STANDING COMMITTEE ON ESTIMATES

COMITÉ PERMANENT DES BUDGETS DES DÉPENSES

Wednesday 15 October 2008 Mercredi 15 octobre 2008

MINISTRY OF AGRICULTURE,
FOOD AND RURAL AFFAIRS

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The committee met at 1604 in room 151.

MINISTRY OF AGRICULTURE,
FOOD AND RURAL AFFAIRS

The Chair (Mr. Tim Hudak): Good afternoon, folks. Welcome back to the Standing Committee on Estimates. Thanks to all members in terms of adjusting the schedule to allow energy to go at the back of the pack so our critics can both be here at the end of November. I hope that folks had a good evening last night.

Minister, welcome. Deputy Minister Archibald, welcome, and–

Ms. Karen Chan: Karen Chan.

The Chair (Mr. Tim Hudak): Ms. Chan, who is CAO at the ministry and assistant deputy minister. Fantastic.

We have the consideration of the estimates for the Ministry of Agriculture, Food and Rural Affairs for a total of seven hours and 30 minutes. As you know, Deputy, the ministry is required to monitor the proceedings. There often are questions that the ministry may not be able to answer directly, and we do ask you, as soon as you can, to get the answers back through the clerk so we can distribute to the committee members. Feel free at the end of each session to have a discussion with our research officer, Carrie Hull, just to make sure that we have the questions as asked by the individual members.

Folks, I'm going to say this at the beginning of the meeting, and I'll ask that you get back to me for our next meeting if there are any objections. The way the new House rules and timing have played out, it does give us an opportunity to start at 3:30 for estimates, and I mean this more directly to the regular members of the estimates committee. If we begin at 3:30 and go to 6, that does give us an additional hour each week, which will probably mean some ministries we could finish up in a shorter period of time than we currently do. So my intention is, then, beginning with the Ministry of Finance, to begin the afternoon sessions at 3:30 until 6. If I hear objections from committee members, I could reconsider. So think about it and get back to me next week.

Are there any questions before we begin the proceedings this afternoon?

Hon. Leona Dombrowsky: Mr. Chair, I just want to clarify that the change in the calendar time does not apply to this ministry.

The Chair (Mr. Tim Hudak): Absolutely right. The Ministry of Agriculture, Food and Rural Affairs will continue as scheduled, as do the subsequent ministries. What we did was we added a week on the end and moved energy to the end, which will be of benefit. Mr. Arnott?

Mr. Ted Arnott: Thank you, Mr. Chair. I've been asked to sub in today for Ernie Hardeman, the member for Oxford, who is our party's agriculture critic, on rather short notice. I'm just wondering if as committee members we'd be given a copy of the minister's presentation, if that would be possible, to follow along as she gives it.

The Chair (Mr. Tim Hudak): Minister, if you choose to do so, that has been the custom, but usually the critics are here. Mr. Hardeman, I know, had an important event in his riding and Mr. Arnott is filling in. If you don't want to do so, you're under no obligation; if you do, that's terrific, and members may appreciate that.

Hon. Leona Dombrowsky: I will certainly do my best to get one for you, Mr. Chair, so you can provide it to Mr. Arnott and also to the NDP.

The Chair (Mr. Tim Hudak): Perfect; thank you. That's very kind.

All right, I'll now call vote 101, which means that we'll begin with a statement of not more than 30 minutes by the minister, and that will be followed by statements or questions, however you want to use the time, of 30 minutes from each of the opposition representatives. Then the minister will have 30 minutes for a reply, in which you can address new issues or respond to the issues that the members of the committee have brought up. That will probably conclude our session for October 15. If not all the time is taken up, then we'll begin with a 20-minute round with the official opposition.

Minister, the floor is yours. You have 30 minutes.

Hon. Leona Dombrowsky: Thanks very much, Mr. Chair. I want to say that the Ministry of Agriculture, Food and Rural Affairs is very happy to be here before the estimates committee to present the activities within this file to the members of the committee, but also this is recorded publicly. We think that it's a tremendous opportunity to highlight the work of the Ministry of Agriculture, Food and Rural Affairs.

