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Senator Plett on Bill C-16: The agriculture sector has been hit hard by the pandemic, but where is the government support?

May 15, 2020 (Ottawa, ON) - The Honourable Don Plett, Leader of the Opposition in the Senate, issued the following statement:

Honourable senators, it was March 11 when the World Health Organization declared the coronavirus outbreak a global pandemic. In his remarks to the media that day, the WHO’s director said the following: In the past two weeks, the number of cases of COVID-19 outside China has increased 13-fold, and the number of affected countries has tripled.

There are now more than 118,000 cases in 114 countries, and 4,291 people have lost their lives. Thousands more are fighting for their lives in hospitals. In the days and weeks ahead, we expect to see the number of cases, the number of deaths, and the number of affected countries climb even higher.

Colleagues, as we know, this is exactly what happened. March 11 was nine weeks ago on Wednesday. Nine weeks ago, there were 118,000 cases of COVID-19. Today, there have been more than 4.5 million cases worldwide. Nine weeks ago, 4,291 people had lost their lives from this virus. The global COVID-19 mortality rate was 3.6%. Today, the virus has claimed the lives of over 300,000 people in 177 countries, and the mortality rate is at 6.7%. In Canada, our mortality rate is even higher, at 7.5%. Over 73,000 Canadians have tested positive for the virus, and over 5,400 have lost their lives.

That’s over 5,400 families and untold loved ones who have been directly impacted by the untimely loss of a family member or a friend due to this virus. These were moms and dads, brothers and sisters, grandmothers and grandfathers who only weeks ago sat together for dinner or visited in a seniors’ home amidst love and laughter, and now they are gone. The pain caused by this virus is incalculable, and our hearts and our prayers go out to everyone who has been impacted.

Colleagues, many of you may not know that one of our own was impacted just two days ago when she lost her father to this. Senator Saint-Germain, our prayers are with you.

She could FaceTime with her father during his last time. Regrettably, nothing will wind the clock back to the way things used to be. Nothing can restore what has been lost. It’s not like a video game where you can just restart in order to replay the level. This is real life, and real life is full of joys and sorrows, some avoidable and some unavoidable. This is the great tragedy of the coronavirus pandemic — it contains both of these: Things which could have been prevented and things which could not have been.

Canada was not in a position to prevent the coronavirus outbreak, but it could have done more, and done it earlier, to prevent its spread. It was inevitable that we would be touched by the pandemic and that lives would be lost, but it was not inevitable that the virus would sweep through so many seniors’ residences unabated. More could have been done and more should have been done to protect our elderly and the most vulnerable amongst us.

Likewise, there was no avoiding the fact that a global pandemic would bring with it a significant economic impact. But it is undeniable that the government’s fumbling of the health crisis amplified the economic crisis we are facing today. No one expects a government to be perfect or to get everything right. But at a minimum, in times of a national crisis, the government should be doing everything it can to increase its effectiveness by being collaborative rather than combative, collegial rather than exclusive, and purposeful rather than political.

But this is not what we have seen from our government. In fact, this government’s response to COVID-19 is beginning to look like a hamster on a wheel, working very hard but not getting very far. We keep seeing the same scenes play out over and over again: Spending announcements followed by confusion and then uncertainty. Who qualifies? How do they apply? Why doesn’t the program cover this situation or this person? Why is this safety net full of holes? Why is there an announcement but no details on how the program will work?

We are nine weeks into the pandemic and yet, for some people, their ship is sinking and they still have no life raft. The government is selectively tossing out life preservers to some people while others are struggling to keep their heads above water.

Emergency spending announcements worth billions of taxpayer dollars are more appropriately made from the floor of the House of Commons, not from the steps of the Prime Minister’s cottage. It’s like they don’t believe Parliament is an essential service. Colleagues, Walmart is open; Costco is open; even Tim Hortons is open. Why on earth isn’t Parliament open? It seems that the less the Liberals have to be in Ottawa to be accountable, the more they like it.

