owners need to get permission when purchasing over a certain size of farmland. What we do have is the Agricultural Land Reserve, which basically sets very tight restrictions in what you can do on the land. That applies to all owners, whether they're domestic or foreign.
Senator Mercer: What do tight controls over the land use mean? How does that play out in British Columbia?
Mr. Letnick: I don't know how much time you have, senator. The Agricultural Land Reserve basically has approximately 4.6 million hectares in it. That's the vast majority of the farmable land in British Columbia. About half of that is under production, and the other half is Crown land that's probably grass land or treed land that's been reserved for future generations for hundreds and thousands of years to come so they can eventually get that into production as well.
If you want to do a non-farm use on your ALR land — if it's not a stipulated non-farm use as per regulations set out by the government — then you have to apply to an independent commission called the Agricultural Land Commission. Those independent people at arm's length from government and from politicians get to adjudicate in a quasi-judicial manner whether the property owner could actually use their land for that non-farm use; for example, if they want to park some oil or service trucks on the land, which would be non-farm use, or set up a garage or any of those other businesses that somebody might want to do.
It really puts a lot of restrictions on what you can do on your land. Without the Agricultural Land Reserve in place, we would see, for example, most of the land around Vancouver being paved over for houses as opposed to being used now as part of our bread basket in British Columbia.
Senator Mercer: In Alberta, you talked about needing cabinet approval for foreign ownership of certain sizes of land. Are people buying the land for non-agricultural purposes also speculating in the petroleum sector?
Mr. Carlier: I don't know about the petroleum sector so much, senator. In my experience in cabinet, acquisitions are largest in the forest sector from, very recently, a foreign-owned forestry company buying another foreign-owned forestry company in Alberta.
In the farmland, we have seen recent acquisitions for setting up processing operations. There was an acquisition for a large canola crushing plant and another two for inland grain terminals. We're seeing that — even though it is farmland, it's for food processing.
In my experience, I have yet to see one that was looking to buy farmland as an investment as farmland.
Senator Tardif: I would like to begin by congratulating Minister Carlier. I am from Alberta and I saw the Edmonton Journal on Saturday in which there was a large section dealing, minister, with your trade mission to China and other parts of Southeast Asia. That was welcome information to the people of Alberta on your trade mission. Congratulations for that, minister.
My question will be to both ministers in Alberta and B.C. Last week, we had some representatives from Saskatchewan and Manitoba — researchers at the university level. They presented their studies on two issues, the financialization of the agricultural sector and concentration of land ownership. Do you see that as being problematic in either of your two provinces?
Mr. Carlier: Thank you, senator, for the kudos on the trade trip to China. As you know — you were there — it was a very successful trip.
On the question of farms getting bigger, this has been going on, I would suggest, for probably several decades, even for generations. The average farm size now in Alberta is about 1,400 acres. There have been some very large farms; there are still some smaller ones. It is a concern, but I think it's more of a concern that, as farms get bigger, it's becoming harder for new entrants to enter the industry. That's probably a bigger concern.
The flip side of that is that there are folks looking to get out of the industry and perhaps don't have anyone to pass it on to. They are seeing some pretty good returns on being able to sell their lands, perhaps, to their neighbour who wants to expand.
That's an ongoing trend. It's a bigger concern for the new entrants more than anybody.
Senator Tardif: In Alberta, are there investment companies that are buying land for investment purposes — for example, pension companies?
Mr. Carlier: We're seeing some of that. I'm looking to Darren here to collaborate, but I don't think we have a good handle on how much that is. It is still the vast majority of farmland that's being sold from farmer to farmer.
Anecdotally, we do hear of the transactions taking place from investment funds, but small in number.
Senator Tardif: And in B.C.?
Mr. Letnick: We have approximately 20,000 farm families in B.C. who own and cultivate their land. It's been approximately 20,000 farm families ever since I can remember. I've been the minister now for four years. It's holding pretty steady. We don't track the ownership of farmland, so I couldn't answer your question directly.
On the land base, though, you see more and more intergenerational transfers are occurring, where parents are leaving agriculture and their kids are taking over. Sometimes that implies families splitting up their farm properties to more than one child, or they're taking their quota, if they are supply managed, and moving that on to a different piece of property.
We're also seeing more farmland under glass — more greenhouses — in B.C., especially in the south part of the province where the weather is more amenable to that.
