Question Period Note: SUPPORTING THE AGRICULTURAL SECTOR

Q1 – How is the Government helping farmers struggling with inflation and the rising cost of inputs? Q2 – How is the Government supporting producers impacted by extreme weather situations, such as droughts and wildfires? Q3 – What is the Government doing to enhance the environmental performance and resilience of the agriculture sector? Q4 – What is the Government doing to protect and strengthen Canada’s supply chains? Q5 – What action is the Government taking to promote trade and market access? Q6 – How is the Government addressing labour challenges in the sector? Q7 – How is the Government supporting preparation and prevention of disease outbreaks in Canadian livestock?

R.1 - As farm operating costs remain uncertain, the interest-free limit for loans under the Advance Payments Program 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.
Fertilizer prices have increased sharply due to global supply concerns and the tariff on Russian imports. Budget 2023 allocated an additional $34.1 million to the established On-Farm Climate Action Fund to help Eastern Canadian farmers impacted by high fertilizer prices in their adoption of nitrogen management practices to optimize the use of fertilizers. R.2 Federal, provincial and territorial ministers of agriculture are committed to working together expeditiously to share information and complete AgriRecovery assessments, while ensuring that producers have access to a full suite of business risk management programs that are timely and reliable.
Our Government was there to support producers during the 2023 drought and wildfires, by working with provinces to provide access to $219 million through AgriRecovery for the extraordinary costs incurred.
This funding helped producers recover and ensured they had the tools needed to continue to be resilient in the face of natural disasters and extreme weather events.
This support assisted farmers and ranchers in British Columbia, Alberta and Saskatchewan.
Producers also have access to AgriStability, which provides protection for income losses of more than 30%. Under the new Sustainable Canadian Agricultural Partnership, the AgriStability compensation rate was raised from 70% to 80% to provide additional support in times of need. R.3 - Since 2021, we pledged over $1.5 billion to ensure a successful, sustainable agriculture and agri-food sector.
As part of the Sustainable Canadian Agricultural Partnership, a $250 million Resilient Agricultural Landscape Program is supporting ecological goods and services provided by the agriculture sector.
The department has invested $704.1 million into the On-Farm Climate Action Fund, $185 million into the Living Labs program, and $441.4 million into the Agricultural Clean Technology program to support the development and adoption of clean technologies and beneficial management practices that reduce emissions.
In 2023, we launched the Agricultural Methane Reduction Challenge to accelerate the development of solutions that aim to reduce enteric methane emissions in cattle. The Government is also developing a Sustainable Agriculture Strategy, which will guide our support of the livelihoods of farmers while growing a sustainable sector. R.4 - We have seen how supply chain disruptions can severely impact the sector, and by extension impact Canadians.
Budget 2023 funded the establishment of a National Supply Chain Office (Transport Canada), launched in December 2023, and the development of a long-term roadmap for Canada's transportation infrastructure and supply chain data. These investments build on the over $600 million announced in Budget 2022 to increase supply chain efficiency and resiliency.
The Government is working on further strengthening and improving the resiliency of our domestic supply chains following disruptions from Russia’s war against Ukraine by collaborating with other federal departments to protect grain and fertilizer movements. R.5 - The Government is working to advance the World Trade Organization’s (WTO) agriculture negotiations, and is engaged in active free trade negotiations with Indonesia, the Association of South East Asian Nations (ASEAN) and Ecuador.
Canada will continue to pursue an ambitious trade agenda that seeks improved market access, a more level playing field, and a more transparent, predictable international trade environment for producers, processors and exporters.
In addition, the Government is facilitating regular bilateral and multilateral engagement with key international partners to advance Canada's agricultural trade priorities and support market access, such as ministerial missions, technical missions, audits of Canada's animal, plant, and food safety systems, and working groups.
The Government also works closely with provinces and industry to help promote and raise the profile of Canada’s agri-food and seafood products. We recently opened the Indo-Pacific Agriculture and Agri-Food Office in Manila, Philippines, underscoring Canada’s commitment to the region. R.6 - Both domestic and international workers are essential to the production of safe and reliable food in this country. The Government is developing a sector-specific Agricultural Labour Strategy with provinces and territories, employers, unions, and workers to help them address labour challenges.
The Government launched a three-year Recognized Employer Pilot, under the Temporary Foreign Worker Program, to simplify the hiring process and help reduce the administrative burden for repeat employers who demonstrate a history of program compliance.
Budget 2022 announced a $48.2 million commitment by the Government to implement a new foreign labour program for agriculture and fish processing, tailored to the unique needs of these employers and workers. Consultations with stakeholders on this commitment launched this spring. R.7 - Strict measures are in place to prevent livestock diseases, such as African swine fever and foot and mouth disease, from entering Canada. Measures include animal and food import controls and declarations for travellers at the border. In the event of an outbreak, we would move quickly to detect, trace, and eradicate disease while ensuring the sector has the support needed.
The Government is implementing the African Swine Fever Action Plan and committing an investment of up to $45.3 million to enhance preparation and prevention efforts.
Budget 2023 announced $57.5 million over five years and $5.6 million ongoing to establish a foot and mouth disease vaccine bank and to develop response plans.