Colleagues, today we have been called back to consider Bill C-16, An Act to amend the Canadian Dairy Commission Act.

I find it interesting, colleagues, that after making billions of dollars of announcements from the steps of his cottage, and after blocking Parliament from sitting more frequently in order to ensure appropriate accountability and consideration of policy proposals, the Prime Minister has asked Parliament to come back to change one word of one act.

In the Prime Minister’s mind, it’s too dangerous for Parliament to convene regularly in order to hold the government to account on the extraordinary spending of taxpayer dollars during a national crisis, but there is no hesitation to reconvene in order to change the word from “three” to “five.”

Don’t misunderstand me. I’m not suggesting that this change isn’t important, and we have every intention of supporting it.

On May 5, the Prime Minister announced new spending of $252 million to support farmers, food businesses and food processors. As part of this package, the government said it intended to increase the Canadian Dairy Commission’s borrowing limit by $200 million to cover the costs related to having to store excess cheese and butter. Dairy farmers have never seen a weekly fluctuation in the demand for milk like they are seeing now.

In addition, the sudden closure of restaurants and hotels across the country has resulted in excess production that is very difficult to manage. You can’t just shut off a milk cow one week because demand is low — we heard the minister say it’s not like shutting off a tap — and then turn it on the following week when demand is higher. It’s a bit more complicated than that.

The dairy industry has struggled to manage these challenges, including donating over $10 million in dairy products to food banks across the country and reducing quotas by 2 to 5%, depending on the province. In spite of these efforts, 30 million litres of milk still had to be disposed of at the farm because there was simply no place for it to go. Nobody wants to see that happen.

Dairy producers tell us that this amendment will help to “offset the impacts of bottlenecks in the supply chain that have prevented dairy from getting from the farm to the store shelf.”

So there’s no debate over whether today’s amendment is necessary. It is necessary to help the dairy industry navigate these turbulent times.

But what isn’t needed is a Prime Minister who only agrees for Parliament to sit when it suits his purposes and who does not seem to understand the weighty importance of parliamentary oversight at such a time as this. Whether he realizes it or not, he is diminishing the value of the nation’s most cherished institution, even while elevating his own.

Rex Murphy said it well in his April 27 column in the National Post:

Alas, the notion of an empowered Parliament in a time of national crisis is, in the truly immortal words of Sir Thomas Browne, a “dream and folly of expectation.” The idea of a national forum to keep check on our ruler, to exercise oversight on the massive dispensation of public funds, to question the decisions of our pre-noon prime minister, is, apparently, at this time simply a distraction, a waste of time, a useless clog to the impeccable functioning of a minority administration.

Nobody says it like Rex Murphy.

But Parliament is not the only target of the Prime Minister’s indifference. Our agriculture industry is also quite low on his list of priorities. There is no shortage of examples of this, but allow me to draw to your attention a few of them.

Number one: Government support for agriculture during this pandemic is absurdly inadequate. Consider the following: This is day 65 of the pandemic. So far, the government has announced $156 billion in direct support payments, which works out to the equivalent of $2.4 billion per day since the pandemic began.

If this spending were spread evenly across the population, it would work out to a cheque for just over $4,100 for every man, woman and child in the country, or $16,400 for a family of four. We all know this is not how money gets disbursed, but it helps to get a sense of the magnitude of the spending that is taking place. In actual practice, the money is disbursed through specific programs and targeted to specific people and industries.

Last month, the Canadian Federation of Agriculture assessed the COVID-related needs of the ag industry to be $2.6 billion. The government responded with an announcement that the industry would receive $252 million.

Colleagues, this is less than 10% of what the industry needs, and less than 0.17% of the government’s total direct spending on the coronavirus crisis to date. This is absurdly inadequate.

Number two: Not only is financial support for the ag industry inadequate, but some of it won’t arrive for months.

