Domestic Agriculture Policy and Regulations Committee

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The Domestic Agriculture Policy and Regulations Committee deals with non-trade related regulatory issues, such as general government policy, safety nets and transportation regulations. It also makes representation to the government and works with other committees or groups on issues of mutual interest.

The Canadian Agricultural Partnership (CAP) officially commenced in April 2018, with most of the details regarding changes to business risk management (BRM) already public due to an earlier information release about the five-year, $3 billion investment to strengthen the agriculture and agri-food sector. Federal, Provincial and Territorial (FPT) Governments’ establishment of a BRM review was top of mind for CCA’s Domestic Agriculture Policy and Regulations (DAPR) Committee in 2018. Consultations and a desire to improve the Canadian agri-food regulatory environment and the livestock tax deferral provision were some of the other main topics for the committee in another busy year for domestic agriculture policy development in Canada.

 

Canadian Agricultural Partnership

With the first program year of CAP underway, CCA devoted considerable time to analyzing the details required to provide context around  the changes to BRM programming most relevant to producers. Particular changes include capping the AgriStability reference margin limit (RML), which is intended to make the program more equitable to producers with lower cost-structures. The RML change is a positive step for cattle producers, especially cow-calf operators with lower eligible expenses. Seeing payment data from year one will be useful in determining if this change has increased uptake in the program and if it has responded better for cattle producers. Producers who have not included AgriStability as part of their risk management strategy in recent years, may wish to explore whether the program’s parameter changes will be of added benefit to their farm or ranch.

 

A late participation mechanism has also been added to AgriStability, which is intended to allow producers to access the program after the enrollment deadline in times of large income decline. This measure will be under the decision-making authority of provinces and territories and has not been activated yet. Starting in the 2018 program year, the maximum allowable net sales eligible under AgriInvest will be reduced to $1 million from $1.5 million. The annual government matching contributions will be reduced to $10,000 per AgriInvest account from $15,000.

 

Since being agreed upon last July, FPT governments have initiated a BRM review to assess program effectiveness and influence on growth and innovation. An expert panel made up of producers, academics and global experts was established in late 2017 to evaluate BRM programming in Canada and made recommendations to FPT Agriculture Minister’s in July.

 

Recommendations from the panel included investigating the feasibility of market-based tools to better manage the middle tier of “marketable risk,” examining BRM program equity, further analysis on challenges with AgriStability and increased education on risk management.  FPT Ministers directed officials to move forward with additional work required on the panel’s recommendations and to report back on progress in July 2019.  Many of the recommendations put forward by the panel were aligned to input CCA provided during the initial phase of the BRM review.

 

In addition to the work areas identified by the panel, ongoing research and development intended to bring improvements to pasture and forage insurance as well as expanding price insurance beyond Western Canada are key areas the CCA hopes to advance while engaging in the BRM review in the upcoming year.

Regulatory Review of Agri-Food Sector

In Budget 2018 the Government of Canada announced a targeted regulatory review process for key economic sectors, including agri-food, focused on identifying bottlenecks and other areas of regulation that can be improved. The CCA actively participated in these important consultations and provided advice in a number of areas. First, implementation of the Canadian Agriculture and Agri-Food Workforce Action Plan to improve current labour shortages in the sector is critical for the industry’s competitiveness and ability to seize the potential of new market access opportunities.

 

Additionally, Canada must maintain a risk and science-based approach to regulatory decision-making to provide industry with a predictable, credible, consistent and transparent regulatory environment. One example of a current regulatory proposal that runs contrary to this lens is aspects of Health Canada’s Front of Package (FOP) Labelling requirements, which targets saturated fats and could impact products such as ground beef. The science around saturated fat and health outcomes has evolved and new evidence suggests saturated fats may not be the cause of afflictions like cardiovascular disease. Moreover, a reduction in foods that contain saturated fats may be more detrimental to ones’ health than the risk of these diseases, especially if people are substituting saturated fats with foods high in sugars and carbohydrates.

 

 

 

Saskatchewan Cattlemen’s Association Fly-in Day in Ottawa. 
Photo credit: CCA. When Canada has unique challenges such as plant breeding or particular animal health and disease issues, Canada’s regulatory framework needs to be nimble and effective, rather than costly or onerous. Canadian regulators should accelerate assessment timelines and encourage drug companies to make simultaneous submissions for product approvals in Canada and the United States (U.S.) (or international trading partners when applicable). The government should support initiatives under the Regulatory Cooperation Council for regulators (Health Canada for veterinary drugs and pest control products, CFIA for biologics, new forage and grain varieties) to harmonize approval processes with the U.S. Emphasis should also be placed on harmonizing withdrawal periods and minimum residue levels for products between countries and establishing price equivalency of products between countries. If implemented, this will help ensure that Canada’s scientific entrepreneurs remain here to benefit us rather than moving to a larger, more lucrative markets that are easier and more profitable to operate in. Traceability, humane transportation, service standards and fee reviews were also raised as important areas of focus. Overall, the government’s focus on regulatory reform presents a great opportunity to enhance the competitiveness of the Canadian beef cattle sector and CCA will continue to engage in this area with the intention of implementing a number of key recommendations provided through this process. Livestock Tax Deferral Provision The initial list of prescribed regions for the 2018 livestock tax deferral provision was released by the Government of Canada in September 2018, with additional regions added in November. The provision allows producers forced to sell breeding stock in 2018 due to forage shortages caused by extreme weather conditions in designated regions in Canada. The provision enables eligible producers to defer a portion of sale proceeds of breeding stock to the following year. The announcement of the provision was made earlier in the year than in past years, which is a welcomed improvement, but challenges remain with the provision. Specifically, the provision was not extended to many counties or municipalities where beef cattle producers faced extreme weather conditions that contributed to feed shortages. Extreme weather challenges such as drought, flooding or fires can impact a producer’s ability to maintain and sustain their herd. These events often force producers to sell animals such as calves, and breeding stock earlier than anticipated, resulting in more than one sale in a fiscal year. Producers need timely tools necessary to ensure the resilience of their operation. Delays or regions deemed ineligible by Finance Canada in determining when income deferral can be applied to drought situations has made that mechanism not always useful for management decisions. Beef producers are asking for modifications to the Livestock Tax Deferral Provision to allow for the individual driven election of partial income deferral when producer incomes are artificially inflated by forced sales due to extreme challenges. This would allow the provision to function as a better risk management tool. Committee Members: Tom Teichroeb, Chair; Joe Hill, Vice Chair; Brian McKersie, Charlie Christie, Tim Smith, Lynn Grant, Ramona Blyth, Rob Lipsett, Craig McLaughlin, Nathan Phinney; John MacDonald, Philippe Alain, Stefan Bouw, YCC ex-officio, Julien Collette. CCA staff: Brady Stadnicki.

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