Sustainable Canadian Agricultural Partnership (Sustainable CAP):
This new $3.5 billion, five-year agreement (2023-2028) injects $500 million in new funds, representing a 25% increase in the cost-shared portion of the partnership. Under the cost-shared envelope, federal, provincial and territorial (FPT) governments agreed in principle and subsequently implemented the $250 million Resilient Agricultural Landscape Program to support ecological goods and services provided by the agriculture sector.

Inflation

To ensure that Canadian farmers have access to the cash flow needed to continue producing food and supporting national food security, the government increased the $100,000 interest-free limit on loans temporarily under the Advance Payments Program to $250,000 in 2022 and to $350,000 in 2023.

Across the country, producers are facing general inflation, increased costs on key inputs like fertilizer, supply chain disruptions and higher debt-servicing costs due to the surge in interest rates. Over the past three years, agricultural production costs in Canada have increased by nearly 30 percent. These higher costs of production create cash flow challenges for producers as they must commit to paying for their farm inputs (e.g., seed, fertilizer and feed) before knowing what their revenues will be for that year.

Year-over-year volatility has created cumulative pressures for farms, most of which are farm families facing inflation of household expenses as well. On March 25, 2024, as announced in Budget 2024, the interest-free limit for loans under the Advance Payments Program was temporarily set at $250,000 for the 2024 program year. This measure will support approximately 11,950 participating producers, who will save an additional $4,916 in interest costs on average as a result of the change. This represents a total interest savings of up to $58.7 million for the program year 2024, and a total savings of $171.6 million for producers over the three year period (2022 to 2024).

Inputs – Fertilizer
On March 3, 2022, the federal government implemented a 35 per cent tariff on all Russian imports, including fertilizer. Ontario, Quebec, and Atlantic Canada rely heavily on fertilizer imports. While Canada is a major producer and net exporter of nitrogen fertilizer, the vast majority of the production resides in Western Canada (Alberta) and is either used regionally (55%) or exported (45%) to the United States. Due to prohibitive transportation costs, there is no movement of nitrogen fertilizer from Western to Eastern Canada. Eastern Canada usually imports 85-90 per cent of its fertilizer from Russia. For the 2022 season, the producer price for fertilizers was impacted by the tariff as the vast majority of fertilizer purchases were made before it was put in place and not all buyers were able to change their sourcing following the tariff implementation.

Drought and Wildfires – Business Risk Management Support
Business Risk Management (BRM) programs are joint Federal-Provincial-Territorial (FPT) programs that help producers manage risks that threaten the viability of their farms, and provide protection against different types of income and production losses. Producers take responsibility for managing normal risks, while government support is in place to help manage events that exceed producers’ capacity to manage. The FPT programs are cost-shared 60:40 and have provided over $1.8 billion per year on average to producers over the last five years.