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I am delighted to have with me a number of members from my ministry. Two are sitting at the table and I will identify them. We do have other members of staff. So if over the course of the afternoon we would require them to assist, providing some detail around the programs that you may ask about, we will bring them to the table and they will be introduced as they come forward. With me today is deputy minister for this file, Dr. Bruce Archibald, and also, sitting beside Dr. Archibald is Karen Chan, who is the chief administrative officer and assistant deputy minister in this file.

I do welcome the opportunity to stand before you today and talk about the abiding respect and appreciation that our Premier and this government have for the people who represent Ontario's agriculture and food industry and our rural communities. They represent an enormous, diverse and integral part of our province's economic and social health. We understand how important it is for them to remain competitive and successful, from rural business, to the multi-generational family farm, to the many commercial enterprises that rely on our agriculture and food sectors. Their success is connected to each other, and their success means a stronger Ontario.

We have a good foundation to work with. Ontario is very fortunate to be blessed with abundance and excellence in both natural and human resources. More than half of Canada's best agricultural land is located right here in this province. With that land, our farmers produce more than 200 commodities. This is the most diverse agricultural province in all of Canada. From cut flowers to car parts, we are growing new ideas and pushing toward new levels of technology and innovation. We have the resources and the people power to build agri-food excellence.

Ontario's farmers have helped to build our world-class agri-food sector. Through the Premier's Award for Agri-Food Innovation Excellence, we continue to recognize their hard work and investment in innovative ideas. We know that farm-level innovation enhances profitability in the marketplace, meets evolving consumer demands and manages the effects of farming on the environment.

We are a world leader in technology, research and development, and more than three quarters of our agri-food exports are now value-added. Field-fresh to fork-full is high-tech business in Ontario.

Food processing represents one of Ontario's key industries and it moves forward at a steady pace. The province is an attractive host for processing companies and contains Canada's major food industry cluster. More than half of national food processing companies, both large and agri-preneurial, generate over 120,000 processing-related jobs and more than $32 billion in annual sales in Ontario.

That type of success doesn't happen overnight. It takes passion, commitment, hard work and a shared vision. A strong vision helps us to focus on our goals. That is why the Ontario Ministry of Agriculture, Food and Rural Affairs recently renewed its vision—thriving rural Ontario agriculture and food sectors—and mission: "a catalyst for transforming our agriculture and food sectors and rural communities for a healthy Ontario."

OMAFRA renewed its vision and mission statements to ensure that government is keeping in step with society's changing needs, and our society has had many changes over the past century. Our agri-food sector has grown and adapted with the passing decades.

Today more than ever it is important to help make even greater strides in order to stay competitive. It's not just about coming up with more new value-added foods or convenient packaging; it's about finding ways to alleviate consumer concern over food safety and security. It's about coming up with new, environmentally friendly uses for agricutural products, uses that will lower our dependence on fossil fuels and raise our ability to turn agricultural waste into renewable energy and a myriad of products, from car parts to clothing, all hopefully based on raw agricultural materials.

Now I'd like to focus on ministry priorities and strategies. Ontario's agri-food sector is the second-largest goods manufacturing industry in this province. It contributes more than $30 billion to this economy every year and employs over 700,000 people. Our priority at OMAFRA is to strengthen Ontario's agri-food sector, enforce and improve food safety, protect the environment and strengthen Ontario's rural communities. We are addressing these under two main strategies: the first, strong agriculture, food and bioproduct sectors and strong rural communities; and the second, healthy people and a healthy environment.

It's no secret that the agri-food sector in Ontario is facing ongoing and new challenges, in particular rising energy, feed and labour costs. Many rural communities are facing issues such as attracting, maintaining and expanding businesses and meeting infrastructure needs. Our ministry continues to work with partners to help the agri-food sector and rural Ontario meet these challenges.

We are pursuing strategic investments in fostering innovation, developing research capacity, enhancing market opportunities and supporting rural communities. OMAFRA is also working on a transformational agenda to help effect change for the long term.

The ministry's key activities fall broadly under six categories within two strategies. Under our strategy of strong agriculture, food and bioproduct sectors and strong rural communities we have economic development, research, business risk management transfers, regulated marketing and capital. Under the strategy of healthy people and healthy environment, we're focused on activities around food safety and the environment.