But with the climate change that's happening in British Columbia, everywhere from down in the Fraser Valley up to the Peace Country in the north, we're seeing more land coming into production with different kinds of crops we've never seen before, whether it's owned by Canadians or other people.
To answer your specific question on the numbers, the best number I have at this point would be the 20,000 farm families. That has been holding on pretty much.
Senator Pratte: To both ministers, you haven't mentioned what many witnesses have mentioned to us, but I understand from your answer that you do not have specific data on land use or land ownership besides sometimes anecdotal data, for instance, as to whether institutional investors own land, speculate on land and so on. Would you see the use for more detailed data on such phenomena? Many witnesses have said that they would wish to have national data on those kinds of trends. Would you see the use for that?
[Translation]
Mr. Letnick: Thank you, senator, for your question. It is important to keep in mind that, this year, we have started to determine how much of our farmland has been bought by foreigners. According to the figures we have, less than two per cent of farmland was bought by foreigners. We will continue to study the numbers and assess the impact in this regard.
However, for us, the data that are the most important are related to the number of hectares we have for growing food. This number continues to rise every year. For the first time in our plan, we are even aiming to acquire 91,000 hectares more that will be brought into production over the next five years. We think this is more important than the 2 or 3 per cent of farmland bought by foreigners.
[English]
Senator Pratte: And on the Alberta side?
Mr. Carlier: I think that's a really interesting question. Farm Credit Canada reports that, in Alberta, only about 1 to 4 per cent of farmland actually changes hands. There is anecdotal evidence, but we don't know exactly what the numbers might be for investment in Canada. We do know what foreign ownership might purchase in Canada, only about 20 acres. We do keep track of that. It is also important to note that our Alberta Farmers' Advocate Office has never received a concern or a complaint from anybody in agriculture about acquisition of land by either investment firms or foreign owners.
Senator Pratte: Has never received a complaint? Did I understand that correctly? Because the sound just came down.
Mr. Carlier: Yes, that is correct. Has never received a complaint or concern.
[Translation]
Senator Dagenais: My first question is for Mr. Letnick. Mr. Minister, can you tell us whether the high price of farmland has led to the abandonment of land by farmers? Perhaps they thought it would be more profitable in the long run to sell their land instead of continuing to farm. If you have noticed that, could you tell us where in your province it has happened?
Mr. Letnick: Thank you for the question.
[English]
I'm going to have to answer in English. It is too many numbers.
Senator Dagenais: Fine, we have the translation.
Mr. Letnick: Thank you. The cost of land in British Columbia is going up, absolutely, but it's going up by less than the national average. I think it's important to recognize the impact of the Agricultural Land Reserve on mitigating the pressure on the agricultural land.
What you find is that land in the populated areas, like in the Lower Mainland and the Central Okanagan, will be going up more than land costs elsewhere in the province. That's a natural factor of more people bidding on land in their area, wishing to stay there.
So I just want to repeat that while it might appear that the cost of land is getting higher — it's true — it is growing at a lower rate than the rest of the hot residential market, for instance, in Vancouver and, for sure, growing at a lower rate than most other provinces and below the national rate.
We continue to support the Agricultural Land Reserve by providing the commission that monitors the reserve with the necessary funds to do their work. With those funds, they hire compliance and enforcement officers. Those restrictions on the land base tend to reduce the amount of land that is under speculation because what will happen is that someone might purchase the land and not farm it, but if they don't achieve a certain level of farm income, then they don't get the tax breaks that go correspondingly with those minimum levels.
Now there will be some discussion, of course, as to the minimum levels. Are they high enough? That's always open for debate, but those levels have served to reduce the amount of speculation on the farmland.
The last piece I can touch on also is the use of farmland for houses. We have provided local governments, who have the responsibility for land-use decisions, with a guideline as to how big houses should be on their farmland, where they should be situated, how big the setback should be, et cetera. For those areas that have adopted those by-law standards, they have found a moderation in the size of houses on the farmland. For others, they are currently looking at adopting those standards so that they can also benefit from reducing the amount of large houses that take up important farmland for basements.
Overall, I would say the approach is one of monitoring the numbers of foreign ownership. But, currently, with the low numbers of foreign ownership and the strong policies provided to us by the Agricultural Land Reserve, we are still not ready to make any changes.
[Translation]
Senator Dagenais: With regard to the abandonment of farmland, have you noticed that some producers simply abandon their land for speculative reasons or, to some extent, to build a pension fund?
