Minister's briefing book: May 13, 2020

Table of Contents

• Canola trade with China

  Updated April 20, 2020

  Anticipated question:

  What actions is Canada taking to resolve the canola issue?

  1. Restoring full market access for canola seed exports to China is a top priority for the Government of Canada.
  2. The Government continues to work through all available bilateral and multilateral channels to restore that full access.
  3. Government officials held a teleconference with China in March 2020 to discuss the trade conditions for the export of Canadian canola seed to China and were subsequently informed of new conditions. The Government is currently working on the next steps of this process.
  4. We have also responded with support program adjustments to help farmers shoulder the impact of the situation.

  On possibility of WTO case against China:

  1. Pursuing a WTO case against China remains a possible option as we determine next steps.
  2. Our Government is committed to rules-based international trade and has been steadfast in our advocacy on behalf of Canadian canola producers and their families.

  On market diversification:

  1. We have drawn lessons from the issues faced by the canola sector in the last year.
  2. The Government remains focused on trade and has set an ambitious target to grow our agriculture and food exports to $75 billion by 2025.
  3. We recognize that the domestic production of renewable fuels represents an important opportunity for value-added domestic markets for producers. We are committed to support the growth of renewable fuels within Canada.

  Background

  Canola seed exports

  In 2019, Canadian canola seed exports to China were valued at $852.9 million (1,602.8 thousand tonnes), which represents a 70% decline from 2018 canola seed exports of $2.8 billion (4,872.9 thousand tonnes).

  Between January and March 2019, the Canadian Food Inspection Agency (CFIA) received notifications of non-compliance from the General Administration of Customs China (Customs China) regarding the detection of alleged quarantine pests in canola seed shipments from Canada.

  In March 2019, Canada was informed of China's decision to suspend the registration and canola imports of two Canadian companies. China also began strengthening its inspection of all Canadian seed imports.

  From March to September 2019, Canada worked through all available channels (e.g. World Trade Organization (WTO), G20, bilateral engagement) to resolve this issue, including holding five teleconference calls with Chinese officials.

  In April 2019, the Government of Canada established the Industry-Government Canola Working Group to help canola producers navigate through this uncertain time. The Working Group meets regularly to discuss market diversification efforts and support to the sector. With respect to market diversification, discussions have focused on increasing opportunities for canola-based biofuels both domestically and in the European Union, as well as on increasing exports to growing Asian markets.

  On May 1, 2019, the GOC announced enhanced financial support to producers through the implementation of the new regulations to strengthen the Advance Payments Program (APP). The amendments increase loan limits from $400,000 to $1 million for all producers on a permanent basis and increase the interest-free portion of loans on canola advances from $100,000 to $500,000 in the 2019 program year. Producers of all other commodities can continue to receive up to $100,000 interest-free. In addition, on August 15, 2019, a stay of default was announced for crop producers impacted by the market disruptions. Eligible producers could take advantage of an additional six months to repay 2018 cash advances under APP.

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  On November 21, 2019, Customs China sent a letter to CFIA inviting Canadian officials to travel to China for technical discussions on the canola issue.

  On December 18 to 20, 2019, technical discussions between Canadian and Chinese officials took place in Beijing. There's opportunity for continued discussion in 2020.

  On February 27, 2020, the Canola Council of Canada released a statement calling on the federal government to resolve the canola seed dispute with China and to support industry diversification efforts.

  On March 30, 2020, government officials held a conference call with Customs China where China informed Canada that the 2016 Memorandum of Understanding outlining the quarantine conditions for canola seed, would not be renewed. China also stated that, as of April 1, 2020, Canadian shipments of canola seed would be required to have dockage levels of less than 1%. An official letter from China subsequently followed.

  Canadian government officials have responded to China to acknowledge this letter. An additional technical letter will follow to confirm process details moving forward to facilitate the predictable trade of canola seed. Government officials are working closely with industry stakeholders and provincial counterparts on next steps.

  Domestic biofuels opportunities for canola:

  Canada's current Renewable Fuels Regulations require blending of renewable fuels into the diesel/distillate and gasoline fuel pools at a rate of 2% and 5%, respectively. These Regulations were part of actions taken under the 2006 Renewable Fuels Strategy, together with a comprehensive suite of programming, to help develop the domestic renewable fuels sector. These mandates have created a steady and stable market signal for renewable fuels, including biodiesel from canola.

  In 2016, the Minister of Environment and Climate Change committed to develop a new and more ambitious Clean Fuel Standard (CFS). The CFS could potentially create a significant increase in demand for renewable fuels, including agriculturally-derived biofuels. However, the details of the design of the CFS, as well as what accompanying incentive and industry support programs may be made available, will influence the scope of the opportunities for agriculturally-derived fuels.

  Canola industry stakeholders have consistently advocated for an increase in renewable content mandates for diesel from the current 2% to 5% under the CFS, in order to create a strong market signal for canola-based biodiesel. Environment and Climate Change Canada (ECCC) have consistently indicated, including in engagement with the canola sector, that this would be incompatible with the principles of their approach under the CFS. However, it is expected that current mandates of 2% and 5% will be maintained under the new Standard, at least in the short term.

  Agriculture and Agri-Food Canada has been collaborating with ECCC in the development of the CFS since it was announced in 2016, and will continue to be actively engaged to ensure that an agricultural perspective is reflected.

  ECCC is working towards publishing draft regulations for the liquid fuel class of the CFS, in the Canada Gazette, Part I in Spring 2020, with final regulations to follow in 2021 and come into force in 2022.

• Supporting the agricultural sector

  Updated May 11, 2020

  Anticipated question

  Producers and processors in the agricultural and agri-food sector are facing unprecedented challenges brought on by the COVID-19 pandemic. What will you do about this?

  First response

  1. The Government recognizes the essential services provided by Canada’s agriculture and agri-food sector and is committed to supporting producers and businesses so that they can continue to provide for Canadians during this difficult time.
  2. Our announcement of $252 million in targeted support for farmers and processors is in addition to previous funding announcements for agriculture, as well as other government announcements that can help the sector. We know there is more to do and I will continue to work with my provincial and territorial colleagues and industry to ensure we get them the help they need.

  Responsive on Agri-Recovery

  1. The Government of Canada is committed to providing spending of up to $125 million through AgriRecovery initiatives to help producers manage extraordinary costs. Under the exceptional circumstances posed by COVID-19, these funds will now be ready to be deployed more quickly and flexibly than would normally be the case.
  2. Our existing Business Risk Management programs provide up to $1.6 billion on average per year to support producers to help manage risks that threaten the viability of the farm.
  3. AgriRecovery is generally cost-shared on a 60:40 Federal:Provincial-Territorial basis. The federal government will provide the federal share without requiring provincial contributions. In addition, the federal government will cover 90% of these eligible extraordinary costs, up from 70% for the 2020-21 fiscal year.
  4. Given the urgent need to help beef and pork producers adapt to a changing market and processing delays, national AgriRecovery initiatives will help farmers and ranchers keep their animals on farm longer, avoid processing backlogs, and help cover additional feed costs.

  Responsive on specifics about support

  1. The $252 million we announced provides targeted support to farmers, ranchers, food businesses, and food processors who are critical to ensuring a safe and reliable food supply, including: $77.5 million to help food producers by adapting, modernizing, and re-opening plants that have closed or are operating under-capacity; a national AgriRecovery initiative of up to $125 million to help with the severe impacts felt by hog and cattle producers; $50 million to ensure surplus food is getting to those in need; as well as proposed additional borrowing capacity of $200 million for the Canadian Dairy Commission to increase its purchases of dairy products, such as butter and cheese, and help producers to avoid dumping their milk.
  2. This is in addition to previous announcements, including $5B for additional FCC lending capacity, $50M to help with additional costs for temporary foreign workers, and $20M for CFIA.
  3. Other early measures announced by the Government of Canada, such as increased lending capacity under the Business Credit Availability Program, as well as tax measures and wage subsidies, including the temporary wage top-up for essential workers, will be of assistance to the sector.
  4. We have also taken steps to improve our existing programs to better serve producers, including a Stay of Default to the Advance Payments Program and an extension to the deadline for enrollment for the AgriStability program. In addition, we will work with provinces and territories to increase interim payments from 50 per cent to 75 per cent through AgriStability and explore the possibility of treating labour shortages as an eligible risk within the AgriInsurance program.
  5. FCC has approved more than $500 million in loans to help alleviate short-term cash flow for producers, in addition to supporting more than 4,800 producers and agri-food businesses who have used payment deferral option on FCC loans totalling $4B.

  Background

  We must ensure food security for Canadians during these difficult times. The COVID-19 health crisis has already created significant disruption in the food supply chain and in consumer demand, and this is likely to worsen over time. There has been a significant increase in sales volumes at retail establishments, reflecting not only “panic buying” but also shift away from food provision through restaurants and the food service sector.

  As Canada is the fifth largest exporter of agricultural products and the fifth largest importer of agricultural products in the world, we must continue to keep the borders open for food and supplies movements. Despite some localized issues, the transportation system supporting food and related products has continued to function.

  Human resources capacity challenges are exacerbated by COVID-19. Absenteeism and health protection protocols reduce productivity and then, the reliability of the food supply chain.

  The Government of Canada plays a critical role to support farmers and food processors to provide safe and secure supply of food to Canadians. Numerous concrete actions have already been taken. For example, the Government has:

  • announced an additional $5 billion in lending capacity through Farm Credit Canada;
  • made changes to the Advance Payments Program to help farmers manage their cash flow by announcing a Stay of Default for crop producers who need it during these difficult times;
  • provided an extension to the AgriStability enrollment deadline allowing farmers more time to sign up and benefit from the program;
  • removed travel exemptions for temporary foreign workers, increased the maximum allowable employment duration for workers in the low-wage stream of the temporary foreign worker program from one to two years and waived the 2-week recruitment period for the next six months, a modification to the labour market impact assessment process;
  • invested $50 million to provide up to $1500 to eligible employers for each Temporary Foreign Worker to help with incremental expenses associated with the 14-day mandatory isolation period such as wages, accommodations, transportation, food, health and safety products;
  • invested $100 million to improve access to food for Canadians facing social, economic, and health impacts of the COVID-19 pandemic. Funding will be delivered through Agriculture and Agri-Food Canada's Local Food Infrastructure Fund; and,
  • invested $20 million for the Canadian Food Inspection Agency (CFIA) to strengthen food inspections and keep food supply safe. This additional funding will mean CFIA can build capacity for more overtime, and extra shifts from inspectors to fill demand. It also means CFIA can invest in hiring and training to get more people on board;
  • launched an online job portal to connect Canadians to diverse jobs in the agricultural sector; and
  • invested $62.5 million for fish and seafood processors to protect their employees with personal protective equipment and adapt their plants to comply with health directives.

  More recently the government has announced further investments to support farmers, food businesses, and food processors by:

  • Creating a $77.5 million Emergency Processing Fund to help food producers access more personal protective equipment (PPE), adapt to health protocols, automate or modernize their facilities, processes, and operations, and respond to emerging pressures from COVID-19 so they can better supply Canadians with food during this period.
  • Launching a national AgriRecovery initiative of up to $125 million in funding to help producers faced with additional costs incurred by COVID-19. This includes set-asides for cattle and hog management programs to manage livestock backed-up on farms, due to the temporary closure of food processing plants. This new federal funding will help beef and pork producers and processors adapt to a changing market, and help farmers and ranchers keep their animals longer before marketing.
  • Announcing the intention to expand the Canadian Dairy Commission's line of credit by $200 million to support costs associated with the temporary storage of cheese and butter to avoid food waste. The government will work with opposition parties to achieve the required legislative change.
  • Launching a first-ever Surplus Food Purchase Program with an initial $50 million fund designed to help redistribute existing and unsold inventories, which could include products such as potatoes and poultry, to local food organizations who are serving vulnerable Canadians.
  • Working with provinces and territories to increase interim payments from 50 per cent to 75 per cent through AgriStability, a federal, provincial and territorial program that supports producers that face significant revenue declines. This change has already been enacted in some provinces.
  • Working with provinces and territories to explore possibilities for expanding the AgriInsurance program to include labour shortages as an eligible risk for the horticulture sector. This work with provincial and territorial partners would insure against lost production due to an insufficient workforce, should producers be unable to find enough labour to harvest.

  In addition, a number of economy-wide measures will help to provide support for businesses and those working in the sector, including:

  • a 75% wage subsidy (to a maximum of $58,700 or $847 a week per employee) for qualifying businesses, for up to 12 weeks, retroactive to March 15, 2020, ending June 6, 2020;
  • allowing businesses, including self-employed individuals, to defer all Goods and Services Tax/Harmonized Sales Tax (GST/HST) payments until June, as well as customs duties owed for imports;
  • the Business Credit Availability Program (including the Canada Emergency Business Account and SME loans and guarantee program), which will provide $65 billion in direct lending and other types of financial support to help Canadian businesses obtain financing during the current period of significant uncertainty;
  • $962 million for regional development agencies to help smaller employers in rural areas;
  • an essential worker wage top up which will provide a wage boost for those working hard to make sure that there that is food on our shelves; and,
  • the Canada Emergency Response Benefit which will provide a taxable benefit of $2000 a month for up to 4 months for those who are in need of temporary income support;
  • a commitment to create jobs for students in essential sectors, including agriculture, that need assistance during COVID-19; and
  • offering $9 billion in support to students which includes the Canada Emergency Student Benefit, which will provide $1,250-$1,750 per month to eligible students from May through August.

  Federal, Provincial and Territorial Ministers continue to meet regularly to discuss the impacts being faced by the sector and what supports can be provided to Canadian producers and processors in response to the COVID-19 crisis.

• CUSMA – Agriculture and agri-food issues

  Updated May 12, 2020

  Anticipated question

  How will the Canada-United States-Mexico Agreement (CUSMA) impact the agriculture and agri-food sector?

  Response

  1. CUSMA will preserve the existing agriculture relationships between Canada, the United States, and Mexico.
  2. The agreement provides continued access to the most important export destinations for many of our crop and livestock producers – Canadian agri-food and seafood exports to our North American partners totaled $42 billion in 2019.
  3. CUSMA preserves and maintains the supply management system, while providing for some additional market access to the United States for dairy, poultry, and egg products.

  Anticipated question

  Is U.S. fluid milk being imported into Canada and sold on retail shelves?

  1. Imports of fluid milk and related products for retail sale are strictly controled by our customs regime and remain negligible.
  2. If products can be found on retail shelves, it is solely as exemptions granted by Global Affairs Canada which authorize, in very specific situations, importations above our international commitments.

  Anticipated question

  How will CUSMA impact exporters of skim milk powder, milk protein concentrates and infant formula?

  Response

  1. Under the provisions of the CUSMA, Canada has agreed to monitor exports of skim milk powder, milk protein concentrates, and infant formula. If exports of these products exceed a certain threshold, export charges will apply to exports above the threshold.
  2. Canada will be required to price skim milk components for skim milk powder, milk protein concentrates and infant formula based on U.S. non-fat dry milk prices.
  3. The Government of Canada is honouring its commitment to fully and fairly compensate our supply-managed producers and processors impacted under CETA and CPTPP, and will do the same for CUSMA.

  Anticipated question

  Will CUSMA affect investments such as Canada Royal Milk’s (Feihe) plans to manufacture and export infant formula in Kingston, Ontario?

  Response

  1. The Government of Canada continues to encourage foreign and domestic investment in agriculture and agri-food industry.
  2. This investment is positive for the Canadian dairy industry, as it will create new middle class jobs and contribute to Canada's long-term export growth.

  Anticipated question

  Why wasn’t the entry into force date for the Agreement delayed to align with the dairy year for export threshold products?

  Response

  1. Under the terms of the Agreement, entry into force takes place on the first day of the third month following the last notification – or July 1, 2020.
  2. The Government is committed to supporting the dairy sector as we transition to the new Agreement.

  Background

  Following the conclusion of negotiations, leaders signed the Canada-United States-Mexico Agreement (CUSMA) on November 30, 2018.  In April, all parties notified of the completion of their domestic ratification procedures for the CUSMA. Consistent with the CUSMA text, the Agreement is to enter into force on the first day of the third month following the last notification, which is July 1, 2020.

  The CUSMA preserves duty free access to North American markets for a wide range of Canadian agriculture products such as meat, grains, pulses, maple syrup, wines and spirits, and processed foods. The CUSMA includes new obligations for agricultural biotechnology that establish practical, trade-facilitative approaches to getting safe products to market. The Agreement contains provisions to minimize time gaps in authorizations and ensure that cases of low level presence (LLP) occurrences in imports are managed based on risk and in a timely and pragmatic manner.  Agriculture stakeholders will have new market access in the form of tariff rate quotas into the United States for refined sugar and sugar-containing products, as well as for certain dairy products including cheese, cream, milk beverages, and butter. Canada also achieved liberalized rules of origin for margarine, and eliminated tariffs on peanut butter, whey and margarine.

  As part of the negotiated outcome, Canada agreed, among other things, to provide additional market access to the United States for dairy, poultry and egg products; to ensure the elimination of current milk price classes 6 and 7 and ensure prices for milk used to make certain products use a new pricing formula (i.e., using a U.S. reference price); to impose an export charge for skim milk powder, milk protein concentrate, and infant formula if exports exceed certain thresholds; and to publish, notify and consult on various aspects of milk class pricing.

  Canada also agreed to allow grain grown in the United States, which is of a variety that is registered in Canada, to receive an official Canadian grain grade. Additionally, Canada agreed to remove requirements for official inspection certificates to indicate that grain grown in the United States is of foreign or mixed origin. Previously, the Canada Grain Act excluded any type of imported grain, including from the United States, from receiving statutory Canadian grades based on origin.

  Infant Formula Export Threshold

  Under CUSMA's requirement to monitor exports of infant formula, exports exceeding 13,333 tonnes in the first year of the agreement and 40,000 tonnes in the second year of the agreement  will be subject to an export charge of $4.25 per kilogram. This mechanism only applies to infant formula containing more than 10% on a dry weight basis of cow milk solids. Canada agreed to this commitment following a significant planned investment to manufacture and export infant formula. Specifically, Canada Royal Milk, a Canadian subsidiary of Feihe International Inc., is building a $332 million plant in Kingston, Ontario. This investment constitutes the first manufacturer of note for infant formula in Canada. The plant will utilize significant volumes of cow and goat milk and has indicated it plans to operate one line producing 30,000 MT from cow’s milk and a separate line using goat's milk.

  Trade Relationship with CUSMA Partners

  Canada and the United States benefit from highly integrated supply chains with bilateral agriculture and seafood trade totaling C$66 billion in 2019, of which Canadian exports totaled C$37.3 billion. In addition, both countries work collaboratively on issues of mutual interest such as regulatory cooperation, science and technology cooperation, third country market access, and promotion of science-based international standards.

  Canada and Mexico enjoy a productive bilateral agricultural trade relationship and have highly integrated markets. Canada was Mexico's fourth-largest export market for agri-food and seafood products in 2019, while Mexico was Canada's fourth-largest export market. Overall, bilateral agricultural trade between Mexico and Canada reached C$4.7 billion in 2019. Mexico enjoyed an agricultural and seafood trade surplus of C$825 million in 2019.

  Imports of Fluid Milk for Retail from the United States

  The only existing tariff rate quota that applies to imports from the United States is the one negotiated under the World Trade Organisation (WTO). This tariff rate quota for fluid milk of 64,500 MT is deemed filled by personal cross-border purchases (within the limits authorised by the Canada Border Services Agency – up to 20kg per person and a value of $20 or lower).

