Question Period Note: Supporting the Agricultural Sector

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

FIRST RESPONSE:

1. The Government recognizes the essential services provided by Canada’s agriculture and agri-food sector and is committed to supporting producers and businesses so that they can continue to provide for Canadians during this difficult time.

2. I strongly encourage producers to take advantage of the whole suite of Business Risk Management programs.

3. Our announcement of $252 million in targeted support for farmers and processors is in addition to other funding, including $5B for additional FCC lending capacity and a new $100 million Agriculture and Food Business Solutions Fund, $50M to help with additional costs for temporary foreign workers, and $20M for CFIA, as well as other government announcements that can help the sector.

4. Further to this, I am happy to announce that we will be providing $9.2 million to fund 700 jobs for youth in the sector, giving young professionals the opportunity to develop important career skills and also tackle labour shortages the sector is facing.

RESPONSIVE ON AGRI-RECOVERY:

1. The Government of Canada is committed to providing spending of up to $125 million through AgriRecovery initiatives to help producers manage extraordinary costs. Under the exceptional circumstances posed by COVID-19, these funds will now be ready to be deployed more quickly and flexibly than would normally be the case.

2. Our existing Business Risk Management programs provide up to $1.6 billion on average per year to support producers to help manage risks that threaten the viability of the farm.
    

3. AgriRecovery is generally cost-shared on a 60:40 Federal:Provincial-Territorial basis. The federal government will provide the federal share without requiring provincial contributions. In addition, the federal government will cover 90% of these eligible extraordinary costs, up from 70% for the 2020-21 fiscal year.

4. Given the urgent need to help beef and pork producers adapt to a changing market and processing delays, national AgriRecovery initiatives will help farmers and ranchers keep their animals on farm longer, avoid processing backlogs, and help cover additional feed costs.

RESPONSIVE ON SPECIFICS ABOUT SUPPORT:

1. The $252 million we announced provides targeted support to farmers, ranchers, food businesses, and food processors who are critical to ensuring a safe and reliable food supply, including: $77.5 million to help food producers by adapting, modernizing, and re-opening plants that have closed or are operating under-capacity; a national AgriRecovery initiative of up to $125 million to help with the severe impacts felt by hog and cattle producers; $50 million to ensure surplus food is getting to those in need; as well as proposed additional borrowing capacity of $200 million for the Canadian Dairy Commission to increase its purchases of dairy products, such as butter and cheese, and help producers to avoid dumping their milk.

2. This is in addition to previous announcements, including $5B for additional FCC lending capacity, $50M to help with additional costs for temporary foreign workers, and $20M for CFIA.

3. Other early measures announced by the Government of Canada, such as increased lending capacity under the Business Credit Availability Program, as well as tax measures and wage subsidies, including the temporary wage top-up for essential workers, will be of assistance to the sector.

4. We have also taken steps to improve our existing programs to better serve producers, including a Stay of Default to the Advance Payments Program, and an extension to the deadline for enrollment for the AgriStability program until July 3. In addition, we will work with provinces and territories to increase interim payments from 50% to 75% through AgriStability and explore the possibility of treating labour shortages as an eligible risk within the AgriInsurance program.

5. The Large Employer Emergency Financing Facility will help protect Canadian jobs by providing bridge financing to large employers with revenues above $300 million. The expansion of that program will now provide support to mid-sized companies with loans of up to $60 million and guarantees of up to $80 million. In addition, the Canadian Emergency Business Account Program is now available to a greater number of businesses including sole proprietors, businesses that rely on contractors and family-owned businesses that pay employees through dividends rather than payroll.

6. FCC has approved more than $500 million in loans to help alleviate short-term cash flow for producers, in addition to supporting more than 4,800 producers and agri-food businesses who have used payment deferral option on FCC loans totalling $4B.

