THE STANDING SENATE COMMITTEE ON AGRICULTURE AND FORESTRY
EVIDENCE
OTTAWA, Thursday, November 27, 2025
The Standing Senate Committee on Agriculture and Forestry met with videoconference this day at 8 a.m. [ET] to examine and report on the role of the agriculture and agri-food sector with regard to food security in Canada, and for the consideration of a draft budget.
Senator John McNair (Deputy Chair) in the chair.
[English]
The Deputy Chair: Honourable senators, I call to order this meeting of the Standing Senate Committee on Agriculture and Forestry. My name is John McNair, and I am the deputy chair of this committee. Welcome to the members of the committee, our witnesses, as well as those watching this meeting on the web.
I would like to start by acknowledging that the land on which we gather is on the unceded traditional territory of the Algonquin Anishinaabe Nation.
Before we hear from our witnesses for today, I would like to start by asking the senators around the table to introduce themselves.
Senator Martin: Morning. Yonah Martin from British Columbia.
Senator Varone: Toni Varone, Ontario.
Senator Robinson: Good morning. Mary Robinson from Prince Edward Island.
Senator Muggli: Tracy Muggli, Treaty 6 territory, Saskatchewan.
The Deputy Chair: Thank you. I would also ask all senators to consult the cards on the table for guidelines to prevent audio feedback incidents.
I want to remind you that anyone participating should refrain from switching languages mid-sentence and to not speak too quickly. Clear audio supports accurate interpretation, transcription and captioning.
Today, the committee is continuing its study on the role of the agriculture and agri-food sector with regard to food security in Canada.
For our first panel, from Cereals Canada, we have the pleasure of welcoming Leif Carlson, Director of Market Intelligence and Trade Policy. Thank you, Mr. Carlson, for accepting to appear before our committee. You will have five minutes for your opening remarks. They will be followed by questions from the senators. I will signal that your time is running out by raising one hand when you have one minute left. If I raise both hands, your time is up; that’s a hard stop.
The floor is yours, Mr. Carlson.
Leif Carlson, Director, Market Intelligence and Trade Policy, Cereals Canada: Thank you, Mr. Chair and members of the committee. Thank you for having me here today. I am the Director of Market Intelligence and Trade Policy with Cereals Canada.
Cereals Canada is the national industry association for wheat, durum, barley and oats. Our membership includes the full cereals value chain, including life science companies that are working to develop inputs for the industry, the hard-working Canadian farmers from coast to coast, the grain handlers and exporters of our crops and, of course, the Canadian millers and food processors who turn our cereal grains into the products feeding Canadians.
As a cornerstone of the Canadian food system, our cereal sector plays an indispensable role in ensuring national food security.
Canadian farmers have access to productive land and a climate that, while sometimes challenging, has built the foundation for a dynamic sector that has proven able to feed our country and the world. Cereal crops are grown across Canada with production in all Canadian provinces. The wheat, durum, barley and oats we grow provide food for our livestock sectors, staple foods for Canadians and are transformed into ingredients for food processors across the country.
Wheat is the largest crop planted in Canada, and farmers know that cereals are an important factor in their crop rotations and for their economic well-being. This outcome is the direct result of the significant domestic investment in research and innovation in our crop production systems within Canada. This starts with the seeds that Canadian farmers plant. Cereal varieties grown here must meet stringent standards that confirm their quality for food processing, demonstrate their adaptability to our agronomic systems and show resistance to disease and field pests. This results in the production of clean, safe and affordable food. Farmers need access to predictable, science-based regulations to support the productivity, reliability and quality of Canadian exports and production.
Our high-quality cereals are key sources of nutrition for Canadians. Crops like wheat are key sources of protein; vitamins A, B and E; and perhaps most importantly, a key source of dietary fibre. Research done through the Canadian Wheat Research Coalition has engaged dieticians and researchers to challenge misinformation about the nutritional aspects of Canadian cereals. Research into the heart benefits of the beta-glucan fibre found in Canadian oats offers new opportunities to incorporate cereals into food products made from these ingredients.
Our Canadian cereal crop production is recognized globally for its high standards of sustainability. The vast majority of Canadian farms remain family owned, and producers are invested in the long-term success of their land, understanding that soil health is critical for ensuring the continuity and success of future generations.
The carbon footprint of wheat in Canada is substantially lower compared to that of wheat grown in the United States or Australia when accounting for soil organic carbon sequestration. Our dryland agriculture system uses natural rainfall without diverting water from other water systems.
We are our own biggest customer. Canada mills about 3.1 million tons of wheat into flour and 220,000 tons into semolina for pasta. Add to that Canadian-made oat foods and barley that is malted. Canadian consumers get to eat foods made from 100% Canadian cereal grains. Our customers in other countries may blend Canadian products with cheaper alternatives, but we have access to the best ingredients here.
Our large cereal sector also supports the greater Canadian economy. Analysis of the Canadian cereals sector has shown that Canadian cereals production generates $68.8 billion in annual economic activity. It also contributes 370,000 jobs. In this way, the cereal sector not only provides the raw materials for our food but also provides jobs and economic security for Canadian families. The study also highlights that the benefits from cereals agriculture are not just in rural Canada but that jobs in transportation, science, food processing and other related industries provide economic support for urban Canada.
Protecting sustained food security in Canada means continuing to make sensible policy decisions for our sector and in particular for the farmers that grow these crops. A country with the population of Canada and the ability to grow food for so many will always be tied to export markets. But at the same time, our sector’s ability to access export markets supports us at home. This provides income for farmers and provides resilient production systems that guarantee a reliable food supply for Canadians. Continuing to invest in our farm economy supports this entire structure and is good policy for Canada and for Canadian consumers.
Thank you very much. I look forward to your questions.
The Deputy Chair: Thank you, Mr. Carlson.
We will begin questions with Senator Martin. I want to remind senators that you will have five minutes for your question and answer. This panel has 45 minutes reserved this morning.
Senator Martin: Thank you, Mr. Carlson. I have three questions related to different aspects about your sector. Since you talked about export markets, I was curious how the current trade conditions are affecting the grains and cereals sector for your members. What are some of the challenges that you can identify based on what is happening with some of the trade issues?
Mr. Carlson: Thank you for the question. This is a very uncertain time for the cereals and overall grains sector. In the case of Canadian cereals, our products are exported to about 80 different countries. That means that trade predictability and rules-based trade has been a long-standing key factor for our industry to access that. That certainty and rules-based trade is certainly something that’s under concern. In related sectors like canola and yellow peas, Canada has seen market access lost to some of our biggest markets. We still have access for the Canadian cereals sector, but the uncertainty remains. I think for groups like Canadian farmers, who are looking at how to make investments, deciding what crops to plant and how to run their businesses, the ongoing uncertainty is affecting them. Any time trade is disrupted, we should expect to see impacts on costs and prices. For Canadian producers, they’ve seen the uncertainty put downward pressure on the prices for their grains, while at the same time, agricultural equipment is made out of steel and aluminum number products that are obviously on the front of Canadian minds. Tariffs on those products are expected to have upward pressure on farm input costs. These are all areas of concern for the sector.
Senator Martin: It is all very interconnected, isn’t it? In terms of another challenge, this is what industry groups are warning about persistent labour shortages in primary agriculture and food processing and that could affect or threaten domestic supply and food affordability. You mentioned that a lot of the farms are family owned. Is the sector facing labour shortages along the cereals supply chain from farms to milling and processing? What specific gaps do you see the national agricultural labour strategy needing to address to protect Canada’s food security?
Mr. Carlson: I think that ongoing access to labour is a concern across the value chain. Farm work has evolved considerably in the last number of generations, and farmers need access to skilled labour to manage the complex systems and expensive equipment that run Canadian farms. Certainly, we continue to see the importance of our grain transportation system, and making sure that that system runs smoothly all the months of the year. Lastly, Canadian food processors will also be needing to access labour to transform these ingredients.
Certainly, in a sector like food, where margins are quite tight, having access to labour and staff who can handle the technical work that’s required in agriculture, all of this is important.
Senator Martin: Thank you. Lastly, I am curious, in the cereals sector, what are the key distribution or logistics bottlenecks that most threaten food security? What specific federal actions would address them best?
Mr. Carlson: The main bottlenecks in the cereals sector typically relate to access to transportation to move the commodity from the place of production to place of processing. For customers outside of Canada, getting that to tidewater, to the Port of Vancouver, for example, is very important. Given the distance from the main production areas in the Prairies to tidewater, means that rail is the only alternative. Rail is also the most effective in terms of the carbon footprint. It is quite effective per tonne to move grain in that way. So needing continued access to good rail movement is important. That’s a point that’s been emphasized out of the grain sector for many years, but it is as true as it has ever been. Thank you, chair.
