Book 3 - Key files: deputy minister's transition book 2023, AAFC

Issue

Regulations play an important role in supporting economic growth and innovation, while at the same time ensuring the health and safety of Canadians. Canada’s science-based regulatory system is one of the most rigorous and well-respected in the world.

The agriculture and agri-food sector operates within a regulatory framework that includes acts and regulations designed to support food safety, animal and plant life and health, the environment, the security and safety of our food supply, access to markets, and the social and economic well-being of Canadians.

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.

Background

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.1 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 AAFC’s regulatory responsibilities). Other key regulators for the sector include the Canadian Food Inspection Agency (CFIA), Health Canada (including the Pest Management Regulatory Agency), Environment and Climate Change Canada (ECCC), and Transport Canada.

AAFC works closely with federal regulators to advance various regulatory initiatives. The 2019 Agri-Food and Aquaculture Targeted Regulatory Review Roadmap (see Agri-food and aquaculture roadmap) lays out a regulatory modernization plan in support of regulatory modernization in the agri-food and aquaculture sector.

Key commitments within the Roadmap, which are led by AAFC and Portfolio, include:

• AAFC launching the Agile Regulations Table (ART) which brings the sector and government together to discuss regulatory priorities and cross-cutting irritants, and find ways to work collaboratively to improve and modernize Canada’s agricultural regulatory system; and
• AAFC and the Canadian Grain Commission (CGC) undertaking a review of the Canada Grain Act and Canadian Grain Commission operations, including public consultation culminating in a What We Heard report which was published on August 13, 2021. AAFC is analyzing stakeholder recommendations in order to determine next steps.

AAFC has made efforts to modernize regulations which fall within the department and Portfolio’s regulatory authority, such as:

• As part of the Second Annual Regulatory Modernization Bill (Bill S-6), AAFC is proposing to modernize the Agricultural Products Marketing Act. Bill S-6 is currently at second reading in the House of Commons. The Bill is led by the Treasury Board Secretariat and contains 23 proposals that fall under the Agricultural Portfolio (22 of which are led by CFIA). AAFC’s proposal would reduce administrative burden, mitigate legal risk and simplify the delegation process.

AAFC continues to work closely with regulatory partners on regulatory modernization opportunities which fall outside of AAFC’s legislative or regulatory authority, including efforts:

• to ensure the perspectives and realities of the agriculture and food sectors are well understood in major regulatory activities such as: Health Canada’s front-of-package labelling and restrictions on the marketing of certain foods to children, both intended to improve food choices as part of the Healthy Eating Strategy; and CFIA’s “Food Product Innovation,” intended to create a more streamlined and agile food labelling framework.
• led by Health Canada to re-design its food regulations to develop a more comprehensive picture of the changing food landscape; and,
• led by ECCC to implement the Clean Fuel Regulations (CFR). ECCC published the CFR in Canada Gazette II in July 2022 and is currently working on guidance to support their implementation. Biofuels derived from agricultural commodities, notably canola and corn, are expected to be an important contribution. AAFC has been working closely with ECCC to ensure that sustainable Canadian production practices are reflected in the regulations.

Considerations

Regulations that affect the sector are enforced by multiple federal and provincial departments and agencies, and impact stakeholders in different ways. In addition to it’s regulatory responsibilities, AAFC helps connect regulatory departments and agencies and industry stakeholders, ensuring that government priorities are well communicated and that sector perspectives are well understood.

Agriculture and agri-food stakeholders are supportive of Canada’s robust science-based regulatory system, as it provides confidence in their products for domestic and international consumers. Nonetheless, many stakeholders feel there are opportunities to better reflect agriculture and agri-food perspectives in regulatory policy development.

Modernizing the regulatory environment must consider many factors, including: desire to eliminate regulatory burden, keeping pace with an evolving landscape and changing products and technologies, domestic and global harmonization and the practical challenges presented by the time it takes to enable new regulations and/or update existing ones.