Part of the $252 million that was announced is to be used to create a $77.5 million Emergency Processing Fund. This fund will help food producers access more personal protective equipment, adapt to health protocols, automate or modernize their facilities, processes and operations, and respond to emerging pressures from COVID-19, so they can better supply Canadians with food during this period. But Global News has reported that this funding probably won’t be available until the end of September, and there are still no details on what the requirements will be to qualify.

Meat-processing plants have been hit hard by the coronavirus. A Cargill plant in High River, Alberta, was closed after an outbreak of 350 COVID-19 cases was linked to it. On Sunday, another Cargill plant near Montreal announced that it will be temporarily closing its doors after at least 64 workers tested positive.

This $77.5 million is supposed to help plants improve their working conditions in order to prevent outbreaks like this. Yet, as Global News reported: “As for when the money is expected to be doled out, the department said that will happen ‘no later’ than Sept. 30.”

September 30 is 139 days from now. By then we will have been in the pandemic for 204 days. How does this help the industry with COVID-related challenges they are facing right now? And why on earth is it being announced in May, like the funding is imminent, when it won’t be available for months?

Number three: Not only is the government’s support for agriculture absurdly inadequate, and some of it will not arrive for months, but the support is conspicuously smaller than what is being provided to other sectors.

The $252 million promised by the government includes money to help livestock producers faced with additional costs incurred by COVID-19. This includes set-asides for cattle and hog management programs, to manage livestock backed up on farms due to the temporary closure of food processing plants.

The amount earmarked for this purpose is $125 million. But here is the problem: Currently there are an estimated 14 million hogs and 11 million head of cattle. That is 25 million head of livestock. If you were to distribute the $125 million by livestock count, it would come to $5 per head. How far does $5 per head go? What would it pay for?

The daily cost of production can vary quite a bit across the country, but in Manitoba it comes in at around $3 per head per day for a cow/calf operation, or $5.75 per head per day for a feedlot operation. Hogs are more expensive to raise, at about $11 per head per day. This means that the government’s big announcement of $125 million for hog and cattle producers covers the equivalent of 12 to 24 hours of livestock production costs.

Hog and cattle producers contribute $13 billion per year to the Canadian economy, and when a global health crisis hits they receive only $125 million in assistance. That’s just under 1% of their total annual economic contribution.

Let’s compare this to what the government has done for students. The government has announced $9 billion in spending for students. Statistics Canada tells us there are about 2 million post-secondary students in Canada, so that works out to the equivalent of $4,500 per student, not including the money that has been earmarked for the Canada Summer Jobs program.

This $9 billion is to help students who are either part of the Youth Employment and Skills Strategy, are not able to find work, or are volunteering, or need help with their student loans. The Canada Emergency Student Benefit will cover them for up to 112 days, from the beginning of May through the end of August.

In other words, students get coverage for 112 days, but pork and beef producers get coverage for 12 to 24 hours.

I trust that no one will insult producers by suggesting that this comparison criticizes students. That would be absurd. Assistance should be available to students who need it, and no one should begrudge them that assistance.

The point I am making is this: Our ag industry puts food on our tables, so why is the government’s support for agriculture disproportionately small when compared to other sectors? It makes no sense.

The fourth example of the government’s low priority for agriculture is that much of the announced assistance to agriculture is just a re-announcement of previous commitments, and not new money for COVID-19 challenges. The government conveniently neglected to mention this, but half of the $252 million for agriculture is not new money; it was already part of the agriculture and agri-food budget for this year. The same is true for the increase of liquidity measures through Farm Credit Canada. Instead of a new COVID-19 assistance program, the Liberals simply re-announced a 2019 campaign commitment. This pattern by the government of re-announcing already existing support for the ag sector demonstrates that they do not consider agriculture to be a priority. If it was a priority, it would be reflected in the decisions they make and the resources they provide to the industry.