AgriRecovery focuses on assisting with the extraordinary costs required to recover following a disaster, but it is not meant to replace available coverage under other programs such as AgriInsurance, AgriStability, and AgriInvest. Environment and Climate Change

Since 2021, the Government of Canada has announced over $1.5 billion in funding to advance climate change mitigation in the sector. This includes $185 million over 10 years for the Agricultural Climate Solutions: Living Labs Program; $704.1 million over six years for the Agricultural Climate Solutions: On-Farm Climate Action Fund; $441.4 million over 7 years for the Agricultural Clean Technology program; and $150 million in federal contributions for a Resilient Agricultural Landscape Program under the Sustainable Canadian Agricultural Partnership. Together, these programs aim to create an enabling environment for the accelerated development and adoption of climate smart beneficial management practices and technologies.

Recent years have demonstrated the extraordinary challenges farmers face on the front lines of climate change. Extreme weather events are projected to become more severe and costly for the agricultural sector in the coming decades.

A Sustainable Agriculture Strategy was highlighted in the 2030 Emissions Reduction Plan, as well as in the Minister’s 2021 mandate letter. It will help set a shared long-term direction for collective action to improve environmental performance in the sector, support farmers’ livelihoods and strengthen the business vitality of the Canadian agricultural industry.

Supply Chains
In response to supply chain challenges, Budget 2022 announced over $600 million to help build more efficient and resilient supply chains, fund projects to ease the movement of goods, use data to make our supply chains more efficient, and reduce the burden of red tape.

Budget 2023 provided $27.2 million to Transport Canada to establish a Transportation Supply Chain Office to respond to disruptions and better coordinate action to increase the capacity, efficiency, and reliability of Canada’s transportation supply chain infrastructure.

The Government of Canada will also collaborate with stakeholders to develop a long-term roadmap for Canada’s transportation infrastructure to better plan and coordinate investments required to support future trade growth. Budget 2023 provided $25 million to Transport Canada to work with Statistics Canada to develop transportation supply chain data that will help reduce congestion, make our supply chains more efficient, and inform future infrastructure planning. Budget 2023 also announced a pilot of the extended interswitching limit in the prairie provinces to strengthen rail competition.

These measures are a down payment on Canada’s upcoming National Transportation Supply Chain Strategy, which will be informed by the recommendations of the National Supply Chain Task Force report and is being led by the National Supply Chain Office.

Trade and Market Access
The World Trade Organization’s (WTO) Agreement on Agriculture (AoA), which came into effect on January 1, 1995, established key multilateral rules on tariff market access, domestic support (i.e., agriculture subsidies), export competition, export restrictions and transparency. After almost 30 years, these continue to provide significant value for Canada’s agriculture sector, including by helping level the playing field and supporting our producers’ and exporters’ competitiveness. The WTO agreements (including the AoA) built the foundation upon which Canada’s free trade agreements rest. While the AoA is a significant achievement, many outstanding issues remain and its rules need to be adapted to 21st century realities. This is why Canada is actively engaged in the ongoing WTO agriculture negotiations, including to further reduce global levels of trade-distorting subsidies. The Canada-European Union Comprehensive Economic and Trade Agreement (CETA) came into force on September 21, 2017, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) came into force on December 30, 2018, and the Canada-United States-Mexico Agreement (CUSMA) entered into force on July 1, 2020. These trade agreements offer significant opportunities for the Canadian agriculture and agri-food sector, while creating some challenges due to new market access for supply-managed dairy products. In total, the Government has announced $4.8 billion dollars in compensation to supply-managed sectors for the impacts of CETA, CPTPP and CUSMA.

The Government 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 in order to provide a transparent and predictable trade environment for Canada’s exporters. This approach has led to the advancement and resolution of a number of key market access issues.

The Government also works closely with provinces and industry to help promote and raise the profile of Canada’s agri-food and seafood products. The Government of Canada released the Indo-Pacific Strategy (IPS) in November 2022, covering five strategic objectives across various sectors. It is a comprehensive plan with an initial investment of approximately $2.3 billion over five years to strengthen relationships and advance Canada’s commitment to a free, open and inclusive Indo-Pacific, with the Association of Southeast Asian Nations (ASEAN) at its core.

