Key files and hot issues: deputy minister transition book 2024, AAFC

Issue

Launched in April 2023, the Sustainable Canadian Agricultural Partnership (Sustainable CAP) is a five-year, $3.5 billion investment in programs and other initiatives by federal, provincial, and territorial (FPT) governments, aimed at fostering sustainability, innovation, and economic competitiveness in the agriculture and agri-food sector.

Context

Sustainable CAP is based on an FPT framework articulated in the Guelph Statement, which established five priority areas aimed at reducing greenhouse gas (GHG) emissions by 3 to 5 mega tonnes, enhancing the resilience of the food system, and fostering diversity and inclusion within the agricultural sector.

Collaboratively developed with Provincial/Territorial partners (PTs), Sustainable CAP programming reflects input from diverse stakeholders, including producers, processors, youth, women, and Indigenous communities, gathered during extensive national and PT consultations.

Sustainable CAP provides $500 million in new FPT funding compared to the previous Canadian Agricultural Partnership (CAP). This includes $250 million in FPT funding for the Resilient Agricultural Landscapes Program, an ecological goods and services program, based on national principles but tailored to regional needs and delivered by provinces and territories.

The Sustainable CAP builds upon earlier frameworks, with greater emphasis on achieving environmental, economic and social objectives by:

• Bolstering climate change and environment action across the framework;
• Updating the suite of business risk management (BRM) programs to be simpler, timelier and more predictable, and exploring options to integrate climate risk and readiness;
• Strengthening the approach to performance measurement and results with shared targets complemented by proportionate spending requirements;
• Enhancing focus to encourage the participation of underrepresented groups in the sector;
• Continuing enhancements to science and innovation, market development and trade, and increased emphasis in other focus areas (for example, labour, Indigenous participation, mental health); and
• Reflecting the sustainable development approach and competitiveness throughout the framework.

Current status

The Framework is now in its second year, and federal and cost-shared programming is now fully underway.

Framework mechanisms, including multilateral and bilateral mechanisms, are being engaged to support the implementation of cost-shared programming and delivery of collective FPT commitments established through Sustainable CAP.

Upcoming priorities

Enhanced data sharing and results reporting was a key outcome for Sustainable CAP, and significant FPT efforts are underway to support efficient data sharing.

Year 2 of Sustainable CAP will include strategic bilateral discussions among FPT officials, focusing on effective framework implementation and constructive engagement on key issues for each jurisdiction.

[Redacted]

Related programs/initiatives

Sustainable CAP includes BRM programs, cost-shared strategic initiatives, and federal-only strategic initiatives.

Strategic initiatives

• Around $1 billion in federal programs and activities that are national in scope and funded and delivered by Agriculture and Agri-Food Canada.
• $2.5 billion in cost-shared programs that are funded 60:40 (F:PT) and delivered by provincial and territorial governments.

Business risk management programs

• An average of $1.8 billion annually (combined federal and provincial/territorial) for demand-driven BRM programs to assist producers in managing significant risks that threaten the viability of their farm and are beyond their capacity to manage.

Issue

Producers have access to a full suite of federal-provincial-territorial (FPT) business risk management (BRM) programs that provide them with protection against income and production losses, helping them manage risks that threaten the viability of their farms. Under the Sustainable Canadian Agricultural Partnership (Sustainable CAP), Agriculture and Agri-Food Canada (AAFC) continues to work with provinces and territories to make BRM programs more agile, timely, and effective for producers to support greater resiliency within the sector.

Context

The Canadian agricultural sector is faced with risks that can have significant impacts on farm viability, including: a short growing season, extreme weather events, disease, and pests, as well as vulnerabilities to market volatilities and trade risks.

BRM programs are long established and positioned to provide support to farmers and help them manage these risks. They are governed by the Farm Income Protection Act and the FPT Multilateral Framework Agreements (MFAs).

The current suite of FPT cost-shared BRM programs are as follows:

• AgriInvest is a producer-government savings account to help address small income declines;
• AgriStability is a margin-based program to assist with large income declines;
• AgriInsurance addresses production declines caused by natural hazards; and
• AgriRecovery is a framework to develop initiatives that help cover extraordinary costs to recover from natural disasters.

Additional federal-only BRM programs include: the Advance Payments Program, which provides cash advances to facilitate marketing flexibilities; and the Canadian Agricultural Loans Act, which provides a loan guarantee program to help establish, improve and develop farms.

Current status

Numerous changes to BRM programs were introduced under the Sustainable CAP (2023-28). These include:

• Increasing the AgriStability compensation rate from 70 to 80 percent and offering a new streamlined AgriStability model that betters aligns with income tax forms.
• Integrating environmental priorities into BRM through an on-going BRM Climate Review, the requirement for large farms to have an agri-environmental risk assessment to access AgriInvest starting in 2025, and an AgriInsurance pilot to provide premium rebates for farmers who implement environmental beneficial management practices that also reduce production risk.

In light of high input costs and increased interest rates, the interest-free portion of the Advance Payments Program was temporarily increased from $100,000 to $250,000 on March 25, 2024, for the 2024 program year.

The last number of years have seen a significant increase in BRM expenditures and pressure for ad hoc programs under AgriRecovery.

Upcoming priorities

Sustainable CAP is currently in its second year and FPT governments are considering possible changes to the suite of programs.

As part of Sustainable CAP, AAFC is currently reviewing BRM programs, in consultation with PTs, to assess the implications of climate change on BRM programs, including on program funding needs and on the programs' potential impacts on on-farm adaptation or mitigation responses. The review will be completed at the beginning of 2026.

[REDACTED]

Quebec requested an assessment under the AgriRecovery Framework [REDACTED].

Related programs/initiatives

• A multilateral agreement is being developed for [REDACTED] provinces ([REDACTED], [REDACTED] and [REDACTED]) to participate in Livestock Price Insurance to protect against market price declines for cattle and hogs.
• Agriculture Financial Services Corporation (AFSC) in Alberta is currently working to evaluate ways to make AgriStability more responsive to the cow/calf sector. AAFC is contributing to this analysis and working with provinces and territories to assess other potential opportunities to improve the AgriStability program.
• AgriRecovery will be discussed as a priority item at the upcoming Deputy Ministers' meeting on June 5, 2024.

Issue

Extreme weather events including droughts and wildfires have occurred with increased frequency and severity in recent years, leading to an increase in requests for business risk management (BRM) support, including through AgriRecovery.

Context

Agriculture and Agri-Food Canada (AAFC) offers a suite of BRM programs that help producers manage risks that threaten the viability of their farms. Producers are encouraged to proactively manage their risks by participating in AgriStability, AgriInvest, AgriInsurance and other risk management tools.

AgriRecovery is a federal, provincial and territorial framework through which governments collaborate to assess the impacts of natural disasters and determine whether there is need for additional assistance beyond the support available through existing government programming and private insurance. The AgriRecovery Framework can assist producers with the extraordinary recovery/mitigation costs related to a disaster event.

The frequency of natural disasters has been increasing in recent years and the BRM suite has provided significant support through AgriInsurance, AgriStability, and AgriInvest. In addition, AgriRecovery support was provided to assist producers who experienced extraordinary costs as a result of disasters such as droughts, wildfires, extreme cold weather, floods and hurricanes.

Depending on the nature and severity of the occurrence, Disaster Financial Assistance Arrangements (DFAA) may also be used for recovery, and our BRM programs would take that into consideration.

Current status

In 2023, AgriRecovery initiatives were launched in British Columbia, Saskatchewan, and Alberta to address the impacts of drought and wildfires. The support to impacted producers is ongoing.

Starting in 2023, the compensation rate under AgriStability was increased from 70 to 80 percent to provide more support to farmers in times of need.

Beginning in the 2024 program year, Canada is offering a new AgriStability model that is faster, simpler, and more predictable, in provinces where Canada delivers AgriStability.