The Deputy Chair: Thank you. We might have to leave that for a second round.
Senator Muggli: I have a few questions, you might as well put me on round two right away. My question is around philanthropy, my first question. I am curious what the degree of philanthropy domestically and internationally for cereals, what role that plays in food security?
Mr. Carlson: That’s not an area that I have spent a lot of time on. I would say that because cereal products are generally available, if a philanthropist chose to use them, they would certainly be. There is also a long history of philanthropy from farmers themselves in terms of donating raw product, grains, to provide food support internationally and within Canada.
That culture of giving is certainly prevalent within the farm sector here. A lot of the companies that are Cereals Canada members also have major giving programs within Canada, including our grain export companies.
Senator Muggli: Thanks for that. It might be interesting to try to get some numbers to understand how much philanthropy contributes to food security domestically.
My next question is around seeing if you have any numbers regarding export versus what stays in Canada for domestic use, so as a percentage of production? I am curious how much is exported for processing abroad and then re-enters the country as finished products.
Mr. Carlson: In Canada, we are able to produce much more cereal grains than we would need for our domestic consumption. In a crop like wheat, about 70% of our production may be gone to export markets. For crops like barley and oats, that number is a lot lower because those crops are widely used to support our animal livestock sector. A lot is exported, but as I mentioned in my opening remarks, we are our own biggest customer. Canadians mill more wheat into flour than any one of our export customers. There are small imports of finished products into Canada. You might get Italian durum imported or specialty baked products, but compared to how much we consume, the amount that’s imported is quite small.
Canadians eat Canadian cereals.
Senator Muggli: Just in terms of processing, do you have a number of how much of our cereals are sent away to be processed to come back as a finished productivity?
Mr. Carlson: The vast majority of our cereal exports are processed elsewhere, but a very small proportion of what we would eat in Canada would be reimported Canadian wheat. That food would be exported, processed elsewhere and consumed elsewhere, by and large.
Senator Muggli: Interesting. Another quick question. In relation to research, do you have any thoughts where we need to go or recommendations around research to ensure we can continue to grow bountiful and disease-free cereals? One thing I found interesting as I visited the crop production centre at the University of Saskatchewan last year, they were actually working on a reduced-gluten wheat. There are a lot of things research can bring. I don’t know if you have time to answer, but if you do, any thoughts on research.
Mr. Carlson: Research is extremely important. It is really what is allowed farming to continue to be successful. I am from a grain farm in Saskatchewan. The development of some of those early varieties to shorten the season and fight rust were probably the economic foundation for my family. Going to as we see now, improved yields and improved disease resistance allows farmers to farm more economically, to use fewer inputs and need less water to get a good crop. Despite the terrible drought of 2021, we still saw yields that were probably double to a generation before. That’s the value of research and innovation in Canada.
Senator Muggli: Thank you.
Senator Varone: I will drill down a bit further on the point Senator Muggli was making, but I will use an example given my ethnic background.
I love my pasta. Inasmuch as the Canadian landscape owns the wheat and semolina categories — and no disrespect to the Canadian producers of pasta, whether it be Primo or Unico or Italpasta — my first choice is the Italian pasta that comes in, but when you read the package, it is using Canadian semolina. My question is: What are we doing wrong? Why can’t we be world-class competitors in that space, because the world is using our product and making a better product that ends up on the shelf?
Mr. Carlson: The Italian pasta is a world leader, and it’s well recognized, so they do get the advantage of starting with that extremely powerful brand recognition.
As you mentioned, senator, Canadian durum wheat is an important ingredient in Italian pasta. It is blended with semolina made from other different countries. The Italian milling and production industry are known for their ability to combine ingredients in a way that results in the pasta you described but still be priced competitively.
The reason why production of pasta is so different, I think, ties to a lot of things. Part of it is that brand recognition. Part of it is the proximity to markets that Italian pasta manufacturers have. A deeper dive should certainly involve the manufacturers themselves, who could probably speak in more detail to those points of concern.
As the cereal sector we want to provide the best raw ingredients, and we do as the top grades of durum wheat are milled in Canada to make that Canadian pasta. We want Canadians to buy the domestically produced stuff as well as their favourite imported brand.
Senator Varone: I read in our notes how closely tied the sector is in the Canada-United States-Mexico Agreement, or CUSMA. The suggestion here is to keep it identical, but what would motivate the United States, from the perspective of cereal production, to dismantle CUSMA? What are they after? What are they looking to do? Maybe it is an unfair question because it is the one that everybody’s asking, but as it relates to this sector, why would the U.S. want to dismantle CUSMA?
Mr. Carlson: For the cereal sector, I don’t think it is clear that they do want to dismantle the trade agreement. There is a lot of concern in some of the non-ag spaces, and certainly where we do have tariffs currently are outside of agriculture.
Over 100 U.S. agricultural associations had recently signed a letter to the U.S. trade representative asking for the trade representative to extend CUSMA by the full 16 years. I think that does recognize the integration of our supply chains. It is Canadian oats that are feeding Midwest processors. It is Canadian wheat that’s being blended alongside U.S. wheat to make the pasta and bread in the U.S. It is the fact that companies are investing on either side of the border. That makes Canadian food processors more efficient. It supports Canadian farm incomes and it supports U.S. food processors and U.S. incomes.
U.S. farmers may not be growing the same crops as Canadians. They may be specialized more in corn and soy beans. That’s good for U.S. farmers and also gives space for Canadian farmers.
Senator Varone: How big is that space in terms of dollar values?
Mr. Carlson: It is big. Canada exports $13 billion of raw cereals and processed cereal products into the U.S. They are important customers, and I think that is a big space.
Senator Varone: Thank you.
Senator Robinson: I want to talk about the fact that our grain farmers and cereal growers sell in a commoditized market and they have little opportunity to influence the price they are paid. When we look at food security, one of the things we can do in production is to try to lower the cost to the consumer through more efficient farm outputs. On that commoditized market, because we can’t differentiate one tonne of barley grown here compared to one tonne grown there, it is different than how you would package a bag of potatoes and you have that consumer-facing product.
Can you talk a little bit more about improved cell coverage, more secure rail transport, interswitching, some of these things? Can you talk about how we can improve confidence in the primary production sector as well as improving profitability? I think the two kind of go hand in hand.
Mr. Carlson: I certainly agree with that assessment. First of all, I would like to comment that Canadian cereals are definitely in commodity markets, and price and efficiency of movement and production are all large parts of keeping farms profitable. When we talk about innovation, the improved ability to get yields from seeds and from agronomy is a big part of keeping Canadian farms profitable.
You mentioned the need for reliable rail transportation and to manage the geographic reality of having two railways through policies like interswitching and other transportation policies. Those are key.
At Cereals Canada, we place a big emphasis on pushing back against the commoditization of Canadian cereals. We do that through highlighting the value that’s created. Canadian wheat, for example, is a segment called hard red spring wheat. That is wheat that’s different than what they grow in Russia or in the southern United States. High-protein wheat with balanced gluten is a way that Canada’s sector can differentiate itself. In our international markets, we do that through the program we offer at Cereals Canada.
There is a long history of that quality of Canadian wheat. You will see bags of Manitoba wheat in some of our customers’ mills. For them, that means high-quality wheat that’s separate from other countries. The work that we do at Cereals Canada is to define that Canadian brand and provide that value back to our value chain. Work done at the Canadian Malting Barley Technical Centre does similar work on malting barley. We do create value through the work that we do, and that’s an important aspect to continue to invest in.
Having a customer who wants your wheat makes them more likely not to put a non-tariff barrier. If you look at trade agreements as we saw with Indonesia and Ecuador this year, those are markets where Canadian wheat is one of the most important traded goods, and I have to believe that helps build the relationship between Canada and those customers. All of that brings value back to our farm economy.
Senator Robinson: Quickly, when you talk about being able to see bags of Manitoba wheat in the marketplace, are you able to command a higher premium and/or are you securing the sale? Back to the producer, are they able to differentiate themselves in a monetary way?
Mr. Carlson: I think the answer is yes to both. Our brand and our value proposition do give us that place in the market and helps us make that sale, but it also keeps those customers coming back, buying the hard red spring wheat instead of a cheaper wheat from an alternative. That higher price is what Canadian farmers need to cover the costs of their operations and the costs of transportation to tidewater and beyond. I think we know it’s working.