Food safety: It has been a priority for the McGuinty government from day one. Shortly after taking office, we commissioned the Honourable Mr. Justice Roland J. Haines to undertake a review of the province's meat inspection and regulatory regime. This government is committed to continually strengthening Ontario's food safety systems to provide safe food for Ontario. That is one of the reasons we asked him to provide us with recommendations on how to enhance our food safety system. We are committed to implementing his recommendations in a responsible manner.

Of the 85 recommendations from his report that apply to the Ontario Ministry of Agriculture, Food and Rural Affairs, 71 are complete, while significant progress has been made on the remaining 14.

As a first step, we proclaimed the Food Safety and Quality Act and introduced a new, stronger meat regulation. This legislation ensures that meat processed in provincially licensed plants for consumption in Ontario meets food safety requirements.

We created a food safety division led by a single senior executive who also has a direct connection to Ontario's chief medical officer of health. We increased the number of meat inspectors in the Ontario public service from 10 to 107 full-time and 63 part-time positions. We proclaimed the Food Safety and Quality Act in 2005. We introduced a modern, science-based meat regulation.

The McGuinty government continues to work with the food processing sector to implement good manufacturing practices and hazard analysis critical control point systems—those in the industry and those of you who speak with your constituents would know it as HACCP. We also continue to work with the industry to put in place a traceability system that will allow us to track foods and their ingredients from the farm almost right to your fork.

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OMAFRA also continues to pay for $200 of the $300 registration fee for the mandatory food handler training course.

Justice Haines was very clear in his recommendations that all meat processing operations, whether an abattoir or a free-standing meat processor, should meet the same food safety standards. Our government recognized that partners would require assistance to meet these new requirements. That is why we are providing up to $25 million in financial assistance for those operators.

We have also funded the Ontario Independent Meat Processors to provide technical and business advice and followed up with an additional commitment of $800,000 to continue with the delivery of the meat plant assessment services.

As part of government's role, OMAFRA is committed to strengthening a science-informed food safety system that will protect public health as well as enhance the competitiveness of the Ontario agri-food industry.

I'd like to talk about the University of Guelph agreement. In 2007-08, the ministry also had some notable one-time payments, which included: $150 million in one-time provincial assistance for the Ontario cattle, hogs and horticulture payment and other industry transformation initiatives; and a $56-million investment to the University of Guelph for research, animal health and the Ontario Veterinary College. This money was independent from the recent agreement we signed with the university in the spring.

The university is internationally recognized as a leader in the field of agri-food and veterinary sciences. Last year, it was ranked the number 1 comprehensive research institution in Canada, and it ranked number 7 worldwide for its impact on agricultural sciences—the only Canadian university among the top 25 institutions cited.

Between 1996 and 2007, an annual provincial investment of $54 million in the University of Guelph partnership leveraged more than $1 billion in returns per year. Researchers at the university are continually exploring new horizons in the heart of agricultural and environmental innovation.

We all benefit from the success of this partnership: Poultry fed flax and fish oils produce meat rich in omega-3, a heart-healthy discovery and one of the many positive results that come from the university's long-time partnership with the Ministry of Agriculture, Food and Rural Affairs; the current $650-million Ontario soybean market is built on 25 years of research conducted through the partnership—into better production, yields and innovative uses such as soy milk, soy-based diesel and even a potential treatment for kidney disease; laboratory testing to protect the food supply, our health and Ontario's reputation in global markets; new, hardier crops and the latest production techniques that improve farmers' bottom lines and our food choices.

I am confident that we will see even greater benefits through our new multi-year partnership agreement with the University of Guelph. It will receive $300 million over the next five years to help it continue its top-notch agri-food and rural research and development programs, animal health and food testing services, and veterinary education. This agreement is built upon a new vision and outcome-oriented performance management system more aligned to transforming the agri-food sector.

Thinking about the future sort of gets me excited—I think it gets all of us excited—because what I see is a true renaissance happening in the Ontario agri-food industry. Ontario can and will build on its position as a leader in agri-food innovation because we have the advantage of this unique partnership and the many connections with other global research institutions that it entails.

This province is well positioned for the future. We are home to many active biotechnology companies. We have the lion's share of our country's prime agricultural land. We have world-class scientific research communities and we have a Premier and a government that recognize the importance of investing in innovation. Part of that innovation means looking for new ways to create cleaner fuels. That's why we introduced a renewable fuels standard requiring gasoline sold in Ontario to contain an average of 5% ethanol, and why we created the Ontario ethanol growth fund. The OEGF has helped the province's ethanol industry gain a firm footing, leveraged key private sector investment and has helped build the market in infrastructure both for increased ethanol production and the next-generation biofuels. It has supported and enabled an environment that will allow new technologies to flourish.