  After July 1, CUSMA will apply to imports from the United States. The CUSMA provisions are similar to those in the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), the Agreement stipulates that 85% of the tariff rate quota be allocated for the importation of milk in bulk (not for retail sale) to be processed into dairy products for use as inputs in further food processing.

  Imports from the United States are also eligible under supplemental import permits. To date, no authorization for supplementary imports has been granted for fluid milk for retail sale.

  Other dairy beverages similar to milk are imported under different tariff codes. They are part of a group of products made with natural milk constituents. While there are tariff rate quotas to import these products under the WTO, CPTPP, and CUSMA, the volumes are quite limited.

• Compensation for dairy, poultry and egg sectors

  January 21, 2020

  Anticipated question:

  How will the Government of Canada compensate the supply managed sectors for losses from recent trade agreements?

  First response

  1. Our message is clear – the Government of Canada strongly supports supply management.
  2. In Budget 2019, we announced up to $3.9 billion to support eligible dairy, poultry and egg producers.
  3. In August, we announced a total of $2 billion in compensation for dairy producers, including $345 million this fiscal year through the Dairy Direct Payment Program.
  4. There has been strong uptake and significant payments have already been made to producers through the Canadian Dairy Commission.

  Responsive on other initatives

  1. We are also supporting the dairy sector through the Dairy Farm Investment Program and Dairy Processing Investment Fund.
  2. The Government will continue to work with producers and processors, in supply managed sectors, to provide full and fair compensation to address the impacts recent trade agreements.
  3. The Government will continue to work with the entire supply-managed sector to address potential future impacts resulting from the Canada-United States-Mexico Agreement.

  Background

  The Comprehensive Economic and Trade Agreement (CETA) came into force on September 21, 2017, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) came into force on December 30, 2018 and, the Canada-United States-Mexico Agreement (CUSMA) was signed on November 30, 2018. The trade agreements offer significant opportunities for the Canadian agriculture and agri-food sector, while creating some challenges due to new market access for supply managed dairy, poultry, and egg products.

  Working groups

  Following the signing of the CUSMA, Government has created working groups with representatives from supply-managed industries.

  The Dairy Mitigation Working Group and the Poultry and Egg Working Group have concluded, and their recommendations have been shared with the Minister of Agriculture and Agri-Food.

  The Dairy Strategic Working Group has met twice. Work remains ongoing.

  Budget Commitment:

  In Budget 2019, the Government of Canada made a commitment to support farmers in the supply managed sectors following ratifications of new trade agreements. Budget 2019 proposed up to $3.9 billion in support for supply-managed farmers. Support will be offered to sustain the incomes of eligible dairy, poultry, and egg farmers, by making available up to $2.4 billion. Of this amount, $250 million has already been provided to support dairy farmers as a result of the CETA.

  Current Status:

  On August 16, 2019, further details of the Budget 2019 commitments were announced, covering $1.75 billion over eight years for Canada's dairy farmers, in addition to the previously announced $250 million Dairy Farm Investment Program for a total of $2 billion in federal support to dairy producers.

  Of this amount, $345 million will be paid in the first year, in the form of direct payments and will benefit all dairy producers in proportion to their quota held. The program is administered by the Canadian Dairy Commission (CDC) and AAFC. Payments will help dairy producers adapt to the CPTPP and CETA market conditions by replacing foregone income, increase producer confidence in the future of the supply management system, and provide producers with the opportunity to make investments in their operations. Details of the remaining funds will be determined in consultation with stakeholders.

  A registered producer will receive a payment in proportion to the quota they hold. To determine individual payments, the program budget of $345 million will be divided according to the provincial shares of the national production quota as of August 31, 2019. Producers will be given the option to receive their payment before the end of calendar year 2019 or before March 31, 2020.

  As of December 31, 2019, the Dairy Direct Payment Program had paid out over $293 million.

• Dairy Farm Investment Program/Dairy Processing Innovation Fund

  January 20, 2020

  Anticipated question

  How are the investment programs introduced by the Government helping the dairy sector?

  First response

  1. The Dairy Farm Investment Program is helping farmers to invest in productivity-enhancing technologies like robotic milkers, automated feeding systems and better herd management tools.
  2. To date, the Program has supported close to 3,200 projects.
  3. The Dairy Processing Investment Fund is helping processors modernize their operations, improving productivity and competitiveness. Over 80 firms have invested in new processing equipment.

  Background

  On August 1st, 2017, AAFC launched:

  • The Dairy Farm Investment Program provides up to $250 million over five years in targeted contributions to help Canadian dairy farmers update farm technologies and systems and improve efficiencies and productivity through upgrades to their equipment. This could include the adoption of robotic milkers, automated feeding systems, and herd management tools.
  • The Dairy Processing Investment Fund provides up to $100 million over four years to help dairy processors modernize their operations and in turn, improve efficiency and productivity, as well as diversify their products to pursue new market opportunities.

  The Dairy Farm Investment Program consists of two phases:

  Phase 1 of the Dairy Farm Investment Program

  Under Phase 1, just over 1,900 projects were approved worth approximately $129 million. Examples of equipment funded include robotic milkers, automated feeding systems, and herd management tools.

  Phase 2 of the Dairy Farm Investment Program

  The application window for Phase 2, with funding valued at $98 million, was open from January 7 to February 8, 2019.

  Eligible expenditures remain the same as in Phase 1. For the second intake period, priority was to farms that have not already received funding (recipients under Phase 1 were ineligible to apply). Projects are eligible for a contribution of up to $100,000. As of December 13, 2019, 1,376 projects have been approved for $88.5 million. Applications for Phase 2 of the Program are still being reviewed and recipients are being notified as projects are approved.

  Based on demand, the program will strive to support investments in all provinces over the five year life of the program, approximately in proportion to their share of the total milk quota.

  Dairy Processing Investment Fund

  The Dairy Processing Investment Fund was established to provide funding to dairy processors for investments that will improve productivity and competitiveness, and help them prepare to market changes resulting from the CETA. The program is providing non-repayable contributions to support projects through capital investments and access to expertise:

  • Improving manufacturing technologies and processes, or the introduction of new or improved products (including the acquisition and installation of equipment);
  • Construction, expansion and/or modernization of dairy processing establishments in Canada; and,
  • Engagement of external expertise/consultants related to plant improvements.

  Access to Expertise can be the engagement of private sector technical, managerial, and business expertise. As of January 9, 2019, the program has approved 87 projects valued at $73,867,976. There are an additional 16 projects in assessment.

• Agriculture and pollution pricing

  January 20, 2020

  Anticipated question

  How has the Government considered the specificities of the agriculture sector in developing its carbon pollution pricing system?

  1. Carbon pollution pricing is an important part of Canada's plan to transition to a cleaner and more innovative economy that reduces emissions and protects our environment.
  2. Farmers and farm families are important drivers of the Canadian economy. The federal carbon pollution pricing system is designed to limit its impact on the agriculture sector and reflect the realities of Canada's agricultural industry.
  3. Greenhouse gas emissions from livestock and crop production are not included in pollution pricing systems. There are exemptions for gasoline and diesel fuel used by farmers for agricultural activities. There is also a partial rebate for commercial greenhouse gas operations.

  First response

  What is the Government of Canada doing to support the sector in reducing Greenhouse Gas Emissions?

  1. Emissions from agriculture have been relatively stable over the last 20 years, even as the sector has grown.
  2. Agriculture and Agri-Food Canada has a long history of supporting sector efforts to reduce greenhouse gas emissions, in areas like soil health and carbon sequestration, and derive new opportunities from clean technology.
  3. The $27-million federal Agricultural Greenhouse Gases Program, supports 20 research projects on greenhouse gas mitigation practices and technologies that can be adopted on the farm.
  4. The Agricultural Clean Technology Program is a three-year $25-million investment helping the sector reduce greenhouse gas emissions through clean technologies.

  Background

  Canada's agriculture emissions represent 10% of Canada's greenhouse gas (GHG) emissions. Agriculture emissions have remained relatively stable for two decades and are projected to slightly increase towards 2030.

  Canadian producers have made great progress in reducing GHG emissions by improving production efficiency and increasing agricultural soil carbon. For example, through improved feeding and breeding, GHG emissions declined by 15% per kilogram of beef over the past 30 years. For over 20 years, Canadian farmers, particularly in the Prairies, have increasingly substituted conventional tillage with no-till or conservation tillage seeding techniques. These practices, combined with a major reduction in summer fallow (i.e., cropland purposefully kept out of production) and an increase in perennial forage crops, have resulted in agricultural soils in Canada being a significant carbon sink since 2000.

  The Agricultural Clean Technology Program is part of the Government of Canada's suite of clean technology programs and initiatives announced in Budget 2017. This $25-million (2018-19 to 2020-21) three-year investment aims to support clean growth and innovation as Canada transitions to a lower carbon economy, and enabling the adoption of clean technologies by the agriculture, agri-food and agri-based products sector.

  From 2010 to 2015, Agriculture and Agri-Food Canada (AAFC) provided $25 million over 5 years to fund the Agricultural Greenhouse Gases Program. This program was renewed in 2016 for an additional $27M over 5 years (2016–21). The program is no longer accepting applications. The objective of the Program is to enhance the understanding and adoption of agricultural technologies and practices that can be used by farmers to reduce GHGs.

  Carbon Pollution Pricing

  Establishing a national price on carbon pollution is a key federal commitment under the Pan-Canadian Framework on Clean Growth and Climate Change. The Federal Government has implemented a carbon pollution pricing legislation (backstop) effective January 1, 2019, in provinces and territories that choose to adopt it or that do not have a carbon pollution pricing system that meets the federal stringency requirements and carbon price benchmark of $20/tonne in 2019 rising to $50/tonne in 2022.

  Currently, carbon pollution pricing systems are in place in British Columbia and Quebec. The federal carbon pollution pricing system has been applied in New Brunswick, Ontario, Manitoba, and Saskatchewan since January 1, 2019. As Alberta repealed its carbon fuel charge in June 2019, the federal backstop is being applied in this province starting on January 1, 2020. The Yukon and Nunavut have invited the Federal Government to implement carbon pollution pricing in their territories. New Brunswick will be implementing its own provincial carbon pricing system starting April 1, 2020.

  On June 20, 2019, the Alberta government initiated a legal challenge against the federal government, contesting the constitutionality of the federal carbon pollution pricing system. Manitoba, Ontario and Saskatchewan, backed by New Brunswick, are also engaged in similar legal actions. On May 3, 2019, Saskatchewan's Court of Appeal ruled that the federal carbon pollution pricing imposed on the province is constitutionally sound and falls within the legislative authority of Parliament. On June 28, Ontario's Court of Appeal also ruled that Canada's federal pollution pricing system is constitutional. An Ontario court ruled on October 11, 2019, that the provincial government broke the law when it repealed the province's cap-and-trade system without consulting the population.

  Impact on agriculture producers: AAFC's work to date indicates that carbon pollution pricing, including the proposed federal backstop, is expected to have modest impact on most farmers' net operating expenses and incomes.

  Impact on agri-processors: some agri-processors emit more than the 50,000 tonnes annually and are therefore regulated under the output-based pricing system. Environment and Climate Change Canada (ECCC) has developed output-based standards for: potato and oilseed processing, ethanol production, by distillation, for use in the production of alcoholic beverages, processing of corn through wet corn mill, sugar refining, and production of citric acid.

  Renewable Fuels and the Clean Fuel Standard:

  In 2016, ECCC announced that Canada would develop a new and more ambitious Clean Fuel Standard (CFS). The CFS would address liquid, gaseous and solid fuels used across all sectors of the economy (compared to the previous regulations which addressed liquid fuels used in transportation only), and use lifecycle analysis to assess the carbon intensity of various fuels, with a view to incentivizing those that offer the deepest carbon reduction potential for the cost.

  The CFS could potentially create a significant increase in demand for renewable fuels, including agriculturally-derived biofuels, as a method for regulated parties to comply with the standard through blending. However, the details of the design of the Standard, as well as what accompanying incentive and industry support programs may be made available, will influence the scope of the opportunities for agriculturally-derived fuels. Canola industry stakeholders joined renewable fuels stakeholders early in the CFS development process to advocate for design of the CFS in a way that sends a clear and direct demand signal for increased production of biofuels, including biodiesel derived from canola.

• Trade with India and Italy

  January 20, 2020

  Anticipated question:

  What is Canada doing to secure trade in pulses to India?

  First response

  1. Maintaining long-term, sustainable market access to India is a priority for the Government.
  2. Canada is raising its concerns on all trade issues with the Government of India and I am currently considering all options available to address these issues.

  Anticipated question:

  What is the Government doing to resolve any negative impacts of Italy’s mandatory country-of-origin labelling decree on Canada’s exports of durum wheat to that market?

  First response

  1. The Government is committed to defending the interests of the Canadian wheat sector and will continue to consult and cooperate with our industry stakeholders and provincial partners.
  2. Canadian durum wheat is among the highest quality in the world. Italians have depended on Canadian Durum wheat for pasta production for more than a century.
  3. Once the EU-wide country-of-origin labelling measure comes into force on April 1, 2020, country specific measures will cease to exist. Canada will closely monitor the implementation of this measure.

  Background

  India

  Since 2017, India has applied a number of measures impacting the trade of pulses.

  India's various trade measures have had a significant impact on pulse imports over the past two years. For example, exports of pulses to India in 2018 (by value) decreased by 83% compared to 2017. While exports of pulses to India increased in 2019, they remain low compared to over $1 billion in 2016 before the measures were applied.

  In August 2019, without prior notification, India began holding incoming lentil shipments. Concerns were raised regarding the presence of weed seeds previously not of concern to India. Despite Canadian efforts to engage, India declared it was taking emergency plant health measures and added 26 weed seeds to its List of Quarantine Weed Seeds. Canada and the United States (U.S.) (also affected) are engaging India to obtain the scientific justification for these measures.

  On October 1, 2017, for the first time in 14 years, Canada did not receive a country-specific exemption from India's mandatory fumigation requirement. Canadian pulse shipments can still be exported to India under a general derogation but a penalty of five-times the regular inspection fee must be paid if they are not fumigated. Despite a Prime Ministers' commitment in February 2018 to finalize an arrangement within the year, India has yet to complete the final steps.

  In April, 2018, India notified the U.S. that shipments of peas and pulses from the U.S. could be fumigated upon arrival in India without paying the penalty. Canada has formally asked India for the same treatment, but has yet to receive a response.

  On April 25, 2018, India introduced import quotas on dried peas, limiting total imports to 150,000 tonnes until March 31, 2020. On September 11, 2019, India's Ministry of Commerce issued an update on the implementation of its pulse quantitative restriction measures informing Indian importers that all consignments of pulses for the fiscal year 2019-2020 must arrive at an Indian Port prior to October 31, 2019, in order to be valid. Furthermore, another notice on September 30th advised that extensions to this deadline will not be considered and importers that fail to meet this deadline risk being debarred for future quota allotment.

  On December 18, 2019, India's Ministry of Commerce and Industry issued an update to its import policy for dried peas. In addition to the quantitative restriction of 150,000 MT already in place, imports of peas will be subject to a minimum import price of Rs. 200/CIF (cost, insurance and freight), per kg, which represents around $3.70 CAD (December 18, 2019 exchange rate), and imports will only be allowed through Kolkata seaport.

  Italy

  Italy formally published a decree requiring mandatory country-of-origin labelling for the primary ingredients in pasta products in the August 17, 2017, edition of the Official Gazette of the Italian Republic. The decree entered into force in mid-February 2018. The decree is applicable on a pilot basis until March 31, 2020, the day before the European Commission implementing regulations covering voluntary country of origin labelling (COOL) for primary ingredients comes into force. The European Commission has confirmed that Italy failed to notify the decree published in Italy's Official Gazette to the European Commission. European Union (EU) law dictates that European Member States may only proceed with such a measure following a formal review by the European Commission.

  Since then, package labels for pasta from durum wheat that is produced and sold in Italy have required the identification of the “country of durum wheat cultivation” and the “country of milling.” Under the decree, these products may be labelled in a manner that indicates the country of origin, such as “EU”, “non-EU” or “EU and non-EU”.

  The Government of Canada has been expressing concerns with Italy's country-of-origin labelling for pasta since seeing a draft form of the measure in December 2016.

  The issue was also raised by Canada on September 23, 2019, during the CETA Agriculture Committee meeting and on October 8, 2019 when Deputy Minister Forbes met with the European Commission's Director General Agri during his official visit to Brussels. The European Commission has confirmed at the highest level that once the EU wide COOL measure comes into force on April 1, 2020, country specific measures will cease to exist. AAFC and GAC will closely monitor the implementation of the EU COOL measure.

  Since this issue arose, the Canadian industry (Cereals Canada) has been urging the Government of Canada to launch formal consultations with the European Union at the World Trade Organization to resolve this matter. ███████████████████████████████████████████████████████████████████████████████████████████████████████████████████████████████████████████████████████████████████████████████████████████████████████

  Exports of Canadian of durum wheat to Italy increased in the first ten months of 2019, reaching $203 million (642,511 tons). This represents one-third of Italy's total imports of durum wheat so far this year, which makes Canada Italy's top supplier of durum wheat again after falling to the fourth place in 2018. Canada is followed by France (18%), the United States, (15%) and Kazakhstan (7%).

• Soybean exports to China

  January 20, 2020

  Anticipated question:

  What actions is Canada taking to support the Canadian soybean sector?

  1. The Government recognizes that there has been a sharp decline in exports of Canadian soybeans to China.
  2. There are a range of factors that have contributed to the decline, including lower demand by China as result of African Swine Fever impacting China's hog sector.
  3. We are working with the sector to help them manage these challenges, including through efforts to help diversify to other markets.

  Background

  At this time, the current official actions taken by China on Canadian agricultural products are limited to canola seed. While there have been reports of trade disruptions covering a broad range of Canadian agricultural products to China, Canada has not received any formal notification from Chinese officials to that effect. ███████████████████████████████████████████████████████████████████████████████████████████████████████████████████████████████████████████████████████████████████████████████████████████████████████████████████████████████████████████████████████████████████████████████████████████████████████████████████████████████████████████████████████████████████████████████████████████████████████████████████████████████████████████████████████████████████████████████████

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  Relatively small domestic consumption for soybeans means Canada relies on export markets to sell excess production capacity annually. Canada exports approximately 70% of its total production annually.

  China was Canada's largest export market for soybeans in 2018, with Canada shipping 3.5 million tonnes valued at $1.7 billion. Canadian soybean exports to China represented almost 64% of total exports to all countries by volume in 2018.

  Canada has exported only 46,700 tonnes of soybeans to China in 2019 (January November), compared to 1,401,100 tonnes exported during the same period in 2018. This represents a drop of 96.7% year‑over-year. Exports to China in 2019 are believed to be primarily food-grade soybeans shipped by container, with no full bulk vessel shipments since December 2018.

  Soybeans grown in Western Canada represented an average of 73.2% (1.1 million tonnes) of total Canadian soybean exports destined for China between 2016 and 2018.

• Farm Credit Canada

  Updated April 19, 2020

  Anticipated question:

  What is Farm Credit Canada doing to support producers and processors who are facing financial challenges as a result of COVID-19?