Upcoming priorities

Work is being undertaken to examine how best to enhance the existing BRM suite of programs and reduce reliance on ad hoc AgriRecovery support for disaster recovery.

Agriculture Financial Services Corporation (AFSC), the organization that delivers AgriStability in Alberta, is currently working to evaluate ways to make that program more responsive to the cow/calf sector. AAFC is contributing to this analysis and working with provinces and territories to assess other potential opportunities to improve the AgriStability program.

Quebec requested an assessment under the AgriRecovery Framework [REDACTED].

Active AgriRecovery initiatives

• 2021 Canada-British Columbia Flood Recovery Program for Food Security. Up to $200 million in federal/provincial cost-shared (60:40) support.
• (2021-2022) Canada-Ontario Overwintering Bee Colony Loss Replacement Initiative. Up to $3 million in federal/provincial cost-shared (60:40) support.
• (2021-2022) Canada-Ontario Grapevine Winter Injury Initiative. Up to $7 million in federal/provincial cost-shared (60:40) support.
• Canada-Prince Edward Island Fiona Fruit Tree Recovery Initiative. Up to $1.76 million in federal/provincial cost-shared (60:40) support.
• 2023 Canada-Saskatchewan Feed Program. Up to $128.6 million in federal/provincial cost-shared (60:40) support.
• 2023 Canada-Alberta Drought Livestock Assistance. Up to $165.3 million in federal/provincial cost-shared (60:40) support.
• 2023 Canada-Nova Scotia Grape and Maple AgriRecovery Initiative. Up to $2.2 million in federal/provincial cost-shared (60:40) support.
• 2022 Canada-Saskatchewan Beekeepers Extraordinary Expense (BEE) Program. Up to $1.07 million in federal/provincial cost-shared (60:40) support.
• 2023 Canada-British Columbia Wildfire and Drought Recovery Initiative. Up to $71 million in federal/provincial cost-shared (60:40) support.

Issue

African swine fever (ASF) is a contagious and fatal disease for pigs that has had devastating impacts on hog markets in Asia, Africa, Europe and Central America. While ASF has not yet arrived in Canada or the United States, a single positive case in Canada would immediately halt all pork and live-hog exports (70% of domestic production). This would have significant financial consequences for producers and processors as they grapple with lost markets and price declines driven by an oversupply of pork relative to domestic demand.

Context

An ASF incursion would have devastating impacts on Canada's hog sector, which injects $24 billion into the Canadian economy and contributes to 103,000 direct, indirect, and induced jobs across the country, especially in rural areas.

An outbreak would also result in an immediate loss of export markets, leading to millions of surplus healthy animals that need to be depopulated. Such an effort would create extraordinary costs for industry and concerns about animal welfare, the environment and farmer mental health.

In December 2021, the Minister of Agriculture and Agri-Food was mandated to "take every necessary precaution to prevent the introduction of African swine fever within our borders and continue to work with provinces and territories and industry stakeholders on prevention and preparedness measures, including a cost-shared response plan." This work is ongoing with provincial and industry partners.

Current status

Federal, Provincial and Territorial (FPT) governments and industry continue to advance the Pan-Canadian ASF Action Plan by collaborating and prioritizing ASF-related prevention and preparedness efforts. The Action Plan has four key pillars:

1. Prevention and Enhanced Biosecurity;
2. Preparedness Planning;
3. Ensuring Business Continuity; and
4. Coordinated Risk Communications.

• [REDACTED]

Upcoming priorities

FPT governments and industry will continue to address outstanding gaps and work towards advancing the Pan-Canadian ASF Action Plan. [REDACTED]

Related programs/initiatives

• In August 2022, the Government of Canada announced an investment of up to $45.3 million to enhance efforts to prevent ASF from entering Canada and prepare for a potential outbreak. Of this amount, $23.4 million is dedicated to Agriculture and Agri-Food Canada (AAFC) to support industry's prevention and mitigation efforts through the African Swine Fever Industry Preparedness Program (ASFIPP). The three-year program was launched on November 16, 2022. Another $19.8 million has supported the Canadian Food Inspection Agency's surveillance and international activities, while the remaining $2.1 million has enhanced the Canada Border Services Agency's border control activities.
• To date, AAFC has approved 39 ASFIPP projects for up to $14 million spanning five priority areas, including biosecurity assessment and improvement, sector analysis and engagement, research projects, processor retrofits, and regional preparedness for welfare slaughter and disposal of surplus healthy hogs.
• The Canadian Food Inspection Agency has proactively negotiated zoning arrangements with the United States, European Union, Singapore, Vietnam and Hong Kong, which cover 35.6% of Canada's pork exports. Zoning arrangements with trading partners allow for trade to continue from disease-free areas, but also require the trading partner to recognize the zones, which can take time and may depend on the nature of the outbreak, including the ability to control disease transmission.

Issue

Industry negotiations to put in place a voluntary Grocery Code of Conduct remain uncertain while discussions continue with 2 of Canada's 5 largest retailers.

Context

The Minister of Agriculture and Agri-Food's mandate commitments prioritize measures to support efficiency and resiliency in the agriculture and food sector in order to strengthen Canada's food system.

Market concentration gives large retailers a dominant position and significant market power, which has been used in ways that negatively impact others in the supply chain, including farmers, food manufacturers, and independent retailers. These behaviours can weaken Canada's food supply chain by creating a challenging competitive environment, negatively impacting innovation and investment, and causing supply chain disruptions.

In July 2021, federal, provincial and territorial (FPT) agriculture ministers called on industry to develop consensus on a proposal for a Grocery Code of Conduct and an approach to dispute resolution in order to improve transparency, predictability, and respect for the principles of fair dealing.

In multiple reports since 2021, the Standing Committee on Agriculture and Agri-Food has called on the federal government to work with industry and provincial and territorial governments to help establish a Grocery Code of Conduct.

Current status

Industry shared a proposed Grocery Code of Conduct with FPT governments in December 2023 following broad consultations across the grocery supply chain.

Until recently, only two of the five largest retailers (Sobeys and Metro) had agreed to adhere to the Code. Federal ministers have publicly stated that the Government is considering all possible options while encouraging all industry partners to sign on.

In May 2024, Loblaw announced their support, conditional on participation of all major retailers and suppliers. Discussions continue with the remaining retailers.

Upcoming priorities

Revised documents have been shared with Walmart and Costco for review, but it is unclear at this stage whether they will agree to participate. Industry is aiming for the Grocery Sector Code of Conduct to take effect in June 2025.

FPT governments continue to actively monitor and support industry's progress.

Related programs/initiatives

• While a Grocery Code of Conduct would not address food affordability, the Government is taking other action to stabilize grocery prices.
• [REDACTED]
• [REDACTED]
• The Government has also launched the Food Price Data Hub to improve the availability and accessibility of data on food prices.

Issue

As the lead for the Food Policy for Canada, Agriculture and Agri-Food Canada (AAFC) is responsible and uniquely positioned to advance a whole-of-government approach to improve social, health, environmental and economic outcomes across Canada's food systems. The implementation of food-related investments announced as part of Budget 2024 and delivering on the Minister's direction for the future of the Canadian Food Policy Advisory Council will be two key priorities in the next three months.

Context

The Food Policy for Canada was launched in 2019 as an evergreen and adaptive policy to align and coordinate federal food-related initiatives and address critical challenges facing Canada's food systems.

Budget 2024 included a number of investments that AAFC led or supported to strengthen Canada's food systems, including a National School Food Program, which is a key shared mandate letter commitment for the Minister of Agriculture and Agri-Food and his Families, Children and Social Development counterpart. Dialogues AAFC led as part of the United Nations Food Systems Summit process and advice from the Canadian Food Policy Advisory Council helped shape Budget 2024 investments.

[REDACTED] Launching the Action Plan by the end of 2025 was agreed to by Canada at the 2023 North American Leaders' Summit. [REDACTED]

Current status

[REDACTED] AAFC is working in close collaboration with Employment and Social Development Canada (ESDC) to ensure the proposed National School Food Program supports the objectives of the Food Policy for Canada and aligns with the expanded LFIF program.