The reality is that there are many other complex factors that affect commodity prices. It is clear that greenhouse gas emissions are contributing to global warming. The impact of climate change poses a greater risk to food security. Biofuels and a growing bioeconomy are part of the solution. The Ontario government has always recognized that corn-based ethanol is only one of several methods of producing cleaner fuels and a healthier environment.

We will continue to support innovative research and approaches that ensure ongoing improvements to related products and processes. In terms of dollars, we know that moving toward a bio-based economy provides the opportunity to displace some of the $12.6 billion worth of petroleum that Ontario has to import each year. Research is key and Ontario is opening the door.

The Chair (Mr. Tim Hudak): About 11 minutes, Minister.

Hon. Leona Dombrowsky: Oh, boy. So much good news and so little time.

In addition to the OMAFRA-University of Guelph agreement, the province is also funding research into biofuels made from agricultural resources at the University of Western Ontario. With OMAFRA's New Directions and Alternative Renewable Fuels Plus Research program, we are supporting novel research and exploring new markets and new uses for alternative renewable fuels, bioproducts and their co-products. Our government continues to invest in initiatives like Soy 20/20, the Ontario BioAuto Council and the BioCar research initiative. Investments like these will help create innovation and new markets for Ontario's agri-food sector and rural communities.

Mr. Chair, it would appear from the stack of paper I have here that I'm not going to get through all of my notes, but I'm happy that I'm getting to the very best part of it right here. So if I'm not able to continue for all of my speech, I do want to say that I think what we are so pleased about right across Ontario, and what we hear most about, is our buy-local Pick Ontario Freshness strategy. As we look to new markets—

The Chair (Mr. Tim Hudak): Minister, you do have a 30-minute wrap-up too, if there are other issues you want to address.

Hon. Leona Dombrowsky: Okay. Well, thank you very much, Mr. Chair.

As we look to new markets, we continue to promote the outstanding quality of fresh Ontario-produced foods.

Earlier this year we held our fourth successful Premier's Agri-Food Summit, with more than 100 agri-food leaders attending. The theme of the summit, as suggested by these agri-food leaders, was Buy Ontario. Our government has listened and it has taken action. We have championed the drive to encourage consumers to buy local.

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Many retailers have caught the wave and developed buy-local strategies of their own in response to increasing consumer demand. Just a couple of examples, but I think they are significant: Sobeys has introduced a Compliments label for Ontario beef, pork and chicken. The packaging contains the Foodland Ontario logo and the products are being promoted in Sobeys's weekly flyer. Highland Farms offers an Ontario fresh meats line, including beef, pork, chicken and lamb. Loblaws has recently launched their Grown Close to Home campaign. Loblaws also currently offers Ontario corn-fed beef products in Your Independent Grocer and Valu-Mart banner stores.

Consumer awareness for OMAFRA's own Foodland Ontario brand is at an all-time high. The Foodland Ontario symbol is recognized by 94% of Ontario principal grocery shoppers, and 88% of these shoppers associate the symbol with fresh Ontario produce. Eighty-seven per cent of principal grocery shoppers also indicate that they would prefer to purchase Ontario-grown produce.

With an investment that was announced in 2008 of $56 million over four years, our government is building on this momentum. We will continue to increase consumer awareness and meet consumer demand for fresh, Ontario-grown local food through our Pick Ontario Freshness marketing strategy. This strategy includes support for the Ontario farmers' market initiative.

Research carried out in 2006 shows that the 125 markets represented by Farmers' Markets Ontario have annual sales of $645 million, and they have an economic impact on the province of $1.9 billion. In 2008, Farmers' Markets Ontario represents 113 member markets of an estimated 130 across the province, so that's a pretty significant representation.

Our multi-pronged approach on promoting healthy Ontario food includes working with sister ministries and Ontario growers on projects such as the healthy eating and active living strategy.