  Response

  1. On March 23, the Government provided Farm Credit Canada with support to increase its lending capacity by an additional $5 billion, offering producers greater financial flexibility.
  2. The Government is committed to ensuring that producers, agribusinesses and food processors have access to necessary capital so they can continue to put quality food on tables across our country.
  3. Farm Credit Canada has put in place a deferral of principal and interest payments for up to six months for existing loans or a deferral of principal payments for up to 12 months. Access to an additional credit line up to $500,000 is also available to eligible producers.

  Responsive on mandate commitment

  1. Canadian farmers and food processors feed Canada and the world, and the strength of our economy depends on their hard work and success.
  2. We are committed to making it easier for the sector to access the financial and advisory services it needs to grow and expand.
  3. Farm Credit Canada is Canada’s leading lender to the agricultural sector. We are building on that success.
  4. We are currently working with the relevant federal agencies and Crown corporations to identify options for expanding financial and advisory services to the agriculture and agri-food sector.

  Background

  The Minister of Agriculture and Agri-Food's mandate letter contained a commitment to lead the consolidation of existing federal financial and advisory services into a new entity called Farm and Food Development Canada, which would have an expanded and enhanced mandate, accompanied with additional capital lending capability.
  Delivering on this mandate commitment will build on the success of Farm Credit Canada (FCC) and its operations. The Government is analyzing the various financial products and services offered by a number of federal and private institutions to the agriculture and agri-food sector to better understand opportunities to enhance support to the sector.

  Agriculture and Agri-Food Canada will continue to work with FCC, other federal government departments, agencies and crown corporations to identify opportunities for an expanded mandate.

  Farm Credit Canada

  FCC is a financially self-sustained federal Crown corporation reporting to Parliament through the Minister of Agriculture and Agri-Food. FCC lends money and provides other services to primary producers, food operations and agribusinesses that provide inputs or add value to agriculture. They share business management knowledge and training with customers, free of charge, and offer insurance, venture capital and management accounting software, that's designed specifically for agriculture.

  FCC is Canada's largest provider of capital to agriculture, agri-food producers and agri-businesses in rural Canada. FCC's loan portfolio is of $36.1 B in 2018-19, up from $17.1 B in 2008-09, and has been growing for 26 consecutive years. The organization has 97 offices, primarily in rural Canada, with over 1,900 employees.

  In 2018-2019, FCC lent approximately $10 billion in long term financing, and another $10 billion in short term financing, through a range of financial products, including feature-specific loans and credit lines. It earned a net income of $656.7 million in 2018-2019 and paid a $394.8 million dividend to the Government of Canada on September 20, 2019.

  On March 23, 2020, FCC received an enhancement to its capital base from the Government of Canada that allows for an additional $5 billion in its lending capacity. This measure was designed to offer increased financial flexibility to producers, agribusinesses and food processors impacted by the COVID-19 pandemic. FCC has also put in place COVID-19 support programs which include:

  • Deferral of principal and interest payments for up to six months on existing loans or a deferral of principal payments for up to 12 months;
  • Access to an additional credit line of up to $500,000, secured by general security agreements or universal movable hypothec (Québec only);
  • Access to term loans up to $2.5 million with no fees and an 18-month interest-only option (funds can be used for working capital and to modify production due to the impacts of COVID-19)

• Intergenerational transfer

  January 20, 2020

  Anticipated question:

  What is the Government of Canada doing to address the challenges associated with farm transfers/succession planning?

  1. The Government wants to see farm families succeed and will continue to work with producers on tax measures to facilitate the intergenerational transfer of farms.
  2. Moving forward, we will work to support family farms in passing down the results of their hard work to the next generation.
  3. As outlined in my mandate letter, I am committed to working with the Minister of Finance on tax measures to facilitate intergenerational transfers of farms.

  Background

  As significant equity can be invested in farm assets, the main challenge is ensuring that retiring farmers can access their investment in farm equity for retirement while leaving their successors with a manageable debt load.

  Several provisions under the Income Tax Act provide support for intergenerational farm transfers:

  • Lifetime Capital Gains exemption, which allows an individual selling a qualified property to use their capital gains to reduce their taxable income;
  • Rollover provision, which allows an individual to transfer the title of an asset on a tax-deferred basis; and
  • Reserve provision, which allows the proceeds from the sale of property to be claimed by the seller over up to five years.

  There are also a number of federal non-tax measures available to facilitate farm transfers:

  • Loan guarantees for farm transfers and to beginning farmers are available under the Canadian Agricultural Loans Act Program;
  • FCC offers free learning programs regarding succession planning, as well as targeted loan products to facilitate farm transitions.

  Through agricultural policy frameworks, the Government has been, and will continue to be, committed to working with provincial and territorial counterparts to ensure the next generation of farmers is equipped for success.

  Guides, workshops and/or financial support for succession planning are also available to farmers through provincial programming. Examples include:

  • The Government of Newfoundland and Labrador's Agriculture Business Program;
  • The Government of Saskatchewan's Farm Business Development Initiative; and
  • The Government of Ontario's Farm Succession Planning Guide.

  The Minister of Agriculture and Agri-Food's mandate letter contained a commitment to “work with the Minister of Finance and farmers on tax measures to facilitate the intergenerational transfer of farms”.

• Grain drying

  February 3, 2020

  Anticipated question:

  What is the Government doing to help address the issue of increased grain drying costs and the associated carbon tax?

  1. Farming families are important drivers of the Canadian economy and the competitiveness of the sector is a key priority of this government.
  2. Poor weather conditions during this year’s harvest have caused producers in many regions of the country to dry a record amount of grain.
  3. Farmers have expressed concerns about higher fuel costs and impacts of the federal carbon pollution pricing system. I have asked industry, as well as provincial and territorial governments, for more information on these costs so I can more fully understand the situation on the ground.
  4. I am currently working with my colleagues and with our provincial partners to refine our understanding of the situation.

  Background

  This year's unusually wet conditions caused a difficult harvest season in many parts of Canada. Heavy, early snow affected a large portion of the crops in the Prairies, while cold and wet fall temperatures affected crops in Ontario. As a result, farmers are relying heavily on grain drying. Recent media coverage has highlighted situations in the Prairies and Ontario where farmers are reporting higher than average grain drying and carbon pricing bills.

  Grain drying is considered a normal farm operation expense; used to lower crop moisture content to protect its quality. Grain dryers come in a wide array of sizes, configurations, energy efficiency levels and costs, usually using natural gas, propane or electricity as heating fuel. Total grain drying expenses incurred by a farm will vary from harvest to harvest, depending on the type and variety of crop, as well as the weather over a given growing season.

  The newly-implemented federal carbon pollution pricing system includes relief for farm activities that represents a significant part of the total cost of production that would otherwise impact their competitiveness. Thus, gasoline and diesel fuel used by farmers for agricultural activities is exempt from the fuel charge, and biological emissions (e.g. from livestock, manure and fertilizer application) are not priced. Recognizing that greenhouse heating fuel consumption for year-round operations represents a significant cost of production, the system also provides significant relief of 80% for natural gas and propane used by commercial greenhouse operators. Natural gas and propane use for heating, for barns and grain drying, is not exempted under the federal fuel charge as it was not considered a significant cost of production for an average grains and oilseeds farm.

  Agriculture and Agri-Food Canada (AAFC) is seeking more details from producer groups on estimates of grain drying and associated carbon tax costs. AAFC has received data from Alberta, the Agricultural Producers Association of Saskatchewan (APAS), the Keystone Agricultural Producers (KAP), and the Grain Farmers of Ontario (GFO). AAFC has engaged with the provincial governments of Alberta, Saskatchewan, Manitoba and Ontario.

• Regulatory action concerning neonicotinoids

  Updated February 17, 2020

  Anticipated question:

  In recent years, Health Canada has announced decisions regarding the cancellation and/or restricted use of neonicotinoid pesticides in the agricultural sector. What measures are you taking to support the sector?

  First response

  1. Agriculture and Agri-Food Canada and its Pest Management Centre continue to research viable alternatives for Canadian farmers and stakeholders.
  2. The Government is facilitating a dialogue with implicated stakeholders to examine the impacts and identify potential alternatives.

  Responsive regarding government assistance to farmers impacted by these proposed regulatory decisions

  1. Stakeholders are actively engaged in providing Health Canada with data related to water monitoring, risk mitigation and alternative products.
  2. The final decision on pollinators provides a phase out period to allow farmers to make appropriate on-farm adjustments and acquire alternative pest control products.

  Background

  Health Canada’s Pest Management Regulatory Agency (PMRA) is responsible for registering pesticides for use in Canada. The neonicotinoid insecticide imidacloprid was approved by PMRA for agricultural and veterinary use in 1995. Clothianidin and thiamethoxam were registered for use in the early 2000s. Registered pesticides are re-evaluated every 15 years.

  These three neonicotinoids are key insecticides used on canola, soybeans, corn, horticulture crops (such as potatoes and carrots), and to a lesser extent wheat and barley. In 2017, total farm cash receipts for grains, oilseeds, pulses, and special crops totaled $24.9 billion and $7.4 billion for horticulture crops.

  Since November 2016, PMRA has announced a series of proposed re-evaluation and special review decisions around neonicotinoid pesticides. Many of these proposed decisions include a risk management plan to phase-out of all agricultural uses of these products.

  Concurrently with the first announcement, Agriculture and Agri-Food Canada (AAFC) established the Multi-Stakeholder Forum on Neonicotinoids (MSF) to bring together a group of agricultural industry and environmental stakeholders, academics and officials from implicated federal and provincial government departments to discuss transition and mitigation strategies.

  In January 2020, the United States (U.S.) Environmental Protection Agency (EPA) announced a proposed interim registration review decision on neonicotinoids, identifying risks of concern for both aquatic vertebrates and honeybees. While a final decision on the use of neonicotinoids in the U.S. is still to come, the EPA has proposed risk mitigation measures to be implemented in the interim.

  The PMRA’s decision to cancel the majority of outdoor uses of all three neonicotinoids because of the risk to aquatic insects has been delayed following the receipt of new scientific papers and additional information from the public, provinces, the agriculture industry and AAFC’s water monitoring working group, established under the MSF. The PMRA is currently reviewing the submitted information and plans to provide final decisions in fall 2020.The crops and horticulture sectors in Canada are concerned that if the decision were for a full phase-out of all outdoor uses of neonicotinoids this would have significant economic impacts through yield reduction in crops due to less effective alternatives or no alternatives, farmers switching to alternative crops, and an increased cost of alternative pesticides.

  Pollinators

  On April 11, 2019, Health Canada published the final re-evaluation decisions for imidacloprid, clothianidin and thiamethoxam in relation to their potential impact on bees and other pollinators. The scientific assessments show varying effects on bees and other pollinators from exposure to each of these pesticides. Health Canada announced that it will be cancelling some uses of these pesticides, and changing other conditions of use such as restricting the timing of application. Remaining uses (e.g., treatment on canola seeds and greenhouse vegetables) are not expected to pose unacceptable risks to bees and other pollinators.

• Canada Grain Act review/use of accumulated surplus

  January 20, 2020

  Anticipated question:

  Why hasn’t the Government yet reformed the Canada Grain Act?

  Response

  1. In Budget 2019, the Government committed to modernizing Canada’s legislative and regulatory framework for grain quality as part of our efforts to better align regulatory frameworks with industry realities.
  2. We will be listening to stakeholders across the value chain to explore what changes are required to ensure the Act meets the needs of the sector, building on what we heard through the Targeted Regulatory Review.

  Anticipated question:

  Why can’t the surplus be given back to farmers?

  Response

  1. As promised by the Prime Minister, the Government is committed to modernizing the Canadian Grain Commission and ensuring the surplus benefits Canadian grain producers.
  2. Through its strategic investment framework, the Canadian Grain Commission has the opportunity to invest funds to deliver clear benefits to producers and innovate programs and services that respond to an evolving sector.

  Background

  The Canadian Grain Commission (CGC) is the federal regulatory body responsible for administering the provisions of the Canadian Grain Act (CGA). As stated in the CGA, the mandate of the CGC is to, in the interests of grain producers, establish and maintain standards of quality for Canadian grain and regulate grain handling in Canada, to ensure a dependable commodity for domestic and export markets.

  The CGC's operations cover four main areas:

  • Grain quality assurance: this includes establishing grain grading standards, and conducting mandatory inspections on grain exported in bulk by vessel;
  • Grain quantity assurance: overseeing the official weighing of export shipments of grain;
  • Grain quality research; and,
  • Producer protection: this includes administering a program to ensure grain producers are compensated for grain delivered to licensed companies, allocating available producer railway cars; and providing binding determination of grading disputes.

  Budget 2019 included a commitment to review the CGA and the CGC, as part of its set of regulatory modernization initiatives. This commitment is also included as a priority in the roadmap of the Targeted Regulatory Review of the Agri-Food and Aquaculture Sector. CGA modernization was also a recommendation put forward by the Agri-Food Economic Strategy Table in 2018.

  The objective of the review is to identify what changes to the CGA and CGC are needed to meet the needs of Canada's grain sector today. Agriculture and Agri-Food Canada (AAFC) is leading the review, with the support of the CGC. AAFC held preliminary discussions with stakeholders at the Grains Value Chain Roundtable in the first half of 2019. Those discussions were intended to identify priority areas of interest in the review, with the understanding that more extensive stakeholder engagement would occur.

  To date, priority areas of interest flagged by stakeholders regarding the CGA and CGC have included producer payment protection, binding arbitration, licensing, CGC governance, the CGC's funding model, and grain quality inspection service delivery.

  Some legislative changes to the CGA will be required in order to implement the Canada-United States-Mexico Agreement (CUSMA). These targeted amendments are limited in scope to the issues that were negotiated as part of CUSMA, and will be handled separately through the CUSMA implementing legislation.

• Agriculture and the environment

  January 20,2020

  Anticipated question:

  What is the Government of Canada doing to minimize the agricultural sector’s impact on the environment?

  Response

  1. Canadian farmers are responsible stewards of the land.
  2. The agriculture sector in Canada is a world leader in innovating and adopting new technologies to improve environmental performance, reduce greenhouse gas emissions and store carbon in agricultural soils.
  3. The Canadian Agricultural Partnership is helping producers to address soil and water conservation, reduce greenhouse gas emissions and adapt to climate change.
  4. The Government is investing in science and innovation to develop solutions that will help the sector grow sustainably and create better opportunities for farmers, businesses and Canadians.

  Responsive on adapting to climate change

  1. Through business risk management programs, federal, provincial and territorial governments provide tools and funding to help the sector prepare for, respond to and recover from climate-related risks like extreme weather.

  Responsive regarding a ban on single-use plastics:

  1. Plastic packaging has been extensively used in the agri-food sector given it helps to increase food safety and reduce food waste. Alternative food packaging options are currently limited but are being developed.
  2. The Government of Canada is investing in bioplastic innovation to develop alternatives for single use plastics. This includes developing bioplastics from agriculture waste and renewable source material.

  Background

  The Canadian Agricultural Partnership (Partnership), launched on April 1, 2018, is a five-year $3-billion investment that will strengthen the agriculture, agri-food and agri-based products sector, helping to promote continued innovation, growth and prosperity. This includes $1-billion in federal programs and activities and $2-billion in cost-shared funding programs and activities by federal, provincial, and territorial governments.

  Up to $690-million is available under the federal-only programs, including the AgriInnovate ($128 million) and AgriScience ($338 million) programs, and Agriculture and Agri-Food Canada (AAFC)-led foundational science ($224 million), to enhance the competitiveness of the sector through research, science and innovation, with an emphasis on sustainable and clean growth.

  Within the $2-billion cost-shared programs and activities, an estimated allocation of up to $436 million has been made available to address environmental sustainability and climate change issues.

  In Budget 2017, the Government announced $70 million in funding over 5 years, starting in 2018–2019, to further support agriculture discovery science and innovation, with a focus on addressing emerging priorities, such as climate change and soil and water conservation. Part of this investment ($44 million) is to hire and equip around 75 scientists in emerging fields. It will also support research projects including within the innovative Living Laboratory Initiative ($10 million) where farmers and scientists co-develop new farming practices and technologies on working farms. The remaining $16 million will fund collaborative federal research projects focused on priority areas affecting the agriculture sector, such as environmental issues.

  The Canadian Agricultural Strategic Priorities Program (CASPP) is an investment of $50.3 million, over five years, to improve the sector's ability to address emerging issues and capitalize on opportunities. The CASPP focuses on four priority areas: adoption of new technology, environmental sustainability, strategic development and capacity building and emerging issues.

  Adapting To Climate Change

  Weather has always been a key factor that producers integrate into their daily and longer-term management decisions. However, climate change is making this challenge even greater. Federal, provincial and territorial governments recognize this challenge and the importance of helping producers avoid – or quickly recover from – the extraordinary costs associated with extreme weather events such as droughts and floods. For example, AgriRecovery can help producers with these unforeseen, extraordinary costs.

  AAFC has developed a scientific research strategy to enhance sustainable agricultural production and is working to better understand the impacts of a changing climate and develop innovative technologies to enable adaptation to it (e.g., more resilient crop varieties and animal breeds, more efficient irrigation systems, models to predict climate impact on important pests and diseases).

  Ban On Single-Use Plastic

  An estimated 46,000 tonnes of plastic is generated from primary agriculture annually (1% of total plastic waste generated in Canada) and plastic packaging (including food packaging) accounts for 33% of all plastic use and 47% of plastic waste in Canada.

  Bioplastics or bio-based plastic alternatives that are compostable or biodegradable may provide an alternative end of life for some single-use plastics, such as plastic bags, straws, cutlery, plates, and stir sticks. Under the Innovative Solutions Canada program, AAFC and Natural Resources Canada participated in a joint challenge to improve the compostability of bioplastics from agriculture or wood biomass in household and municipal composting systems. Additionally, the Canadian Agricultural Partnership's AgriScience Bioproducts Cluster is funding three projects that address food packaging.

• Food Policy for Canada

  January 20, 2020

  Anticipated question:

  How will the Food Policy address challenges in Canada’s food system?

  First response

  1. Canada’s first ever Food Policy, launched on June 17, 2019, is our roadmap for a healthier and more sustainable food system.
  2. The Food Policy brings a coordinated approach to dealing with food issues in Canada by building stronger linkages across existing federal initiatives that affect food.
  3. We have already launched the Local Food Infrastructure Fund to support community-led solutions that address food insecurity. We have had a great response, at almost 500 applications.

  Background

  On March 19, 2019, the Government of Canada committed $134.4 million in new funding for A Food Policy for Canada, under the four action areas; Help Canadian Communities Access Healthy Food, Make Canadian Food the Top Choice at Home and Abroad, Support Food Security in Northern and Indigenous Communities and Reduce Food Waste.

  The Food Policy action areas include programs that will address some of the most pressing issues including:

  • $50 million for the development of a Local Food Infrastructure fund;
  • $15 million to establish the Northern Isolated Community Initiative Fund;
  • $25 million for a Buy Canadian Promotion Campaign;
  • $24.4 million for tackling food fraud; and,
  • $20 million for a Food Waste Reduction Challenge.

  The Government of Canada also committed, through Budget 2019, to engage with provinces and territories towards the creation of a National School Food Program. Employment and Social Development Canada (ESDC) is leading this engagement process, with support from Agriculture and Agri-Food Canada (AAFC).

  The creation of the Canadian Food Policy Advisory Council will bring diverse stakeholders together to provide advice to the minister of Agriculture and Agri-Food on food-related issues. The call for applications for the Canadian Food Policy Advisory Council ran from August 9 to September 20, 2019, and generated 124 eligible applications, with broad representation of interests and perspectives from across the Canadian food system.