[REDACTED]

Upcoming priorities

• Launch LFIF throughout the summer and fall of 2024 [REDACTED]. LFIF will be delivered in a complementary fashion to other Government of Canada food security programming including the National School Food Program, the expanded Northern Isolated Community Initiatives Fund, and the Harvesters Support Grant and Community Food Programs Fund.
• [REDACTED]
• Implement the Minister's direction for the Council.

Related programs/initiatives

The Food Policy for Canada complements and supports other key Government of Canada priorities, including the Healthy Eating Strategy and the Poverty Reduction Strategy, as well as implementation of the United Nations Declaration on the Rights of Indigenous Peoples Act (UNDA) Action Plan.

The following initiatives announced in Budget 2024 are being advanced [REDACTED]:

• $62.9 million over three years to AAFC to renew and expand LFIF to support community organizations to invest in local food infrastructure, with priority to be given to Indigenous and Black communities. Part of the expansion will support community organizations to improve infrastructure for school food programs as a complement to the National School Food Program.
• $14.9 million over three years [REDACTED] to renew and expand the Northern Isolated Community Initiatives Fund to all regions of Inuit Nunangat to support local and Indigenous food production systems.
• $25.1 million over two years [REDACTED] to expand the Canadian Shellfish Sanitation Program to assist Indigenous communities to safely access shellfish harvest for food, as well as social and ceremonial purposes.
• $2.8 million over three years [REDACTED] to implement the UNDA Action Plan Measures to bolster the policy and engagement capacity among Inuit Tapiriit Kanatami and Inuit Treaty Organizations to co-develop legislative and policy options to facilitate the production, sale, and trade of traditional and country food.

Issue

The cost of food purchased from stores (groceries) increased 22% between 2021 and 2023. Such rapid price increases have not been seen since the early 1980s. Input costs have increased along the supply chain, putting pressure on businesses producing food. Coupled with rapid inflation across essential categories, many Canadians faced affordability challenges, particularly vulnerable consumers and those whose incomes have not kept pace with inflation. Inflation is showing signs of stabilizing in 2024 and food price inflation has been lower than overall inflation for the last three months, however higher prices from recent rapid price increases remain a challenge across the entire agriculture and agri-food supply chain.

Context

The price of food products at the grocery store is determined by many factors, such as input costs (for example, raw materials and labour), marketing, transportation, the international trade environment, geopolitical uncertainties, shifting consumer preferences, and supply shocks. As such, any increase to a particular input cost would change final consumer prices by relatively smaller percentages if fully passed along the supply chain. Recent drivers behind higher food inflation in Canada and around the world include lingering effects of COVID-19 pandemic-related supply chain disruptions; labour shortages and wage increases; higher energy prices; higher United States dollar; and Russia's war against Ukraine.

Although the federal government has minimal direct involvement in managing food prices, it does have a role in promoting measures to ensure an adequate supply of food and an efficient and fair market, and in providing supports for the most vulnerable populations. Agriculture and Agri-Food Canada (AAFC) collaborates with other government departments including, Innovation, Science and Economic Development Canada (ISED), Employment and Social Development Canada (ESDC), and Transport Canada, on many cross-cutting issues related to inflation, food prices, and supply chains. These efforts include monitoring food inflation with the Grocery Task Force (through ISED) and the Food Price Data Hub (through Statistics Canada) and supporting the development and implementation of a Grocery Code of Conduct.

Higher costs of production create cash flow challenges for farmers as they must commit to paying for their farm inputs before knowing what their revenues will be for that year. Canadian farmers are price takers, so they are not generally able to increase their selling prices to reflect the rising costs of inputs.

Current status

Canada wide grocery price increases have slowed, with grocery prices in April 2024 up only 1.4% from prices in April 2023. April also marks the third month in a row where grocery store prices were increasing more slowly than overall economy wide prices, which were up 2.7% from April 2023. That said, food insecurity remains high; according to Statistics Canada, in 2022/23, about 8.7 million people reported that they experienced food insecurity.

Over the past three years, agricultural production costs in Canada have increased by nearly 30%, the bulk of which in 2021 (+9.5%) and 2022 (+19.4%), with operating expenses in 2023 increasing at a slower rate than general inflation (+2.3%). Both fuel and fertilizer expenses saw notable declines in 2023, while interest expenses increased. Net Cash Income (NCI) for the sector increased 11.3% to $24.9 billion, due to strong cattle prices and crop marketings.

Looking ahead to 2024, NCI is forecast to decline 14% to $21.3 billion, as cash receipts fall slightly with expenses modestly increasing; although, NCI would still be 28% above the 2018-to-2022 average.

Upcoming priorities

AAFC is leading the Government Response to the House of Commons Standing Committee on Agriculture and Agri-Food report titled "A Call To Action: How Government And Industry Can Fight Back Against Food Price Volatility". The report contains 10 recommendations on areas where the federal government could provide relief on price volatility across the food supply chain.

Related programs/initiatives

• The Affordable Housing and Groceries Act amended the Competition Act recently to empower the Competition Bureau to investigate unfair practices and block corporations from stifling competition.
• Budget 2024 launched a National School Food Program, investing $1 billion over 5 years, which is expected to provide meals for up to 400,000 kids each year.
• To aid in promoting food security in Canada, Budget 2024 announced the provision of $62.9 million over three years, starting in 2024-25, to renew and expand the Local Food Infrastructure Fund.
• In Budget 2024, the interest-free limit for loans under the Advance Payments Program (APP) was temporarily set at $250,000 for the 2024 program year instead of returning to $100,000. This measure will support approximately 11,950 participating producers with rising input costs, at a cost of $64 million.
• Budget 2024 announced the Government will launch consultations in June 2024 on interoperability, so that farmers can use their equipment in the way that is best for their farm. This is part of broader work the Government is undertaking to support the right to repair and interoperability.

Issue

Agriculture and Agri-Food Canada (AAFC) seeks to publish the Sustainable Agriculture Strategy (SAS) for Canadian farmers to meet growing domestic and global demands for sustainable food, make meaningful progress on agri-environmental performance, and be resilient to the impacts of a changing climate.

Considerations

The SAS Advisory Committee (SAS AC) has put in significant effort to develop a SAS that will be supported by producers.

[REDACTED]

Context

The SAS is a long-term approach (to 2050) to improving environmental performance in the sector and supporting its competitiveness and vitality.

It will focus on five priority areas: soil health, climate adaptation and resilience, water, climate change mitigation, and biodiversity.

The SAS responds to the 2021 Mandate Letter, which directs the Minister of Agriculture and Agri-Food to increase support to farmers to develop and adopt agricultural management practices to reduce emissions, store carbon in healthy soil and enhance resiliency.

Throughout 2023, AAFC carried out significant consultations to inform the development of the SAS. The SAS AC was established with key producer associations, environmental organizations, and an Indigenous partner who met bi-weekly in 2023, and monthly in 2024.

The SAS has been designed as an evergreen strategy to 2050. Subsequent versions can be adapted to advance the scale of ambition and scope to reach the long-term vision and goals (for example, including whole supply chain).

AAFC has committed to publish the SAS in 2024.

Current status

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The Government has committed to publish the SAS in 2024, including in response to the recent CESD audit on AAFC's Climate Change programming, which found that the department did not have an overarching strategy to guide its actions.