It is estimated that if immediate and meaningful support is not provided to help Canada’s agriculture and food industry, up to 15% of our farms, or about 30,000 farm families, will go out of business. The situation is serious. The unprecedented nature of this pandemic calls for unprecedented action, not recycled programs by a government that does not take the agricultural sector seriously.

Fifth, if you want to see how low the ag sector is on the government’s priority list, consider how they are treating the dairy industry.

Ask yourself this: What has the government done for the dairy industry since the pandemic required a virtual shutdown of the economy? Well, the first thing they did, as I mentioned last time we were in this chamber, is they stabbed the dairy industry in the back. The Dairy Farmers of Canada and the Dairy Processors Association of Canada were promised that the new Canada-United States-Mexico Agreement would not be implemented prior to August 1, so that the sector would have a full 12 months of exports at the year-one threshold on key dairy products, before being constrained by the significant reduction conceded in year two of the agreement. Instead of honouring that promise to our dairy farmers and dairy producers, the Liberal government was the first one out of the gate to give notice to the other parties that it was ready to implement CUSMA, a month earlier than promised. By ratifying the trade deal one month early, the government robbed the dairy industry of 11 months of operation at a preferred export threshold limit. This will cost the industry about $100 million. The government now says it will reimburse the dairy industry for these losses, but this does nothing to erase their egregious breach of trust. All it means is that they are now passing on the bill for their incompetence to Canadian taxpayers.

What about the legislation before us today? This bill increases the Canadian Dairy Commission’s borrowing limit by $200 million to cover costs related to having to store excess cheese and butter. Surely this demonstrates the government’s commitment to the dairy industry? Not really. Here are the facts. This is a necessary measure, but it will probably cost the federal government nothing. The Parliamentary Budget Officer has confirmed that almost every time the government announces a new loan program or other liquidity measure, the government makes money off it; they don’t spend money on it.

Take Farm Credit Canada’s $5.2 billion loan program, which the government announced on March 18. That assistance to farmers will net the government $96 million. The EDC’s $20 billion small- and medium-sized enterprise loan and guarantee program will bring $3 million into the treasury. The BDC’s $20 billion small- and medium-sized enterprise loan and guarantee program will net the government $389 million. The $150 billion insurance mortgage protection program credit and liquidity support will bring in $428 million for the government.

The additional $200 million in borrowing room that Bill C-16 provides is needed and welcome, but don’t assume it will cost the government a nickel. We’ll have to wait for the Parliamentary Budget Officer’s costing note on the matter, but it’s highly likely that the government will be making money off this program as well.

The other thing you need to understand about how the government is treating the dairy industry is their proposed handling of something called tariff rate quotas or TRQs. Here is how the Dairy Processors Association of Canada explains the significance of TRQs to the dairy industry, “TRQs or dairy import licences are designed to protect Canadian industries harmed economically by international trade agreements like CETA, CPTPP or CUSMA. Traditionally, they provided industries like ours with financial stability over the long term. With TRQs, we import products at no or low-rate tariffs, which we then offer through retailers to Canadians at competitive prices. The profit helps compensate our industry for losses resulting from international trade agreements.”

The problem is that the Prime Minister is about to give 100% of these quotas to retailers rather than to the dairy processors. The dairy processors are very concerned about this because the retailers have suffered no economic harm from the recent trade agreements, whereas the dairy industry has. This makes no sense — except I do recall that the government felt it needed to charge taxpayers $12 million for refrigerators for Loblaws last year. Perhaps now it wants to fill those refrigerators at the expense of the dairy industry.

Here is why the dairy processors believe they should get TRQs and not retailers: Simply put, retailers and distributors have not been harmed economically by recent trade agreements. They don’t make any products. They merely offer them to Canadian consumers, and they make a profit in doing so. Dairy processors, on the other hand, have made significant investments in their manufacturing facilities to develop and market dairy products. Allocating TRQs to us provides our businesses with the predictability and the stability needed to continue to invest and help provide us with a reasonable return of investment for the investments we’ve made.