OMAFRA and the Ministry of Health Promotion, in conjunction with the Ontario Fruit and Vegetable Growers' Association, local health units and school boards in Porcupine and Algoma districts, are in the third year of implementing a northern Ontario fruit and vegetable program to over 12,000 elementary school children. These children receive a fruit or vegetable snack two days a week, with over 80% of the produce being grown in Ontario.

Last month, our ministry also took part in the Eating Healthy Looks Good On You pilot project that was introduced by the Premier. Ontario has already dropped trans fats from lunch menus, school vending machines and tuck shops, and with this new pilot project we are helping to encourage healthier food choices for students, with easy recipes to use fresh, locally grown foods.

Our Pick Ontario Freshness strategy also includes the Ontario market investment fund. Through the market investment fund, we are offering to partner with agri-food industry groups and local food networks to help either jump-start or maintain momentum for local food initiatives. We are providing $12 million over the next four years to projects that focus on local market research, building local networks, connecting farmers with food service businesses and other promotions. This program is really all about relationships, bringing together both large and small groups of people dedicated to selling fresh and abundant foods that are grown and made right here in Ontario. We want local food networks, farm and commodity organizations, food processors, retailers and individuals to get together and send in project submissions that cover such things as market research, promotional strategies or getting expert advice and assistance to coordinate local efforts.

I had the opportunity to promote the Ontario market investment fund at the Local Food Action Forum that was held in the Niagara region in August.

As my time is quickly drawing to a close, I would say that I'm sure that I'm going to have a few more things to say in the wrap-up, but I do want to talk about support for farmers.

This government recognizes the challenges Ontario farmers face, and that is why we have provided more than $1.2 billion over the past five years in farm income and support programs. In December of last year, OMAFRA began the implementation of a new suite of business risk management programs and made a decision to continue non-business risk management programs that already existed under the agriculture policy framework.

Beginning in February, the ministry also provided more than $130 million in direct support to cattle, hog and horticulture producers who had been facing financial pressures over some years. They came to us and told us that they had some hardship over some years, so we provided $130 million to allay those pressures. In addition to that, they were also victims of a higher Canadian dollar, higher input costs and lower market prices.

We also provided $20 million toward a variety of initiatives aimed at creating a more sustainable future for the sectors. As part of the transitional support package announced in January 2008, we provided $9 million to cattle abattoirs in Ontario. The funds helped the abattoirs with some of the operational costs that resulted from the July 2007 implementation of the Canadian Food Inspection Agency's enhanced feed ban regulations.

During development of a new agricultural policy framework, we moved forward with programs designed to mitigate shorter-term risks for Ontario producers. Initial payments under the three-year risk management program pilot project to support grains and oilseeds were also committed and began to flow in 2007. This, again, was a program where we worked very closely with representatives from the grains and oilseeds sector. We've implemented a program and we continue to look for the federal government to participate because this is something that the sector made very clear was important to them.

Mr. Chair, I have appreciated this opportunity to tell you about how, from the concession road to the city lights, we have been listening and working to build a better quality of life for the people who live and work in rural Ontario. We must always remember that agriculture is the foundation that built this province. Through the Ministry of Agriculture, Food and Rural Affairs, we will continue to reinforce and build on that foundation so that it stands strong for generations to come. This portfolio is very large and multifaceted. It serves a great and complicated sector with no single solution to the many issues that inevitably come with the territory. Our ministry interfaces with many partners from the farmgate to the dinner plate and that means there will always be a broad range of interests put forward and a multitude of issues solved.

I do look forward to the questions that will come from the members of this committee and I do have some other remarks that perhaps I can add when I do my wrap-up this afternoon. Thank you very much.

The Chair (Mr. Tim Hudak): Terrific, Minister. Thank you very much for your opening comments. Thanks also for voluntarily distributing your comments, the formal remarks, to members of committee. I know they appreciate it. Again, we'll have 30 minutes for the official opposition, 30 minutes for the third party, and the minister, 30 minutes for summation and to respond to comments from your committee colleagues. Mr. Arnott, you have 30 minutes.

Mr. Ted Arnott: Thank you, Minister, and staff for coming to this committee today to deal with some of the issues that we've begun to talk about and answer the questions that we have. As I said earlier, I'm pleased to be here on behalf of the member for Oxford, Ernie Hardeman, who is our agriculture critic. Unfortunately, because of another commitment in his riding, he couldn't be here today, but he certainly plans to join this committee for the subsequent meetings that will take place as the agriculture and food estimates continue to be discussed.