Upcoming priorities

[REDACTED]

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Related programs/initiatives

Since 2021, $1.5 billion in investments have been allocated to environment and climate programming, including through the following programs:

• Agriculture Climate Solutions (ACS): On-Farm Climate Action Fund (OFCAF)
• ACS Living Labs
• Agricultural Clean Technologies (ACT)
• Resilient Agricultural Landscape Program (RALP) – part of Sustainable Canadian Agricultural Partnership

Federal actions and funding [REDACTED] would support the agriculture sector's contributions to national and international commitments, including:

• Fertilizer Emissions Reduction Target
• Emissions Reduction Plan (ERP)
• National Adaptation Strategy (NAS)
• Strategic Conservation Framework for Species at Risk – Agriculture Sector (AgSAR)
• Freshwater Action Plan and Canada Water Agency
• Global Biodiversity Framework (GBF) and National Biodiversity Strategy and Action Plan
• Global Methane Pledge

Issue

The Minister of Agriculture and Agri-Food has a mandate commitment to develop a sector-specific agricultural labour strategy to address persistent and chronic labour shortages in farming and food processing in the short and long term.

Context

While labour shortages were a major issue for the entire Canadian economy during the COVID-19 pandemic, labour shortages in the agricultural sector have persisted for decades. Given the rural location, seasonal nature and physical requirements of most jobs, employers have difficulty attracting Canadians to the sector.

Agriculture and Agri-Food Canada (AAFC) conducted stakeholder consultations on the strategy through an online questionnaire; a generic email inbox; targeted engagement with partners, stakeholders (for example, unions, industry) and underrepresented and marginalized groups; and direct discussions with provinces and territories. A What We Heard Report summarizing the results of the consultations was released in May 2023. The most consistent message received during the consultation process dealt with frustration accessing the Temporary Foreign Worker Program (TFWP) and the desire to improve pathways to permanent residency for workers in the sector.

The agricultural sector relies heavily on temporary foreign workers (TFW), the first of which began coming to Canada in the late 1960s. Many advanced economies, including the United States, Germany, Australia, France, and United Kingdom, similarly depend on international workers particularly for seasonal agricultural work. TFW use in both primary agriculture and food and beverage manufacturing have grown steadily in Canada in recent years; in 2023, just over 70,000 TFWs worked in primary agriculture and just over 45,000 TFWs worked in food and beverage manufacturing.

In addition to AAFC's work, industry is taking leadership to address labour issues through work led by the Canadian Agricultural Human Resource Council (CAHRC), in partnership with Food and Beverage Canada and the Canadian Federation of Agriculture, to develop a National Workforce Strategic Framework. AAFC is leveraging this work and continues to engage closely on this initiative to ensure the federal strategy is complementary to industry efforts.

Current status

Since the mandate commitment was made in December 2021, the Government provided $23.7 million in October 2023 to March 2024 for CAHRC and Food Processing Skills Canada to address human resource shortages in Canada's agriculture sector through training programs and other initiatives.

In Budget 2022, the Government announced a number of reforms to the TFWP, including a new agriculture and fish processing stream on which Employment and Social Development Canada is currently consulting; a Recognized Employer Pilot for repeat employers who meet the highest standards for working and living conditions and worker protection (which was launched in August 2023); and increased capacity for processing employer applications within established service standards. Combined, these actions represent a $145 million investment by the Government of Canada.

The Government has also expanded pathways to permanent residence for workers in the agricultural sector. Specifically, allocations to the Provincial Nominee programs have increased, and the Agri-Food Immigration Pilot, which provides a pathway to permanent residence for experienced, non-seasonal workers in the agricultural and food processing sector, was extended until May 2025. In February 2024, category-based selections under Immigration, Refugees and Citizenship Canada's Express Entry Program were announced to respond to changing economic and labour market needs within Canada, with agriculture and agri-food occupations being a priority.

Overall, vacancy rates in the sector have been steadily improving over the last year. The latest Job Vacancy and Wage Survey data from Statistics Canada for 2023 indicates that vacancy rates for the food and beverage manufacturing sector are lower than the economy wide vacancy rate of 4.18%, with food manufacturing at 3.58%, and crop production at 4.88%.

Upcoming priorities

A decision on [REDACTED] an agricultural labour strategy will be required from the Minister.

Related programs/initiatives

• Temporary Foreign Worker Program

Issue

The agricultural sector relies heavily on temporary foreign workers (TFWs), with over 70,000 TFWs working in primary agriculture and over 45,000 TFWs working in food and beverage manufacturing.

Context

The Temporary Foreign Worker Program (TFWP) is jointly administered by Employment and Social Development Canada (ESDC) and Immigration, Refugees and Citizenship Canada (IRCC), and assists Canadian employers with filling their labour requirements when qualified Canadians and permanent residents are not available and ensures that TFWs are protected while in Canada.

The TFWP requires employers to obtain a positive or neutral Labour Market Impact Assessment (LMIA) so that the employment of a TFW does not have a negative impact on the Canadian labour market.

The two key components required for hiring through the TFWP are a positive LMIA issued to employers by ESDC, and eligibility to receive a work permit as determined by IRCC.

Agricultural workers come to Canada via four streams of the TFWP; the seasonal agricultural worker program (SAWP); the agricultural stream; the low-wage stream; and the high-wage stream.

Agricultural employers are the highest volume users of the program. Most TFWs in the sector are hired in occupations such as general farm workers, industrial butchers and food manufacturing labourers.

Broadly speaking, TFWs are used to fill labour shortages within primary agriculture (for example, greenhouses, fruit and tree nut farms, horticulture products) for shorter, seasonal periods of 12 to 16 weeks. These workers typically come in via the SAWP and agricultural stream and represent approximately 20% of the workforce (as much as 40% in horticulture industries).

In food and beverage processing (for example, meat butchering and packing, frozen pizza manufacturing), where most positions are year-round, reliance on TFWs has been growing. These workers typically come in via the low-wage stream and represent approximately 10% of the workforce.

In 2022, ESDC announced temporary measures allowing seven priority sectors, including food processing, to hire up to 30% of their total workforce through the TFWP. The 30% cap was extended multiple times, most recently in October 2023 when the Government announced it would be extended again until August 30, 2024.

Current status

Changes have recently been made to the TFWP. On March 21, 2024, it was announced that, based on market conditions and declining job vacancies, the cap on low-wage TFWs would be adjusted from 30% to 20%, effective May 1, 2024, for five of the seven priority sectors, including food processing (the cap will remain at 30% for construction and healthcare). In addition, new LMIAs will be valid for six months (a decrease from 12 months), similar to before the pandemic.

ESDC and IRCC, with support from other key stakeholders and partners, including Agriculture and Agri-Food Canada (AAFC), are working together to develop the new stream under the TFWP which includes select positions in Canada's agricultural fish and seafood processing and primary fruit and vegetable processing, which will be implemented as early as 2027.

The new stream will support more organized labour mobility, help strengthen worker protections, lend greater consistency in the treatment of employers across the sector, and help ensure that Canada's food producers have access to a stable and reliable supply of labour. Additionally, the stream is exploring the possibility of sectoral work permits, updated market-based wages and deductions, and housing requirements. ESDC led consultations with industry groups will be taking place during spring/summer 2024.

On March 21, 2024, the Government announced that starting in the fall, the Immigration Levels Plan will be expanded to include both temporary and permanent resident arrivals. The Minister of Immigration, Refugees and Citizenship is consulting with provincial and territorial counterparts, as well as other relevant ministers this spring/summer to develop plans for realigning the temporary worker streams.

As a starting point, IRCC is targeting a decrease in the temporary resident population to 5% over the next 3 years. This target will be finalized in the fall, after consultations with provincial and territorial counterparts and as part of the annual levels planning.

Upcoming priorities

ESDC is consulting on a new stream under the TFWP.

AAFC continues to work with ESDC, IRCC, and stakeholders to ensure the needs of the agricultural sector are considered under the TFWP.

AAFC is also working closely with IRCC on the Immigration Levels Plan for 2025-27, [REDACTED].

Related programs/initiatives

Agricultural Labour Strategy

Issue

The food supply chain continues to provide Canadians with reliable access to food and maintains healthy economic growth. Well-performing domestic supply chains are critically important to ensuring Canada's agricultural goods reach critical international markets reliably. However, issues including labour disruptions, transportation bottlenecks, production back-ups, extreme weather situations, and geopolitical conflicts can have significant impacts on Canada's supply chains and undermine our ability to supply domestic and international markets.