  As part of the Food Policy for Canada, AAFC launched the Local Food Infrastructure Fund in August 2019. AAFC also held external consultations over the summer on the next stream of the Local Food Infrastructure Fund, which seeks to fund projects up to $250,000. The first call for proposals under the program, which accepted applications for funding up to $25,000, received close to 500 applications.

  AAFC will also be engaging stakeholders on the Food Waste Reduction Challenge over the coming months to ensure the challenge best reflects the opportunities that are available to reduce food waste across the value chain from production to consumption

• Mental health challenges in the agriculture sector

  Updated May 8, 2020

  Anticipated question:

  What is being done to help address the mental health challenges faced by farmers, ranchers and producers?

  First response

  1. The uncertainties caused by the COVID pandemic have led to increased stress for Canadians across the country - and the hard working people in the agriculture and food processing sectors are no exception.
  2. The Government will continue to work with provincial and territorial partners to ensure all Canadians have access to the mental health support needed.
  3. Public Health Agency of Canada has developed a website specifically for the COVID pandemic that provides solutions to manage mental health and contact information for distress lines.
  4. On May 3rd, the Government announced an investment of $240.5 million to develop, expand, and launch virtual care and mental health tools to support Canadians.
  5. Agriculture and Agri-Food Canada supports action through the Canadian Agricultural Partnership. Provinces and territories can use federal cost-shared funding to address regional-specific pressures that can pose mental health challenges.
  6. Farm Credit Canada is actively working to raise awareness of mental health warning signs and available resources through its Rooted in Strength initiative.

  Responsive regarding the standing committee report, “Mental health: A priority for our farmers”:

  1. The Government has reviewed the Standing Committee report and is taking the recommendations under consideration.

  Background

  In the agriculture sector, producers face challenges and uncertainties related to financial pressure, animal disease, weather, commodity prices, trade, and labour, which can result in unique mental health needs. According to research from the University of Guelph, farmers are more vulnerable than other groups in the population when it comes to mental health challenges, with higher rates of stress, anxiety, depression, emotional exhaustion and burnout.

  The recent COVID-19 crisis has increased uncertainties for farmers and food processing operations in areas such as labour availability, financial stability and supply chain reliability, ensuring self-isolation protocols are followed for temporary foreign workers entering the country, and proper sanitation and physical distancing measures are implemented on farms and in food processing facilities to reduce the spread of the virus – all of which can contribute to increased levels of stress.

  Health is a provincial jurisdiction and provinces are well-placed and active in addressing the regional-specific pressures that can pose mental health challenges. All provinces and territories have resources in place such as help lines to assist in coping with mental health challenges, and some have established services specific to the agriculture sector. Provincial and Territorial Ministers of Agriculture identified mental health challenges in the sector as a priority at their December 2019 meeting.

  National resources are also available to Canadian farmers, ranchers and producers.

  The Public Health Agency of Canada has developed a “Taking care of your mental health (COVID-19)” website that identifies stressors, suggests solutions to manage mental health and provides contact information for distress lines.

  The federal government’s May 3, 2020 announcement of an investment of $240.5 million in virtual care and mental health tools for Canadians will be used to create digital platforms and applications, improve access to virtual mental health supports, and expand capacity to deliver health care virtually, including projects to reach vulnerable Canadians. This investment will support the previously launched “Taking care of your mental health (COVID-19)” website and will also support a growing family of digital products that includes the Canada COVID-19 app, which helps people track their symptoms, receive the latest updates, and access trusted resources.

  The federal government is committed to working with the provinces, as well as industry partners, to support the mental health of farmers, ranchers, and producers. Budget 2017 confirmed $5 billion over 10 years directly to provinces and territories to improve mental health and addiction services. Additionally, Agriculture and Agri-Food Canada (AAFC) can provide federal funding under the Canadian Agricultural Partnership (CAP) that supports provincial efforts to address mental health challenges in the sector.

  On-going research at the University of Guelph suggests that resources and supports for the general public are less successful in the agricultural realm. A mental health literacy training program, custom-tailored to Canadian agriculture, has been developed by a professor at the University of Guelph to address the gap in mental health literacy in the agricultural community.

  The national, non-profit Do More Agriculture Foundation launched in January 2018 with funding from organizations such as the Canadian Federation of Agriculture and Bayer. The organization focuses on educating the agriculture industry on mental health, breaking the stigma that currently exists, creating a community of belonging, and provides resources and research.

  Farm Credit Canada (FCC) has done some work in the area of mental health. Activities include:

  • A mental health awareness campaign, “Rooted in Strength”, which included a brochure mail out to 200,000 rural households in November 2018 and a series of videos on their website that identify strategies to identify and manage stress and mental health challenges.
  • A co-partnership to sponsor 4-H Healthy Living Program for two years to increase awareness of mental health;
  • A renewed partnership with the Do More Agriculture Foundation to deliver a series of mental health first aid workshops in rural communities across Canada, and create a network of mental health first aiders who can identify and support producers coping with difficult or unfortunate circumstances;
  • Supporting farmers in difficult times through the FCC ag crisis fund, which can provide support to farm families through disasters like floods, tornadoes, house fires, death of a family members, farm accidents, or critical illnesses; and
  • Providing mental health first aid for all management who deal directly with producers.

• Temporary foreign workers

  Updated May 12, 2020

  Anticipated question

  What is the Government doing to help improve the agriculture and agri-food processing sector’s access to labour?

  First Response

  1. Ensuring Canada's food security is a top priority, and temporary foreign workers are an important part of the sector’s labour force.
  2. Following the exemption of the travel ban for temporary foreign workers, we are seeing encouraging progress with more temporary foreign workers arriving everyday.
  3. On April 13, the Government announced $50 million to help employers offset costs associated with the mandatory 14-day isolation period required of temporary foreign workers entering Canada.

  Responsive on arrivals of temporary foreign workers

  1. As of May 10, it is reported that over 23,800 temporary foreign workers are currently in Canada
  2. Since the travel ban was lifted, more than 12,900 temporary foreign workers have arrived, and another 1,000 are booked on flights
  3. The Government continues to work with international governments and provincial counterparts to work through logistical hurdles that impact the travel of foreign workers.

  Responsive on support for self-isolation costs

  1. The Government has heard concerns about the unexpected costs associated with the self-isolation period for newly arrived temporary foreign workers.
  2. That’s why we have announced $50 million to cover a portion of employers’ incremental costs associated with the 14-day mandatory isolation period.
  3. The rules of the mandatory isolation period have been clearly defined and distributed to employers, as well as foreign workers entering Canada.
  4. We are continuing to work with provinces and territories to ensure the health and safety of all Canadians, and temporary foreign workers.

  Responsive on health and safety

  1. We know that employers and workers are all committed to protecting the health of their co-workers and broader communities.
  2. This is why all individuals entering from abroad must isolate for 14 days upon their arrival in Canada, in addition to health screening protocols before travel.
  3. The rules of the mandatory isolation period have been clearly defined and distributed to employers, as well as foreign workers entering Canada.
  4. Those who do not comply with the Quarantine Act or the isolation protocol will face severe fines and sanctions.
  5. Government authorities will continue to proactively communicate and engage with employers, source countries and other stakeholders on public health requirements.

  Background

  Reliable access to workers through the Temporary Foreign Worker (TFW) Program is a key concern for some agriculture and processing employers. The TFW Program aims to assist employers in filling their temporary skills and labour requirements when qualified Canadians and permanent residents are not available. The TFW Program is jointly administered by Employment and Social Development Canada (ESDC) and Immigration, Refugees and Citizenship Canada (IRCC).

  In 2018, TFWs accounted for about 19% of the primary agriculture workforce and 1% of the food and beverage manufacturing sector. TFWs are common in horticulture and meat and seafood processing in Ontario, British Columbia and New Brunswick. Most TFWs in the sector are hired in low-skilled/low-wage occupations such as general farm workers, industrial butchers and fish plant workers.

  Travel Ban Exemption

  On March 20, 2020, the Government of Canada announced exemptions to the air travel restrictions which were announced on March 18, 2020, including:

  • seasonal agricultural workers, fish/seafood workers, caregivers and all other TFWs
  • international students who held a valid study permit, or had been approved for a study permit, when the travel restrictions took effect on March 18, 2020
  • permanent resident applicants who had been approved for permanent residence before the travel restrictions were announced on March 18, 2020, but who had not yet travelled to Canada

  Allowing foreign workers to enter Canada recognizes their vital importance to the Canadian economy, including food security for Canadians and the success of Canadian food producers. The arrival of farm workers and fish/seafood workers is essential to ensure that planting and harvesting activities can take place.

  Temporary Foreign Worker Quarantine Requirements and Employer Compliance

  Most TFWs entering Canada are subject to an Emergency Order under the Quarantine Act, which requires a 14-day mandatory quarantine upon arrival. Penalties of up to $750,000 can be levied against a TFW who violates this Order. A person who causes a risk of imminent death or serious bodily harm to another person while willfully or recklessly contravening the Quarantine Act or associated regulations could be liable for a fine of up to $1,000,000 or to imprisonment of up to three years, or to both. Under the Immigration and Refugee Protection Regulations, workers who are found to have failed to adhere to an isolation order could be found inadmissible, issued a removal order and barred from coming back to Canada for one year.

  Amendments to the Immigration and Refugee Protection Regulations came into force April 20, 2020 and compel employers of TFWs to meet additional requirements, including:

  • Paying workers for the initial quarantine/isolation period upon entry into Canada
  • Not prevent a worker from meeting their requirements under orders made under the Quarantine Act and/or the Emergencies Act, as well as provincial/territorial public health laws related to COVID-19, and
  • Additional requirements for employers who provide accommodations to workers.

  Employers are subject to inspection and those who do not comply with the requirements could be subject to penalties of up to $1 million and a ban from hiring TFWs, depending on the seriousness of the situation and number of workers affected.

  $50 Million for Employers to Support Costs associated with Self-Isolation of TFWs

  On April 13, 2020, the Government of Canada announced $50 million to help farmers, fish harvesters, and all food production and processing employers, put in place the measures necessary to follow the mandatory 14-day isolation period required of all workers arriving from abroad.

  In addition to the responsibility of paying the workers for the two weeks during which time they cannot work, many employers are also responsible for providing workers with transportation and accommodations, as well as access to food and basic supplies needed to meet all of the conditions imposed by public health authorities.

  Recognizing the importance of this responsibility, the federal government will provide support of $1,500 for each TFW, to employers or those working with them to ensure requirements are fully met. The funding is conditional on employers not being found in violation of the mandatory 14-day isolation F quarantine requirements are met.

  Flexibility in the Temporary Foreign Worker Program

  A temporary modification for the TFW Program is being made to the Labour Market Impact Assessment process for agriculture and food processing employers, as the required 2-week recruitment period will be waived until October 31, 2020.

  Labour Market Impact Assessments in key occupations related to agriculture and agri-food sectors will be prioritized for processing.

  The Government is also increasing the maximum duration of employment under Labour Market Impact Assessments from 1 to 2 years, for workers in the low-wage stream of the TFW Program as part of a three-year pilot. This will improve flexibility and reduce the administrative burden for employers, including those in food processing.

  These measures are in addition to existing flexibilities within the Seasonal Agricultural Worker Program within the TFW Program, including a process for the transfer of foreign workers between employers.

  Primary Agriculture Review

  As part of the Path Forward Plan for the TFW Program, announced in April 2017, the federal government committed to performing a review to modernize the administration of the TFW Program’s primary agriculture streams. In February 2019, a “What We Heard” Report summarizing the review’s key findings was released to provinces, territories and industry. Key issues were raised in four areas: Program Eligibility and Structure; Wages and Deductions; Housing; and Labour Market Impact Assessment (LMIA) Process.

  On September 9, 2019, ESDC re-affirmed its intention to continue to engage with employers, workers and other stakeholders on ways to modernize the TFW Program’s Primary Agriculture Stream to address issues raised during the Primary Agriculture Review.

  International Phase of the Quality AgriWorkforce Management Program

  In January 2019, AAFC announced that it would be providing up to $279,223, through the Canadian Agricultural Adaptation Program, to the Canadian Agricultural Human Resource Council (CAHRC) to lead the International Phase of the Quality AgriWorkforce Management Program. This project was designed to clarify best practices for recruiting and retaining international workers. It involved developing and delivering communications and training products for employers, including guides and workshop training materials. CAHRC reports that 520 farm employers have participated in this training.

  Pathways to Permanent Residence

  In February 2019, IRCC launched a Rural and Northern Immigration Pilot aimed at spreading the benefits of economic immigration to smaller communities. As of May 5, 2020, the pilot has been launched in 8 of the 11 rural and northern communities selected by IRCC. Newcomers are expected to begin to arrive under this pilot in 2020.

  In March 2019, IRCC announced an addition of 2,000 spaces to provinces and territories under the Provincial Nominee Program aimed at providing more opportunities for existing TFWs at the intermediate skill level (National Occupation Code C) to transition to permanent residence.

  In July 2019, IRCC announced an Agri-Food Immigration Pilot which will test an industry-specific approach to help address the labour needs of the Canadian agri-food sector, particularly in meat processing and mushroom production. The pilot is targeted at attracting retail butchers, industrial butchers, food processing labourers, harvesting labourers, general farm workers, and farm supervisors and specialized livestock workers. A maximum of 2,750 principal applicants, plus family members, will be accepted for processing in any given year. Due to the COVID-19 pandemic, the opening of the application process for the Agri-Food Immigration Pilot was delayed until May 15, 2020.

  Open Work Permits for Vulnerable Workers

  All work permits issued under the TFW Program are employer-specific, allowing TFWs to only work for the employer hiring them. As of June 2019, IRCC officers are able to issue open work permits when there are reasonable grounds to believe that TFWs, including in the agriculture and agri-food sector, are experiencing abuse or are at risk of abuse. These permits are designed specifically to protect vulnerable workers, allowing them to immediately leave their employer and maintain their immigration status while they seek another job.

  Occupation-Specific Work Permits

  IRCC and ESDC are considering amending the Immigration and Refugee Protection Regulations to support the introduction of an occupation-specific work permit in the Primary Agriculture Stream and low-wage stream of the TFW Program. This new work permit, designed to complement the new open work permit for vulnerable workers, would allow a TFW to move between jobs in the same occupation without the requirement for a new work permit each time. Any subsequent job offer would still require the employer to have an approved LMIA for that occupation. This intention was announced in the Canada Gazette in June 2019.

• Value creation for Canada’s cereals sector

  January 20, 2020

  Anticipated question:

  What is the Government of Canada doing on value creation models for funding cereals breeding?

  First response

  1. My Department does extensive research in the area of cereals.
  2. We have been working with the sector on ways to increase investment and innovation in the sector to ensure its future success.
  3. There are a lot of different views out there. I look forward to industry coming forward with proposed approaches.

  Responsive regarding syngenta discontinuing its canadian cereal seed research and development program

  1. Syngenta’s decision to discontinue its cereal breeding program is disappointing. Cereal seed research and development is important to maintaining a strong grain sector.

  Background

  In 2016, Agriculture and Agri-Food Canada (AAFC)'s Grains Roundtable (GRT) recognized the need to engage the cereals sector to develop a value creation model for funding cereal research and variety development. A GRT working group on value creation was formed that included producer associations from all regions of the country, wheat and barley commissions, seed companies, public and private sector cereal variety developers and government representatives.

  In March/April 2017, the working group held engagement sessions to build awareness on the topic and gauge cereal stakeholders' interest in a new model. The second round of the engagement process (including consultation on potential models for value creation) progressed into the summer and the fall of 2017. After a final meeting in fall 2017, the working group provided a recommendation to the GRT on two potential models for value creation.

  Following this industry-led stakeholder engagement process, the GRT requested that the government consult on the following two models for value creation in Canada's cereal sector:

  1. producer-facilitated end point royalty collection and
  2. royalty collection enabled by production contracts to place conditions on the use of farm saved seed.

  AAFC and the Canadian Food Inspection Agency (CFIA) launched consultations with a series of engagement sessions that started in November 2018. Sessions were attended by approximately 500 stakeholders from across the crop production value chain, including producers, provincial wheat and barley commissions, other commodity organizations, provincial governments, seed growers, grain handlers, public and private breeders and seed companies. In addition to the in-person sessions, AAFC and CFIA officials also travelled across Canada to engage more than 1,500 producers and other cereal sector stakeholders at farm meetings, agricultural trade shows and other events.

  These consultations and informal engagement efforts have revealed a diversity of views and an expressed desire for additional analysis of the proposed models, consideration of other options, and for more consultation with producers. This sentiment was echoed in a letter received from Western Canadian Cereal Commissions in January 2019, and in the results of a producer survey launched by farm organizations in western Canada in July 2019.

  AAFC has encouraged industry leadership to determine the next steps to take. Two industry-led projects are currently underway, which AAFC is prepared to support if needed:

  • The Canadian Federation of Agriculture, Grain Growers of Canada and Canadian Seed Trade Association are working together to develop a set of guiding principles for value creation, including a list of requests for AAFC that encompass the overall funding environment for cereals variety development; and,
  • The Canadian seed industry will reportedly be launching a pilot of the farm-saved seed contract approach in February 2020.

• Increased trade under Comprehensive and Progressive Agreement for Trans-Pacific Partnership

  January 20, 2020

  Anticipated question:

  The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) has been in force since December 30, 2018, what have been some demonstrable benefits to the agriculture sector?

  First response

  1. The CPTPP has opened new opportunities for the agriculture and agri-food sector and Canadian businesses are experiencing gains.
  2. For example, Canadian pork exports to Japan increased over 10% from January to October 2019 compared to the same period in 2018.
  3. Through the accession of new members, Canada will be able to secure new preferential market access and address non-tariff barriers.

  Anticipated question:

  Will the new United States – Japan Trade Agreement negatively impact the gains Canada’s agriculture sector has made in Japan through the CPTPP?

  First response

  1. Through the CPTPP, Canadian exporters enjoy preferential market access to Japan and other Asia-Pacific markets.
  2. Canada ratified the CPTPP to ensure early implementation of the Agreement ahead of other trading partners who are also pursuing preferential access into CPTPP markets.
  3. Canada’s agriculture sector is already benefiting from Canada’s first mover advantage by building trade links and gaining market share in Japan.

  Background

  The Comprehensive Partnership Agreement for Trans-Pacific Partnership (CPTPP) is a comprehensive free-trade agreement among 11 countries, forming a trading bloc that represents 13.5% of global gross domestic product and almost 500 million consumers. Seven CPTPP signatories have ratified the Agreement: Mexico, Japan, Singapore, New Zealand, Canada, Australia and Vietnam (remaining signatories: Brunei Darussalam, Chile, Malaysia and Peru).

  The CPTPP entered into force for Canada on December 30, 2018. Canadian exporters have benefited from two back-to-back tariff cuts from the first seven ratifiers. The first was on December 30, 2018, and the second was on January 1, 2019 (April 1, 2019 for Japan). The third tariff cuts took place January 1, 2020 (April 1, 2020 for Japan).

  As the CPTPP is implemented, tariffs will be eliminated or reduced on a wide range of Canadian exports for the agriculture sector, including: meat, grains, oilseeds, pulses, maple syrup, wines and spirits, fish and seafood, and agri-food products. Once CPTPP is fully implemented, 95% of agriculture and agri-food tariff lines will be duty-free.