[English]
Mr. Letnick: That would apply to people across the board. It's not specifically targeted at foreign owners or domestic owners. We do see some land that is currently not in production, whether it's not in production because they are letting the land lie fallow and resting. We have, of course, a lot of crop rotation that happens. When you have 200 commodities on the land, there is a lot of crop rotation.
We also find that some people would have purchased land for speculative reasons, but if they are not farming it, they don't benefit from some of the tax breaks. Are those tax breaks significant enough? Well, again, that's a policy measure that governments will review on a regular basis. But that's in a different ministry than my own.
We try to encourage landowners to farm their land, and we do that by continuing to expand our focus on domestic consumption through our Buy Local programs that promote domestic consumption to British Columbians and also through our foreign investment offices, encouraging foreign countries and their businesses to buy B.C. products. We had a record year last year in exports — $3.5 billion in exports. That will continue to drive more production on the land.
[Translation]
Senator Dagenais: My last question is for Minister Carlier. Mr. Minister, I am pleased to see you again. Correct me if I am wrong, but you talked about an increase in land value up to 300 per cent. We could almost compare this to a stock market bubble from which seasoned speculators would emerge winners. At some point, any stock market bubble eventually bursts. Do you not fear that this could happen, and that the population is supporting the price?
[English]
Mr. Carlier: Senator, that's a really important question. On financial speculation, I'm afraid I'm no expert, but I know that, on farmland in Alberta, we are seeing the higher prices because farmlands in what we call the Highway 2 corridor, between Edmonton and Calgary, are being sold for other reasons — for urbanization, for industrial projects, et cetera.
It is also important to note that, of our approximately 50.5 million acres of farmland Alberta, approximately 1.4 million acres of that is irrigated land in southern Alberta. Close to about 50 per cent of all irrigated land in Canada is in southern Alberta. That land, as well, stays in agriculture, and the best use for it is agriculture. It too has increased dramatically in price because of the variety of crops, specialty crops, being grown on there. They are good value crops, good cash crops for the farmers. So it's important to note, as well, that it's not just speculation. It is the fact that the land is more valuable because of the development on the irrigation that has been going on and the new specialty crops that have been grown for the past few years.
Senator Plett: I just have one very brief question for the minister from British Columbia. I enjoy going and holidaying in the Okanagan now and again. I have some family living there. I play golf there. I see that there are a lot of golf courses in amongst orchards. It would seem to me that the price of the fairway is worth a lot more money than the price of the apples in between the two fairways. What are the regulations in B.C. for farmers who would like to sell their land to someone who wants to develop a golf course?
Mr. Letnick: That's a very good question. I especially appreciate the preference with your experience being a tourist in the Okanagan and would invite all senators to come and share our wonderful wine and food products.
The Agricultural Land Reserve at the beginning did not prohibit golf courses from being developed, but partway through its 40-plus years of history — and I don't know what year it was — that stopped. You cannot today take your agricultural land that is farmed, for instance, and go to the land commission and ask for your land to be turned into a golf course.
Having said that, I'm not sure if the regulations actually specifically prohibit golf courses on ALR land. I do not believe so. But knowing the land commission, as I have come to know them over four years, I would be willing to bet more money on them than I did on Calgary in the Grey Cup — sorry, Oneil. I was actually rooting for Calgary — that the Agricultural Land Commission would not approve of a change of use from farming to a golf course. It would not happen today.
Senator Plett: Well, some of us were cheering for Ottawa, so we did okay. Being from Winnipeg, it was mostly because Calgary has been kicking our ass more often than Ottawa has.
Mr. Letnick: Glad to see the language in the Senate isn't much different than the language in B.C.
Senator Plett: Not a lot. Further to that though, I used golf courses, and maybe I was too specific because the same thing would apply to residential land. There have been years there that the orchards aren't doing that well, and if you could sell a piece of land that measures 75 feet by 125 feet and could get a quarter of a million dollars for that, you'll never get that growing cherries. Overall, do you restrict farmers from doing that specifically, whether it's a golf course or whether it's a developing into houses? I think the orchards would disappear pretty quickly if you didn't have regulations, but maybe not.
Mr. Letnick: I think, senator, you have answered the question very well. The orchards would have disappeared if we didn't have regulations. Already in the Okanagan, one of the most beautiful drives is from Kelowna down to the American border, and that's because of the orchards that produce good food for all Canadians and the world to partake in.