Context

Supply chains are an increasingly significant priority across government, referenced in ten Ministers' mandate letters across the federal system.

Budget 2023 provided $52.2 million to Transport Canada to establish a National Supply Chain Office; develop a long-term roadmap for Canada's transportation infrastructure; and support increased supply chain visibility through enhanced data efforts. Budget 2023 also announced a pilot of the extended interswitching limit in the prairie provinces to strengthen rail competition. Agriculture and Agri-Food Canada (AAFC) has worked closely with Transport Canada in the establishment and scale up of the Supply Chain Office and continues to collaborate closely on supply chain visibility work.

Well-functioning domestic supply chains across rail, trucking and ports are critical to ensuring Canada is able to meet its export commitments. Freight rail is a particularly critical supply chain link for the movement of Canadian grain crops from the prairies given the significant distance to export position (primarily at ports, in particular, the port of Vancouver).

Current status

The National Supply Chain Office was launched in December 2023 and is currently drafting a National Transportation Supply Chain Strategy, which will provide guidance and opportunities to collaborate with industry towards a common vision, as well as a mechanism for reporting on progress. In addition to developing the overall strategy, the Office has been convening stakeholders in focused Eastern and Western corridor discussions with the aim of improving data availability for decision making in each corridor and identifying opportunities for optimization in the near and medium term.

The threat of work stoppages at critical links in the supply chain is a growing concern for agricultural stakeholders. This includes potential labour action by rail conductors and engineers at both national freight railways (Canadian Pacific-Kansas City [CPKC] and Canadian National [CN]), by longshoremen at the Port of Montreal and longshore supervisors at the Port of Vancouver, and by officials at the Canadian Border Services Agency (many of whom would be designated essential in the event of a stoppage, but would nonetheless likely enact slow down measures, which could introduce significant delays for cross border movement of agricultural goods).

Upcoming priorities

The National Supply Chain Office is aiming to publish its Transportation Supply Chain Strategy in summer 2024 and will continue to engage with AAFC and other interested partners as it is developed.

AAFC is closely engaged with the National Supply Chain Office, Transport Canada and Employment and Social Development Canada on the rail and port labour issues, including making sure potential impacts of work stoppages for the sector are well understood and that agriculture and food stakeholders are captured in industry engagement on these issues.

Related programs/initiatives

In September 2023, in line with a Budget 2023 commitment, Transport Canada initiated an 18-month interswitching pilot project, which extends the interswitching zone from 30 km to 160 km for facilities located within CN or CPKC interchange in Alberta, Saskatchewan or Manitoba. Transport Canada is considering the future of interswitching in light of the results of the pilot, as well as feedback from stakeholders. Agricultural stakeholders are supportive of the pilot and would wish to see it made permanent as a means of encouraging greater competition in freight rail service, which is critical to their competitiveness. However, railways are strongly opposed and see it as limiting their profitability and innovation.

[Redacted]

Issue

The Canada Grain Act (CGA) provides a framework to ensure that grain exports are of a consistent, dependable quality and producers are protected in their interactions with grain companies. The CGA has not been comprehensively updated since 1971.

Context

CGA modernization is a longstanding need that has been identified as a priority by successive governments.

• Budget 2019 highlighted the review of the CGA as part of its proposal to introduce Regulatory Roadmaps.
• The 2021 mandate letter for the Minister of Agriculture and Agri-Food, committed to "continue to explore next steps to modernize the Canada Grain Act and ensure it meets the needs of the sector now and in the future".

On January 12, 2021, consultations for the review of the CGA were announced. Feedback from stakeholders was gathered through 66 submissions, a public Town Hall, and three stakeholder roundtables. Topics discussed included alternative service delivery, producer protections, governance, export sales reporting, and licensing.

• A "What We Heard" report was published on August 13, 2021 (What We Heard: Canada Grain Act Review Consultations).

Current status

On March 26, 2024, the Agricultural Producers' Association of Saskatchewan hosted a Canada Grain Act Summit in Saskatoon with participation by select stakeholders, who reiterated many of the same concerns and suggestions from the 2021 consultations.

Upcoming priorities

The Government continues to consider potential paths forward with respect to CGA modernization, taking into account feedback received from stakeholders during and after consultations.

Issue

Despite negative public opinion, pesticides are essential tools for the agriculture sector. For some commodities across Canada, in the absence of pesticides, yields would drop by approximately 50%.

Context

Pesticides support Canadian growers by protecting their high yields and adapting to the proliferation and migration north of pests caused by climate change. Pesticides also enable no till farming, allowing for enhanced carbon sequestration in croplands.

Recent Pest Management Regulatory Agency (PMRA) decisions in the area of pest control, including the decision on lambda-cyhalothrin have drawn criticism from the agricultural sector and provincial-territorial partners. Lambda-cyhalothrin is a synthetic insecticide used to control a broad range of insect pests on a wide variety of crops. PMRA cancelled several previously permitted uses due to human health concerns.

Agriculture and Agri-Food Canada (AAFC) supports science-based decision-making in the area of pesticides and recognizes their importance for the sector and for food security. AAFC does not have any regulatory role when it comes to pesticides, but stakeholders often engage AAFC to help ensure that federal departments/agencies fully understand and consider the impacts on the sector for any decisions. Supporting alternative pest management approaches is a Ministerial Mandate Letter Commitment.

Current status

Since 2021, the PMRA has undertaken a funded transformation agenda. Some elements of this transformation have been less-well received by the sector, such as the establishment of the external Scientific Advisory Committee. Other elements, such water monitoring activities that enhance our access to real-world data, have been better received.

In December 2022, Canada agreed to the Kunming-Montreal Global Biodiversity Framework (KMGBF) and its 23 targets to safeguard biodiversity. Sector stakeholders have been generally supportive of the KMGBF targets, but have expressed concern that target 7, which focuses on reducing risks from pollution, including from pesticides, could shift to focusing on reducing pesticide use.

On July 21, 2023, in response to the PMRA decision on Lambda, Agricultural Ministers agreed to create a Federal-Provincial-Territorial (FPT) working group, which explored the challenges of pesticide management. The FPT working group presented the report and recommendations to FPT Ministers in February 2024, which received unanimous support. FPT Ministers also asked that an action plan be developed and presented to them at their 2024 July Annual meeting.

While industry was advocating for a reconsideration of the Lambda decision, PMRA recently published an update that further information is required from the registrants, so no changes will be made for the 2024 growing season and growers are encouraged to secure alternative products.

Upcoming priorities

As part of the federal government's 2024 Budget, $39 million over two years was earmarked for "Sustainable Pesticide Management". This includes [REDACTED] AAFC to continue efforts to accelerate research on alternative pest management solutions as per the Minister of Agriculture and Agri-Food's mandate letter in 2021. [REDACTED]

Within the context of Canada's 2030 National Nature Strategy, AAFC is working with its co-leads, Environment and Climate Change Canada (ECCC) and PMRA, to develop an action plan to implement KMGBF Target 7. AAFC is working to ensure that Canada's efforts to achieve Target 7 recognize our strong regulatory framework and remain focused on pesticide risk rather than usage.

On June 5, 2024, during the FPT Deputy Ministers meeting, the FPT action plan on pesticides will be presented. AAFC is seeking support from all provinces and territories for the action plan, which includes a pilot project led by PMRA to help refine their engagement with provinces and territories and data collection.

Related programs, initiatives and further background

Pesticide regulation

In Canada, all pesticides must be registered prior to manufacture, import, sale or use. Pre-market evaluations are carried out by Health Canada's PMRA, who also conduct post-market re-evaluations every 15 years. The Canadian Food Inspection Agency (CFIA) monitors domestic and imported food commodities for pesticide residues to ensure their safety.