  The greatest gains for the agriculture and agri-food sector are expected to be in Japan and Vietnam, where Canada previously faced higher tariffs and did not have preferential market access through existing free trade agreements. Canadian agriculture agri-food and seafood exports to Vietnam were valued at $323.1 million in the first ten months of 2019, representing an increase of 17.8% compared to the same period in 2018 ($274.2 million).

  Going forward, economies that meet the high standards of the CPTPP may join the Agreement by accession, potentially furthering the economic benefits for Canada. To date, no economy has formally requested to commence the accession process. Economies that have publicly expressed interest in acceding to the CPTPP include Thailand, South Korea, the United Kingdom and Taiwan.█████████████████████████████████████████████████████████████████████████████████████████████████████████

  Consultations took place this summer and, overall, the agriculture sector expressed support for CPTPP expansion as it would create new commercial opportunities as a result of reducing tariffs and addressing non-tariff barriers.

  CPTPP Benefits in Japan

  Gains under the CPTPP help level the playing field for Canada's beef sector in Japan with competitors such as Australia, who already have free trade agreements with the country, as well as secure an advantage for Canada's beef and pork sectors over other competitors in the market without preferential access. Canada is one of the top exporters of pork, in particular fresh and chilled pork, to Japan and has seen steady export growth over the last few years. Canadian pork exports to Japan from January 2019 to October 2019 were valued at $1.2 billion, which represents a 10.6% increase compared to the same period in 2018.

  Canadian industry and government have been actively promoting beef in Japan since the implementation of the CPTPP and Canadian beef exports to Japan have dramatically risen the first few months following the coming into force of the Agreement. Canadian beef exports to Japan from January 2019 to October 2019 were valued at $302.9 million, which represents a 68.6% increase compared to the same period in 2018. On May 17, 2019, Japan officially announced that it has expanded beef access from Canada, the U.S., and Ireland to also include beef from animals over 30 months (OTM) of age.

  On October 7, 2019, Japan and the United States signed the United States-Japan Trade Agreement for goods (USJTA) and the United States-Japan Digital Trade Agreement. Initial tariff reductions which came into effect on January 1, 2020, and subsequent annual tariff reductions will take place on April 1, in line with Japan's schedule under the CPTPP.

  For a majority of goods, the USJTA falls short of the CPTPP market access. However, once the USJTA is in force, key Canadian agricultural exports to Japan such as beef, pork and wheat will face increased competition from the United States' exports, as Canada's tariff advantage vis-à-vis the United States will be eliminated.

• Closure of Ryding Regency Meat Packers: Impact on slaughter capacity

  Updated January 29, 2020

  Anticipated question:

  What is the government doing to support beef producers impacted by the cancellation of licenses at Ryding Regency Meat Packers facilities?

  First response

  1. We understand the impact the closing of Ryding-Regency has on the beef sector.
  2. Our Government has been working closely with private industry and the province to look for solutions to the loss of processing capacity.
  3. We have programs through the Canadian Agricultural Partnership to help farmers manage risks beyond their control.
  4. We are ready to help beef producers through our Advance Payments Program, which provides easy and fast access to low-interest cash advances in the short term.

  Responsive on slaughter capacity

  1. Producers are looking at other processing plants in Ontario and other provinces that may be able to absorb some processing volume.

  Responsive regarding supply of kosher beef in Canada

  1. There are two other plants in Canada that are eligible to produce kosher beef, one in Ontario and one in Quebec.
  2. Imports of kosher beef will continue to be required to meet demand.

  Background

  The Canadian Food Inspection Agency has canceled the Safe Food for Canadians (SFC) licences of Ryding-Regency Meat Packers LTD. (Est. 99), and Canadian Select Meats Inc. and The Beef Boutique LTD., (both operating under St. Ann's Foods Inc., Est. 639).

  According to the Beef Farmers of Ontario (BFO) and the Canadian Cattlemen's Association (CCA), the Eastern Canadian beef industry is in a difficult situation due to insufficient slaughter capacity in Eastern Canada to handle the number of beef and dairy cattle on the market at certain times of the year. This has resulted in depressed prices, delays in cattle slaughter and lack of market security. This situation has been exacerbated by the recent suspension and ultimate cancelation of Ryding Regency Meat Packers. Additionally, Est. 99 was the only beef facility in Ontario producing Kosher products and the Jewish community has been expressing concerns because this has affected Kosher beef supply in Canada.

  The tight cattle slaughter capacity in Eastern Canada during the peak fall marketing has been further impacted by the temporary closure of a Tyson plant in the United States, which resumed operations fully in early January, and halt in purchases of fed cattle at a Pennsylvania facility.

  Ontario's beef processing sector is comprised of 6 federally inspected abattoirs and approximately 98 provincially inspected abattoirs. The sector is, however, highly concentrated. In 2018, 3 federally inspected plants, Cargill Meat Solutions, St. Helens Meat Packers, and Ryding Regency Packers, processed 89% of the 687,752 cattle slaughtered in Ontario. Overall, approximately 90% were processed in federally inspected plants.

  Ryding Regency's 55,000 square foot abattoir and processing plant had the capacity to process approximately 80,000 head of cattle annually, along with 4,000 veal calves, and 4,000 lambs.

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  The company employed approximately 300 people between its three facilities and had annual sales revenue of over $90 million.

• Compensation for Canadian goat milk producers

  January 20, 2020

  Anticipated question:

  How is the government supporting goat milk producers?

  Responses

  1. Canadian producers are the foundation of our rural communities and they have a key role in Canada’s economic prosperity.
  2. Goat, sheep and buffalo milk producers benefit from support programs, such as the Canadian Agricultural Partnership and Business Risk Management programs.
  3. Over the past decade, these sectors have received more than $44 million in funding.

  Anticipated question:

  Why did the government not announce compensation measures for goat milk producers?

  Responses

  1. The Government continues to listen to the needs of goat milk producers so that the industry can expand its activities, continue to grow and take full advantage of new market access opportunities.

  Background

  The goat, sheep and buffalo milk production sector is relatively small.

  Overall, Canadian goat milk production continues to grow. Ontario being responsible for about 75% of total production; the majority of farms are located in the south-central and south-western parts of the province. In 2017, Ontario producers produced about 53 million litres of goat's milk. Ultimately, the majority of Canadian production is destined for the processing sector and is used in the production of various cheeses. Goat's milk is also marginally used in the production of butter, yogurt and milk for consumption. According to 2017 data, Canadian goat milk production was approximately 63 million litres, representing about 0.7% of total cow's milk production (about 90 million hectolitres).

  Through Budget 2019, the government announced up to $3.9 billion in compensation for eligible producers operating under the supply management system, to address the impacts resulting from the ratification of the Canada-European Union Comprehensive Economic and Trade Agreement (CETA) and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). The compensation measures announced do not apply to producers of goat, sheep or buffalo milk, as these are not subject to supply management.

  These producers are not subject to the same production limits and are not required to have quotas. Thus, since these producers operate in an open market without being subject to the constraints associated with pricing and supply control, the impact of trade agreements must be considered differently. In addition, since the tariff rate quotas also limit the quantity of imported milk products from other animal species, these sectors benefit from protection similar to supply management.

  Goat, sheep and buffalo milk processors are eligible for the Dairy Processing Investment Fund (DPIF), which was announced in the margins of the CETA. This $100 million program is designed to support dairy processors interested in modernizing their operations.

• 2018-2019 Departmental Results Report

  January 20, 2020

  Anticipated question:

  Why was the Department’s overall spending in 2018–19 less than what was planned?

  First response

  1. Some areas of programming saw actual spending that was less than planned. In particular, spending on programs that focus on managing sector risk was less than planned based on market and production conditions, and reduced demand.
  2. The suite of Business Risk Management programs continues to provide support to participating producers, based on market and industry conditions.
  3. Despite overall spending being less than planned, payments in 2018-19 increased relative to 2017-18, reflecting some of the difficulties producers faced in 2018.
  4. Canada’s agriculture and agri-food sector is a powerful driver of Canada’s jobs, economy and growth of the middle class, and the Government is committed to supporting the sector to ensure it remains a leader in job creation and innovation.

  Background

  The 2018-19 Departmental Results Report outlines results over the last three fiscal years under each Core Responsibility (Domestic and International Markets, Science and Innovation, and Sector Risk) of Agriculture and Agri-Food Canada's Departmental Results Framework (DRF). This is the first year reporting on results and spending under the DRF. Details on the Department's spending and human resources trends are described below.

  In 2018-19, AAFC:

  • had actual spending of $2,158 billion compared to planned spending of $2,516 billion, $358,1 million or 14.2% less;
  • had an increase in actual spending compared to the previous year;
    • $2,158 billion in 2018-19 versus $1,985 billion in 2017-18 (increase of $173,0 million or 8.7%)
  • had actual FTEs of 4,716 compared to planned FTEs of 4,689 (27 FTEs more); and
  • had an increase in actual FTEs compared to the previous year (43 FTEs more).

  Spending - Actual compared to planned

  2018-19 actual spending was $358.1 million less than planned (actual spending of $2.158 billion compared to planned spending of $2.516 billion).

  • primarily due to sector risk programs which are mainly demand-driven and therefore, spending varies in response to requirements of the agriculture sector. Planned spending for these statutory programs reflect funding authorities. Actual spending that is less than planned indicates that there was no need to spend the full authorities.

  Explanations for the major differences by Core Responsibility are:

  Core Responsibility	2018-19 Planned Spending ($ millions)	2018-19 Actual Spending ($ millions)	Difference (actual minus planned) ($ millions)	Explanation
  Domestic and International Markets	250.2	280.7	30.5	Transfer of federal canal infrastructure
  Science and Innovation	590.1	560.8	(29.3)	First year of the Canadian Agricultural Partnership and ramping up of program
  Sector Risk	1,524.2	1,145.6	(378.6)	AgriStability, ($214.4 million), due to market and production conditions and reduced demand AgriRecovery, ($122.7 million), little demand for disaster response Loan Guarantee Programs, ($45.4 million), which includes Agricultural Marketing Programs Act and the Canadian Agricultrual Loans Act programs, due to current low interest rates and lower than expected default rates
  Internal Services	151.5	170.8	19.3	Funding carried forward from 2017-18 and realignment among programs
  Total	2 516.0	2 157.9	(358.1)

  Spending - actual compared to the previous year

  Actual spending has increased compared to the previous year.

  $2,158 billion in 2018-19 compared to $1,985 billion in 2017-18 (increase of $173,0 million or 8.7%).

  The increase is primarily due to:

  • An increase in demand for statutory grants and contributions for Business Risk Management programs, under Sector Risk, mainly attributed to the AgriStability program;
  • An increase in support for the Dairy Farm Investment Program and the Dairy Processing Investment Fund;
  • The transfer of federal canal infrastructure to the Government of Saskatchewan; and
  • An increase in spending for the Advance Agricultural Discovery Science and Innovation Initiative resulting from the Budget 2017 commitment.

  Full-time equivalents (FTEs) – Actual compared to planned

  2018-19 actual FTEs was 27 more than planned (actual FTEs of 4,716 compared to planned FTEs of 4,689).

  • primarily due to full-time equivalents required to support research priorities, including the Advancing Agricultural Discovery Science and Innovation Initiative as announced in Budget 2017.

  The differences by Core Responsibility are:

  Core Responsibility	2018-19 Planned FTEs	2018-19 Actual FTEs	Difference (actual minus planned)	Explanation
  Domestic and International Markets	493	517	24	Realignment among programs
  Science and Innovation	2,600	2,633	33	Increase in FTEs (scientists) to support research priorities, including the Advancing Agricultural Discovery Science and Innovation Initiative (Budget 2017) and realignment among programs
  Sector risk	456	442	(14)	Realignment among programs
  Internal Services	1,140	1,124	(16)	Realignment among programs
  Total full-time equivalents	4,689	4,716	27

  FTEs – Actual compared to the previous year

  Actual FTEs have increased compared to the previous year.

  4,716 FTEs in 2018-19 compared to 4,673 FTEs in 2017-18 (increase of 43 FTEs or 1.0%).

  The increase was mainly due to:

  • staffing required to support research priorities, including the Advancing Agricultural Discovery Science and Innovation Initiative as announced in Budget 2017, as well as to support service delivery improvements and modernization of agriculture science and technology initiatives.

• Appointment of Canadian Dairy Commission’s former CEO to the board of Feihe Limited

  January 20, 2020

  Anticipated question:

  How does the government explain the appointment of the Canadian Dairy Commission’s former CEO to the board of the Chinese company Feihe Limited?

  1. This matter is the purview of the Conflict of Interest and Ethics Commissioner.
  2. Our independent Parliamentary officers play a key role to ensure transparency and accountability at the federal level, and to uphold the institutions Canadians rely on.
  3. Mr. Laforge left his position as CEO at the Canadian Dairy Commission in May 2018.
  4. Mr. Laforge waited over a year before accepting a position on the Board of Feihe Limited.

  Background

  On January 19, 2020, the Canadian Broadcast Company (CBC) Web site published an article indicating that the former CEO of the Canadian Dairy Commission (CDC), Mr. Jacques Laforge, has accepted a position of independent, non-executive director on the board of Feihe Limited; a Chinese company that is building a plant in Kingston, Ontario, to produce infant formula.

  Several people interviewed for the article indicate that in their opinion, the rules of ethics that apply to former public servants should be stricter.

  CDC Commissioners are recruited for their knowledge of the dairy industry, It is not exceptional for them to continue to work in this industry after their mandate, especially since they do not receive any benefits, notably a pension. Governor in council appointees, such as Mr. Laforge, are subject to the Conflict of Interest Act (Act). Concerning post-employment, the Act indicates that:

  Prohibitions after leaving office

  33 No former public office holder shall act in such a manner as to take improper advantage of his or her previous public office.

  Previously acting for Crown

  • 34 (1) No former public office holder shall act for or on behalf of any person or organization in connection with any specific proceeding, transaction, negotiation or case to which the Crown is a party and with respect to which the former public office holder had acted for, or provided advice to, the Crown

  Improper information

  • (2) No former public office holder shall give advice to his or her client, business associate or employer using information that was obtained in his or her capacity as a public office holder and is not available to the public.

  According to the Office of the Conflict of Interest and Ethics Commissioner, a “one-year cool-off period” does not apply to part-time governor in council appointees such as Mr. Laforge.

• 2019-20 Agriculture and Agri-food Canada's final supplementary estimates

  January 31, 2020

  Anticipated question:

  Agriculture and Agri-Food Canada's 2019-20 Final Supplementary Estimates total a net amount of $435.0 million. What is this funding for?

  First response

  1. Agriculture and Agri-Food Canada manages public funds responsibly to maximize the benefits for the agriculture and agri-food sector.
  2. Most of these funds will go to the Dairy Direct Payments Program for Dairy Farmers, the Canadian Agricultural Partnership and the Advance Payments Program; programs that make a real difference for farmers.
  3. In total, Agriculture and Agri-Food spending authorities to date are approximately $3 billion.

  Background

  The Final Supplementary Estimates of $435.0 million, when added to Agriculture and Agri-Food Canada (AAFC)'s 2019-20 Main Estimates of $2.5 billion, the 2018-19 Operating Budget Carry Forward of $26 million, the 2018-19 Capital Budget Carry Forward of $10.1 million, and other Treasury Board central adjustments of $13.8 million, bring AAFC's 2019-20 Authorities to Date to approximately $3.0 billion.

  AAFC's 2019-20 Final Supplementary Estimates of $435.0 million are made up of the following:

  Voted Appropriations - $65.3 million

  • $55.3 million for the Canadian Agricultural Partnership program
    These Supplementary Estimates include unspent funding from 2018-19 related to the Canadian Agricultural Partnership (CAP) Cost-Shared multilateral framework agreement totaling $55.3 million in Vote 10 Contributions. This amount is being carried forward into 2019-20 and is broken down as follows:
    • $33.0 million for contributions in support of provincial/territorial delivered cost-shared programs under the CAP;
    • $12.4 million for contributions in support of the AgriScience program under the CAP; and
    • $9.8 million for contributions in support of the AgriAssurance program under the CAP.
  • $5.6 million for the reinvestment of royalties from intellectual property
    AAFC is seeking access to $5.6 million in Vote 1 Operating in 2019-20 related to royalties and licenses from intellectual property collected and deposited into the Consolidated Revenue Fund in 2018-19. Royalties are collected for Science and Technology Branch, and are for numerous agricultural commodities that have been developed by scientists. These commodities range from grain & oilseeds to fruits to flowers.
  • $2.3 million for the reinvestment of revenues from sales and services related to research, facilities and equipment, and other revenue
    AAFC is seeking access to $2.3 million in Vote 1 Operating in 2019-20 from sales and services related to research, facilities and equipment, and other revenue earned in 2018-19 and deposited into the Consolidated Revenue Fund.
  • $1.9 million to support the Federal Infrastructure Initiative
    AAFC is requesting to reprofile the $1.9 million unspent funds from fiscal year 2018-19 related to the Federal Infrastructure Initiative. This amount is being carried forward into 2019-20 for the completion of the St-Hyacinthe Pilot Plant Refurbishment project.
  • $0.3 million for the reinvestment of revenues from the sale or transfer of real property
    AAFC is seeking access to $0.3 million in Vote 5 Capital in 2019-20 related to revenue from the 2018-19 sales of real properties as follows: the sale of Rosetown warehouse/lot and Watrous warehouse/lot in Saskatchewan.

  Statutory Appropriations - $366.4 million

  • $345.0 million in Statutory Grants to support Canada's supply managed dairy producers through the Dairy Direct Payment Program
    The Dairy Direct Payment Program provides payments in 2019-20 of $345 million to compensate cow's milk producers in proportion to their quota held. The one-year program ends on March 31, 2020.
  • $21.4 million in Statutory Contributions for the forecast increase in the Advance Payments Program under the Agricultural Marketing Programs Act (AMPA)
    The 2019-20 Main Estimates reflected an annual statutory contribution funding allocation for AMPA of $65.9 million. On June 3, 2019, the Government of Canada implemented the new regulations necessary to strengthen the Advance Payments Program (APP), as announced on May 1st, 2019. These changes provide farmers with more cash flow, providing them flexibility to manage their farm operations, adjust their marketing plans and explore new market opportunities. As a result of these changes, the forecasted statutory contribution amount for the APP program under AMPA increased by $21.4 million for 2019-20. The total statutory contribution for AMPA reflected as of the 2019-20 final Supplementary Estimates will be $87.3 million.