Certainly, the minister has graciously provided me with a copy of her opening remarks and I appreciate that very much. I think it's very helpful to have this in front of us as we go through it. I realize you couldn't cover all of the issues that you wanted to, but at the same time I think it's helpful to have this information and I appreciate the overview of what the ministry's been doing. I certainly want to commend, congratulate and thank the Ministry of Agriculture and Food staff, many of whom live in the great riding of Wellington—Halton Hills, some of whom live in the great riding of Guelph and other ridings as well. But certainly I'm acquainted with a number of your staff and they are excellent, professional public servants and we do appreciate the work they do. I hope you'll pass along my thanks, Deputy Minister, to everyone there.

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I have a question that arises from your statement, Minister. You talked about the buy-local efforts of the ministry to encourage consumers to buy food that is produced and processed in Ontario. One of my constituents is Anita Stewart—and I know you're acquainted with her too—who has done a lot to encourage this idea, and I've spoken to her on a number of occasions about this. I was just wondering if the cafeteria at the Ministry of Agriculture and Food head office is now making an effort to ensure that the food that is prepared and served to ministry staff is Ontario food?

Hon. Leona Dombrowsky: I'm going to begin that response. I'm very delighted to answer the member's question. It was a very interesting point that was raised by his constituent Anita Stewart. When we did pursue investigating how much food was sourced—and by the way, it wasn't just the cafeteria in Guelph. We wanted to know more broadly how much food in the public buildings of the province of Ontario was sourced locally. We felt that it was a respectable number. I'm going to ask staff who are at the table here to respond.

You would also appreciate that there are some products that we'll never grow—no, I shouldn't say we'll never grow bananas in Ontario; we might just grow bananas in Ontario.

Mr. Ted Arnott: But we don't today.

Hon. Leona Dombrowsky: Who knows what they're doing over there in Vineland.

In any case, I think it's a very valid point and I'm happy that you've raised it. Deputy, would you like to give the figures? I think you might be surprised and, hopefully, reasonably pleased; that's why I want them to be exact.

Dr. Bruce Archibald: We'll get you the exact percentage.

I will tell you that Ms. Stewart raised this issue with us in a number of different forums, and I've told her privately and publicly that I thank her for that challenge because I think it was appropriate to see what we could do to even further encourage the use of Ontario produce in our cafeteria at 1 Stone Road.

When we talked with the folks at Sodexho, the good news was that over 70% of the produce they were using was Ontario-based. Clearly, milk, cheese, chicken, all those things, were coming from Ontario sources, but they hadn't done a lot in terms of actually promoting Ontario produce. We had a group work with them. We had our Foodland Ontario people come down and talk about different initiatives. We worked with them on feature menus and actually having produce available for staff to buy in the cafeteria if they wanted to. So if you needed to bring a tomato home that night, you didn't have to go to the local grocery store; you could actually buy it at the cafeteria. We have seasonal specials that we promote. Every single day now, when you first come down into the cafeteria, you'll see the Ontario feature of the day. I will get you the exact percentage. It is considerably more than 70% now. As the minister said, there are certain items that our staff like to purchase that aren't grown in Ontario, but I think there was a real effort. There are banners, there are recipes.

Anita has been a tireless promoter for us. In fact, she is part of our United Way campaign today, and she was in the building autographing her new book and, again, talking about the good things that grow in Ontario, and she has been an ambassador for us in our Pick Ontario Freshness program.

It was good to have that social conscience. I think the folks involved in running the cafeteria have been extremely responsive. If you go there now, you will see lots of good evidence and banners of that. I think for our staff and for people who come and visit the building, because it is a public building, there is a real sense of pride for us in terms of things that we are—Karen just passed me a note here that over 80% of all the food that's now in that cafeteria is sourced Ontario product.

Mr. Ted Arnott: I'm pleased to hear that you're taking this seriously and making efforts toward getting it closer to 100%. On one level it is a symbolic gesture, but on another I think it makes a strong statement about the ministry's leadership in this regard, and we should be making a real effort toward 100%.

I want to raise with the minister and staff some questions surrounding AgriCorp.

Interruption.

Mr. Ted Arnott: No one paid the hydro bill?