Senator Robinson: We see that price increased additionally beyond where it is. I think in farm profitability, we could see improvements there?
Mr. Carlson: That’s certainly our goal. Not every market will value Canadian wheat the same way. But at the same time, we want to be in all of those markets. That market diversification goal, as we see, does provide resiliency and hopefully longer term price stability, which supports our farmers.
Senator Burey: Thank you for being here. Sorry for being a few minutes late.
I wanted to ask two questions. One is a sort of a high-level question, recognizing we’re undertaking a food security study, which encompasses food security.
On a high level, I want to have your comments on how essential it is for Canada to recognize food security as an essential component of national security and global security. That’s the first question. I know I’ll probably run out of time, so I’ll give you the second question at the same time.
The second question is about accessing new markets. You are more aware than I am of the new announcements for expanding Agriculture and Agri-Food Canada’s AgriMarketing Program. In your view, which new markets should Canada target with respect to agriculture and in your specific area, cereals, in an effort to diversify and expand new markets?
Mr. Carlson: Thank you very much for those questions. I guess I’ll start with the importance of food security and national security. I think that link is quite clear. It is not that long ago that we saw the effects of the global pandemic, followed shortly thereafter by the beginning of the Black Sea conflict. Those events had consequences in world food markets with, at times, certain export countries closing their borders to those exports and the overall disruption to food supply, creating price spikes. We had heard stories from some of our customer markets where mills had to operate at negative production margins just to keep the food going through, even though the price of the ingredients made it uneconomic. It doesn’t take much for one to understand, that’s an unsustainable situation. People need food first and foremost.
I think the concerns over food prices in North America currently also show the sensitivity and the importance of food and food budgets to people around the world. Disrupting that would certainly be a risk to national security.
Looking at trade diversification, certainly there are two parts of the globe that are seeing a great need for food and growth in demand. That would be in Southeast Asia, in the Indo-Pacific, and secondly in Africa. Canadian cereals already have strong footprints. Our ability for Canadian wheat to be blended with wheat from other origins, in the case of a market like Nigeria, still make good loaf breads. The Canadian quality provides that volume and other wheats provide a lower cost. We’ve seen how Canadian wheat can work with other ingredients to create high-quality but still affordable food.
When it comes to diversifying, Canada needs to look where our products are in demand and go there first. For cereals, that means we’re always in touch with millers and looking as to how to work Canadian in. There’s a lot of wheat grown in the world, and a competitive marketplace, but we want to be there, too.
Senator Muggli: I’ve heard a lot from the Saskatchewan Association of Rural Municipalities that producers are increasingly concerned about the condition of roads and fragile or non-weight bearing bridges. Is this a pan-Canadian issue you’re hearing about? I’m also curious, do we have storage infrastructure issues at our ports?
Mr. Carlson: I think that your concerns over rural infrastructure would be something that is talked about across the country. Knowing very well the grain production and transportation systems in Saskatchewan, the first 10 to 60 miles of that grain’s journey from farm to customer will be on roads, needing to carry weights beyond what was in place when those roads were built in the 1940s and 1950s. That’s a real concern.
Infrastructure needs are going to be different in Ontario than in Saskatchewan, but nonetheless, understanding that the tight margins that our sector faces, the need for effective transportation, having that transportation infrastructure right within Canada, the roads and bridges, is important.
Grain storage is a key part of a farm business. It means that you can manage your crop to deal with quality issues. It gives farmers the ability to control their marketing by holding that commodity until the marketing conditions are appropriate for them to sell. Storage infrastructure in the country is important.
Storage infrastructure at ports is important because once that grain is at tidewater, it’s available for export. Having more storage at Canadian ports gives us more resilience against cold winters, any disruptions to our export infrastructure. That is something that our customers do watch very closely, whether Canada is able to ship its grain on time because they too are facing tight margins and just-in-time supply chains.
Senator Muggli: Is storage adequate at this time?
Mr. Carlson: We could always use more. Part of the economic benefit is us growing more of these crops, and, of course, that also means we’ll need more storage.
Senator Muggli: Yes. Last question. Do you have any suggestions or thoughts around how we can do more domestic processing, creating finished cereal-based product right here at home?
Mr. Carlson: For the larger mills, a good economic environment is important. Again, I would encourage the committee to talk to the processors themselves to get that best understanding of how to help. We want to continue to see innovation in the food product sector in Canada. Some of the big developments are in plant-based proteins. Canadian wheat is often 14% to 15% protein as well. That’s been an exciting space, having small- and medium-sized enterprises who can be on that cutting edge of innovation for those that are successful that can really provide income into the value chain. We want to continue to see opportunities in specialty products and branding. We have an eco-label for Western Canadian winter wheat that also highlights the protection of a wetland habitat that comes when you plant winter cereals.
There are a variety of ways, but this sector works best when there are a lot of different actors who are all innovating and doing what’s best for their businesses. Providing the environment to support that, I think, will be important going forward as well.
Senator Muggli: Thank you so much.
Senator Robinson: Thank you. I’m going to ask a question. Keep in mind that if you don’t have the answer now, the committee is certainly welcome to you giving us a written submission after you’ve had some time to do some research.
I want to ask a question specifically about what your top recommendations are. I realize that Cereals Canada represents the cereals grain value chain, and there are a lot of components to that which may not be visible to us. I’m wondering, looking at that entire value chain, what would you tell our committee that’s looking to study food sustainability? A big portion of that is affordability and also distribution.
I’m wondering if you could tell us what your top two or three recommendations would be in policy that this government could adopt that would help us achieve greater food security, that profitability and distribution component in particular. You can give a verbal answer as well. If you want to follow up with more information later, that’s an option too.
Mr. Carlson: Thank you for the question. It’s a big one. I’ll attempt to start answering verbally.
The innovation side is quite important. Again, going back to the farm, the ability for farms to invest in machinery that supports precision agriculture, and the investment in our seed stock in Canada, both public and private, have been key factors. Keeping Canadian grain productive, improving yields and protecting quality of Canadian grain are two of the biggest ways that we can keep this sector profitable. That extra production translates into extra revenue, and increasing the productivity per unit of land has been an important way that farmers have been profitable.
Keeping disease off of our kernel makes that food perfect for human consumption and it also protects the prices. I would always encourage continued investment in that space. I guess that would be my starting spot.
In terms of distribution, we’ve talked about railways, distributing food the last mile to consumers, I think has a different set of questions, ones that I would consult with our members, like the milling association, to best understand what they see from Canadians.
For the cereals sector, we want the food to be there. That means that we want a growing and processing company in Canada.
Senator Robinson: I wanted to go back to that innovation component that you brought up. When we look at how we compete in this commoditized market on a global stage, I wonder if you could give us some facts in writing as to your organization’s opinion of Canadian farmers’ access to crop inputs. When we look at our Pest Management Regulatory Agency, or PMRA, how do we compare as far as accessing newer technologies?
As you were saying, when looking at the quality and the output per acre, could you give us written answers in regard to what we could do to improve that so that our producers can access and be competitive on a global stage? We’d like that one in writing because I see our chair is getting heavy-handed.
Mr. Carlson: Thank you for that invitation, senator.
Senator Varone: My question deals with internal trade barriers. Given the fact that we export some 70% of our harvested crops, the minute you turn rye into alcohol — I know the Province of Ontario never reduced internal trade barriers as related to alcohol. Do you face the same in Canadian-made trade barriers for your main crops, or is it only on the secondary manufacturing part?
Mr. Carlson: No, Canadian grain does move more freely than Canadian alcohol. That’s important because it does allow those ingredients to get from wherever they’re produced to wherever they’re needed for food production. When I talked about the benefits of the cereals sector across Canada, having food processing in different parts of Canada does provide benefits in those provinces. That’s important to maintain.
Senator Varone: There is an up on the finished products once it’s manufactured.
Mr. Carlson: For the cereals sector, the ability to move the ingredients across is important for our food processing sector. The reason why those barriers have been harder to bring down in the secondary sector is not a discussion that I’m as well positioned to speak to.
Senator Varone: Can you point us, in a written form, to who can give us that answer?
Mr. Carlson: Organizations like Spirits Canada would be closer to the question on interprovincial liquor trade.
Senator Varone: We’re food insecurity, not alcohol insecurity, so I’m not sure it would be good. Thank you.
The Deputy Chair: Colleagues, that concludes our time for this panel. Mr. Carlson, I want to thank you very much for your participation today. Your testimony and insight are very much appreciated. Thank you.