  Transfers — $3.3 million

  Transfers from Other Organizations

  • $2.6 million transfer from Department of Employment and Social Development for the Youth Employment and Skills Strategy
    AAFC is receiving $213 thousand in Vote 1 Operating and $2.4 million in Vote 10 Contributions in 2019-20 from Employment and Social Development (ESDC) to implement the modernized Youth Employment and Skills Strategy. This is a Budget 2018 and Budget 2019 initiative. This is a horizontal initiative involving ESDC and ten partner departments, agencies and Crown Corporations.
  • $1.2 million transfer from National Research Council of Canada for genomics research and development
    AAFC is receiving $1.2 million in Vote 1 Operating in 2019-20 from National Research Council of Canada for the delivery of the Genomics Research and Development Initiative shared priority projects “Antimicrobial Resistance” and “Metagenomics Based Ecosystem Biomonitoring”.
  • $0.7 million transfer from Department of Public Works and Government Services to implement and support cluster management offices as part of the Federal Sciences and Technology Infrastructure Initiative
    AAFC is receiving $738 thousand in Vote 1 Operating in 2019-20 from Public Works and Government Services for the provision of cluster management support in relation to the Laboratories Canada Initiative. AAFC's resources will contribute to clarifying the science vision, coordinating and providing business requirements in each functional area, informing the strategy for investments, disposing of assets and provide costing input.
  • $0.2 million transfer from Treasury Board Secretariat for innovative approaches to reduce greenhouse gas emissions in government operations
    AAFC is receiving $204 thousand in Vote 5 Capital in 2019-20 from the Treasury Board Secretariat to purchase two zero-emission plug-in electric farm tractors and install charging equipment in support of vineyard and orchard operations at Summerland Research and Development Centre in British Columbia and Kentville Research and Development Centre in Nova Scotia

  Internal Transfer

  • Internal reallocation from Vote 1 Operating to Vote 5 Capital - $10.0 million
    AAFC is seeking the authority to transfer $10 million from Vote 1 Operating to Vote 5 Capital in 2019-20 to address departmental infrastructure requirements. The increase in Vote 5 Capital funding would help address costs related to deferred maintenance, accessibility issues and the new real property greening of government targets.
  • Internal reallocation from Vote 10 Contributions to Vote 10 Grants - $3.2 million
    AAFC is seeking the authority to increase the Vote 10 Grants in support of the International Collaboration program by $3.2 million in 2019-20 to respond to additional program demands. This increase would be funded from existing Vote 10 Contributions and would have no impact on AAFC total authorities. This will bring the total authority for this grant to $4.0 million for 2019-20.

  Transfers to Other Organizations

  • $32 thousand transfer to Administrative Tribunals Support Service of Canada for the Canada Agricultural Review Tribunal
    AAFC is transferring $32 thousand out of Vote 1 Personnel in 2019-20 to Canada Agricultural Review Tribunal (CART) for the establishment of a temporary paralegal position at CART in an effort to reduce the backlog of cases pending before CART and further prepare CART for new requests for review of violations related to the Safe Food for Canadian Regulations.
  • $0.2 million transfer to Department of Foreign Affairs, Trade and Development to support the North American Platform Program Partnership
    AAFC is transferring $160 thousand out of Vote 1 Operating in 2019-20 to the Department of Foreign Affairs, Trade and Development to support the North American Platform Program (NAPP). NAPP is horizontal initiative of the Government of Canada that provides a coordinated and integrated approach to advancing Canadian interests and promoting international commerce in the United States and Mexico.
  • $0.3 million transfer to Department of the Environment to support greening growth in the agriculture and agri-food sector
    AAFC is transferring $250 thousand out of Vote 1 Operating in 2019-20 to the Department of the Environment to conduct research that will explore how non-regulatory policy instruments such as nudges and other behavioural economics instruments could be developed and used in the Canadian context to better enable the Agriculture and Agri-Food sector to help meet Canada's climate commitments under the Paris Accord and the Pan-Canadian framework on Clean Growth and Climate Change.
  • $0.3 million transfer to Treasury Board Secretariat to support the Government of Canada Financial and Material Management Solution Project
    The Comptroller General is seeking voluntary departmental contributions to support the development of the SAP S4/HANA that will address the initial challenges faced by the 18 departments and agencies using FreeBalance, which is at a high risk of critical failure, and build a future platform for additional departments. AAFC is contributing $260 thousand through the 2019-20 Supplementary Estimates as support ($100 thousand had already been transferred in 2019-20 through the Main Estimates).
  • $0.7 million transfer to Department of Foreign Affairs, Trade and Development to support departmental staff located at missions abroad
    AAFC is transferring $699 thousand out of Vote 1 Operating in 2019-20 to the Department of Foreign Affairs, Trade and Development as an adjustment of funding previously provided to support departmental staff located at missions abroad. This transfer reflects a reclassification of a position in Brussels (Belgium) and the creation of positions in Seoul (South Korea), Manila (Philippines), Guadalajara (Mexico), Hanoi (Vietnam), Berlin (Germany) and New Delhi (India)

  Additional Background Information:

  Frozen Allotments in Voted Authorities – ($17.5) million

  The Final Supplementary Estimates also include an annex on Frozen Allotments in Voted Authorities, for information purposes. Frozen Allotments are amounts intended to lapse at year end. AAFC’s frozen allotment is $17.5 million funding withheld related to the Budget Measure vote “A Food Policy for Canada”.

• Brexit and impact on Canada's agriculture and agri-food sector

  February 5, 2020

  Anticipated question:

  In light of the United Kingdom’s departure from the European Union, what is the anticipated impact on the Canadian agriculture and agri-food sector?

  First response

  1. The United Kingdom officially departed the European Union on January 31, 2020. As part of its Withdrawal Agreement, the United Kingdom will be treated as a Member State of the European Union during a transition period lasting until December 31, 2020.
  2. Canada consented to the United Kingdom continuing its participation in CETA and all other agreements between Canada and the European Union during the transition period.
  3. CETA will continue to apply to Canadian agriculture trade with the United Kingdom until the Withdrawal Agreement’s transition period ends.

  Responsive regarding the status of future canada-united kingdom trade relations?

  1. Canada remains committed to seeking continuity, predictability, and stability in our trade with the United Kingdom.
  2. Any future trade arrangement between Canada and the United Kingdom will be influenced by other Canadian trade agreements in place with Europe, as well as the United Kingdom’s own policies.
  3. The United Kingdom remains an important market for Canadian agriculture. The Government will work very hard to establish a long-term trade agreement with the United Kingdom Government.

  Background

  The United Kingdom (UK) is an important trading partner for Canada, with deep historical ties, common values and well-established commercial relations. The Canada-UK trade relationship is important for the Canadian agriculture and agri-food sector. Canadian agriculture stakeholders wish to maintain Canada's current trading relationship with the UK post-Brexit.

  On January 29, 2020, the Withdrawal Agreement treaty ratification was completed in both the UK and the European Union (EU), with the UK leaving the European Union effective on January 31, 2020. The Withdrawal Agreement includes a provision for a “transition period” until December 31, 2020. During the transition period, the UK will be treated as a Member State of the EU, though without the ability to participate in EU decision-making. Canada has consented to the UK continuing its participation in the Canada-EU Comprehensive Economic and Trade Agreement (CETA), and all other Canada-EU agreements, during the transition period.

  The transition period is set to conclude on December 31, 2020, unless extended by mutual consent of the EU and UK. Upon the termination of the transition period, the UK will no longer be bound by the EU's treaties, including CETA.

  Canadian officials remain engaged with their British counterparts on possible next steps. Any future trade arrangement between Canada and the UK would be influenced by the UK-EU trade relationship, as well as any unilateral UK approaches.

  Canada's agriculture, agri-food and seafood products exports to the UK valued $552.3 million in 2019. The same year, Canada's imports of these same products from the UK valued $636.0 million

• Trespassing on farms

  February 17, 2020

  Anticipated question

  What is the Government doing to protect farmers from activists who trespass on farms?

  First response

  1. Trespassing and disruption of farm operations is stressful for farmers and their families. Such actions create biosafety risks, disrupts the livelihood of producers and threaten the health of animals.
  2. A number of provincial governments have adopted measures to prevent trespassing as it falls under their jurisdiction.
  3. I will continue to work with my provincial and territorial counterparts to ensure producers can feel safe on their farms and ranches.

  Background

  Provincial governments have the legal authority to pass legislation concerning trespass on private land. Agriculture and Agri-Food Canada does not have the authority or mandate concerning trespassing on farms.

  In 2019, a number of animal rights advocates held protests that trespassed on private farms, disrupted farm operations and, in some cases, allegedly damaged buildings or equipment. Examples include:

  • On March 9, 2019, about 15 animal rights advocates live-streamed their protest and trespass into a barn in West Montrose, Ontario to protest dairy farming;
  • On April 28, 2019, approximately 200 animal rights advocates held a protest at the Excelsior Hog Farm in Abbotsford, British Colombia. About 50 advocates broke into the hog barn and live-streamed video of the interior until police escorted them out. Their stated goals were to both bring to light conditions of the animals, and ultimately to end the animal agriculture industry;
  • On September 2, 2019, approximately 60 animal rights advocates staged a “liberation lockdown” at a turkey farm near Nobleford, Alberta. Their goal was to protest what they claimed was the inhumane treatment of animals.

  Stakeholders from the agricultural sector, farmers, ranchers, processing plants, truckers and others, have raised several concerns regarding increased this activism:

  • The safety of farmers and their families, who usually live on the farm. Similarly, farm families have faced intimidation and verbal abuse both in person and online;
  • The biosecurity and animal welfare on farms, as well as for animals being transported or at processing plants. For example, Alberta Pork has spoken publically about the threat to the health and safety of the animals posed by trespassers;
  • The need for provinces to increase rural policing, and to strengthen and enforce trespass laws.

  These and other acts of trespass have motivated some provinces to take some form of action. In 2019, British Columbia amended its provincial Trespass Act to explicitly include buildings and structures used to shelter livestock. A Private Member's Bill was also introduced in October 2019 to stipulate fines for trespassing on establishments where food is stored or is handled. Alberta introduced legislation in 2019 to increase the penalties for trespass. In addition, new regulations were introduced under the existing authorities of Alberta's Animal Health Act to protect animals from the introduction of potential disease, and stress associated with breeches of biosafety protocols. In late 2019 the province of Ontario introduced new legislation that would increase fines for trespassing up to a maximum of $15,000 for a first offence, and $25,000 for a second offence as well as possible jail time of up to six months.

  Other provincial governments are closely monitoring concerns about trespass. For example, the province of Québec has created a working group to examine the issue of trespassing and incidents on farm.

  At this time, there has been no direction to suggest any changes will be made in Saskatchewan to trespass legislation to specifically address the concerns of on-farm activism, though trespass in general is a concern in Saskatchewan and Manitoba due to concerns about rural crime. As reported by Statistics Canada in 2018, crime rates in rural areas in Canada are much higher than in urban areas. There is increasing pressure from industry to revisit existing regulations under Manitoba's Petty Trespasses Act.

• Perishable Agricultural Commodity Act - Financial protections for Canadian produce sellers

  February 14, 2020

  Anticipated question

  What will the Government do to ensure that Canadian sellers of fruits vegetables are financially protected against non-payment?

  First response

  1. The Government is committed to the financial viability of Canada’s fruit and vegetable industry.
  2. Our system provides for a single dispute resolution body to resolve the majority of non-payment incidents faced by fresh produce sellers.
  3. We will continue to engage with industry to find a mutually acceptable solution.

  Responsive regarding the implementation of a regime similar to the USA for canadian fresh produce sellers

  1. Canadian fresh produce sellers continue to have access to the United States market and to their dispute resolution mechanism.
  2. The majority of non-payment situations brought before the Perishable Agricultural Commodity Act are resolved at the informal dispute resolution stage.
  3. Under our Safe Food for Canadians regulations, we have a dispute resolution corporation that can levy strict penalties against partial or absence of payment.

  Background

  The fresh produce industry asserts that the perishable nature of their product exposes it to higher risks of payment defaults than other industries as the short time frame for fresh sales limits the potential pool of buyers and reduces their ability to rely on due diligence and standard commercial financial risk mitigation practices.

  The Canadian and United States industries want Canada to implement a regime similar to the United States Perishable Agricultural Commodity Act (PACA), a broad regulatory regime for the produce industry that includes licensing, inspection services and dispute mediation for payment issues by solvent buyers. In the case of bankruptcy, PACA also includes a legislated deemed trust, which requires that a buyer's property be held in trust to secure payment of any amount owed to a seller for fresh produce sales, ahead of all other creditors (including secured creditors such as banks).

  In Canada, the Department of Innovation, Science and Economic Development (ISED) has the mandate for bankruptcy and insolvency. In 2014, ISED undertook a statutory review of the Bankruptcy and Insolvency Act (BIA). This included public consultations on whether to expand protections in the Act that give Canadian farmers a super-priority, whereby debts owed to them from insolvent buyers are paid ahead of all others except secured creditors. Due to potential negative effects on credit cost and availability, stakeholders outside of the fresh produce industry were not supportive of enhanced provisions.

  On June 1, 2016, the fresh produce industry appeared before the House of Commons Standing Committee on Agriculture and Agri-Food (AGRI). Industry representatives presented a draft payment protection legislative regime for fresh fruit and vegetable sellers (the fresh fruit and vegetable model law). In a letter dated January 9, 2018, the Ministers of ISED and Agriculture and Agri-Food, after due consideration and analysis, sent a joint response to Member of Parliament Pat Finnigan, the Chair of AGRI. The response explained that the frequency of insolvency in the fresh produce industry does not warrant the creation of a legislated deemed trust, an extraordinary remedy that could have a significant effect on credit cost and availability.

  Canada has taken several steps to achieve comparability with outcomes under PACA. For instance, under the Safe Food for Canadians Regulations, which came into force on January 15, 2019, the Fruit and Vegetable Dispute Resolution Corporation (DRC) is permitted to act on behalf of the Minister of Agriculture and Agri-Food as the single dispute resolution body and ensure the adherence of fresh fruit and vegetable buyers to a unified set of trading rules. The DRC also governs against slow, partial or no pay by buyers, with strict penalties for buyer non-payment. The DRC is expected to resolve the majority of non-payment issues in Canada, and will achieve comparable results to that of the U.S. in terms of non-payment from solvent buyers. Since 2014, the average annual number of formal complaints filed was 17 with an average claim amount of about $40,000. The average annual number of informal complaints was 43 with an average claim amount of about $50,000. The highest number of total complaints filed was in 2017, with 55 informal complaints, and 15 formal complaints filed. The lowest amount of complaints filed was in 2018 at 49 (33 informal and 16 formal).

  Both Agriculture and Agri-Food Canada and ISED continue to engage with the Canadian Produce Marketing Association (CPMA), the Canadian Horticultural Council (CHC) and the DRC on this issue. Most recently, at a meeting on September 13, 2019, AAFC officials met with the CPMA, CHC and DRC and other industry leaders to re-iterate the policy implications the creation of a deemed trust would have on the BIA and ensure that the Canadian fresh produce industry understood that any future policy consideration would require compelling and significant evidence of significant harm. This has not yet been fully demonstrated by the Canadian fresh produce industry.

• Grain transportation

  February 17, 2020

  Anticipated question

  What is the Government doing to address the serious problems in grain transportation which have arisen because of the blockades?

  Response

  1. The Government fully understands the importance of an efficient and responsive transportation system for our grain farmers.
  2. Farmers expect a reliable transportation system that can get their products to market safely and in a timely manner.
  3. Re-storing rail service to the Port of Prince Rupert has been a positive development, given the critical role of the Port to our agriculture sector.
  4. I will continue to support my colleagues, the ministers of Indigenous Services, Crown-Indigenous Relations and Transport, as we work towards a resolution.

  Anticipated question

  What is the Government doing to ensure efficient grain movement in Western Canada?

  Supplementary response

  1. The Government continues to support rail and road infrastructure projects that will help address bottlenecks in the Western grain corridor.
  2. The National Trade Corridors Fund is providing $2 billion over 11 years to strengthen Canadian trade infrastructure, including ports, waterways, roads, bridges, and rail networks.
  3. I will continue to work with my colleague, the Minister of Transport, to closely monitor and improve grain supply chain performance.

  Background

  Blockades

  Since February 8, 2020, protests have been taking place at various locations across Canada, which have blocked major rail transportation routes. Major blockades have occurred at New Hazelton in northern B.C., Tyendinaga/Marysville, Ontario (near Belleville), and Kahnawake, south of Montréal. Protests have also affected some activity at the Ports of Vancouver and Halifax.

  As a result of the blockades, Canadian National (CN) Railway announced it had to temporarily discontinue service in key corridors. Service on Canadian Pacific (CP) Railway has also been affected, although to a lesser extent. VIA Rail passenger rail service has also been disrupted.

  As of February 17, 2020, blockades remained at Tyendinaga/Marysville, Ontario, and Kahnawake, Quebec. CN's operations east of Belleville, Ontario, remain shut down. The blockade at New Hazelton, B.C., was removed on February 14, 2020, restoring CN's access to the Port of Prince Rupert.

  Railway Safety Act Ministerial Order on Rail Traffic

  On February 6, 2020, a Canadian Pacific train carrying petroleum crude oil derailed near Guernsey, Saskatchewan. The Minister of Transport subsequently issued a Ministerial Order under the Railway Safety Act, requiring the immediate slowdown of trains carrying large quantities of dangerous goods. Since then, Transport Canada officials have worked with large railway companies to further assess the causes of recent derailments, and to develop a plan to address the areas of greatest concern. As a result of this work, an amended Order was issued on February 16, 2020, which takes a more targeted, risk-based approach which requires reduced speed limits for higher risk key trains traveling through areas of greatest concern. The Order will remain in place until April 1, 2020.

  CN has stated that the revised Order will allow its operations to recover more efficiently from the blockades. CN had asserted that the consequence of the previous Order was a reduction in at least a third of CN's overall network capacity for all trains, even those not carrying dangerous goods.

  Grain Supply Chain Status

  The 2019-2020 Western Canadian crop is estimated to be 75.1 million Metric Tonnes (MT), which is up 4.9 per cent from 2018 and 2.5 per cent below the record 2013 harvest of 77 MT. The federal government's Grain Monitor estimates carry-forward stock to be 9.8 MT, resulting in an estimated supply of 80.9 MT for the 2019 Western Canadian grain crop.

  The protest blockades have significantly worsened rail service at this time when the rail system was already experiencing strain caused by a combination of factors, including: the lingering effects of the November 2019 CN labour strike, several line outages in British Columbia in the past month caused by poor weather, and heavy rainfall along the west coast, which can slow vessel loading.

  At this time of year, Vancouver (the largest) and Prince Rupert are the two major ports available for the export of western Canadian grain. The other major port at Thunder Bay, Ontario, is closed due to winter ice, and will re-open in the spring.

  As of February 17, 2020, there are significant vessel line-ups at the Ports of Vancouver and Prince Rupert, which is an indication of rail system deterioration. As at February 14, 2020, the grain terminal at the Port of Prince Rupert had effectively run out of inventory due to the rail blockade at New Hazelton, B.C. Since removal of the blockade on February 14, 2020, CN is now in the process of resuming rail service to Prince Rupert, including the delivery of grain.

  Infrastructure – National Trade Corridors Fund (NTCF)

  Budget 2017 announced the Trade and Transportation Corridors initiative, which includes $2 billion over 11 years for the NTCF to invest in trade and transportation projects to build stronger, more efficient trade corridors. Commitments to date include over $300 million for several infrastructure projects in and around Vancouver, specifically targeting improvements to the port and rail infrastructure aimed at reducing congestion and improving fluidity in the port area. An additional $153 million in investments has also been announced for several infrastructure improvements to the Port of Prince Rupert and surrounding area.

• 2020-21 Main Estimates

  February 18,2020

  Anticipated question

  Agriculture and Agri-Food Canada’s 2020-21 Main Estimates are $2.539 billion. What is that funding for?

  First response

  1. This funding will help the sector take advantage of market opportunities, strengthen its competitive edge, address business risk, and support sustainable growth.
  2. Agriculture and Agri-Food Canada’s 2020-21 Main Estimates reflect the third year of the Canadian Agricultural Partnership, a federal–provincial-territorial $3 billion investment that will drive growth in the sector.
  3. Agriculture and Agri-Food Canada’s Main Estimates also reflect $19 million for the Food Policy for Canada and an additional $24 million for the Advance Payments Program.