If we didn't have the Agricultural Land Reserve, I'm sorry to say that most of that land would probably be in condos or some other use. It is the land reserve that is protecting the land. People who own the land, whether they are farmers or not, do have the right of ownership, as any Canadian does under our Charter, but they don't have the right to use lands for purposes that it's not meant to be used for.
If they want to use the land for other non-agricultural purposes that aren't stipulated in regulation, then they have go in front of an independent land commission who's following the act, and the first piece of the act, section 6 of the act, says the land is supposed to be safeguarded for agriculture purposes for future generations. That's really the guiding principle that the independent commissioners follow, and they did a really good job of protecting the land base of 4.6 million hectares in British Columbia. That's shown by the amount of land that is currently being farmed in the Okanagan, as you pointed out, and other places around the province.
Senator Plett: Thank you very much. Simply to our friends from Calgary, I did live in Calgary for six years, and they told us year after year, like they are doing in Winnipeg, there is always next year.
[Translation]
The Chair: I have two questions for Minister Carlier.
Large farms are pushing people to desert small communities for cities. We are seeing this in Quebec, and I am sure the same is happening where you live.
How is your government reacting to this transformation? Several witnesses told us that they were leaving their lands and going to work in the city. There were few small villages where there were no large canola or other grain crops, which means that the heart of the villages no longer existed and that people were going to the city.
How is your government reacting, Mr. Carlier?
[English]
Mr. Carlier: Yes, senator, that's a really good point. Among the many things I have learned from being in this portfolio is that Alberta is actually the most urbanized province in the country. If you take not just our two larger cities but our smaller cities as well, about 90 per cent of our population in Alberta actually lives in urban centres. That leaves only 10 per cent of the rest of us who live rural. Absolutely it is a concern, but coupled with that is also the fact that the vast majority of the wealth generated in Alberta comes from rural Alberta, whether it's oil and gas, agriculture, forestry or in a large part tourism as well comes from there. Even though it is only 10 per cent of the population, we do need that population in our rural areas to continue generating the wealth of Alberta, which benefits all of Canada too.
It has been going on probably for generations, and it is a trend. It is troubling just looking to ensure that we have the correct infrastructure, what we need for rural Alberta, and it's a challenge if rural Alberta continues to depopulate. It is a concern, but we need those small communities because that is where the wealth is generated.
[Translation]
The Chair: You are also the Minister of Forestry. How is the forestry industry reacting to the crisis taking shape with the U.S. government? What concerns does the Government of Alberta have about that?
[English]
Mr. Carlier: Thank you, senator. Forestry is an important industry, the third largest industry in Alberta. It supports about 17 communities, several tens of thousands of workers. It is not as large an industry as it is in B.C., but it's still very large.
As I'm sure you're aware, we're reliant on our exports, and most of those are going to the United States. We have had the opportunity to make some inroads into Asia, but it is still the market in the United States that is the largest. The United States forest industry filing their petition with the U.S. government looking for tariffs on our lumber is very concerning.
I am concerned about our smaller operations. Some of our larger ones over the past 10 years or so have diversified into other markets, West Fraser being the best example out of B.C. They have operations in Alberta as well. They also now own mills in the United States. Weyerhaeuser is, I believe, one of the largest in the world. They have operations all over the world, so they are going to be able to weather this storm that is coming. But it's the smaller mills that I am more concerned about, and you wouldn't consider these smaller by looking at them. These are large operations employing several hundred people, but in the scheme of things, they are considered smaller, so that is a real concern.
I'm not concerned that we're going to lose this battle. When we have made complaints to world trade organizations or NAFTA around the complaints from the United States, we have always been successful. But unfortunately, it will cost our industry and our governments right across the country billions of dollars in fees in fighting these complaints. We will be successful in the end. We will prove to them yet again that we do not subsidize our forest industry, but unfortunately it's going to be a battle. I am concerned about our smaller mills. They are going to see some hurt.
[Translation]
The Chair: Thank you very much for you explanations, Mr. Minister. I was looking forward to hearing them. They are important because our committee is also looking at the forestry sector. Everything related to forests is of concern to us at the moment.
[English]
Senator Tardif: Recognizing that management of farmland is under provincial jurisdiction, what role would you see for the federal government in helping provinces deal with issues pertaining to farmland acquisition?