Senators, for our second panel we are welcoming Tyler McCann, Managing Director at the Canadian Agri-Food Policy Institute in person here. Joining us by video conference, from the Canadian Alliance for Net-Zero Agri-food, we welcome Nick Betts, Executive Director.
On behalf of the members of the committee, I thank both of you for being here today. We will now hear your opening remarks, which will be followed by questions from the senators. I will signal when your time is running out by raising one hand when you have one minute left, and I will raise both hands when your time is up.
Mr. Betts, the floor is yours to deliver your opening remarks.
Nick Betts, Executive Director, Canadian Alliance for Net-Zero Agri-food: Thank you, Mr. Chair and members of the committee, for the opportunity to contribute to today’s important discussion. I serve as the Executive Director of the Canadian Alliance for Net-Zero Agri-food. We’re also known as CANZA.
The Canadian Alliance for Net-Zero Agri-food is a national alliance accelerating climate action in agriculture by mobilizing partners, data and innovation to advance solutions that strengthen both farm resilience and environmental outcomes. Our role is simple: We want to unite the entire sector around shared evidence, coordinated action and investment that supports farmers in reducing emissions and improving soil health while strengthening the long-term resilience and competitiveness of Canada’s food sector. We want to focus on solutions that are both environmentally effective and economically viable for farmers because climate action will only succeed in real farms and real conditions.
In all of our work, CANZA serves as a trusted, non-partisan partner to governments and industry to compete, helping Canada’s agri-food system to compete, adapt and lead in a net-zero future. Regenerative agriculture is one of the most practical and proven ways to protect our food supply while strengthening farm businesses. It focuses on improving soil health, protecting water and increasing biodiversity.
The reason these matters is simple: Healthy soils mean more food, surviving more droughts and more floods and reducing farmers’ reliance on off-farm products and inputs. This means Canadian farmers are more competitive, more resilient and better able to withstand the climate and economic pressures that are already affecting yields and, therefore, food security.
Regenerative agriculture won’t reach the scale needed to shape Canada’s food system on its own. Transition takes time, support and upfront investment long before we see benefits. That’s why the private sector and the marketplace innovation that CANZA is working toward will help move that whole sector forward.
Across Canada, companies are increasingly stepping up to invest directly in on-farm innovation and on-farm environmental improvements. This isn’t charity, but it’s because it strengthens their supply chains, reduces risk and helps them meet their environmental commitments. This private sector leadership has the power to accelerate change far faster than the public funding can alone.
What we’re building at CANZA is called an environmental outcomes marketplace. This is a made-in-Canada coordinating mechanism that capitalizes the system and rewards farmers for delivering measurable environmental outcomes and results like emission reduction and improved water quality. This has three wins: Farmers earn new, stable revenue streams for practices that improve their land, food processors and retailers get more resilient, lower-risk supply chains and Canada moves toward a more secure climate, nature and food future.
If we want to secure food’s future for Canada, regenerative agriculture isn’t just nice to have; it’s really essential. If we want adoption at scale, the private sector must be a part of the solution. Our opinion — CANZA’s — is that government has a crucial role here in enabling and empowering this, not replacing those market signals.
With the right support, Canada can lead the world in building food systems that are more secure, more resilient, more competitive and more sustainable powered by farmers, backed by industry and guided by clear, measurable outcomes. Government can help make this possible by enabling the transition, both on-farm and through Canada’s domestic and export supply chains. By supporting research, reducing early-stage risk for farmers and supply chains that are supporting farmers, governments can help create clear and trusted standards for measurement and help coordinate efforts across provinces.
I’m very happy to be here today and look forward to your questions.
The Deputy Chair: Thank you very much, Mr. Betts, for your opening comments. Now I’m going to turn the floor over to Mr. McCann, who is here in person.
[Translation]
Tyler McCann, Managing Director, Canadian Agri-Food Policy Institute: Thank you for inviting me to appear before you today.
[English]
Food security and food production are critical issues, and I welcome the opportunity to provide some remarks on them.
While your study aims to link food security and food production systems, it is important to understand the differences between the two. There is the question of food security and the increasing levels of food insecurity in Canada today and a separate issue related to the ability of the food-production system in Canada to meet the needs of consumers in Canada and around the world.
I think Canada’s food policy and the lack of progress on it is an example of what happens when there is not an adequate understanding of the difference between the two sides of the food security and food production system.
I would like to start with some remarks on food security, and acknowledge that food insecurity in Canada is not inherently a food-production system challenge. Setting aside the issue of remote communities that present a unique challenge when it comes to the availability and affordability of food, most food-insecure Canadians live in communities where food is available, accessible and relatively affordable.
Over the last couple of years, food inflation has shone a light on the challenge of food affordability, but the reality remains that, on average, Canadians pay a small share of their income on food. The average household in Canada spent 10% of their disposable income on food in 2024, a historically low amount. For most Canadians, food may be more expensive, but it remains affordable and accessible.
The challenge is that the averages hide an increasing food insecurity challenge in lower-income households. The greatest point of failure today in food security in Canada today is income, a challenge that is made worse by increases in the cost of living across the variety of costs that households have to pay.
We do not do food-security research at CAPI, but I often go to an interdisciplinary research team at the University of Toronto, called PROOF. They call for policy interventions that improve the financial circumstances of households at the bottom of the income spectrum.
The PROOF team says:
Given the scale of the problem and the need to address income inadequacy, governments’ continued focus on funding food charity and other food-based initiatives as a response to food insecurity is ill-founded. It should stop in favor of policies that better support household incomes.
It’s also important to acknowledge that the drivers of food insecurity in Canada and in developed countries is often different from other places around the world where the food system plays a much greater role.
On the second side of your study, the food-production system, it is important to acknowledge that the food system in which food is produced in Canada is a complex, challenging one. A reliable, sustainable food system is one where food increasingly moves across borders, is produced in increasingly innovative ways, is increasingly concentrated but faces increasing volatility and risk.
One of the fundamental challenges we face in food-production policy is that the food system is asked to deliver on competing outcomes. Your study asks about food security, farmers, local food systems and food sovereignty. While we like to think that we can achieve all of these outcomes at the same time, these outcomes create competing pressures on the farmers and the rest of the food-production system that is being asked to deliver on them.
For example, increasing the availability of affordable food may lead to more imports, while a focus on food sovereignty may limit markets for farmers and disrupt profitable global supply chains.
There is a need to ask whether the food system is being used to deliver economic, social or environmental objectives. Ideally, we could do all three, but in reality, choices need to be made and those choices have consequences.
A good example is the potential to use “buy Canadian” policies in school food procurement programs, using the program to achieve economic development and food security ends. But as with fighter jets, procurement and choosing local can complicate and add cost to these programs.
However, in this era of increased instability around the world, there is good reason to take the money and spend the time and energy needed to better leverage these procurement programs to support the local food systems that are there.
Ultimately, what the food-production system needs — and that includes the farmers, food processors and input suppliers and transportation systems and others that are key to it — is profitability, stability and the conditions to grow, all three of which are under pressure today.
I think you will hear from witnesses in your study that will speak to the unique challenges that come with different agriculture supply chains and how they play into food security, but it is important to consider the systemic issues that are at play and the two very different sides of the study at hand. I look forward to your questions.
The Deputy Chair: Thank you to both of you for your opening comments.
Colleagues, being aware of the time available to us, I suggest that for the first round, each senator is allowed five minutes, which includes, as you know, both questions and answers.
Senator Varone: I don’t know where to start. I’m going to start with the Canadian Agri-Food Policy Institute and a survey that they conducted. They came up with three items, and the three top risks to the industry were policy and regulatory environment, extreme weather and trade barriers and protectionism. I just wanted to drill down on the three of them. When we talk about and policy and regulatory environment, I assume we’re talking about the regulatory burden? Regarding extreme weather, well, outside of climate resilience, there is not a lot we can control in terms of the weather. With respect to trade barriers and protectionism, my question is whether they are external or internal to the country, and what needs to be done on both? I leave that to whomever wishes to answer.
Mr. McCann: I appreciate the question. In this year’s version of the survey, we asked a follow-up question to the policy and regulatory risk one, because that is a very big basket, and it can mean very different things. We gave respondents the chance to select from eight different options around “when you say policy and regulatory risk, what do you mean?” Regulatory risk was the No. 1 issue, but close behind it was a lack of understanding about the sector within government, differences in priorities that didn’t seem to be aligned with what the sector needs. Regulatory issues are easy to go to. Very clearly, this is an issue across the sector consistently.
Senator Varone: Is it a burden?