Next steps

As expectations for concrete regulatory improvements remain high, AAFC will continue to advance regulatory modernization efforts, without impacting health and safety objectives, including working closely with partners, such as Health Canada, the CFIA and the agriculture sector.

Annex A — AAFC’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.

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 are exclusive to their country of origin.

Annex B — Agri-food and aquaculture roadmap

Budget 2018 announced a regulatory reform agenda focused on supporting innovation and economic growth. The agri-food and aquaculture sector was one of three sectors identified for “targeted regulatory reviews,” a comprehensive initiative to identify and advance work on specific regulatory irritants and update regulations. The Agri-food and Aquaculture Roadmap2 (Roadmap), led by the CFIA, lays out a regulatory modernization plan for the sector and contains 35 initiatives advanced by 5 departments and agencies, including AAFC.

These initiatives contain detailed actions to address stakeholder concerns in support of regulatory modernization, and fall into one of four themes:

• Clear, agile, responsive regulations;
• Competitiveness in domestic and international markets;
• Risked-based, efficient, and predictable regulatory programs; and,
• Novel regulatory approaches.

This includes commitments to modernize the grains regulatory framework and efforts to improve government-stakeholder collaboration on regulations.

There is a requirement to report back to Treasury Board on the progress in implementing Roadmap actions, and AAFC will work with CFIA to develop a progress report for Treasury Board in 2023.

An overview of the supply management (SM) system for the Canadian dairy, poultry and egg sectors and compensation programming for trade agreements

What is supply management?

SM is the production and marketing system under which dairy (cow’s milk), table eggs, broiler hatching eggs, chicken, and turkey are produced in Canada.

SM aims to ensure a reasonable return to producers for their labour and investment, while consumers receive a predictable supply of products.

The SM system is based on 3 pillars:

• pricing mechanisms
• production control
• import control

Supply management: how it works

Production: designed to match domestic demand.

• Production levels are set at the national level then allocated to provincial marketing boards, which then allocate maximum production levels to producers through quotas.

Pricing: aimed at ensuring producers receive a fair return for their labour.

• Provincial marketing boards establish the prices producers receive, reflecting factors such as the cost of production and inflation. Retail prices are not regulated.

Import: managed and administered through the federal government.

• Imports of SM products are controlled through Tariff Rate Quotas (TRQs) where limits are set on the volume of imports allowed to enter Canada at low or zero tariff rates, with much higher, over-quota rates for additional imports.

Sector snapshot

Dairy

• 9,952 dairy farms in Canada, with majority (80%) located in Ontario and Quebec.
• Farm cash receipts, 2021: $7.39 billion
• Average net operating income, 2020: $176,109

Poultry and eggs

• 2,837 chicken producers, 515 turkey producers, 236 broiler hatching egg producers and 1,205 egg producers in Canada, with majority (62%) located in Ontario and Quebec.
• Farm cash receipts, 2021: $5.5 billion
• Average net operating income, 2020: $193,508

Processing sector

• Approximately 507 dairy processors and 460 poultry and egg processing plants in Canada, majority located in Ontario and Quebec.
• Manufacturing shipments: $24.8 billion ($16.2 billion for dairy; $8.7 billion for poultry and egg)
• Number of employees in SM processing, as reported by the industry: 24,500 in dairy; more than 28,000 in poultry and egg

Recent trade agreements

CETA – 2017

• Comprehensive Economic and Trade Agreement — dairy (cheese) only

CPTPP – 2019

• Comprehensive and Progressive Agreement for Trans-Pacific Partnership — all SM sectors

CUSMA – 2020

• Canada-United States-Mexico Agreement — all SM sectors

Recent trade agreements provide Canada’s key trading partners with additional access to the domestic dairy, poultry and egg market, while keeping the SM system and its pillars intact.

Access provided through Tariff Rate Quotas, which allow imports of set amount of specific products at a low or zero rate of duty.

New imports under these agreements replace products that would have otherwise been supplied by Canadian producers.