AAFC's role in pesticides and pest management

• Research and development of alternative pest management solutions.
• Facilitating the alignment of Maximum Residue Limits (MRLs) internationally to support Canadian agriculture and agri-food exports.
• Facilitating grower prioritization of pest/crop issues for minor crops through AAFC's Pest Management Centre and generating data to support submissions to the regulator.
• Supporting the sector in the adoption of novel pest control technologies such as the use of drones for the application of pesticides.

PMRA transformation

On August 4, 2021, in response to public concerns regarding the increase or establishment of pesticide MRLs for several pesticides, including glyphosate, the most-widely used herbicide, the government of Canada announced the transformation of the PMRA and a pause on MRL increases.

On June 20, 2023, MRL increases have been implemented in a staggered manner, beginning with less complicated proposals before addressing glyphosate.

As part of the federal government's 2024 Budget, $39 million over two years (2024-25 and 2025-26) was earmarked for "sustainable pesticide management". [REDACTED] funds will be allocated to Health Canada's PMRA to continue the implementation and maintenance of initiatives that began as part of the Transformation Agenda, including integration into day-to-day operations.

On June 27, 2022, the PMRA announced the establishment of its Scientific Advisory Committee, consisting of nine external volunteer expert members, which provide their independent scientific advice to support evidence-based decision making on pesticides.

Issue

The commitment to ban the live export of horses for slaughter was included in the Minister of Agriculture and Agri-Food's mandate letter in 2021. Private Member's Bill C-355, which is currently being considered in the Senate, addresses the concerns raised in the mandate letter commitment.

Context

The export of lives horses for slaughter is a niche market in which four known Canadian exporters supply young draft horses to Japan to be fattened, slaughtered and consumed raw as a delicacy. In 2023, approximately 2,500 horses were exported to Japan, valued at $19 million. In Canada, approximately 350 producers supply exporters with horses.

Live horse exporters must comply with the animal health and transport requirements set out under the Health of Animals Act, which is administered by the Canadian Food Inspection Agency (CFIA).

Many Canadians are opposed to the practice of the export of horses for slaughter for a number of reasons, as evidenced through thousands of letters received by the department. Examples of reasons cited included stress to the horses and the size and type of crates used during air transport to foreign countries.

Agriculture and Agri-Food Canada (AAFC) and CFIA have consulted on this issue with various industry members, including exporters and producers, provincial governments, animal welfare advocates, Indigenous organizations and scientific experts.

Current status

In September 2023, Member of Parliament Tim Louis introduced Private Member's Bill C-355, Prohibition of the Export of Horses by Air for Slaughter Act. The Bill was studied by the Standing Committee on Agriculture and Agri-Food (AGRI) over the course of five meetings during which 31 witnesses appeared, including witnesses from AAFC, CFIA and the Canada Border Services Agency (CBSA).

On May 9, 2024, Bill C-355 passed in the House of Commons at Third Reading and is now in the Senate, sponsored by Senator Pierre J. Dalphond.

Upcoming priorities

AAFC continues to monitor the progress of Bill C-355 as it moves through the parliamentary process and will provide support to the Senate if requested.

The Government will evaluate what further work is required, including additional industry consultations to address remaining gaps in information, and providing advice to the government to mitigate any unintended consequences of a potential ban.

Related programs/initiatives

Senator Pierre J. Dalphond introduced Bill S-270 in the Senate on June 21, 2023, "to amend the Health of Animals Act and the Agriculture and Agri-Food Administrative Monetary Penalties Regulations (live horses)." This bill was subsequently dropped from the Senate Order Paper on March 21, 2024.

Issue

Given that over half of Canadian agricultural production is exported, the sector's continued prosperity relies on its ability to maintain predictable trade, boost exports and diversify in existing and emerging international markets.

Context

In 2023, agri-food and seafood exports reached $99 billion and are concentrated in five markets, making up 83% of Canada's international trade (by value), with 60% of exports destined to the United States.

The global trade environment is challenging (for example, technological advancements, consumer demands, labour, inflation, geopolitics), non-tariff barriers continue to increase and there is a growing focus on economic security in the face of ongoing United States-China trade conflict.

Current status

Aligned with broader government objectives to increase and diversify Canadian exports, Agriculture and Agri-Food Canada (AAFC) continues to urge trading partners to adopt measures and regulations that are based on risk and scientific evidence in accordance with trade agreements and international standards to provide a transparent and predictable trade environment for Canada's exporters.

AAFC works in close collaboration with the Canadian Food Inspection Agency (CFIA) and Global Affairs Canada (GAC), as well as with provinces and industry to advance Canada's objectives to support the rules-based trading system, gain preferential access, overcome trade barriers, and reach buyers in key markets.

Upcoming priorities

[Redacted]

[Redacted]

Related programs/initiatives

Canada's trade agenda

[Redacted]

Key market access issues

The Market Access Secretariat, housed within the joint CFIA–AAFC International Affairs Branch, is dedicated to coordinating agriculture market access activities on behalf of AAFC, the CFIA and GAC, serving as a focal point for a whole-of-government approach to monitor and manage bilateral trade irritants and market access issues, including those caused by non-tariff barriers. Key priorities include:

[Redacted]

[Redacted]

[Redacted]

Canada's Indo-Pacific Strategy

On February 21, 2024, as part of Canada's Indo-Pacific Strategy, AAFC and the CFIA officially opened the Indo-Pacific Agriculture and Agri-Food Office. This Office is located in Manila, Philippines and its staff are mobile throughout the region – ready to engage regional counterparts to deepen partnerships and advance agricultural trade objectives, with a primary focus on 6 markets in the ASEAN: Indonesia, Vietnam, Philippines, Malaysia, Thailand and Singapore.

The Team Canada approach to United States engagement

The United States is Canada's most important export market. [Redacted]

Minister MacAulay has been active in United States outreach this year. The Minister's June 5-8 visit to Iowa and Minnesota marks his third visit to the United States in 2024 (Washington in January, and Boston in March).

Market development

AAFC collaborates with other federal departments, provinces and industry to promote the advantages of Canadian agri-food products to both buyers and consumers under the Canada Brand. AAFC also provides Canadian exporters access to important international trade shows, global market intelligence on how to get their products to market and funding through the AgriMarketing program.

Issue

New guidance on Canada's approach to the regulation of products derived from new plant breeding technologies (for example, gene edited products) has raised concerns from the organic sector about the transparency needed to meet market organic certification requirements.

Context

In Canada, all novel products are subject to a pre-market assessment by Health Canada and the Canadian Food Inspection Agency (CFIA).

CFIA and Health Canada have published updated guidance respectively for novel seed (2023), feed (2024) and food (2022). These guidance pieces clarify that most gene-edited products are considered non-novel (except for plants with herbicide tolerance traits) and do not require pre-market safety assessments. This guidance is based on the scientific evidence that gene editing techniques pose no unique safety concerns compared to conventional breeding methods.

The updated guidance will encourage Canada's competitiveness in crop innovation and put more tools into the hands of farmers to contend with climate change, mounting pest pressures and an evolving marketplace.

Organic and anti-genetically modified organism (GMO) advocates have been critical of this guidance and claimed the biotechnology sector had undue influence in its development.

In May 2023, the Industry-Government Technical Committee on Plant Breeding Innovation Transparency developed and released its Chair's Report to help support transparency in meeting market requirements, including the integrity of organic certifications, which allow the use of untreated conventional seed but not gene edited seed.

The Chair's Report outlined several key recommendations to improve transparency around seed varieties, including establishing a Government-Industry Steering Committee.

Current status

Agriculture and Agri-Food Canada (AAFC), CFIA, and Health Canada are active in monitoring the use of gene editing to develop new products and emphasizing the importance of comprehensive participation in non-regulatory transparency mechanisms. The first gene-edited varieties are expected to be introduced to the Canadian market in 2025/26.