Mr. McCann: I think most people would tell you that there is absolutely a burden, there is a timeline issue, and a capacity issue to deal with the framework. I think there is just a lack of regulatory effectiveness. The food system needs a strong regulatory environment to succeed and grow, but the food system can’t handle a regulatory system that is opaque, not timely and not predictable and not science- and risk-based. The question is how do we get smart and effective regulations? I don’t think anybody wants no regulations. What we want are better regulations. That plays into the trade and environment side as well. Extreme weather and climate resilience is a big piece of it. There is amazing potential for new innovations to come to market, and new practices to get farmers new tools that they need to manage that extreme weather risk. Again, we have a regulatory system that can stand in the way of that happening. In addition, trade markets clearly require a different set of tools today.
One of the interesting things when you look at those risks, in my mind, extreme weather is different — this is beyond our control. But the survey respondents told us they have the same amount of confidence in the system’s ability to change extreme weather as they do the policy and regulatory environment. That’s quite a damning statement about our ability to deliver good policy outcomes when people think they have just as much control over the weather as they do over the policy and regulatory environment. That’s something to understand about the challenges that the sector faces.
Senator Varone: Just to follow up and then I will move to the second round; has the industry outlined specifically what regulations or regulatory burden are standing in the way? You talk about an opaque system, but what would you do better? What would be your recommendations on behalf of the industry to the Government of Canada?
Mr. McCann: There are two different ways to think about it. What are the specific issues? I think the Agile Regulations table at Agriculture and Agri-Food Canada host has got a list of 160 regulatory issues, these are specific regulations that need to be changed and addressed. The second is the systemic issues that exist. If we want to try to change the regulatory culture so that it performs better, how do we change the incentives that exist in the system so that those who are tasked with managing the regulatory framework are proactively dealing with the problems rather than having to go back and fix them? There is a long list of very specific examples across sectors. I don’t want to give you just one because it’s not going to do justice to the other 159. The more important issue is how we fix the systemic issues so that we have regulators in a regulatory culture and regulatory framework in Canada, that don’t, seemingly at first glance, want to go to the burdensome route every chance they get, which does, at times, feel like that’s what our reflex is in Canada today.
Senator Burey: Thank you. I will probably have to go on second round, too. I am going to start with CANZA. I asked this in the first round. This food security study, as you say, is huge study and it has many dimensions. We have definitions out, there et cetera. I want you both to kind of situate it in what does food security mean as an essential component of national and global security? I ask that there, just as high-level question.
Then I ask, from CANZA, could you talk a little bit about The Million Acre Challenge, after that?
Mr. McCann: If I can go first briefly on food security and global security, one of the unfortunate things that have changed over the last five years is that the rates of food insecurity around the world have gone up. We had, for two decades, been making really good progress, making the world safer by making the world more food secure. For a variety of reasons, that has changed. Conflict, COVID, the cost of inflation impacted it and weather has impacted it. If you look around the world and these hot spots, food insecurity and conflict go hand in hand. As Canada looks to do more from a national defence and national security perspective, there is a real opportunity to look at what roles agriculture and food play in that? How can Canada leverage its expertise in being safe, sustainable producer of food and share that knowledge around the world? How can we help build capacity around it to create this kind of peace dividend when people aren’t hungry anymore?
There is a very clear link between the two of them. Conflict has made food insecurity worse and there is a need and an opportunity for Canada to do more.
Mr. Betts: Thank you for those questions. I would echo those statements. When you’re talking about food insecurity, we have to think about how it impacts our economy and the ability of our farmers to provide long-term food security. One of our good friends within the alliance talks about the fact that we are three days away from anarchy, because we have three days’ worth of food in the grocery stores and if we don’t have food in the grocery stores, we have bigger issues. When we’re talking about domestic food supply, that’s a significant one and our supply chains, as we learned in COVID, are not quite up to the ability that we need them to be.
This is one of the things that The Million Acre Challenge is trying to achieve here is building greater resilience in our food systems, not necessarily the supply chains around it. But Canada’s farms have delivered remarkable productivity gains in high quality, in safeness and in affordability of food for Canadians. Despite farmers’ best efforts to continually reduce their environmental footprint, they are taking on huge risk with very little reward. Huge capital expense with long, long, long-term payout for taking care of our shared environment and food systems. At the same time, climate-smart incentive programs from the government or the private sector are often fragmented and hard to navigate. On top of this tracking, measuring and understanding how they can improve their complex soil structure is very time-consuming. Because of these challenges, many farmers are hesitant to try new sustainability practices or new practices at all other than those that are tried and tested on their farm, because there are huge risks and they offer only long-term advantages.
Without coordinated action, Canada risks falling behind global markets and missing climate targets and undermining the very systems that we feel are essential.
So CANZA launched The Million Acre Challenge, a six-year initiative, backed by a $50-million commitment by industry to design and transform Canada’s agriculture into a climate-smart resilient, economically vibrant system. At the heart of this lies a simple but powerful idea of aligning farmers and investors, marketed around measurable environmental outcomes to de-risk the transition to more regenerative practices and unlock new sources of value for farmers and to build confidence in the market. It is decoupling the cost of the food with the impact on the environment and saying there are multiple things that farmers are doing for us. Multiple values, both from a public sector as well as a private sector, from climate resilience to food on our table. If we give the economic tools to farmers to do this, they will pick it up. We have learned this in the past. The fact is it is a noisy environment and we need to streamline this process. We’re starting with the demonstration project in Ontario right now, in hopes of getting it into every single province in the next three years, and then in an environmental outcomes marketplace to actually streamline the process, cut through some of the red tape and make it easier for investors to have confidence that there is a supply there for the environmental outcomes that they want to actually use and credit.
The Deputy Chair: Thank you.
Senator Martin: Thank you to both our witnesses. Mr. McCann, my first question is just in relation to a conversation I was having with Senator Varone about our internal trade barriers. Recently, there was an agreement that was reached, but it wasn’t for food or alcohol.
Do you have any comments on the issues that we face within Canada in that regard?
Mr. McCann: We often think that removing these internal barriers should be easier than they are, but it is important to understand that not all of the internal barriers are the same and that they exist for different reasons. Ultimately, again, there are choices that need to be made around whether or not we want to solve them.
If you look at a couple of different food issues that are there, there are reasons why these barriers exist. The supply management system, for example, is based on provincial production quotas. If you remove the provincial controls and barriers that exist in the movement of products from one province to the other, you have, effectively, taken away the ability of the system to orderly manage the marketing of it. There is a legitimate purpose for those interprovincial barriers to exist within that production system.
If you look at the meat system, meat processing has been a hot-button topic when it comes to this. If you were a federally registered facility, there are no interprovincial barriers that exist for you. The problem is when you are a provincially inspected facility, and I think there are two different ways you can solve that: You make it easier to become a federally registered facility, or you find solutions that enable that interprovincial trade to happen, recognizing that not all provincial systems are the same. There is a benefit for some small plants not having to deal with the more intense inspection systems that are there.
There can be very legitimate reasons why these interprovincial barriers are in place, and it is important to understand what they are. It is also important to be brave and willing enough to take on some of the more complex pieces of it.
On alcohol, I’m not sure — setting aside the issue of provincial coffers — if there is a good reason for it that is there. However, on a lot of the food issues, there are systems, and there are justifications.
Again, there are choices that need to be made around what the priorities are that we are going to make.
Senator Martin: Right. We don’t understand the complexities, and we don’t necessarily talk about that. Rather, we just hear about the internal barriers that are getting in the way of what is happening within Canada. Thank you for some of the clarification there.
My other question is regarding government strategy and accountability. Given that many federal departments are involved in food security and food systems, how well are data and evidence being shared across government, and do you see active coordination that adds up to one clear, measurable food security strategy rather than a series of disconnected programs? Is that coordination being done well, or do you think there are some ways that we can do better?
Mr. McCann: That coordination is not being done well. “Strategy” and “accountability” are two words that seem hard, at times, for the federal government to use lately.
One of the challenges when it comes to food security issues is whether we are talking about this as a social issue and the need to address the social determinants of food security or not. Or are we talking about it in the context of the food production systems and how we make sure we have a strong, resilient food system?
Those two things require different approaches. They require different tools, and they require different departments to be involved in the discussions that are around them.
What we have over the last couple of years is many blurring of lines and a lack of accountability around who is responsible for what part of the strategy and what is the mandate that’s there at the end of the day. If we want to have a real effective progress, we need real clarity around what it is that we are trying to achieve and who is responsible for it, but we don’t have that today.
Senator Martin: Have we had that in the past?
Mr. McCann: On food security, probably not.