Imports under CETA, CPTPP and CUSMA to date have been high for specific commodities, while certain CUSMA and CPTPP TRQ fill rates have been lower than expected due to various reasons.

Compensation for CETA/CPTPP

Overall compensation for impacts of CETA and CPTPP: $3.083 billion

In 2016, the GOC announced $350 million in compensation for the impacts of CETA.

Dairy producers

• Dairy Farm Investment Program ($250 million over 6 years; program concludes March 31, 2023)

Dairy processors

• Dairy Processing Investment Fund ($100 million over 5 years; program ended March 31, 2021

CPTPP: Through Budgets 2019 and 2021, the Government of Canada announced additional $2.733 million in support to supply-managed sectors.

SM producers

• Dairy Direct Payment Program ($1,750 million over 4 years)
• Poultry and Egg On-Farm Investment Program ($647 million over 10 years)
• Market Development Program for Turkey and Chicken ($44 million over 10 years)

Dairy, poultry and egg processors

• Supply Management Processing Investment Fund ($292.5 million over 6 years)

Compensation for CUSMA

Through the 2022 Fall Economic Statement, the Government announced $1.7B for the impacts of CUSMA. Majority of funding will be delivered through existing compensation programs:

Dairy producers: $1.2 billion

• Dairy Direct Payment Program (over 4 years)

Poultry and egg producers: $112 million

• Poultry and Egg On-Farm Investment Program (over 8 years)

Dairy, poultry and egg processors: $105 million

• Supply Management Processing Investment Fund (over 5 years)

Current status

• Treasury Board submission forthcoming

CUSMA compensation also includes $300 million for a new program to support dairy processors’ efforts to manage the surplus of solids non-fat (SNF), a by-product of milk processing.

Current status

• GOC announced its intention to invest in this new program for the dairy sector following the 2022 Fall Economic Statement
• Consultations with key dairy industry stakeholders and associations took place between December 2022 and February 2023
• AAFC currently seeking budget approval to secure funding and required authorities

Next steps

Treasury Board Submission forthcoming

Supply management sector: key priorities and issues

• Inflation (for example, rising input costs)
• Public trust (for example, environmental sustainability, animal welfare)
• Labour shortages

Dairy

• Trade disputes (CUSMA and CPTPP dairy TRQs)
• Consumer concerns over increasing dairy prices
• Milk disposal and surplus of solids non-fat (for example, skim milk powder, whey powder)
• Dairy Vision exercise to chart a path forward for the dairy sector

Poultry and egg

• Avian influenza
• Ukraine Remission Order – temporary tariff removal on all products originating from Ukraine (expires in June 2023)

Key dairy industry players

Dairy Farmers of Canada

• National producer-led policy, lobbying and promotional organization
• Plays coordinating role amongst producers
• Administers producer programs and pursues industry policies, such as ProAction
• Advocates for producers domestically and internationally and lobbies government
• Conducts advertising, events and other promotional activities on behalf of producers
• President: Pierre Lampron; Executive Director: Jacques Lefebvre
• Funded via producer levies

Provincial marketing boards

• Responsible for implementing the system on a provincial basis
• Market milk to the processing industry
• Set prices for each milk class
• Administer provincial quota policies; and allocate quota on a producer basis

Dairy Processors Association of Canada

• National industry association representing Canadian dairy processors:
• A non-voting member of the Canadian Milk Supply Management Committee

Canadian Dairy Commission

• Responsible for providing federal oversight of the supply management system
• Reports to Parliament through the Minister of Agriculture and Agri-Food and responsible for:
• Estimating of Canadian quota requirement;
• Establishing support prices for butter;
• Administering the Special Milk Class Permit, Pooling, and a number of dairy programs (the Dairy Innovation program, Dairy Direct Payment Program, Milk Access for Growth, and Domestic Seasonality Programs)
• 3 members and 60 employees; CEO: Benoit Basillais; Chairperson: Jennifer Hayes
• Funding: 50% appropriations, 50% industry and marketplace