  Anticipated question

  Why is there a decrease compared to last year’s Estimates to Date

  First response

  1. The decrease ($395.4 million) in the 2020-21 Main Estimates is mostly related to the 2019-20 Dairy Direct Payment Program.
  2. The Main Estimates reflect approved budget and resource allocation decisions at the start of the fiscal year. Every year, it is normal for additional spending to be authorized later in the year through Supplementary Estimates.

  Background

  A summary of Agriculture and Agri-Food's (AAFC) 2020-21 Main Estimates, 2019-20 Estimates to Date and 2019-20 Main Estimates follows:

  Summary of AAFC's 2020-21 Main Estimates
  ($ millions)

  	2019-20 Main Estimates	2019-20 Estimates to Date(1)	2020-21 Main Estimates
  Vote 1 - Operating (net of Vote Netted Revenue) (2)	571,6	570,2	593,8
  Vote 5 - Capital (3)	40,5	52,9	39,9
  Vote 10 - Grants and Contributions
  CAP
  Provincial & Territorial Delivered Cost-Shared programs under CAP	206.5	239.5	206.5
  AgriScience program	36.8	49.2	40.8
  AgriInnovate program	21.7	21.7	21.7
  AgriMarketing program	20.3	20.3	20.3
  AgriAssurance program	12.3	19.7	12.3
  AgriRisk Initiatives program	11.0	11.0	11.0
  AgriCompetitiveness program	3.1	3.1	3.1
  AgriDiversity program	1.0	1.0	1.0
  Other
  Dairy Farm Investment Program & Dairy Processing Investment Fund	77.6	77.6	72.6
  Food Policy Initiatives-	-	-	11.0
  Canadian Agricultural Strategic Priorities program (CASPP)	8.6	8.6	9.1
  Agricultural Clean Technology program	7.5	7.5	9.0
  Agricultural Greenhouse Gases program (AGGP)	5.4	5.4	5.4
  Living Laboratories	2.5	2.5	2.5
  Food Waste Reduction Challenge	-	-	2.0
  International Collaboration program	0.9	4.0	1.6
  Innovative Solutions Canada program	3.0	3.0	1.0
  Employment and Skills Strategy	0.9	3.2	0.9
  General Vote 10 for Central Vote allocation purposes	-	(0.8)	-
  Total Vote 10 Grants and Contributions (4)	419.0	476.6	431.7
  Items Voted in prior Estimates (5)	19.0	19.0	-
  Total Voted	1,050.1	1,118.7	1,065.5
  Statutory Grants and Contributions
  AgriInsurance program	623.0	623.0	623.0
  AgriStability program	424.2	424.2	424.2
  AgriInvest program	139.5	139.5	139.5
  AgriRecovery program	118.5	118.5	118.5
  Agricultural Marketing Programs Act (AMPA)	65.9	87.3	90.3
  Canadian Agricultural Loans Act (CALA)	13.1	13.1	13.1
  Grant to agencies established under the Farm Products Agencies Act	0.1	0.1	0.1
  Dairy Direct Payment Program	-	345.0	-
  Total Statutory Grants and Contributions	1,384.2	1,750.6	1,408.6
  Other Statutory (Employee Benefit Plan / Minister's Car Allowance / CPMA)	65.5	65.5	65.3
  Total Statutory (6)	1,449.8	1,816.2	1,473.9
  Total Estimates	2,499.9	2,934.9	2,539.4
  Difference between the 2020-21 Main Estimates and the 2019-20 Estimates to Date	($395,4M)
  Difference between the 2020-21 Main Estimates and the 2019-20 Main Estimates	$39.5M
  Notes: Due to rounding, figures may not add to totals shown. (1) The "2019-20 Estimates to Date" reflect the 2019-20 Main Estimates and adjustments made in the 2019-20 Supplementary Estimates (B). (2) The Department's Vote 1 Operating in the 2020-21 Main Estimates is $593.8 million, an increase of $22.2 million in comparison to the 2019-20 Main Estimates of $571.6 million. This increase is mainly due to: Funding for collective bargaining obligations; Food Policy for Canada; Increase in funding for the Advancing Agricultural Discovery Science and Innovation Initiative; Funding for CAP AgriScience was reprofiled from 2022-23 to 2020-21; and Increase in support for Canadian agricultural exporters and international standard setting bodies. Partially offset by funding transferred to Shared Service Canada to modernize and enhance the Government's digital services. Compared to the 2019–20 Estimates to Date, the Vote 1 Operating in the 2020-21 Main Estimates is $23.6 million higher. This is mainly due to the above mentioned items in addition to: Increase as AAFC had transferred funding from Vote 1 Operating to Vote 5 Capital in 2019-20 Supplementary Estimates; Partially offset because 2019-20 Supplementary Estimates included a reinvestment of royalties and other revenues generated in 2018-19. (3) The Department's Vote 5 Capital in the 2020-21 Main Estimates is $39.9 million, a minimal $0.6 million decrease in comparison to the 2019-20 Main Estimates of $40.5 million. Compared to the 2019-20 Estimates to Date, the Vote 5 Capital in the 2020-21 Main Estimates is $13.0 million lower. This decrease is mainly due to: Decrease as AAFC had transferred funding from Vote 1 Operating to Vote 5 Capital in 2019-20 Supplementary Estimates; 2019-20 Supplementary Estimates included Federal Infrastructure Initiative funding carried forward from 2018-19. (4) The Department's Vote 10 Grants and Contributions in the 2020-21 Main Estimates is $431.7 million, an increase of $12.7 million in comparison to the 2019-20 Main Estimates of $419 million. This is primarily due to: Food Policy Initiatives (including Food Waste Reduction Challenge); Funding for CAP AgriScience was reprofiled from 2022-23 to 2020-21; Increase in support for Canadian agricultural exporters and international standard setting bodies; Partially offset by a decrease in funding for Investments in the Dairy Sector. Compared to the 2019-20 Estimates to Date, the Vote 10 Grants and Contributions in the 2020-21 Main Estimates are $44.9 million lower. This decrease is primarily due, in addition to the reasons above, to: 2019-20 Supplementary Estimates included CAP Cost-shared funding carried forward from 2018-19; 2019-20 Supplementary Estimates included Youth Employment and Skills Strategy funding transferred from Employment and Social Development. (5) Compared to the 2019-20 Main Estimates and Estimates to Date, there is a decrease of $19 million in the temporary Budget implementation Vote (a Food Policy for Canada) created in 2019-20. In the 2020-21 Main Estimates, the funding for the Food Policy Initiatives has been realigned to the appropriate votes (Vote 1 Operating, Vote 10 Grants and Contributions and Other statutory). (6) The statutory forecast in the 2020-21 Main Estimates is $1.474 billion, an increase of $24.2 million in comparison to the 2019-20 Main Estimates of $1.450 billion. This is mainly due to an increase in statutory Contributions for the Advance Payments Program under the Agricultural Marketing Programs Act (AMPA),as a result of regulations changes that increased loan limits for all producers on a permanent basis and increased the interest-free portion of loans on advances for canola producers in the 2019 program year. Compared to the 2019-20 Estimates to Date, the Statutory forecast in the 2020-21 Main Estimates is $342.2 million lower. This decrease is primarily due to : The Dairy Direct Payment program being currently approved for 2019-20 only.

  A summary of Agriculture and Agri-Food’s (AAFC) 2020-21 Main Estimates, and 2019-20 Main Estimates by Core Responsibility follows:

  ($ millions)

  Core Responsibility	2019-20 Main Estimates	2020-21 Main Estimates	Variance	Explanation of the Variance
  Domestic and International Markets	236.4	252.3	15.9	Food Policy for Canada (Budget 2019), Collective bargaining obligations, Increase in support for Canadian agricultural exporters and Canada's engagement with international standard setting bodies. Offset primarily by: Decrease in funding for Investments in the Dairy Sector, Transfer to Global Affairs for missions abroad and the North American Platform Program.
  Science and Innovation	587.1	601.8	14.7	Collective bargaining obligations, CAP AgriScience (reprofiled funding from 2022-23 to 2020-21), Increase for the Agricultural Discovery Science & Innovation Program.
  Sector Risk	1,506.7	1,531.6	24.9	Increase for Advance Payments Program under the Agricultural Marketing Programs Act (AMPA), as a result of regulation changes, including for canola producers.
  Internal Services	150.7	153.6	3.0	Collective bargaining obligations.
  Funds not allocated to the 2020-21 Departmental Results Framework	19.0	-	(19.0)	Decrease in the temporary Budget Implementation Vote (a Food Policy for Canada) created in 2019-20. In 2020-21, Food Policy is under Domestic and International Markets.
  Total	2,499.9	2,539.4	39.5

• Departmental Plan 2020-21

  February 18, 2020

  Anticipated question

  The Departmental Plan for Agriculture and Agri-Food Canada informs Canadians and Parliamentarians of the performance expectations and planned budgetary spending in 2020-21 and beyond. How will Agriculture and Agri-Food Canada demonstrate results against its planned spending?

  First response

  1. The Government is committed to supporting the agricultural and agri-food industry to ensure it remains a leader in economic growth, job creation and innovation in Canada.
  2. From scientific innovations to trade missions to supporting farmers in need, Agriculture and Agri-Food Canada is proud to share its plans with Canadians.

  Supplemental Response

  1. The Departmental Plan for 2020-21 outlines performance expectations for the next three fiscal years, with a focus on 2020-21.

  Responsive regarding spending trends

  1. The decrease ($395.4 million) in the 2020-21 Main Estimates is mostly related to the 2019-20 Dairy Direct Payment Program.
  2. The Government is committed to supporting Canada’s supply managed sectors. Consultations continue with stakeholders on the funding allocated in Budget 2019, including the commitment to make available $1.75 billion over eight years for Canada’s dairy farmers.

  Background

  The 2020-21 Departmental Plan outlines plans and performance expectations over the next three fiscal years under each Core Responsibility (Domestic and International Markets, Science and Innovation, and Sector Risk) of Agriculture and Agri-Food Canada's Departmental Results Framework. Details on the Department's spending and human resources trends are described below.

  The 2020-21 Departmental Plan reports that the Agriculture and Agri-Food Canada spending and human resources trends are as follows:

  Spending Trend ($ millions)

  2017-18 Expenditures	2018-20 Expenditures	2019-20 Forecast Spending	2020-20 Planned Spending	2021-22 Planned Spending	2022-23 Planned Spending
  1,984.9	2,157.9	2,984.8	2,539.4	2,516.6	2,447.6

  Human Resources Trend

  2017-18 Actual FTEs	2018-19 Actual FTEs	2019-20 Forecast FTEs	2020-21 Planned FTEs	2021-22 Planned FTEs	2022-23 Planned FTEs
  4,673	4,716	4,828	4,837	4,820	4,780

  Spending Trend Explanation

  Over the period 2017-18 to 2022-23, spending varies from a low of $2.0 billion in 2017-18 to a high of $3.0 billion forecasted for 2019-20.

  Actual spending in 2018-19 was higher as it reflected:

  • Increased demand for Business Risk Management programs, mainly for the AgriStability Program;
  • Increase in Dairy Investment Programs;
  • The transfer of federal canal infrastructure to the Government of Saskatchewan; and
  • Spending on the Advance Agricultural Discovery Science and Innovation Initiative, a Budget 2017 commitment.

  Forecast spending in 2019-20 is higher as it reflects:

  • Support for the new Dairy Direct Payment Program;
  • Full authority for Business Risk Management programs and Canadian Agricultural Partnership (CAP) programs – actual spending will vary;
  • 2019-20 included funding carried forward from 2018-19 for:
    • CAP cost-shared programs
    • Operating and Capital Budget carry forwards
    • Reinvestment of royalties and other revenues;
  • Increase for the Advance Payment Program under the Agricultural Marketing Programs Act as a result of regulation changes, including for canola producers; and
  • Support for the Food Policy for Canada, as announced in Budget 2019.

  Planned spending in 2020-21 is lower as it reflects:

  • That the Dairy Direct Payment Program is currently approved for 2019-20 only. The Government of Canada has committed an additional $1.405 billion in funds in compensation for dairy farmers. Details on future years of funding are still being determined;
  • 2019-20 included funding carried forward from 2018-19 for:
    • CAP cost-shared programs
    • Operating and Capital Budget carry forwards
    • Reinvestment of royalties and other revenues;
  • Decrease in funding for Dairy Investment Programs;
  • Partially offset by an increase for the Advance Payment Program under the Agricultural Marketing Programs Act; and
  • Increase for the Advance Agricultural Discovery Science and Innovation Initiative.

  Planned spending in 2021-22 is lower as it reflects:

  • The expiry of the Dairy Processing Investment Fund;
  • The expiry of the Agricultural Clean Technology Program; and
  • Partially offset by an increase for the Advance Payment Program under the Agricultural Marketing Programs Act.

  Planned spending in 2022-23 is lower as it reflects:

  • The expiry of the Dairy Farm Investment Program;
  • A decrease in funding for the Advance Agricultural Discovery Science and Innovation Initiative;
  • Funding for CAP AgriScience was reprofiled to earlier years; and
  • Partially offset by an increase for the Advance Payment Program under the Agricultural Marketing Programs Act.

  Human Resources Trend

  The increase in full-time equivalents in 2018–19 and beyond is due to staffing required to support research priorities, including the Advancing Agricultural Discovery Science and Innovation Initiative as announced in Budget 2017, to support service delivery improvements and modernization of agriculture science and technology initiatives, and the Food Policy for Canada, as announced in Budget 2019.

  The decreases in planned full-time equivalents starting in 2021-22 are due to expiry of the Dairy Processing Investment Fund and the Agricultural Clean Technology program at the end of 2020-21, and the Dairy Farm Investment Program at the end of 2021-22.

  Variances by Core Responsibility

  Core Responsibility: Domestic and International Markets

  Fiscal Year	$ millions	Variance	Explanation
  2017-18 Expenditures	187.5	93.2	Increase in Dairy Investment programs Transfer of federal canal infrastructure to the Government of Saskatchewan
  2018-19 Expenditures	280.7
  2019-20 Forecast Spending	625.8	345.1	Dairy Direct Payment Program Food Policy for Canada as announced in Budget 2019
  2020-21 Planned Spending	252.3	(373.4)	Expired Dairy Direct Payment Program 2019-20 included Canadian Agricultural Partnership cost-shared reprofile Decrease in funding for Dairy Investment Program
  2021-22 Planned Spending	228.2	(24.2)	Expiration of the Dairy Processing Investment Fund
  2022-23 Planned Spending	182.4	(45.8)	Expiry of Dairy Farm Investment programs

  Core Responsibility: Science and Innovation

  Fiscal Year	$ millions	Variance	Explanation
  2017-18 Expenditures	605.9	(45.1)	First year of the Canadian Agricultural Partnership and ramping up of programs
  2018-19 Expenditures	560,8
  2019-20 Forecast Spending	636.5	75.7	2019-20 reflects full authority for CAP programs - actual spending will vary 2019-20 included funding carried forward from 2018-19 for: CAP Cost-shared Capital Budget Carry forward reinvestment of royalties and other revenues
  2020-21 Planned Spending	601.8	(34.7)	2019-20 included funding carrierd forward from 2018-19 for: CAP Cost-shared Capital Budget Carry forward reinvestment of royalties and other revenues 2020-21 has increase for the Advance Agricultural Discovery Science and Innovation Initiative
  2021-22 Planned Spending	589.0	(12.8)	Expiry of the Agricultural Clean Technology Program
  2022-23 Planned Spending	562.7	(26.2)	Decrease in funding for the Advance Agricultural Discovery Science and Innovation Initiative Funding for CAP AgriScience was reprofiled to earlier years

  Core Responsibility: Sector Risk

  Fiscal Year	$ millions	Variance	Explanation
  2017-18 Expenditures	1,020.6	125.0	Increased demand for Business Risk Management programs, mainly for the AgriStability Program
  2018-19 Expenditures	1,145.6
  2019-20 Forecast Spending	1,542.8	397.2	2019-20 included funding carried forward for CAP Cost-shared 2019-20 and future years reflect the full BRM statutory grants and contributions authority; actual spending will be according to demand 2019-20 and future years reflect an increase for the Advance payment Program under the Agricultural Marketing Programs Act.
  2020-21 Planned Spending	1,531.6	(11,2)
  2021-22 Planned Spending	1,546.2	14.6
  2022-23 Planned Spending	1,550.5	4.2

  Internal Services

  Fiscal Year	$ millions	Variance	Explanation
  2017-18 Expenditures	170,9	(0,1)
  2018-19 Expenditures	170,8
  2019-20 Forecast Spending	179,7	8,8	Included funding carried forward from 2018-19 to 2019-20, such as Operating Budget Carry Forward
  2020-21 Planned Spending	153,6	(26,0)	2019-20 included funding carried forward from 2018-19 to 2019-20, such as Operating Budget Carry Forward
  2021-22 Planned Spending	153,3	(0,4)
  2022-23 Planned Spending	152,0	(1,3)

• Impact of covid-19 on the agricultural sector

  March 9, 2020

  Anticipated question

  What is the impact of the spread of the COVID-19 on Canada’s agriculture and agri-food sector?

  First response

  1. The Government of Canada is carefully monitoring the impacts of the potential spread of COVID-19.
  2. We are engaged with producers and processors, provinces, territories, and other stakeholders to understand what effects COVID-19 could have on the agricultural sector.

  Responsive on whether Agriculture and Agri-Food Canada has an exact financial figure for the impact of the COVID-19 on the sector

  1. Agriculture and Agri-Food Canada is gathering data on the impact the virus has on the sector.

  Background

  The outbreak of COVID-19 was first detected in Wuhan City, Hubei Province, China. The Chinese government has taken extraordinary measures to control the spread of the virus, including quarantining entire cities, closing highways, and requesting that residents stay home. China also extended its Lunar New Year holidays to allow people to stay home.

  The overall economic impact of coronavirus on China is expected to be more significant than the impact of Severe Acute Respiratory Syndrome (SARS) since the COVID-19 is more contagious than SARS and the Chinese Government has implemented much more significant quarantining measures.

  The effects on Canada's agriculture and agri-food sector will depend largely on the spread and severity of COVID-19. As scenarios range from containment in the short-term to transmission on a global scale in the long-term, more data and information will be required before Agriculture and Agri-Food Canada (AAFC) can sufficiently assess and estimate the impacts of COVID-19 on the sector. Currently, AAFC is collecting information from a wide variety of sources, including news media and information services, industry stakeholders and contacts, and federal, provincial, and territorial governments.

  The Public Health Agency of Canada is closely monitoring this emerging and rapidly evolving situation. As of March 8, 2020, 62 cases of COVID-19 have been confirmed in Canada. In addition, the Government of Quebec reported their third case of COVID-19 and the Government of Alberta reported their first case of COVID-19. The provinces have sent their presumptive positive samples to the National Microbiology Laboratory for further testing.

• Advance Payments Programs

  Updated April 7, 2020

  Anticipated question

  Producers have had a difficult harvest and are grappling with trade and domestic issues. How can the Advance Payments Program assist producers?