The Dairy Processors Association of Canada maintains that it is imperative that TRQs related to the CPTPP and CUSMA trade agreements be allocated to the dairy processing industry to compensate for losses it will suffer because of increased access granted to the Canadian dairy market. But for some reason, the government is not listening. This is becoming a pattern with how they treat our dairy industry and our ag industry as a whole.

The sixth example of how low the ag industry is on the government’s priority list; take a look at how they treat the grain industry. It did not escape the notice of Canada’s grain growers that they were completely left out of the $252 million package for agriculture and agri-food.

Following the government’s spending announcement, the Grain Growers of Canada had this to say:

This relief package offers no resolution to our existing issues, which result from long-standing market access challenges, rail blockades, and 2019’s harvest from hell.

As net farm incomes continue to plummet, the federal government has only offered relief programs that are either not applicable to the majority of farms or prioritize access to debt for already highly leveraged farmers. This relief package, unfortunately, maintains that trend.

Time after time the Liberal government fails to step up to the plate for Canada’s grain growers. This is just the latest example.

Without exaggeration, I could probably keep giving you examples of the government’s disdain for our agriculture sector until midnight — I think our motion says we can sit here till midnight — but I doubt it would keep your attention that long, so allow me to note one more, number seven, the federal carbon tax.

It is difficult to find something that is going to hurt the ag industry more than the carbon tax. Farming is heavily dependent on the use of fossil fuels because tractors don’t actually run on horsepower anymore. They use diesel fuel.

Grain isn’t dried by airing it out in the sunshine like it was hundreds of years ago. Farmers use propane heat to dry their grain.

Then there’s rail transportation, heating and electricity, and trucking that is necessary for many aspects of farming. These all require carbon-based fossil fuels to which there is currently no reliable alternative.

And contrary to what Elizabeth May of the Green Party or the Bloc Québécois may want you to believe, it’s a little difficult to mount a bank of solar panels or a wind farm on top of a tractor.

That’s the first problem with the carbon tax: Farmers use a lot of carbon-based fuels.

The second problem is that farmers are price takers and will be unable to pass on the cost of the carbon tax to consumers like many other industries will.

The net result of these two factors, according to research done by the Agricultural Producers Association of Saskatchewan, is that:

. . . farmers can expect to lose 8% of their total net income in 2020 to the carbon tax. For a household managing a 5,000‑acre grain farm in Saskatchewan, this will take the form of a $8,000-$10,000 bill.

In less than two years, when the carbon tax increases to $50/tonne in 2022, this bill will go up to $13,000-$17,000 for the same household — the equivalent of a 12% decrease in net income.

Producers across the country are very concerned about the carbon tax and rightfully so. I note that Senator Griffin has drawn the attention of this chamber to this fact through Bill S-215, an Act to amend the Greenhouse Gas Pollution Pricing Act (farming exemptions).

But while farmers are very concerned about the impact that the carbon tax will have on the ag industry, and while senators are paying close attention to this concern, the government is paying none. How do we explain all of this?

On the one hand, we get statements like the following from the Minister of Agriculture and Agri-Food Canada, Marie-Claude Bibeau, who was here today:

I want to reassure all our farmers and agri-business owners across the agri-food industry that our government fully understands that they are essential to our communities and that we are fully engaged to help them through this unprecedented period.

But then, on the other hand, this talk is never followed up with action. What are farmers supposed to make of this?

If the government was at least consistent in how it treated Canadians, then perhaps we could conclude that they are probably giving it their best shot, but they are far from consistent.

They breeze over the needs and concerns of the ag industry while indiscriminately sending money to people who don’t even qualify for it.

I’m sure you have all seen the National Post headline, which we talked about this morning: “’Do not impose a stop pay’: federal workers ordered to ignore cheating in CERB and EI claims.”

That was the quote in the National Post.