Canadian Milk Supply Management Committee

• Oversees the administration of the National Milk Marketing Plan
• takes quota allocation and pricing decisions, along with decisions related the milk classification system;
• addresses policy issues affecting the dairy SM system
• Chaired by the Canadian Dairy commission; consists of provincial milk marketing boards and provincial governments; Dairy Farmers of Canada, Dairy Processors Association of Canada and Consumers’ Association of Canada are non-voting members/observers

Key poultry and egg industry players

Farm Products Council of Canada (federal agency)

• approves national production allocations and levies
• supervises the activities of the national marketing agencies under the Farm Products Agencies Act, reports to the Minister
• reviews stakeholder complaints related to national marketing agency decisions

National Marketing Agencies (producer-based)

Chicken Farmers of Canada; Turkey Farmers of Canada; Egg Farmers of Canada; and the Canadian Hatching Egg Producers are responsible for

• estimating national production requirements
• playing a central coordinating role for industry
• administering producer programs and pursuing industry policies
• conducting advertising, events and other promotional activities
• advocating for the industry and lobbying government

Funded by producers and through consumer levies.

Provincial Commodity Boards (producer-based)

Take their portion of the national quota and allocate it to producers and approve prices determined by the price supervisory board in each province.

Canadian Poultry and Egg Processors Council

Industry association representing processors and further processors of chicken and turkey meat, graders and further processors of eggs, and hatcheries in Canada.

Why Business Risk Management?

Canadian agricultural sector is faced with risks that can have significant impacts on farm viability:

• Short growing season, extreme weather events, disease, and pests
• Small, export dependent sector vulnerable to market volatilities, exchange rate fluctuations, and foreign governments’ trade policies

Business Risk Management (BRM) programs are positioned to provide support to farmers and help them manage these risks:

• The BRM programs are in place to help producers manage the impact of risks such as drought, flooding, low prices, and increased input costs
• The varying individual needs of producers mean that different combinations of programs work best

BRM programs are governed by Farm Income Protection Act (FIPA) and the federal-provincial/territorial (FPT) Multilateral Framework Agreements (MFAs).

• These instruments include agreed-upon overarching principles, such as respecting Canada’s trade obligations, maintaining equitable programming nationwide, and minimizing distortion of production and marketing decisions.

Business Risk Management program evolution

Over time, the focus of BRM programs has shifted from safety nets to income stabilization to assisting with severe market volatilities, severe losses and disasters.

1980s and 1990s

Tripartite/Growing Together

• Tripartite were commodity specific based on regional needs
• Safety Nets introduced Gross Revenue Insurance Plan revenue based support and Net Income Stabilization Account subsidised savings
• Agricultural Income Disaster Assistance was first to introduce “disaster income support“ using whole-farm margins

2003 to 2008

Agricultural Policy Framework

• Focused on BRM and income stabilization, as well as introduced non-BRM programs
• Major BRM programs were Canadian Agricultural Income Stabilization (100% margin coverage) and Production Insurance
• Non BRM themes: environment, food safety and quality, innovation, renewal, and international
• Programs were cost-shared 60:40 federal–provincial with national focus

2008 to 2013

Growing Forward

• The creation of two new programs – AgriInvest, and AgriRecovery – address concerns raised about CAIS timeliness and predictability
• BRM suite was seen as too comprehensive, covering normal risks that should be managed by producers
• Provincial flexibility introduced to non-BRM programs
• Non-BRM themes: competitiveness, innovation, society’s priorities, and proactive in managing risks

2013 to 2018

Growing Forward 2

• BRM amended to encourage producers to manage normal risks and governments to focus on severe market volatility and disasters
• Investments to encourage development of private sector risk management tools, including insurance (AgriRisk)
• Some BRM savings were redirected to Strategic (non-BRM) Initiatives
• Strategic Initiatives focus on innovation, competitiveness and market development

The Canadian Agricultural Partnership (2018 to 2023) maintains the policy direction of GF2, and responds to industry concerns around eligible coverage under AgriStability, ensuring a more equitable level of support for all producers.