The AAFC-led Government-Industry Steering Committee on Plant Breeding Innovation Transparency was launched in June 2023. The Steering Committee continues to meet regularly to advance key measures from the Chair's Report, including developing an audit framework, conducting annual surveys, enhancing the oversight and data of the industry-led Canadian Variety Transparency Database, as well as exploring any other options to improve overall awareness and transparency (for example, publishing an AAFC plant breeding innovation transparency web page and generic email address to address public enquiries).

Upcoming priorities

The Steering Committee will continue the development of an annual survey, focussed on determining seed developer awareness of transparency initiatives. Subsequent surveys will focus on participation in voluntary transparency measures (for example, Health Canada's list of non-novel food products database and Seeds Canada's Canadian Variety Transparency Database).

Related programs/initiatives

• Transparency - Plant breeding innovation initiative
• Health Canada's list of non-novel products of plant breeding for food use
• Seeds Canada's Canadian Variety Transparency Database
• Chair's Report to the Minister on the Industry-Government Committee on Plant Breeding Innovation Transparency

Issue

While Canada's agricultural science-based regulatory system is strong, there are opportunities to improve. Stakeholders have pointed to regulatory system challenges associated with complexity, unnecessary administrative burden, and long approval times for new products and technologies as a significant impediment to growth and innovation.

Context

While not a large regulator, Agriculture and Agri-Food Canada (AAFC) and its portfolio agencies are responsible for over 280 regulatory instruments, which derive their authority from over a dozen acts. AAFC regulatory instruments are designed to enable the creation of programming and services including assisting producers in managing business risks; supporting marketing of agricultural products; and facilitating competitiveness and trade (see Annex A for list of AAFC regulatory responsibilities).

The sector is highly regulated, with the Canadian Food Inspection Agency (CFIA) and Health Canada being the most prevalent regulators in areas including food and feed safety, novel foods, and labeling. AAFC works closely with regulatory partners on regulatory modernization opportunities, including efforts to ensure the perspectives and realities of the agriculture and agri-food sectors are well understood.

The current regulatory modernization efforts are rooted in the 2019 Agri-Food and Aquaculture Targeted Regulatory Review Roadmap, which lays out a regulatory modernization plan in support of innovation and economic growth in the agri-food and aquaculture sector.

Current status

AAFC's regulatory modernization priorities include a review of the Canada Grain Act and Canadian Grain Commission operations, which included a public consultation culminating in a What We Heard report published on August 13, 2021. AAFC is analyzing stakeholder recommendations to determine next steps.

In response to the Roadmap recommendations, AAFC launched the Agile Regulations Table (ART) in 2020, which brings the sector and government together to discuss regulatory priorities and find ways to collaboratively improve and modernize Canada's agricultural regulatory system. AAFC and partners are leading several novel regulatory approaches which have shown early promise.

More broadly, AAFC efforts in regulatory modernization are in the following areas:

• Work with CFIA and federal-provincial-territorial (FPT) partners to modernize regulations, notably through the launch of domestic meat trade pilot projects;
• Health Canada's front-of-package labelling and restrictions on the advertising of certain foods to children, both intended to improve food choices as part of the Healthy Eating Strategy; and CFIA's "Food Product Innovation" initiative, intended to create a more streamlined and agile food labelling framework;
• Health Canada and CFIA's work on the comprehensive "Part B Food Regulatory Modernization Project", which will result in a more agile framework that can adapt to new science, industry innovation and emerging health risks; and
• Environment and Climate Change Canada (ECCC) proposed regulations intended to address Canada's zero plastic waste agenda that: 1) would require that plastic packaging in Canada (aside from most food contact packaging) contain at least 50% recycled content by 2030; and 2) would change the current recyclable labelling scheme.

Upcoming priorities

Although there is significant interest in regulatory innovation and modernization, key constraints exist regarding limited capacity and challenges with the completion of prioritized initiatives. Given many of the regulatory modernization opportunities raised by the sector fall under the mandate of other departments, regular and ongoing engagement with federal partners remains important.

AAFC continues to prioritize regulatory agility including by pursuing more regulatory experimentation opportunities, building on the success of the ART and work with regulators and industry stakeholders to continue to advance its regulatory modernization agenda.

Related programs/initiatives

AAFC is supportive of Budget 2024's intent to amend the Red Tape Reduction Act (RTRA) to enable regulatory sandboxes, which AAFC can use to test novel projects and regulatory approaches. Each Minister will have the authority to pursue a sandbox which could further support overall regulatory agility and modernization efforts for the sector.

The FPT Domestic Food Trade Working Group, reporting under the FPT Food Safety Committee, was launched in 2021 to enhance government leadership and partnership in support of the Canadian Free Trade Agreement objective to reduce barriers to the free movement of goods and services in the agri-food sector. Advancing internal trade is also a priority outlined in Budget 2024 and AAFC is actively involved on this file.

Annex A – Agriculture and Agri-Food Canada's regulatory responsibilities

The Canadian Agriculture Loans Act and the Agricultural Marketing Programs Act grant ministerial authority to provide various loan guarantee programs and advances to producers and farmers.

The Farm Income Protection Act provides authority to facilitate business risk management programs (including income stabilization for farmers, disaster assistance and crop insurance).

The Canada Grain Act outlines the authorities of the Canadian Grain Commission (an AAFC portfolio partner), establishes regulations that govern quality standards for Canadian grain, and regulates grain handling to ensure a dependable commodity for domestic and export markets.

The Agricultural Products Marketing Act allows the delegation of federal authority to provincial commodity boards to regulate the marketing of a commodity destined for interprovincial or export trade to the same extent as it does for intraprovincial trade.

The Farm Products Agencies Act authorizes the establishment of agencies with powers relating to the marketing of a farm product destined for interprovincial or export trade (for example, Pork Proclamation).

The Canadian Pari-Mutuel Agency maintains the regulatory framework of laws, regulations, regulatory documents, licences and authorizations to govern and ensure the integrity of pari-mutuel betting systems in Canada.

The Certificates of Age and Origin for Distilled Spirits Produced or Packaged in Canada Order fulfills Canada's international trade commitments as certain trading partners require, as a condition to the importation of distilled spirits from Canada, that the distilled spirits be accompanied by a certificate issued by a duly authorized official of the Government of Canada attesting to the age and origin of the distilled spirits.

The Spirits Drinks Trade Act respects the implementation of international trade commitments by Canada regarding spirit drinks of foreign countries and recognizes that the use of certain spirit drink names is exclusive to their country of origin.

Issue

On May 1, 2024, the Return to Office (RTO) directive was updated: As of September 9, 2024, public servants in the core public administration (CPA) who are eligible for a hybrid work arrangement will be required to work on-site a minimum of three days per week. To ensure leadership and effective support for their teams, executives are expected to be on-site a minimum of four days per week as of the same date.

In November 2022, Agriculture and Agri-Food Canada (AAFC) senior management agreed to proceed with a Workplace Transformation Program (WTP) project at the National Headquarters Complex for the Agriculture Portfolio (NHCAP) Tower 7. WTP is led by Public Services and Procurement Canada (PSPC) and aims to provide employees at all levels with equal access to modernized and accessible spaces in support of a hybrid and modern work environment. A Government of Canada Workplace Project is also underway in Winnipeg, which will see two offices merged into one new modernized work environment.

Context

The department has been working to manage accommodation pressures as a result of the RTO directive in December 2022. Work has been done to modernize workspaces and increase unassigned seating across research and development centres and regional offices to ensure AAFC can continue to recruit and retain talent nationally. Corporate Management Branch has developed a staffing and space management process to help hiring managers determine the availability of space at AAFC worksites so the department can continue to hire unique talent across the country while managing its space portfolio.

The original RTO directive required employees to be in the office 40% to 60% of their work schedule. Calculations for WTP's mobility rate were based on AAFC's population and it has been determined by PSPC that our modernized offices would provide sufficient space.

To be eligible for the WTP program funding, AAFC committed to switch to an unassigned work environment where all occupants have equal access to various work points. The unassigned model applies to executives as well.