The Minister of Agriculture and Agriculture-Food officially opened the Indo-Pacific Agriculture and Agri-Food Office on February 21, 2024 in Manila Philippines, underscoring Canada’s commitment to the region. The Office will play an important role in deepening relationships with regional partners and foreign counterparts, to increase our ability to proactively assist Canadian exporters in finding new business opportunities, advance technical cooperation, and help position Canada as a preferred supplier in the region.

Labour
Budget 2023 provided $48 million over two years for Employment and Social Development Canada to improve the employer compliance regime under the Temporary Foreign Worker Program, including more program inspectors and the maintenance of the worker protection tip line.

Following an announcement in Budget 2022, the Government of Canada launched a three-year Recognized Employer Pilot (REP) under the Temporary Foreign Worker (TFW) Program to help address labour shortages and reduce the administrative burden for repeat employers who demonstrate a history of complying with program requirements. Under REP, eligible employers will gain access to Labour Market Impact Assessment (LMIA) validity periods of up to 36 months, and a simplified LMIA application should they need to hire additional workers from the same occupation during the Pilot.

Further to the Budget 2022 commitment to introduce a new program for agriculture and fish processing, the Government is consulting on the new program with stakeholders in Spring 2024. The Government aims to reform and streamline the Temporary Foreign Worker Program to support employers and better protect workers. African Swine Fever
Canada Border Services Agency (CBSA) and the Canadian Food Inspection Agency (CFIA) have taken concrete actions to prevent the spread of African swine fever (ASF) from affected countries to Canada, which would devastate the pork industry. Federal and provincial governments and industry have collaborated to create an ASF Action Plan, which outlines four areas of focus: prevention and enhanced biosecurity, preparedness planning, ensuring business continuity, and coordinated risk communications.

AAFC is working with provinces and industry on plans to support the sector should ASF arrive in Canada, and announced up to $45.3 million to enhance efforts to prevent ASF from entering Canada and prepare for a potential outbreak. The funding will be critical in reducing the risk of introduction and spread of ASF in Canada. The Government of Canada is investing up to $23.4 million to support the pork industry’s prevention and mitigation efforts through the African Swine Fever Industry Preparedness Program, $19.8 million in CFIA prevention and preparedness efforts and up to $2.1 million to enhance CBSA border control activities.

Foot and Mouth Disease Vaccine Bank for Canada
Foot and mouth disease (FMD) presents one of the greatest economic threats to Canadian animal agriculture and is viewed as the most important transboundary animal disease in the world. A single case of FMD in Canada would result in a full and immediate border closure to exports from all livestock sectors. Without the vaccine bank, it would take at least 18 months for Canada to regain access to foreign markets and cost the Canadian economy between $19.4 billion and $65.2 billion.

While Canada has access to 312,000 doses of vaccine from the North American Foot and Mouth Disease Vaccine (NAFMDV) Bank, it falls well below the estimated 1.9 million to 2.7 million doses required to control a large outbreak. Funding provided through Budget 2023 will enable CFIA to secure a strategic reserve of 30 million doses of FMD vaccines to protect Canada’s livestock industry against large and uncontrolled FMD outbreaks. By not securing this stockpile, Canada would be at a disadvantage given the now heightened global demand. This vaccine bank will help protect Canada from the emerging threat of this disease, maintain public confidence in the Canadian food supply, and help mitigate prolonged market disruptions to trade should an outbreak occur.

• The Agricultural sector is critically important in feeding the country and the world in a sustainable way. We continue to support farmers, ranchers, food businesses, and food processors across the value chain.

• Federal, provincial, and territorial governments are also investing $3.5 billion over the five-year Sustainable Canadian Agricultural Partnership to strengthen and grow the sector.

• This is in addition to other programs and continued support through our business risk management (BRM) programs, which provide protection against income and production losses, and help producers manage risks that threaten the viability of their farm operations. The BRM suite of programs have provided over $1.8 billion per year on average to producers over the last five years.