Mr. Letnick: What role would we see the federal government playing to help us when it comes to farmland acquisition? We are trying to track currently through our property transfer tax the purchase of farmland by foreign entities. I'm not too sure what other pieces of information we could benefit from from the federal government at this point. Over time, we will have a better picture as to what percentage of our farmland is being purchased by foreign entities
We are doing a land use inventory, which is basically looking at every parcel of land we have in the reserve. As I said before, we only have 4.6 million hectares of land that is farmable in the province. That's plus or minus being preserved by the Agricultural Land Reserve. We are in the process of identifying all parcels and what is being grown on the parcel, how much water is being used, et cetera, so over time, we will have not only a good picture as to the ownership profile of the parcels in the province, but we'll also have a good picture as to the usage and productivity. Therefore, you can make informed decisions or policy levers as to how to get more production off the limited land that we do have.
Again, the best thing I can think of that the feds can help us with is by moving forward on the new framework, Growing Forward 3 or whatever it will be called, and put more money in the framework so we can continue to support our agricultural community. If you can do any of that for us, that would be much appreciated.
Senator Tardif: Thank you. Minister Carlier?
Mr. Carlier: Senator, I fine that question very interesting. As for the acquisition of farmland by parties that perhaps aren't necessarily farmers, I think it's best to look after that perhaps by the provinces and then our workings and dealings with the municipalities within Alberta.
But further to what Minister Letnick says, yes, that's policy framework for a while as well, but to maintain the viability of agriculture in Alberta and across the country, continuing what the federal government does best, which is negotiating the bilateral and multilateral trade agreements with our trading partners right across the globe and that keeps agriculture that much more viable, that much more strong, and keeps the new farmers being able to make a living. You know, there is a lot of talk about how farming is a way of life, and it is. But you don't make a cent in a way of life. You make money on a business. So the more we can keep increasing our trade across the world — with the United States as well — to Asia, Europe and other countries, that keeps agriculture that much more viable and keeps our farmland in production.
Senator Tardif: Thank you to both of you.
Senator Mercer: Ministers, thank you for your presentations. I did want to tell Minister Letnick that the trip from Kelowna down to the U.S. border is one that we have taken as a committee. We didn't go across the border. We stopped at the Nk'Mip winery, close to the border, and Senator Plett and I made sure that we purchased a fair number of products and had them shipped home while we were there, so we've been there, we've done that and we hope to do it again. It was a great trip.
Prior to this meeting, about three hours ago, we had other witnesses on another subject. I didn't want to pass up the opportunity of having the Minister of Agriculture from Alberta and British Columbia before us and not ask a question. We had before us Dr. Kochhar, the Chief Veterinary Officer for Canada with the CFIA. The subject we were talking about was bovine tuberculosis.
First of all, I'll start in British Columbia, since you're not directly affected by it. I want to know what you're doing to monitor the very large cattle industry in British Columbia as this crisis unfolds. Are you at all concerned?
Mr. Letnick: As some of us have been discussing while you're actually asking the questions senator — and thank you for that — and thank you for taking the wine. I hope you legally were allowed to take it across the border.
Senator Mercer: I'm not answering that question on grounds it may incriminate me.
Mr. Letnick: Whatever you can do to help with that file would be good as well.
Senator Mercer: I'm with you.
Mr. Letnick: To your question, the disease is reportable. We have our chief veterinarian in the province constantly testing for it. But you are correct. The industry is more significant in dollar terms overall in Alberta. I'm sure Oneil will have something say about that.
But just to remind our listeners, the cattle industry is really important to B.C. as well, especially when it comes to raising cattle here that we then ship to Alberta to be finished off and come back to us in terms of packaged meats and others. It is a partnership that we have had with Alberta for many years. We do have a growing industry of our own B.C.-raised beef here in our province. But you are right, given our landscape and the feed being in Alberta, it makes more economic sense in large part to continue with that relationship.
We are looking at seeing if we can expand the amount of beef that is processed here in British Columbia, and I'm sure that the work of our chief veterinarian, to continue to monitor for this disease, amongst others, will be more and more important. With that, I will leave it to Oneil.
Senator Mercer: Minister Carlier, as you know, when you were in China, because we were there together, the opening of that market to Canadian cattle was a big deal. I counted three different events that the Canadian Cattlemen's Association sponsored while we were there. I probably missed one or two as well. It is a big deal.
I wanted to first of all to make sure that farmers in Alberta know that we're paying attention. We have had a meeting on it. We are trying to monitor the situation. It's obviously difficult to do from here. Perhaps you could tell us what the mood is now in the industry in Alberta. How is everybody feeling now that we have a few days under our belt?