The NHCAP modernization requires a significant percentage of the population to work in swing space during the construction. The use of swing space is not required in other locations. To date, finding a workstation has not been an issue for employees at NHCAP, but concerns regarding the availability of enclosed spaces and boardrooms are regularly raised, and are expected to mount with the increase in on-site presence in the fall.

Current status

The increase to the RTO directive (from 40% to 60% of an employee's work schedule, to three days per week for employees and four days per week for executives) will have an impact on the availability of space across all AAFC sites and specifically at NHCAP.

We are currently in Phase 1 of WTP construction in NHCAP. In Tower 7, floors 1 to 6 are currently under construction and employees are working out of Tower 7 floors 7 through 10, and Towers 3, 4 and 5.

During construction, there are enough workstations for employees to be in the office three days per week. There will be enough workstations to accommodate executives at four days per week, but not to assign enclosed offices.

Upcoming priorities

• January 2025, WTP Phase 1 complete: AAFC will occupy Tower 7 floors 2 to 6, plus Towers 3, 4, and 5.
• June 2025, WTP Phase 2 complete: AAFC will occupy all of Tower 7, and can hold on to Towers 3, 4, and 5 until June 2026.
• The lease with PSPC expires June 2026 at NHCAP; retaining all or some of these towers will need to be negotiated with PSPC.

Related initiatives

• Onsite monitoring/reporting decision
• Labour Relations guidance on non-compliance
• Exemption process/full time telework
• Information Services Branch transition plan to bring back exempted information technology (IT) workers

Issue

Budget 2023 included direction to departments and agencies to review their spending to find savings and adjust government expenditures under the Refocusing Government Spending (RGS) initiative.

Context

To achieve the required savings, Agriculture and Agri-Food Canada (AAFC) mapped out savings of $39.4 million by 2026-27 and beyond.

The department took a collaborative and principles-based approach, factoring in the delivery of its mandate and the need to find efficiencies that are aligned with government and departmental priorities.

[Redacted]

Of the $39.4 million in savings:

• $9.0 million is for professional services and travel;
• $16.4 million is for grants and contributions; and
• $14.0 million is for other operating reductions.

Current status

AAFC's plan to achieve $17.5 million in savings in 2024-25 involves $9.0 million of savings in professional services and travel, $4.6 million savings in grants and contributions and the remaining $3.9 million in other operating savings.

The areas of focus for providing these savings are:

• Reducing professional services through greater alignment of contracting to priorities;
• Modernizing processes by increasing automation, decommissioning legacy internal systems, reducing costly software customizations, and implementing digital tools;
• Improving internal efficiencies by reducing duplicative processes, right-sizing our fleet, and managing vacant positions;
• Reducing travel expenditures through adoption of revised guidelines, processes, and enhanced monitoring; and
• Adjusting grants and contributions expenditures in a way that will still enable the programs to meet their objectives, including greenhouse gas reduction targets.

Upcoming priorities

Corporate Management Branch is monitoring the implementation of the planned savings. This will be discussed at governance on a regular basis throughout the year.

Related initiatives/programs

A few items in Budget 2024 relate to the refocusing of government spending:

• Starting April 1, 2025, we will be required to cover a portion of increased operating costs through existing resources.
• Over the next 4 years, based on historical rates of natural attrition, the Government expects the public service population to decline by approximately 5,000 full-time equivalent positions, or around 1.4%.

AAFC is awaiting details from central agencies on these items and is preparing scenarios to evaluate the potential impacts.

Issue

Agriculture and Agri-Food Canada's (AAFC) land divestitures are managed in alignment with Treasury Board (TB) policy requirements as per the Directive on the Management of Real Property.

Context

AAFC must hold and use real property to support the Department's science and program objectives. AAFC takes a proactive departmental planning approach, rather than a transactional approach to the disposal of real property.

TB policy and various Government of Canada initiatives are drivers that are taken into consideration in the management of the Department's real property portfolio and specifically on surplus real property. These include the Horizontal Fixed Asset Review (HFAR) and broader Government of Canada priorities (Housing Initiative and Indigenous Reconciliation). Corporate Management Branch (CMB) manages the divestiture program and has established internal tools, guidelines, and processes that further support TB policy and Government of Canada priorities and ensure sound stewardship, management oversight and decision-making for divestitures.

CMB also demolishes buildings and structures that no longer have a program use or have sustained damage. These structures range from small storage sheds to larger research buildings and greenhouses.

Current status

AAFC engages Public Services and Procurement Canada (PSPC) to support active divestiture of federal real property. [Redacted]

AAFC also has the Water Infrastructure Divestiture and Community Pastures Program. The Department had developed dams, irrigation systems and canals with community pastures as systems to support livestock producers in Saskatchewan and Manitoba. These assets are no longer required to support program needs and all assets (including pasture lands) are in the process of divestiture.

[Redacted]

Upcoming priorities

CMB and Science and Technology Branch (STB) are co-developing AAFC's Real Property Portfolio Strategy (RPPS), as per TB's mandate to custodians who are required to develop, implement and monitor a long-term real property portfolio strategy. The RPPS will ensure that AAFC's real property portfolio and asset-level investment decisions are made in alignment to advance AAFC's mission-driven science priorities as identified in the Department's Strategic Plan for Science.

The Surplus Real Property Guidelines incorporate a utilization review and inventory that will assess what lands are under-utilized or not used, which could then be declared surplus. The utilization review exercise is anticipated to launch in Quarter 3 of fiscal year 2024-25.

Related programs/initiatives

AAFC's divestitures will continue to align with TB policy and broader Government of Canada priorities, including the National Housing Strategy.

The RPPS will ensure the long-term vision of the portfolio continues to support AAFC's Strategic Plan for Science.

Issue

Agriculture and Agri-Food Canada's (AAFC) Long-Term Capital Plan is a strategic road map that will help address AAFC's mounting deferred maintenance, while optimizing the investment portfolio through transformation, consolidation, and alignment with our forward-looking science, program delivery and operational priorities.

AAFC is currently mid-way through the development of its Long-Term Capital Plan, which identifies internal strategies that will help guide integrated medium to long-term planning for future investment plan (IP) renewals on a triennial basis. It will also be used to articulate our readiness to capitalize on future potential fiscal measures.

To be effective, the Long-Term Capital Plan must align with both our Strategic Plan for Science and our Real Property Portfolio Strategy, while taking into consideration our Greening Government Strategy, digital operations and program delivery objectives.

Context

AAFC's Investment Planning Committee has made a concerted effort to identify and align individual investment strategies under its Long-Term Capital Plan to ensure AAFC remains a modern, sustainable and impactful organization for the future. AAFC's 2023-28 IP was renewed in June 2023. The IP highlights how a significant portion of AAFC's resources are dedicated to supporting our assets as it covers approximately $300 million per year in spending (about a third of AAFC's combined Operating and Capital Budgets).

AAFC's 2023-28 IP identified a buildup of over $500 million in deferred maintenance costs and a growing resourcing shortfall of over $110 million per year based on our current estimated investment portfolio.

AAFC received $115 million (over 5 fiscal years) through Budget 2023 for laboratory asset renewal, which helps reduce our accumulated deferred maintenance. [Redacted]

Current status

AAFC's Investment Planning Committee has made a concerted effort to identify and align individual strategies to ensure AAFC remains a modern, sustainable, and impactful organization for the long-term.

The Long-Term Capital Plan will steer departmental investment prioritization processes and strategies as it incorporates both Vote 1 (Operating) and Vote 5 (Capital).

Some of these strategies were finalized, such as our Green Fleet Strategy, while others require more time due to their complexity, such as the Real Property Portfolio Strategy and the Digital Workload Migration Readiness. Once completed, there will remain a significant resource gap to fully realize our desired strategic outcomes.

Upcoming priorities

Discuss the 2024-25 update to AAFC's 2023-28 IP at the Senior Management Committee meeting (July 15, 2024), which will include feedback on the draft Long-Term Capital Plan [REDACTED]