Current suite of Business Risk Management programs

Under CAP, FPT governments have continued to rebalance support towards proactive investments in the sector to promote innovation, competitiveness, and adaptability of the sector.

Producers are expected to proactively manage their risks and many use a combination of on-farm practices (for example, diversifying crops) and BRM programs to protect against both shallow and severe losses.

The current suite of FPT cost-shared BRM programs includes:

• AgriInvest to help address small income declines
• AgriStability to help address large margin declines
• AgriInsurance to help address production losses
• AgriRecovery to help cover extraordinary costs to recover from natural disasters
• AgriRisk to support the development of tailored risk management tools (sunsets at the end of CAP)

AgriInvest

Government-matched savings account to address income declines or make investments to manage on-farm risks.

• A producer savings account, to which governments contribute.
  • Contributions are based on a producer’s allowable net sales (ANS) – sales minus purchases of allowable commodities (for example, flower or tree sales less seed or seedling purchases).
• Producers can deposit up to 100% of their ANS annually, of which the first 1% is matched dollar-by-dollar by governments (up to $10,000).
• Government contributions must be withdrawn first, and are taxable upon withdrawal.
• There is no trigger for withdrawal – producers manage their accounts as they see fit.
• There is over $2.7 billion in AgriInvest accounts, with a balance of about $29,000 on average per account (as of October 2022).

Program cost-share

• Federal, 60%
• Provincial, 40%

Program delivery

• Federal: Manitoba, British Columbia, Saskatchewan, Newfoundland and Labrador, Nova Scotia, New Brunswick, Ontario, Alberta, Prince Edward Island
• Provincial: Quebec

FPT payments to date, as of October 2022 ($)

Targeted areas of coverage

AgriStability

Individual margin-based program that assists with large margin declines caused by severe market volatilities and disasters.

• Provides support to producers who experience large margin declines (30%+) in a given year compared to their historical margins.
• Payment represents 70% of losses beyond a reference margin; will increase to 80% starting in 2023.
• Covers all major income-related risks of a farm in one program (that is, income loss due to production problems, decreases in commodity prices or increases in input costs).
• Coverage is available for most agricultural commodities and is tailored to individual circumstances.
• AgriStability has paid out over $2.9 billion to producers since 2013.

Program cost-share

• Federal, 60%
• Provincial, 40%

Program delivery

• Federal: Manitoba, New Brunswick, Nova Scotia, Newfoundland and Labrador
• Provincial: British Columbia, Alberta, Prince Edward Island, Quebec, Saskatchewan, Ontario

FPT payments to date, as of October 2022 ($)

Targeted areas of coverage

AgriInsurance

Insurance protection against natural hazards (that is drought, flood, wind, frost, excessive rain or heat, snow, losses from uncontrollable disease, insect infestations and wildlife).

• Addresses production declines caused by natural hazards (for example, wind, frost, excessive rain or heat, snow, disease and pests).
• Insurance plans are tailored by provincial administrations to respond to regional needs:
  • Provinces monitor the industry (for example, new crops, new production techniques) and respond to the needs of producers by developing or adjusting insurance plans to address gaps in coverage.
• Producers choose the commodities to insure, the type of plan, and the coverage level, and governments share in the cost of premiums with producers:
  • Generally 60% of premiums are paid by governments, and governments cover the full cost of program administration.
• Indemnities are paid when production volume or quality falls below the insured level of production.

Program cost-share

• Federal, 36%
• Provincial, 24%
• Producer, 40%

Program delivery

• Provincial: all 10 provinces

FPT payments to date, as of October 2022 ($)

Targeted areas of coverage

AgriRecovery

An FPT framework that facilitates the implementation of federal/provincial responses to natural disasters and disease/pest outbreaks.