  First response

  1. The Advance Payments Program is a federal loan guarantee program which helps provide agricultural producers with easy access to low-interest cash advances.
  2. The Government made rapid changes in 2019 to the APP to help producers manage cash flow by increasing the loan limit from $400,000 to $1 million.
  3. As of March 31, 2020, the APP has issued over $3 billion in advances for 2019, an increase of $700 million over the previous year.
  4. On March 23, 2020, in response to COVID-19 and the requests from nine APP administrators, the Government announced several Stays of Default.
  5. A six month Stay of Default was granted on 2018 advances grain, oilseed, pulse, cattle and bison productions, with a new repayment deadline of September 30, 2020. Also, a six month Stay of Default on 2019 advances was granted on flowers and potted plants, with a new repayment deadline of October 31, 2020.
  6. As of April 1, 2020, producers were able to access 2020 advances, including the $100,000 interest-free to address cash flow concerns.
  7. If an APP administrator makes the request, the Government can implement another stay of default if producers are facing significant challenges repaying their advances.

  Responsive on March 31 APP repayment deadline

  1. Approximately 3,000 producers are participating in the Stays of Default announced on March 23, 2020 at a value of $173 million.
  2. Producers have the option to repay their 2018 outstanding advances with amounts advanced under the 2019 program year and these advances were available until March 31, 2020.

  Background

  The Advance Payments Program (APP) is a federal loan guarantee program that provides agricultural producers with easy access to low-interest cash advances. The APP allows Canadian farmers to obtain cash advances on the expected value of their commodities, thus helping them meet their financial needs over their production and marketing cycle. This helps provide marketing flexibility so producers can sell their products based on market conditions rather than the need for cash flow. Farmers can receive cash advances of up to 50% of the expected market value of the eligible agricultural products they will produce or already have in storage.

  On June 3, 2019, the Government announced amendends to the Agricultural Marketing Programs Regulations to assist with the impacts from the reduced marketing opportunities on Canadian canola with China. The maximum APP advance a producer can have at any time was increased from $400,000 to $1 million for all producers on a permanent basis, with the Government of Canada continuing to pay the interest on the first $100,000 advanced per program year. For 2019 canola advances only, the interest-free portion was increased by $400,000, allowing canola producers to receive up to $500,000 interest-free. The numbers for the last two years of the APP are:

  • 2019 advances: $2.9 billion advanced (up 27%) with $2.4 billion in interest free (up 62%);
  • 2018 advances: $2.3 billion advanced with $1.5 billion in interest free.

  Producers who receive an APP advance are required to reimburse it as they sell their products, with up to 18 months for full repayment for advances on most agricultural products (24 months for cattle and bison). For each program year, producers have access to a new $100,000 interest free portion. The important dates are:

  	Available	Application Deadline	Repayment Deadline
  2019 advances	April 1, 2019	March 31, 2020	September 30, 2020
  2020 advances	April 1, 2020	March 31, 2021	September 30, 2021

  Program Administration

  APP advances are made available across Canada through 34 industry associations (administrators). APP administrators sign annual tripartite agreements with their financial institution (i.e., lender) and the Minister of Agriculture and Agri-Food, which authorizes them to deliver the Program to producers. Once their agreement is signed, APP administrators become responsible for the day-to-day delivery of the Program. They assess a producer's eligibility, coordinate the application process, determine advance amounts and manage the producer's file until full repayment, while respecting the terms and conditions of their agreements.

  Agriculture and Agri-Food Canada's role is to oversee all aspects of the delivery of the program by the APP administrators, including the overall compliance with Program requirements and setting Program policies. In addition, the Government pays the interest on the interest-free portion of the producer's advance, and acts as a guarantor on the loans for the lenders in case of a default of payment by producers.

  If a producer does not repay his APP advance by the repayment deadline, he is declared in default and the administrator applies financial penalties to the outstanding APP amount owed by the producer. The administrator and producer will collaborate to develop a repayment agreement for the full repayment, within the next three years, of the outstanding amount and penalty interest. When administrators are unsuccessful in getting producers to repay their defaults, then the Government is transferred the file/debt and it will take actions, such as legal recourse, to attempt to recover the debt to the Crown. Neither the Minister nor the department have the delegated authority to forgive an outstanding APP debt.

  Stay of Default

  When producers are facing significant challenges in repaying their APP advances because of a severe event out of their control, and they risk going into payment default, the Minister can implement a “Stay of Default”. The Agricultural Marketing Programs Act, which governs the APP, allows the Minister to delay the repayment of the advances. At the request of an APP administrator, the Minister can order the payment defaults to be stayed for a specified period on any terms and conditions the Minister believes appropriate. The Minister can only implement a Stay of Default when defaults are impending, which is typically 4 months before the repayment deadline (e.g., the earliest would be May 30, 2020, for 2019 crop advances with repayment deadline of September 30, 2020).

  The initial six month Stay of Default, which was introduced in summer 2019 for 2018 advances on grains, oilseeds and pulses was extended for an additional six months to September 30, 2020. Producers have the option to repay their 2018 outstanding advances with amounts advanced under the 2019 program year. Producers continue to reimburse their 2018 advances. As of March 2, 2020, there was approximately $125,000 million outstanding from the initial $323 million stay of default.

  For the two new Stays of Default announced on March 23, 2020, 380 cattle and bison producers are participating with advances valued at approximately $31 million, as well as 16 producers of cut flowers and potted plants with advances valued at approximately $1 million.

• WTO dispute with Australia on wine

  March 11, 2020

  Anticipated question

  How is the Government of Canada responding to the wine industry’s concerns on the impending World Trade Organization decision regarding the dispute with Australia on wine?

  First response

  1. Our Government recognizes the significant contribution that the Canadian wine industry makes to the national economy.
  2. Canada will continue to defend the interests of the Canadian wine industry and stand up for Canadian workers.
  3. The Government works closely with provinces and territories to ensure that their liquor distribution and sales policies are consistent with Canada's international trade commitments.
  4. Despite Australia’s concerns, Australian wine is doing extremely well in the Canadian market. In 2018, wine imports from Australia increased by 12%, making it the fourth largest foreign wine supplier to Canada.

  Background

  On January 12, 2018, Australia formally requested consultations with Canada under the World Trade Organization (WTO) dispute settlement mechanism on a range of Canadian federal and provincial (British Columbia (B.C.), Ontario, Quebec and Nova Scotia) wine measures that it alleges are inconsistent with Canada's WTO national treatment obligations.

  Consultations failed to resolve the matter and on September 26, 2018, a WTO dispute settlement panel was established. Fifteen parties, including the United States (U.S.), New Zealand, Argentina, the European Union, Ukraine, South Africa, China, Mexico, and Chile reserved their rights as third parties.

  On April 5, 2019, Minister Carr exchanged letters with his Australian counterpart reproducing the commitment that Canada made to the U.S. under the Canada-United States-Mexico Agreement, regarding the sale of B.C. wine in grocery stores and removing this measure from the dispute. The proceedings continue against the remaining measures which include distribution at the provincial level, as well as taxation measures at both the federal and provincial levels.

  At the federal level, the dispute implicates the federal excise duty exemption for Canadian wine. At the provincial level, this would cover a number of measures involving mark-ups, taxes and charges applied by provincial liquor boards.

  Canadian wine producers have called for a negotiated resolution to the dispute.

• COVID-19 impacts on meat processing

  Updated May 5, 2020

  Anticipated question

  What is the government doing to respond to COVID-19 related temporary plant closures in the meat processing industry?

  Response

  1. The Government recognizes that cattle ranchers, hog producers and meat processing plants are facing enormous challenges due to COVID-19.
  2. Meat plants workers across the country play an essential role in maintaining a stable food supply for Canadians.
  3. Processors are working closely with local health authorities to ensure workers can continue to perform their essential tasks while remaining safe and healthy.
  4. We understand that some producers may be facing no choice but to humanely cull some of their animals and we want that to be a last resort.
  5. The Government is working with industry to look at ways for farmers to manage their production and to support food security during this volatile period.
  6. The Government is closely monitoring the situation and will continue to work in lockstep with the meat processors, producers and with the provincial and territorial governments on this issue.

  Anticipated question

  How will you make sure that the meat processing industry has the appropriate level of Personal Protective Equipment for its workers?

  Response

  1. The food sectors is making efforts to ensure employee safety, including adapting their plant operations.
  2. Personal Protective Equipment is an important part of these efforts to protect employees and maintain the food supply chain and the well-being of Canadians.
  3. The Government is working closely with the provinces, territories and industry to ensure that the food sector has measures in place and the tools needed to protect employees and is able to continue to provide food for Canadians.

  Anticipated question

  How are you ensuring the safety of the meat supply chain during this time?

  Response

  1. The CFIA continues to deliver critical services that protect food safety, as well as animal health and welfare, plant health and market access.
  2. The CFIA is working closely with meat processing establishments to provide appropriate inspection oversight to ensure food safety and prevent pressures on the Canadian meat supply.
  3. The Government is upholding its commitment to safe food for Canadians and support for Canada’s agriculture and agri-food industry by providing an additional $20 million to the CFIA to bolster its inspection capacity.

  Background

  Due to the impacts of the COVID-19 pandemic, some federally registered meat establishments have closed temporarily while others are reducing production speed due to worker absenteeism and as a way to slow the spread of COVID-19 among staff. The reduced capacity for the slaughter of food animals in meat establishments has Canadian livestock producers faced with backup of live animals on farms across the country. This can lead to animal welfare issues and some producers have no option but to consider humane culling of animals that were destined for slaughter.

  The Canadian Food Inspection Agency (CFIA) plays a key role in ante-mortem and post-mortem inspection of animals and carcasses. Under regulation, federally licensed meat establishments require CFIA inspection staff on-site at all times in order to operate.

  Beef

  Beef processing in Canada is heavily concentrated in Alberta, with 77% of cattle slaughtered in this province. The Cargill plant, in High River, Alberta is a beef processing plant that normally employs approximately 2,000 employees and processes 4,500 head of cattle per day, representing 37% of Canada’s beef processing capacity. A COVID-19 outbreak in High River resulted in at least 750 positive cases linked to the establishment, as of April 28th. Cargill implemented a reduction in shifts, staggering breaks, enhanced cleaning and sanitizing, and employee temperature testing as some of the actions taken to minimize risks for employees.

  On April 20th, Cargill temporary closed the High River plant. Operations resumed on May 4th with one daily shift. During the 14-day temporary closure, Cargill implemented additional safety measures to respond to the community-wide impacts of the virus.

  Slaughter and processing has also been impacted at the JBS plant in Brooks, Alberta where 276 COVID-19 cases were confirmed among employees and contractors with one death. Safety measures and worker absenteeism has the plant operating at half normal capacity, at best.

  Plant closures and slowdowns in slaughter has led to fed cattle and cull cows being backed up in feedlots and on farm. It is estimated there are 125,000 cattle backed up in Western Canada.

  Agriculture and Agri-Food Canada (AAFC) has been in regular conversations with the Canadian Cattlemen's Association to understand a proposal submitted to set-aside cattle to reduce bottlenecks at processing plants. AAFC is evaluating this proposal.

  Pork

  On March 28, Quebec health services notified Olymel that several employees at its Yamachiche plant tested positive for COVID-19. On March 29, Olymel announced the temporary 14-day closure of that slaughterhouse, which impacted almost 1,000 employees. The plant resumed operations on April 13th at a reduced capacity.

  Two additional hog processors in Quebec were significantly impacted by labor shortages and increased absenteeism.

  On April 24, 2020 Conestoga Meat Packers announced that they would be suspending operations during the week of April 27, as a number of employees tested positive for COVID-19. Conestoga accounts for 45% of hog capacity in Ontario and 8% in Canada.

  The plant closures and slowdowns in slaughter has led to hogs being backed up on farms in the Maritimes, Quebec and Ontario. Prince Edward Island culled 200 hogs on April 7th, and, as of April 29th, it is estimated there are 120,000 hogs backed up on farms in Quebec and Ontario.

  AAFC is in close communication with the meat industry and has established a joint Meat and Poultry Industry-Government COVID-19 Working Group to ensure a national approach to addressing the current environment's challenges.

• COVID-19 impacts on equine industry

  New May 5, 2020

  Anticipated question

  What is the government doing to respond to COVID-19 related challenges in the equine industry?

  Response

  1. The Government is aware of the impacts of COVID-19 on the equine sector.
  2. The horse sector is very diverse and unique, touching on sport, recreation, tourism, racing and agriculture.
  3. The public health measures have resulted in revenue loss for equine businesses, while their costs remain the same.
  4. We are engaged with equine representatives and are exploring how the Government can assist the sector.

  Background

  The situation of the equine industry is complex due to the wide variety of uses of horses in agriculture and the degree to which operations are commercial undertakings. Horses are raised for racing, sport, Western disciplines (e.g. rodeo), pleasure riding, work, therapy, meat production, and for pharmaceuticals. A rough estimate of the distribution of horses by primary use: racing 9%, sport 31%, Western disciplines 17%, pleasure riding 24%, ranch/farm 7% and breeding stock 6%.

  Due to COVID-19 related public health measures, almost all horse facilities have closed, resulting in total loss of income. Many predict that they will not be able to reopen unless they can access financial assistance soon, others have more resources to work with in the interim and are developing measures to recover once restrictions are eased. The impact on other parts of the horse industry are as yet unclear, as not all parts of the industry have registered a need for assistance.

  At the request of Equestrian Canada (EC), Agriculture and Agri-Food Canada (AAFC) met three times with industry representatives and has agreed to continue discussions with a broader group to identify financial needs and potential support. Approximately $12M ($260 per month, per equine) is being requested by the industry for an emergency relief fund to support operations for those who have experienced over 30% reduction in income as a result of COVID-19.

  The challenge is that numerous facilities are left to bear the monthly costs of equine housing, feed and care, while no longer deriving commercial income. Disposal of the animals may be the only choice for some as additional credit or loans is not considered a viable option for most. As well, since substantial parts of the horse industry rely on discretionary spending, a severe downturn in the global economy in response to COVID-19 is predicted by some to result in a high rate of exit from parts of the horse industry.

  The equine industry does not significantly benefit from Business Risk Management (BRM) programs as BRM adopts the Canada Revenue Agency definition of farm income as the basis to determine eligibility, which excludes much of the revenues generated in equine industries. Some provinces (Saskatchewan, Ontario and Alberta) have applied for benefits under the AgriRecovery Program. It is still unclear if the equine industry may be able to participate. Further engagement with provinces is underway given their role in animal welfare.

  According to Farm Credit Canada (FCC), the raising, breeding and training of horses for racing and rodeo are not eligible to take advantage of their additional $5 billion in lending capacity. However, most other activities would be eligible for loans, including riding schools and therapeutic horses, though FCC acknowledges that loans would not be a workable solution for many equine farms and facilities. Regional Development Agencies also have loans available for businesses.

  The Canada Emergency Commercial Rent Assistance for small businesses is a federal-provincial-territorial initiative that could benefit some in the horse industry, however, most equine farms and facilities will not qualify since they are already owned by their equine owners.

  According to AAFC's discussion with Sport Canada (SC), those in the equine industry that fall under funding assistance for national sport organizations will receive a portion of SC's announced $500 million initiative, but would not include provisions to support the needs of horse facilities and their owners. The department will continue to engage with SC for possible financial support to the equine industry.

  On May 4, 2020, EC shared a return to business operations framework with the Canadian equestrian community in anticipation of the conclusion of the first pandemic wave. However, returns to business operations must be aligned with directives from the local and provincial governmental authorities. Provincial reopening plans related to the equine activities are being monitored by the department.

• Support for Dairy Sector in response to COVID-19

  New May 11, 2020

  Anticipated question

  How will the Government of Canada support the dairy sector in response to impacts of COVID-19?

  First response

  1. The Government of Canada is taking concrete actions to help mitigate the impacts of COVID-19 on the dairy sector.
  2. We are responding to the needs of the dairy industry by proposing changes to the Canadian Dairy Commission Act to increase the Canadian Dairy Commission’s borrowing capacity from $300 million to $500 million.
  3. This change will provide significant assistance to the dairy sector by increasing the CDC’s ability to purchase cheese and butter and help manage the surplus of milk.

  Supplementary response

  1. COVID-19 has resulted in unforeseen and rapid fluctuations in the demand for many key dairy products, which, unfortunately forced some farmers to dispose of their milk.
  2. On May 5, the Government announced its intention to increase the CDC’s borrowing limit by $200 million to allow for purchases of cheese and butter to be temporarily stored to avoid food waste.
  3. Increasing the CDC’s borrowing limit will complement the CDC’s existing programs to help the sector balance supply and demand fluctuations while delivering much needed assistance to keep the supply chain strong.

  Background

  The COVID-19 pandemic is having a significant impact on the Canadian dairy industry. While there was an increased demand for fluid milk during the first two weeks of physical distancing, this demand has now flattened and returned to closer-to-normal levels, but the outlook remains volatile.

  The mass closure of restaurants and schools have forced a sudden shift from the food service industry to the retail market reducing demand, especially for cheese and cream. As a result of these challenges, overall demand for milk has dropped which in turn forced dairy producers to dispose surplus raw milk at the end of March and into the first half of April.

  In order to deal with the drop in demand, provincial milk marketing boards have implemented various measures to reduce milk production, including a reduction of monthly credit days and quota cuts. The dairy industry has also increased its donations to food banks.

  In April, producers, processors and the Canadian Dairy Commission (CDC) discussed additional ways the CDC could support the management of the surplus milk. There was agreement for the CDC to:

  • Maximize its butter purchases under its existing programs; and
  • Introduce a new program called Plan C for cheese.

  To provide flexibility to respond to the impacts of COVID-19, the CDC, after consultation with the industry, requested an increase to its borrowing authority by $200 million. This means an increase from the existing limit of $300 million to a new limit of $500 million.

  The CDC’s purchasing and storage programs will help ensure food is not wasted, provide relief to dairy producers by reducing the amount of surplus milk, and provide relief to dairy processors, allowing them to defray the costs of carrying stock until the market rebounds.

  The Government announced its intention to increase the borrowing authority from $300 million to $500 million as part of the broader package of supports for the agri-food industry on May 5, 2020.

  The first step to operationalize the CDC’s increased borrowing authority is to change the current limit set in the legislation. This requires a legislative change to adjust the maximum borrowing limit. This legislative change is supported by the CDC, as it is the amount they asked for, and also has the support of the industry.

• AgriInvest

  New May 11, 2020

  Anticipated question

  How will you respond to requests from the sector for additional support?

  First response

  1. Producers have access to federal-provincial-territorial Business Risk Management programming, including AgriInvest.
  2. AgriInvest is a government-matched savings account for producers to address income declines or make investments to manage on-farm risks. Producers can withdraw from their AgriInvest accounts at any time.
  3. During challenging times such as these, the first line of defense is AgriInvest accounts, which currently total more than $2 billion.

  Background

  AgriInvest is a government-matched savings account for producers to address income declines or make investments to manage on-farm risks. Producers can deposit up to 100% of their allowable net sales annually, of which the first 1% is matched by governments. The maximum annual governmental contribution is $10,000. The program provides flexibility, as farmers are able to withdraw funds from their AgriInvest accounts at any time, including to get rapid access to funds.

  The program is well-subscribed across the country. Producers representing 93.4% total agricultural market receipts participated in the AgriInvest program in 2016 (the last year with complete data), above the target of 85%.

  The current value of all producers’ accounts is approximately $2.3 billion (as of May 2020), with an average balance of over $24,000 per account. However, balances vary greatly between producers and across commodity groups, depending on how producers have built or used balances in the past.

  AgriInvest is 60:40 cost-shared between federal and provincial governments. AgriInvest is delivered by the federal government in all provinces, except Québec, where it is delivered provincially by La Financière agricole.