By and large, especially when you look on the social side, it often seems to be a provincial issue with provincial jurisdiction. The federal government has not been as directly involved as it chose to be over the last 10 years, so I think that involvement, as the federal government tried to play more of a leadership role on it, blurred some of those lines. In the past, it has not been a huge priority, and I think that partly reflects that we tend to have a very food secure country. We tend to be very fortunate.
Again, we’ve seen things change over the last couple of years, but this has not been the biggest priority governments have felt the need to solve, and that has taken some of the pressure off big government strategies that are trying to do big things.
Senator Martin: I’ve noticed that if there are several departments and multi-departments involved, the problem is identifying who will take that lead, so the coordination doesn’t happen. We need to, I guess, figure out who that will be.
Maybe you can say who, if you have an idea?
Mr. McCann: Again, I think that there is a lot of potential for Agriculture and Agri-Food Canada to play, but there needs to be much more clarity of purpose around Agriculture and Agri-Food Canada’s role, what they are trying to achieve and how they are trying to achieve it.
Senator Muggli: Thank you for your question, Senator Martin, because I think you may have identified what will be, perhaps, a key recommendation in our report and being able to separate out the social side and the production side.
My question is a higher, overarching one. We will have a report at the end of the day, and if you could both look forward in our final report, what is the one thing that you believe should absolutely be in it?
To reframe that, in your view, what is a bleeding edge issue in food security that needs more attention or that you would be able to point to this study and say, “Yes, the Senate understands the urgency of food security in Canada.”
I will start online with Mr. Betts.
Mr. Betts: Thank you. That’s a great question.
There are many chronic issues with our food security in Canada and around the world, and those need to be addressed. What really stands out is the risk that climate change poses to the future of that, and the way that it will increase the volatility and the extremes of what food security can look like around the world.
When we are looking at what can the federal government do, I think as an industry-led group, they want to do a lot of things, too, because their bottom line, their profitability and their supply chains rely on food security, so this is important. But from a government perspective, the ability to endorse and fund national standards to ensure outcomes are credible, I think, is an important piece. Fast-tracking a federal system that can endorse a common measurement, reporting, and verification protocol, or MRV, that can really help harmonize the work and understand how we can support integration between provincial programs and how we can align with industry programs that are out there. This can help both from a domestic perspective in providing that food resilience for farmers but also for an export market, because if we have that alignment internally, that can feed into a competitive piece that our exporters can actually look at and bank on. Canada has been trusted in that area before, but that alignment and harmonization will make it much easier for supply chains to drive things forward.
The second piece to this question would be to understand how we can build confidence in the demand. The demand signals are there. We know there is investment for this kind of action on a farm to build the resilience and understand how we can build food security. We know farmers are up for the task, but it is still chicken and egg. There is still a need to build confidence to say, “Where is the backing here?” Where can government potentially come in and say, “We can have procurement and policy levers to create that initial demand and set that baseline so both investors and companies can trust that the market will be here long term.”
It is the same thing with farmers. They are not going to produce a product that will be gone tomorrow, so if they have the confidence that what they will grow today and the things they will invest in like soil carbon, like biodiversity and like water resilience so that our cities don’t get flooded and we have more food on our tables, they need to know that program will be here for more than just a four-year term or a five-year term or a six-year term. It has to be here for ten years, and understanding what that looks like long term is important.
Mr. McCann: Two things: First we need to acknowledge that food insecurity in Canada is an income issue, and the second thing where there is a real opportunity today is to recognize that the Minister of Agriculture and Agri-Food needs to play a role on the National School Food Program on the procurement piece.
We understand that the Minister of Innovation, Science and Economic Development Canada, or ISED, plays a really big role when it comes to buying fighter jets. I think the Minister of Agriculture and Agri-Food should play a really big role when it comes to school food programs and programs like that.
Senator Muggli: I have a quick question for Mr. Betts: If you were able to give us top innovations that are critical to the best outcomes in achieving regenerative food production, what would those innovations be?
Mr. Betts: Putting a real cost on long-term production, so looking at what does — if a farmer attains water on their farm that’s preventing a flood in the city and increasing their productivity, what is that value, publicly?
That comes back to MRV piece and outcome-based incentives. Industry wants to be there to actually help support this and drive things forward, but it needs that standardization. Canada is helping to do that from the industry side, but government plays an important role of being that foundational leader.
Senator Muggli: Any other innovations that you would suggest?
Mr. Betts: I will double down on that: That needs to happen — to build that taxonomy. Thank you.
Senator Muggli: That’s important, thank you.
Senator Robinson: My question is for Mr. McCann.
I am thinking about the slippery slope we seem to be on. Canada used to be in the top five of food-exporting countries. I think we have slipped to seven, and nine is within our reach, unfortunately. I know there are many factors that contribute to that, but I’m looking more at primary production. Within that, we know that the foundation for food security in our country is that we have this embarrassment of riches as far as food production goes. I look at it and wonder why we are slipping.
I have concerns about farm succession, and I have concerns about profitability — all of that.
Could you speak about your opinion on whether farmers have the risk-management tools they need to be resilient and contribute to the strength of the food system?
Mr. McCann: Thank you for that question. It is near and dear to our hearts.
First, I will give a quick comment on something that people don’t appreciate: We farm fewer acres today than we have in about the last 80 years. Some of that is because cities have gotten bigger, but some of that is because farmers don’t see the profitability in farming the acres that they once did.
We’ve come through 20 good years on farms across the country. By and large, profitability has not been an issue. This has been a really good time to see growth in farm income and revenue, but many of the drivers of those 20 good years can no longer be taken for granted the way that they could. The strong demand around the world, the stable trading system, weather that was relatively predictable and a policy environment that gave access to new tools. Supply chain systems that worked and were resilient no longer work the way that they did.
What we are telling farmers is to deal with this really changed risk landscape where you now need to face pressures you have probably never faced before as a business, but do it using tools that were built 25 years ago. The tools governments offer farmers for risk management are effectively 25 years old. They were designed at a time and for a purpose where the issue was whether it rains. We have a really good program for production insurance problems, but if you talk to farmers across the country, whether they are in grains and oilseeds, in potatoes, in blueberries or in pork, the risks they face go far beyond that production challenge. It is about markets, geopolitics, supply chains and these other issues.
We need to be a lot more aware, first, of the fact that the 20 good years that we have just come through is ending, and we are at risk of real potential concern from a farm income perspective in this country. We can no longer take for granted that farmers are the backbone of rural Canada the way they used to be. Their margins are getting squeezed and will increasingly be more negative.
In the face of all of that, we have this opportunity, as federal and provincial governments are renegotiating their next policy framework, to say that we need to give farmers better tools to manage the risks they face. We know governments are turning their heads to it. The timing is now, because the risk landscape is changing so wildly.
I really hope — and I think farmers across the country expect — governments to say that they need to offer better, more effective tools so farmers can manage the very different risk landscape they are in today.
Senator Robinson: Thank you.
As a follow-up, the province that I represent, Prince Edward Island, potatoes, obviously, are a strong economic driver and make up the fabric of so much of what P.E.I. is. Our largest competitor would probably be the U.S. on the fresh side. Can you speak to the kind of securities and risk management tools that American producers have access to? What is the reality for them, and how does that compare to what we have in Canada?
Mr. McCann: It really is quite striking today to see the amount of support that the U.S. government is offering U.S. farmers. I think we are expecting another multi-billion-dollar aid package to be announced in the weeks ahead.
It is not just the value of the support — arguably, we can’t go dollar for dollar with the Americans when it comes to offering farmers support — but it is the quality of the support they offer, too. They both manage to get more targeted support that’s more effective support but also easier support that’s more reliable and predictable for farmers. There are a lot of lessons we can learn from the U.S. when it comes to how to support farmers better and give them the tools they need to manage this landscape.
Senator Varone: I am not the farmer on the committee, so forgive me for not understanding a lot of the nuances you are speaking about. I still have some confusion with respect to the manner in which food security and food affordability interact. You said it is not the quantity of food that we produce — we are a very food-secure nation — but it is about income compression that deals with food affordability, and that is the social side of the issue.
We heard testimony last week from Agriculture and Agri-Food Canada about the cost of delivering food products to very remote and rural communities where they are paying $23 for a dozen eggs and $14 for a litre of milk. That’s not about income compression; that’s about the delivery mechanisms to get food to rural communities.
At what point does food affordability and food security merge in this landscape?