• Acts as a mechanism for FPT governments to develop individual initiatives to address specific disaster events within predefined criteria.
• The framework provides:
  • A protocol for FPT interaction;
  • A definition of disaster to guide when intervention is warranted; and
  • Guidelines on the type of assistance to be provided.
• Focuses on assisting with the extraordinary costs required to recover following a disaster, not meant to replace available coverage under AgriInsurance, AgriStability, and AgriInvest.
• Not intended to provide responses to recurring disaster events, as a recurring disaster might indicate that there is a need to look for longer-term options.
• The federal government recently committed to providing up to $525 million through AgriRecovery initiatives to help producers facing additional costs due to events such as the 2021 drought

Program cost-share

• Federal, 60%
• Provincial, 40%

Program delivery

• Federal: On a case-by-case basis
• Provincial: all 10 provinces

FPT payments to date, as of October 2022 ($)

Targeted areas of coverage

Additional Business Risk Management programs

Federal-only risk management programs include:

• Livestock Price Insurance (LPI; Western Canada) allows cattle and hog producers to purchase insurance coverage against unanticipated price declines, offering protection against volatility in the marketplace. Producers pay 100% of premiums while governments (FPT) pay administration costs and insurance deficit financing covered by Canada. Total LPI premiums collected in 2021-22 were $11.6 million; as of November 2022, $7.8 million in premiums collected in 2022-23 (full year ends March 2023).
• The Advance Payments Program is a loan guarantee program which provides producers with easy access to low-interest cash advances to support marketing flexibility (an annual loan average of $2.3 billion); and
• The Canadian Agricultural Loans Act provides a loan guarantee program designed to increase the availability of loans to farmers to help establish, improve and develop farms (averaging $100 million in loans annually).

Assessments of Business Risk Management programs

A number of internal/external reviews have concluded:

• The BRM suite meets many of its objectives, but improvements to individual programs is possible to improve synergy and overarching response.
• AgriInsurance is simple, predictable and quick to respond, thus it is well-liked by producers; however, because it is commodity-specific, it can provide support for normal losses relative to whole-farm income and is largely only available to crop producers.
• AgriInvest provides predictable support each year, thus it is well-liked by producers; however, the program design allows support to be used for purposes other than risk management.
• AgriStability covers whole farm income loss, but participation has been declining due to strong sector performance as well as due to the burden to participate and timeliness of payments.

In general, stakeholders are heavily supportive of AgriInsurance and AgriInvest for their simplicity, ease of understanding, timeliness and responsiveness, however, there are concerns around the complexity of AgriStability.

• Stakeholders feed directly into BRM policy and program design through the National Program Advisory Committee.

Business Risk Management enhancements under Sustainable Canadian Agricultural Partnership

FPT governments continue to work towards enhancements to BRM programs and agreed to the following:

• Undertaking a review to assess how BRM programs can make positive contributions to reducing agriculture’s climate change footprint and encourage farmers to adapt to climate change. The review will also consider the financial implications of climate change on BRM programs.
• Increasing AgriStability compensation rate from 70% to 80% to better support farmers in times of need.
• Requiring large farms (allowable net sales of $1 million or greater) to have an agri-environmental risk assessment (for example, Environmental Farm Plan) by 2025 to participate in AgriInvest.
• Exploring the possibility of a more streamlined and timely AgriStability model.
• Adding option under AgriInsurance for provinces to offer Whole Farm Cost Share as an alternative coverage to producers that would encourage diversification and lower producer premiums.
• Offering premium rebates under AgriInsurance for producers who adopt environmentally beneficial management practices that also reduce production risk. Provinces agreed to implement a rebate for a minimum of one beneficial management practice over the course of the Framework.
• Continuing the exploration of a whole-farm revenue insurance program.
• A National Program Advisory Committee meeting is scheduled for March 22-23 to engage with producers on these priorities.

Issue

AAFC has been working with Employment and Social Development Canada (ESDC) and other key stakeholders to develop an Agricultural Labour Strategy (the Strategy) to address chronic and persistent labour shortages faced by the sector.