Mr. Carlier: Thank you very much, senator, for that really important question. Thank you as well for your interest.
It is troubling. You know, when the case was first identified, it couldn't have come at a worse time. This time of year is obviously when the producers are looking to sell their calves. It's their one and only paycheque. There is a lot of stress. We have had the opportunity to make sure that any of those producers have an opportunity to talk to health care professionals to ensure that their own health is looked after.
As for the bovine tuberculosis, it is rare. It does pop up once in a while. My understanding from talking to our veterinarian staff is that it's passed pretty much by nose to nose. So it's not easily transmitted. It's not easily spread.
The issue was that the field where the original herd had contact was within a community pasture. That's why we're looking upwards to perhaps over 10,000 head that could be initially affected. CFIA is doing a very good job in making sure that they are vigilant and making sure they inspect all cattle that could have possibly come in after that.
My understanding is this is considered one case. It's not going to affect Alberta's status as a tuberculosis free zone. It happens more regularly in some of the States. Even though it is troubling, it's also my understanding that this particular strain of tuberculosis comes from Mexico. There have been some concerns that it may come from a wild population of elk within the area, but that has pretty much proven to be impossible as the strain did come from Mexico.
There is a lot of work yet to be done by CFIA in continuing their quarantine practices and continuing their testing of those quarantined animals. CFIA, the federal government and the Alberta government have been talking right from day one to make sure that all of the processes and programs are in place to ensure that we can do what we can for these producers.
The issue with at least some of them is that they're expecting to winter half their animals, their cows, and not wintering their calves. So as this progress will still take some time, the problem will be to make sure that those producers have some place to winter their calves until they are found out either to be positive and they will have to be culled or negative and they're able to sell.
In that time, they're going to have to find the wintering grounds. We're continuing working with CFIA and our provincial folks on finding the space to be able to make sure these producers are looked after and that way making sure they have the water and the feed to do as well.
Senator Mercer: Thank you, minister. We're with you on this.
[Translation]
The Chair: Gentlemen, for the past couple of weeks, the Standing Senate Committee on Agriculture and Forestry has been monitoring the file in Alberta, Saskatchewan, and even in Quebec and British Columbia, on a daily basis. This file is very important to us.
We obtained a mandate from the Senate this afternoon. Earlier, before you joined us, we heard from representatives from the Canadian Food Inspection Agency, including the Chief Veterinary Officer, who spent an hour talking to us about the situation, compensatory methods and what we will have to do in the future. I can assure you that the federal government is working very hard so that cattle farmers in your regions are treated fairly and so that we can eradicate bovine tuberculosis.
Minister Letnick from British Columbia and Minister Carlier from Alberta, I would like to thank you both. Thank you for treating us so well in China where, unfortunately, we did not have enough time.
I think this is the first time that we have received two ministers at the same time. This meeting has been very interesting for the committee members, and we will no doubt have an opportunity to repeat the experience over the next year, perhaps to address other topics.
I will give you the last word.
Mr. Letnick: Thank you, Mr. Chair. It has been a great honour for me to testify before a committee of the Senate of Canada with my friend Mr. Carlier from Alberta.
[English]
We are working very hard with our federal government and all our partners across this great country to continue to provide good food to British Columbians and to people across our country and around the world.
I firmly believe, based on the numbers we've been seeing not only in British Columbia but in other parts of the country, that this industry — no pun intended — is going to continue to grow and grow exponentially over the years and decades to come.
I would like to thank all the farmers, ranchers, fishers and value-added producers, processors who make our food safe to eat and all the people in government and the Senate and the legislators that provide that area of safety so that we can continue to provide good food to British Columbians.
Again, thank you very much for the privilege of being here.
The Chair: Thank you very much, minister.
Mr. Carlier: Thank you very much, chair, senators, for this opportunity to address you again. I welcome these opportunities. It gives us a chance to exchange views and a chance to express our views on topics of the day. I think that's important and I welcome them.
I want to thank the committee for their work on promoting agriculture, not only in Alberta and B.C. but across the country. I want to thank you for your work there as well.
Any time we have the opportunity to do this, it's more than welcome. We are sitting and we're going to sitting late tonight so we'll be happy to go into that.
For Minister Letnick, I'm not a good golfer, but I'm a pretty good wine drinker, so I'm looking forward to my next trip to British Columbia.
The Chair: Thank you very much. Good evening, everybody.
(The committee adjourned.)