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

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

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

The Government of Canada plays a critical role to support farmers and food processors to provide safe and secure supply of food to Canadians. Numerous concrete actions have already been taken. For example, the Government has:
• announced an additional $5 billion in lending capacity through Farm Credit Canada;
• made changes to the Advance Payments Program to help farmers manage their cash flow by announcing a Stay of Default for crop producers who need it during these difficult times;
• provided an extension to the AgriStability enrollment deadline allowing farmers more time to sign up and benefit from the program;
• removed travel exemptions for temporary foreign workers, increased the maximum allowable employment duration for workers in the low-wage stream of the temporary foreign worker program from one to two years and waived the 2-week recruitment period for the next six months, a modification to the labour market impact assessment process;
• invested $50 million to provide up to $1,500 to eligible employers for each Temporary Foreign Worker to help with incremental expenses associated with the 14-day mandatory isolation period such as wages, accommodations, transportation, food, health and safety products;
• invested $100 million to improve access to food for Canadians facing social, economic, and health impacts of the COVID-19 pandemic. Funding will be delivered through Agriculture and Agri-Food Canada’s Local Food Infrastructure Fund;
• invested $20 million for the Canadian Food Inspection Agency (CFIA) to strengthen food inspections and keep food supply safe. This additional funding will mean CFIA can build capacity for more overtime, and extra shifts from inspectors to fill demand. It also means CFIA can invest in hiring and training to get more people on board;
• launched an online job portal to connect Canadians to diverse jobs in the agricultural sector and committed to funding 700 jobs in the sector for young people through the Youth Employment and Skills Program;
• invested $62.5 million for fish and seafood processors to protect their employees with personal protective equipment and adapt their plants to comply with health directives;
• created a $77.5 million Emergency Processing Fund to help food producers adapt to health protocols, automate or modernize their facilities, processes, and operations, and respond to emerging pressures from COVID-19;
• launched a national AgriRecovery initiative of up to $125 million in funding to help producers faced with additional costs incurred by COVID-19. This includes set-asides for cattle and hog management programs to manage livestock backed-up on farms, due to the temporary closure of food processing plants;
• expanded the Canadian Dairy Commission’s line of credit by $200 million to support costs associated with the temporary storage of cheese and butter to avoid food waste;
• launched a first-ever Surplus Food Purchase Program with an initial $50 million fund designed to help redistribute existing and unsold inventories, which could include products such as potatoes and poultry, to local food organizations who are serving vulnerable Canadians;
• announced that the Government will work with provinces and territories to increase interim payments from 50% to 75% through AgriStability, a federal, provincial and territorial program that supports producers that face significant revenue declines. This change has already been enacted in some provinces. The median fee for producers to enroll is $250, as cost of enrollment is based on individual producer operations; and,
• announced that the Government will work with provinces and territories to explore possibilities for expanding the AgriInsurance program to include labour shortages as an eligible risk for the horticulture sector. This work with provincial and territorial partners would insure against lost production due to an insufficient workforce, should producers be unable to find enough labour to harvest.

More recently, the government has announced further investments and support to the fish and seafood industry and created a new venture capital fund through FCC. These include:
• The Fish Harvester Benefit, a program worth up to $267.6 million, to help provide income support for this year’s fishing seasons to eligible self-employed fish harvesters and sharespersons crew who cannot access the Canada Emergency Wage Subsidy. The Fish Harvester Grant, a program worth up to $201.8 million, to provide grants to help fish harvesters impacted by the COVID-19 pandemic, and who are ineligible for the Canada Emergency Business Account or equivalent measures. This will give them more liquidity to address non-deferrable business costs.
• Measures or changes to Employment Insurance (EI) that would allow self-employed fish harvesters and sharespersons to access EI benefits on the basis of insurable earnings from previous seasons (winter and summer claims).
• The $100 million Agriculture and Food Business Solutions Fund designed to support viable enterprises dealing with significant business disruptions. The stated purpose of the fund is to support business in the agribusiness and agri-food sector, including those involved in a variety of areas, from primary production to agri-tech and food manufacturing. Financing will be provided to companies on an individual basis, up to a maximum of $10 million.

In addition, a number of economy-wide measures will help to provide support for businesses and those working in the sector, including:
• a 75% wage subsidy (to a maximum of $58,700 or $847 a week per employee) for qualifying businesses, for up to 12 weeks, retroactive to March 15, 2020, ending June 6, 2020;
• allowing businesses, including self-employed individuals, to defer all Goods and Services Tax/Harmonized Sales Tax (GST/HST) payments until June, as well as customs duties owed for imports;
• the Business Credit Availability Program (including the Canada Emergency Business Account, the SME loan and guarantee program and the recently added mid-market financing and guarantee program), which will provide direct lending and other types of financial support to help Canadian businesses obtain financing during the current period of significant uncertainty;
• $962 million for a Regional Relief and Recovery Fund for regional development agencies to support businesses that may require additional help to recover from the COVID-19 pandemic, but have been unable to access existing support measures;
• an essential worker wage top up which will provide a wage boost for those working hard to make sure that there that is food on our shelves;
• the Canada Emergency Response Benefit which will provide a taxable benefit of $2,000 a month for up to 4 months for those who are in need of temporary income support;
• a commitment to create jobs for students in essential sectors, including agriculture, that need assistance during COVID-19;
• offering $9 billion in support to students which includes the Canada Emergency Student Benefit, which will provide $1,250-$1,750 per month to eligible students from May through August; and,
• established a large Employer Emergency Financing Facility to provide bridge financing to Canada’s largest employers, whose needs during the pandemic are not being met through conventional financing, in order to keep their operations going.

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

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