Background

Canada’s agricultural sector faces complex and long-standing challenges that have led to chronic labour shortages predating the pandemic.
Minister Bibeau’s 2021 Mandate Letter included the following commitment; “With the support of the Minister of Employment, Workforce Development and Disability Inclusion, and in partnership with provinces and territories, employers, unions and workers, 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.”
The future holds a challenging labour market for the sector with the overall labour participation rate expected to decrease because of an aging population. The Canadian Agricultural Human Resources Council (CAHRC) estimates that by 2029, the agriculture and agri-food sector will have 123,000 more jobs than the domestic labour force can fill.

Job vacancy rates (2015 to 2021)

• Primary agriculture industries ranged from 7.5% to 15.9%
• Food processing industries ranged from 1.9% to 5.8%
• Compares with 3.2% for broader Canadian economy

Advanced economies across the world have turned to foreign labour to make up for the gap in domestic workers. Canada has become increasingly reliant on Temporary Foreign Workers (TFWs) to fill labour shortages and TFWs are a growing segment of the agricultural labour force due to difficulty attracting domestic workers, making up approximately 20% of the workforce in seasonal industries.
Immigration is also key to Canada’s labour supply and recent estimates find it accounts for almost all of Canada’s labour force growth. Canada's workforce is the most educated of any of the G7 countries, with recent immigrants making up nearly half of the growth in the share of Canadians with a bachelor's degree or higher, but the sector requires more “unskilled” workers (that is, skills mainly learned with on-the-job training and not through post-secondary education).

Current status

Public consultations on the Strategy were launched Summer 2022 and stakeholders provided input through

• online consultations via a questionnaire that was open from June 27 to September 28, 2022
• a generic e-mail inbox that was open until December 31, 2022
• targeted engagement with partners and stakeholders
• direct discussions with provinces and territories via AAFC’s various federal–provincial–territorial fora

To date, AAFC has received written submissions from over 68 individuals and industry groups, reviewed 218 completed online questionnaires, and engaged fora such as the Canadian Agricultural Youth Council and the Canadian Food Policy Advisory Council.
Based on the themes that emerged through consultations, the Strategy will look to take targeted action under four pillars:

• Supporting access to domestic and foreign workers
• Welcoming youth and new entrants while increasing representation
• Creating the tools and skills of the future
• Bolstering capacity: human resource and agricultural labour market information

Of highest importance to the sector are the Temporary Foreign Worker Program and immigration reform efforts underway by ESDC and Immigration, Refugees and Citizenship Canada (IRCC). AAFC has been working closely with ESDC and IRCC on the parameters of forthcoming reforms to ensure the needs of the agricultural sector are considered.
Provincial–territorial (PT) ministries of agriculture also have an important role to play. Some of the $2.5B in cost-shared funding made available through the Sustainable Canadian Agricultural Partnership can be used for labour and skills initiatives and agricultural labour strategies are being developed by some provinces. Provinces can also use the Provincial Nominee Program to fill labour shortages as they have the ability to create dedicated streams based on their economic needs and the credentials they accept for individuals nominated. The department regularly engages with PT colleagues through a Labour Task Team.
In addition to AAFC’s work, industry is taking leadership to address labour issues and the department is leveraging work being led by the Canadian Agricultural Human Resource Council, in partnership with Food & Beverage Canada and the Canadian Federation of Agriculture, to develop the National Workforce Strategic Framework to ensure the federal strategy is complementary. Through this sustained engagement, both strategies remain aligned on wanting to take collaborative action and outline short, medium and long-term solutions to address immediate labour shortages and systemic workforce challenges.

Next steps

• The strategy will advance federally led, agriculture and agri-food sector-specific solutions both by leveraging current efforts and partnerships and implementing new initiatives where gaps exist.
• A “what we heard” report outlining the results of consultations is expected to be released in March/April 2023.

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