Apparently, a memo recently went out to employees of Employment and Social Development Canada, along with Service Canada, which said the following:

Effective immediately, while processing a claim, if an agent uncovers information that suggests potential abuse of the EI system by a client, an employer or a third party, they do not impose a stop pay and do not refer the file to integrity unless it is considered an urgent investigation.

This is a result of the integrity service branch suspended all non-critical investigations. In addition to suspension of Claimant Information Sessions (CIS), in-person interviews and on-site visits, they have suspended all Integrity Operations activities for compliance and enforcement of the EI program.

I find this unbelievable. How can you deny our farmers the assistance they desperately need while at the same time shovelling money out the door to people who don’t even qualify? And you have no mechanism of collecting it back.

How do you turn a blind eye to claims that you know are fraudulent and insist on sending them money anyhow while brazenly ignoring critical financial needs in our ag sector?

This speaks not only to the government’s poor attitude toward the ag sector, but it also illustrates the incompetence with which it is handling the pandemic.

Colleagues, in closing, let me say this: I found it troubling to read that the office of the Auditor General has had to suspend much of its work due to lack of funding.

Allow me to quote from an iPolitics story. Canada’s auditor general says the lack of funding for his office has left it no choice but to delay work on most audits, as the COVID-19 pandemic adds new demands on the resource-stretched office.

Interim auditor general Sylvain Ricard told the House of Commons finance committee on Tuesday that his office has had to suspend work on all but three audits.

We might ask the nominee about that later on.

This, colleagues, is unbelievable and unacceptable. At a time when government spending is at all-time historic highs and the Prime Minister is bragging that they have introduced the “biggest economic measures in our lifetime,” the one thing he cannot find the money for is the office which holds him accountable for his spending. Doesn’t that strike you as a little odd?

First, the Prime Minister doesn’t want Parliament to sit too often and ask too many questions; then he won’t pay the Office of the Auditor General to do its job as the spending watchdog.

Colleagues, I must admit that the government is providing all the necessary elements for a good conspiracy theory. And like you, I get countless emails from those who are convinced that the government is involved in some kind of a nefarious plot, furtively working in the shadows of dark corridors to align the pieces of its secret agenda.

Well, I personally doubt it, not because I am teeming with confidence in this Prime Minister’s motives, but because I am pretty certain that any successful conspiracy requires at least some level of competence. Clearly, this is not something that this government has.

Just so that you know, I am sure that many of you heard the exchange yesterday, or the day before, maybe, in the House of Commons where MP Pierre Poilievre asked the Finance Minister a series of basic questions about the state of our country’s finances. The first question was: What is the total dollar value of the assets of the Government of Canada?

The second question was: What are the total liabilities of the Government of Canada?

The third question was: I know we shouldn’t ask the minister about numbers. He’s just the finance minister, after all, but what is the equity on the Government of Canada’s balance sheet?

The fourth question was: Can the minister, if he is familiar with any of these numbers, tell us if it is possible that his government will hit $1 trillion of debt this year?

The final question was: What is the size of our current national debt?

Colleagues, the Finance Minister was unable to answer one single one of those questions — not one question could he answer. Now, either he didn’t want to answer, which is shameful when we finally get to see him once a week, or he is incompetent if he doesn’t know. Colleagues, if you had a business and you had a chief operating officer and you walked into your office and asked, “What’s our balance sheet?” what would you do if he didn’t have an answer? You would fire that individual.

Here we have a Minister of Finance, and when your Minister of Finance doesn’t seem to know the fundamentals of the nation’s financing, you know you have an incompetent administration in office.

Colleagues, today the Conservative caucus will be supporting the passage of Bill C-16 unanimously, not on division, because dairy farmers need this and it is needed by the industry at this critical time. But what we cannot and will not support is this government’s indifferent attitude toward our agriculture industry.

I invite all senators to join me in urging the government to not just acknowledge that the agriculture industry provides essential services, but to begin to demonstrate this by providing the support and the services that this industry needs in this time of need. Thank you.

 

Senator Plett's Third Reading speech on Bill C-16 is also available here.

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