Mr. McCann: It is important to understand that the vast majority of Canadians who are using food banks are not using them because they live in a remote community that cannot reliably get food to them. It is important to understand that remote communities are different. A community in the North that doesn’t have a reliable supply chain and needs extra supports to get food to where the people are is a very different context than what the average Canadian that is experiencing food insecurity experiences it in. It is important to understand that remote communities are different; they face different challenges.
Senator Varone: When you were talking about food affordability, it has both components. That’s where I get confused.
Mr. McCann: Right.
The point I’m trying to make is that when we look at the broad issue of food insecurity in Canada for “average Canadian” who is food insecure, that is not as a result of living in a remote community. Those are people who are living in downtown Toronto and cannot afford the food they need.
Senator Varone: Income compression.
Mr. McCann: That’s an income issue.
You can put a frame around those who live in remote communities where there is an issue getting food to them — that’s a unique and particular circumstance. That’s why governments use different tools to deal with that and subsidize the costs of getting food to them. We need to look at longer-term, better solutions about how we produce more food more locally for them. There are tools for doing that if governments are prepared to invest in them. But that is a very different and unique part of the food insecurity challenge compared to food insecurity for the average Canadian.
Senator Varone: Is there data as it relates to those groups that you’ve just identified — urban Toronto, income compression, how many people rely on the food banks — versus remote communities and the costs of food just getting there?
Mr. McCann: Yes, there is a tremendous amount of data. I would encourage you to hear from PROOF at the University of Toronto. I heard the Ag Canada officials talking about the work they are doing to improve data. At a certain point in time, there is always better data that we could have, but we know the fundamentals today, and we know where the challenges are. Yes, more data would be better, but we have enough data to encourage governments to act in ways to address these issues.
Often, what we don’t have is the political will. It is not a data issue; it is a political will issue.
Senator Varone: Thank you.
Senator Muggli: Hopefully, I can squeeze in a few different things here. My first question is for you, Mr. McCann. Do you have any recommendations for the key barriers that we need to address to ensure better farm succession?
Mr. McCann: First, we need to make sure that the farms remain profitable. As I was just saying a minute ago, there’s a huge risk today that the things that made it easier for farm succession to happen over the last 20 years may not be there over the next 20 years. We’re facing this challenging cliff where we’re going to see the number of farms shrink substantially over the 10 next years. That is the reality of the space that we’re in. That shrinking, that consolidation will be further, faster and more aggressive if we don’t give farmers the risk-management tools they need to be able to understand how they can survive and thrive as independent farm businesses. It comes down to, at the end of the day how, how do we make sure these farms have the tools they need to be profitable?
We talk about business risk management programs, but we’re in a world where we need to think about agriculture risk management differently. Again, that comes down to making sure we have profitable supply chains that these farms go into. If we can ensure that farms, farm system and sector remain profitable, that addresses the huge succession issue that we’re facing.
Beyond that, there are a lot of opportunities for governments to use things like the tax code to ensure they’re smoothing that transition. If you look at —
Senator Muggli: Anything in particular in the tax code that you’d recommend?
Mr. McCann: It was very good to see the capital gains changes be avoided. There was a risk that was going to add extra pressure there. “Let’s not make things worse” is probably the starting point for that. There’s an opportunity, I think, to make things better. Then, you get into provincial issues. Land ownership is a huge issue. This is always the challenge. We don’t want to necessarily limit whom farmers can sell their land to, but we may want to limit who can buy that land to take some pressure off. Ultimately, for many farmers, the biggest barrier to farm succession today from a financial perspective is the cost of the land, but the flip side of that is that’s the biggest asset for the farmer who is leaving the business. That’s a tough balance.
Senator Muggli: To segue into the importance of data, what data do we need to support succession? Can you speak at all to the importance of drought and flood forecasting?
Mr. McCann: If you go back to the risks that we heard about, extreme weather is major risk for farmers. However, farmers have better tools to manage that risk. Better drought-resistant varieties are a tool they can use, but they need to know if the drought is coming. They need to understand how weather patterns are changing. There is a tremendous amount of science capacity inside government, but often, it may not be used for the right things. This is a really good example of how, as the government looks at its science footprint and the resources it’s investing in, investing in better modelling and tools to give better data to farmers so they can better manage the risks they face is smart and a good way for the government to spend better than what they’re spending today.
Senator Muggli: Mr. Betts, anything on drought and flood forecasting?
Mr. Betts: It has to come down to higher resolution forecasting and early-warning systems that we can invest in even as a joint initiative with the private sector. From the insurance sector and risk-management tools, it’s really necessary to be proactive around mitigation. Finally, regarding things like crop selection and continued crop and animal breeding, it’s important to understand what the regulations are, what’s necessary to keep us safe and our production moving and how to increase our timeline. If I’m producing a climate-smart crop and it takes seven years to get from inception to commercialization, it’s going to be way too long. It’s not going to be relevant anymore.
Senator Muggli: Thank you.
Senator Lewis: Hello, Mr. McCann and Mr. Betts. I appreciate your conversation about succession. I think back to the 1980s. When I first started, if you inherited a farm, that was thought of as maybe child abuse, and now, it’s seen as an opportunity. We have come a long way as far as profitability is concerned.
I don’t know if this morning you talked about variety development and the role that Agriculture and Agri-Food Canada plays. Certainly, for food security, over the last 40 years, especially in coarse greens and oilseeds, we’ve seen so much increase in varieties. Really, Agriculture and Agri-Food Canada has played a huge role in the development of that. As we go through the budget process and we talk now about a, perhaps, 15% reduction, it would seem variety development is a pretty easy target for the government to step back from. There’s lots of concern about that because we have a system that is the envy of the world. We’ve seen the results, without question.
I’d just like your opinion, both of you, on where we’re at as far as variety development is concerned and how important it’s been in the last decades to get us to the point where it’s not only a secure resource for Canada but really for our customers around the world.
Mr. McCann: Looking beyond variety development, the reality is that if we are not in agricultural innovation crisis today in Canada, we are very close. Unfortunately, rather than developing solutions to get Canada out of that crisis and to make sure we have an agricultural innovation system that can deliver all that we need it to deliver over the next 20 years as farmers face these pressures, what we see is the federal government choosing to cut in agriculture science. It’s really hard. If you start at the front of the budget, it tells a good story about high-impact investments, about the knowledge economy and about this opportunity for Canada to grow. Then, you get to the back and the annex and you look at what they particularly call out in the Agriculture and Agri-food Canada context for cuts, and it is those exact same high-impact investments that they refer to at the beginning of the budget. It was a surprise, to be honest, to see that they are specifically referencing reducing their science footprint. There are a lot of opportunities to talk about how to spend that money better, and how to better do things, like variety development, to ensure farmers have access and a strong pipeline that gives them the new varieties they need. Reducing spending is going in the wrong direction.
If you look at the trend, Canada is slightly above average when it comes to OECD countries for investment in the agricultural innovation system. I suppose that’s a good thing that we are above average, but we used to be a leader and we aren’t anymore because we have cut back on public investment. I think it’s shortsighted to cut that investment in the budget, and it’s unfortunate. There’s a need for the government to be focused. There’s a need for restraint, but I don’t see, when I look at that risk landscape that farmers face and the pressures they face, how cutting science is the place to start for that. I hope that it’s done in a way that ensures it limits the impact. I think we’re all waiting to see what that means, looks like and where it goes.
Mr. Betts: Building on Mr. McCann’s comments, variety development is one of the most cost-effective levers to increasing productivity, reducing input and adapt to prepare for what’s coming next. This plays a critical role in prebreeding and registration, but we need to accelerate those outcomes. We need better data, modernized breeding tools, streamlined approvals and stronger public-private opportunities for collaboration in places like Europe, Asia and South America that are we’re not seeing here. I’m happy to provide greater insight in a written statement after, if you wish, but I think there are huge opportunities that we need to grab onto if we are to keep on that productivity curve that we need to be on.
Senator Lewis: Thank you.
Senator Robinson: Mr. McCann, you spoke about succession, shrink and amalgamation. I just wanted to clarify, when we talk about shrink, we’re talking about the number of farms, not acres farmed. Would that be right?
Mr. McCann: That’s right.
Senator Robinson: Great. The province I represent, Prince Edward Island, does have legislation around land ownership. It’s moderated by a government agency called the Island Regulatory and Appeals Commission, or IRAC, and it’s no one’s friend. What it does is limit the number of acres that any one entity can control. Thinking about that and about how a lot of provinces don’t have that kind of protection, which is good but not flawless, I wonder if you can speak to how you feel amalgamation and that increased value or financial burden that anyone faces if they don’t inherit a farm like Senator Lewis had the good fortune to do. They have to pony up and come up with the money to buy it.
What is the saying, Mr. McCann? If you have a 10,000-acre farm, how much are you spending an acre?
Senator Lewis: About $400.
Senator Robinson: That’s pretty big investment. In my province, if you’re going to buy potato land, you’ll have at least 500 acres, with a mandatory crop rotation, that means to grow 500 acres, you need 1,500 acres, and you’re spending 10 grand an acre for those acres. It’s a big investment.
As we see this continued burden and we talk about succession, can you give us a sense of how you see this amalgamation — this bigger farm or corporate farm that we always have looming over us — how that’s going to impact food production as well as what it’s going to mean for the viability of life in rural Canada? There are all kinds of issues around that with food security as well as national security. I wonder if you can speak to that for a moment.
Mr. McCann: I’ll declare my personal bias: My wife and I have bought 200 acres of farmland in western Quebec over the past eight years, so we are some of those people who have invested, spent the money and are now living with the consequences of owning farmland.
I think there are two different sets of issues: The first is how do we make sure that those who stay in the system are the most resilient and successful that they can be, and the second is how do we make sure that there’s an opportunity for that to be a younger, more diverse generation of people who are more resilient? Inherently, you get into this kind of weird space in agriculture today where I think we talk about our farms getting too big to fail and what are the consequences of that, and does that really make a stronger food system?
I think the ability to try and create the ongoing conditions for succession to happen so that it doesn’t just lead to an increasing amount of consolidation on farms is really important. The problem is that it is a tough nut to crack. We often think about land in agriculture as the elephant in the room in almost any policy discussion we’re in. It’s the single greatest asset and the productive tool. If you look at it from a sustainability perspective, that’s where your sustainability questions start.
How do we make sure we’re creating tools to give people the ability to purchase and invest in it? There are some interesting models across the country. Quebec does really interesting things around creating what are, effectively, investment funds that support young farmers to get involved in the business. We are in a space where we need to be thinking about new tools like that. We need to be creative in how we’re supporting the next generation who want to come in and grow. There’s a resiliency of the entire system around how we make sure we have farmers of different sizes, shapes and business models that build some redundancy into it. There’s also a rural livelihood question.
We try to start to serve many different outcomes. Is what we want a strong farm sector or a strong rural community? Those two things don’t always go hand in hand. If you look at the value-added and different processing components — that supply chain question — so it’s not just about farmers in rural communities but value-added agriculture in rural communities, there really is a great potential. Again, I have a bias. I live in a rural community, and I want to see strong rural communities. We’re raising a family in a rural community, and we see what happens when there aren’t more people doing that. We see the benefits of creating conditions so the farmers there see the benefits of returning and coming back.
Again, it often comes back to how we ensure that the business, first and foremost, is profitable to come back to. If it is, what other tools can we give that next generation who are looking to succeed and become farmers? Then give them the tools they need to succeed and make up for how things were before when you could be given a farm, which was the strong footing you needed to start.
Senator Lewis: This meeting is being recorded and transcribed. So the $400 to $500 per acre that was mentioned earlier, would be the production cost? In our area, land is going for $4,000 an acre, so a 10,000-acre farm would be a $40-million asset. I’d better make sure that is on the record.
Senator Robinson: I was just trying frantically to buy 10,000 acres in Saskatchewan at $400 an acre.
The Deputy Chair: That’s a significant clarification. Thank you for that.
Senator Burey: I have a comment and then two short questions.
I come from the health space, and it has taken us generations to understand that we have to connect the dots to people. For many years, you had the dichotomy of this is science and medicine, and then it turns out that a lot of our health problems — most, in fact, at 60% to 80% — are due to the social determinants of health. The problem that we had was that when we siloed these spaces, we couldn’t get to the answer. We certainly are trying to get to the answer.
That was one of the conceptual frameworks we were thinking of as a committee, to try to connect the dots in terms of the whole picture of food security and Canada’s food policy. But we have to define the problem in the scope.
That’s the comment I had coming from the system.
I’m going to specifically ask about climate-smart agriculture and food waste from Mr. Betts. Then, if we have time, just to flesh out more of the procurement programs that Agriculture and Agri-Food Canada could incentivize, especially for the national school nutrition program. I’ll start with you, Mr. Betts.
Mr. Betts: Thank you for the question.
When we’re looking at emissions and food waste, food waste is a significant driver of that. It’s more about how we’re using the food waste than where we’re putting it. In agriculture, when we have methane, which is a global warming gas, the best thing we can do is capture it and use it as a renewable fuel, in most cases. We can almost see our cities as a giant feed lot where we’re feeding all of these mammals but we’re not collecting that waste. It’s a huge waste, whether it comes through people or whether just wasted by people and put in the garbage instead of captured or put in a green bin program — and actually understanding what the emissions from that mean.
That’s one kind of short-term fail-safe.
It would be better if we could take that food and actually use it more productively or sell it in a new way if it’s not going to be used in our system. There are huge opportunities around what we can do with that food waste in agricultural systems, specifically in the peri-urban environments, which are between the urban and rural areas.
At the same time, we need a more concerted push to understand how we can decrease that waste in households. At the end of the day, when that waste exists, we need to use it more effectively to provide nutrients back to a farm in a more circular, economical kind of way.
Mr. McCann: I always think one of the interesting things when it comes to food loss [Technical difficulties] whether an economy is developed is whether the waste is happening in the food production system or at the consumer level. Our biggest issue in Canada when it comes to food loss and waste is not in the food production system. It is once consumers have taken all the food and it becomes their responsibility. That’s a tougher challenge to solve than addressing our production system waste.
On the broader question around healthy diets, healthy eating and these pieces you talked about earlier. Again, there’s been this temptation in the past to look at food inflation — and food has been getting more expensive — as this big significant issue. If you look at the long-term trend and how we, especially in this Western world we’re living in, are engaging with the food we eat, that’s a broader set of cultural issues where we don’t go to the grocery store often enough. We don’t spend enough time cooking the food we buy, and we aren’t buying good enough food. It doesn’t need to be more expensive food; often there are good, healthy choices that there that are just as affordable as other foods in the grocery store. But we make these cultural choices to make bad food choices.
The challenge is that we may want to try to use the food system to try to solve that, but the food system is not the best way to solve that problem. That is a cultural-consumer issue where we need to look at how we make sure we have the right social incentives in place to spend more time as families in households in our personal lives engaging with food in a different way.
Again, we need to understand the difference. I think Canada’s Food Guide change took a lot of flak from a lot of people. It was a different process done in a different way, but it acknowledged this broader set of dynamics that come with healthy food, healthy eating and healthy lifestyles; that was an important change.
Senator Burey: On procurement for the National School Food Program, if you can flesh that out.
Mr. McCann: The National School Food Program is one piece of it, but there’s a tremendous amount of procurement that happens from governments around the country. It is schools, hospitals, jails — there’s a tremendous space. It isn’t always easy. We tend not to have the right systems.
At your hearing earlier this week, you heard about the potential for an Ontario food terminal to be a hub. There’s the ability to create this infrastructure to make procurement easier.
Again, the system isn’t necessarily well designed. If what institutions want is the most consistent and most affordable food, they are probably not going to get it from a local food system, but if we can build the right mechanisms and create the right systems that give them the ability to bring in local food and food that changes, there’s a tremendous amount of opportunity. It’s not going to be the easiest food that they are going to get, but there’s a lot of benefit if we can get that right.
The Deputy Chair: Thank you, colleagues. That’s the extent of the time we have for this second panel.
Mr. Betts and Mr. McCann, thank you very much for appearing before us today. This was an informative session, and we truly appreciate your contribution to our study.
Colleagues, before we proceed to call the question on the budget, I wanted to give each of you one more chance to ask any questions you might have about the proposed budget for the two trips.
Then I’m going to move to the budget application. I will formally move that the budget application for $27,145 under the committee’s order of reference to examine and report on the role of the agriculture and agri-food sector with regard to food security in Canada be approved for submission to the Standing Committee on Internal Economy, Budgets and Administration for the fiscal year ending March 31, 2026. Agreed?
Hon. Senators: Agreed.
The Deputy Chair: I declare the motion carried.
I want to take a second to thank the committee members for your active participation and thoughtful suggestions today. As Senator Robinson said, we had the designated hitter come in for a spot on the roster.
I also want to take a moment to thank all the staff who support the work of this committee: Our clerk, our Library of Parliament analysts and communication team, the interpreters, the Debates team transcribing this meeting, the committee room attendant, the multimedia services technician, the broadcasting team, the recording centre, ISD and, of course, our page.
(The committee adjourned.)