The Chair (Mr. Tim Hudak): I thought it was mood lighting, maybe. I don't know.

Mr. Ted Arnott: In all seriousness, the issue of AgriCorp is one that is important to the people of Ontario, as well as farm families. As you are well aware, Minister, there was an audit by the Auditor General of AgriCorp and its delivery of farm support programs, which I'm told was commenced in September 2007, so that's just over a year ago. On July 14, 2008, in the summer of this year, the report of that audit was released. I understand that there were 17 recommendations for action by AgriCorp and the ministry to improve program delivery and accountability. While a number of the recommendations dealt with the CAIS program, they remain valid for the successor program, our caucus believes.

My first question with respect to the AgriCorp issue would be, how many of the recommendations from the Auditor General's report are being addressed in these estimates that we are discussing and debating today and in the next few days?

Hon. Leona Dombrowsky: First of all, I'm going to give staff the heads-up that I think they will be able to give you the detail in terms of what might be included in these estimates that will assist us in meeting the recommendations that came from the auditor.

I'm very aware of the report; I asked the auditor for it. It did take a good deal of time. It's a very comprehensive document. I'm sure those of us who represent rural ridings in this room have heard a lot about AgriCorp problems that may have been experienced. Ontario is rather unique in that we are one of three provinces—Ontario, Prince Edward Island and Alberta—in Canada that have our own delivery agency for the risk-management programs. In the other provinces, the program is managed by the federal agency. So I did ask the Provincial Auditor to look at whether it would be more cost-effective to have the federal government's agency administer the programs, as is done in most other provinces in Canada. This did require some time. I think that the auditor, as he always does, took his time to do his job well. I asked him to do that in September 2007; the report was issued in July. I had the opportunity to meet with the auditor before it became public and to thank him for his very good work and a very comprehensive document.

With the recommendations that we received, I then went to the agriculture community, because it was really for that community that I made the request. They had suggested that this was something that needed to be done. They wanted to be sure, and I wanted to be sure, and I needed to be able to say to producers in Ontario who would be using risk management programs, "You are getting the best value for your dollar with this agency in place."

Deputy, I'm going to ask you if you could address more specifically the recommendations that came in the report and how many would be included in the estimates, as they have been presented in this document.

Dr. Bruce Archibald: As the minister has already stated, she received the report and she asked stakeholders to review it to provide feedback to the ministry. They had till the end of September to do that. They've submitted a number of different comments. In many areas, they're very supportive of recommendations; in other areas, they would like us to consider different options. We're putting those together for the minister and we'll be presenting a summary for her in terms of the feedback from various stakeholders and where they go.

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In terms of this specific 2008-09 budget, there are no changes to our budget to reflect any of the recommendations that were in the auditor's report. I think it's really for going forward, so as we go into 2009-10 and beyond, some of the recommendations the auditor talked about were things that AgriCorp had begun to implement in terms of various kinds of tracking systems, improved customer performance and those types of things. But in terms of the actual budgeting for the ministry in 2008-09, there is nothing in there that is specifically designed for the recommendations in the report. As we present those to the minister and we develop our own results-based plan for going forward, we'll have to consider those and see where they fit into the budget going forward from here.

Hon. Leona Dombrowsky: If I may also add, I indicated to you that after I received the report from the Provincial Auditor, I did ask, over the course of the summer, for our partners in the industry to review the recommendations and provide me with their feedback. I certainly wanted to understand from our industry partners: Do they support all of the recommendations? Were there any recommendations that they might think we should not move forward on? And, by the way, there are. Would there be some priority in terms of what recommendations we should move on first? All of this information we are now considering.

Rather than say that we have this report and this is what we're going to do, before we ask our stakeholders—I thought that would be very premature. So we're taking the time, we've asked our stakeholders; they've been very good to accommodate us with their advice and some direction. They've identified a couple of the recommendations that they prefer we not move on—by the way, it might generate some revenue—so that's all something that we're taking into account. I do hope that within the few weeks ahead we will be able to provide you with our plan going forward with respect to AgriCorp.

Mr. Ted Arnott: Well, I'm all for consultation and I appreciate the fact that the minister has taken this step to consult with the industry. It has now been about three months, I think, since you received that report. I believe consultation, generally speaking, should have a beginning and an end, and then the government should take appropriate action. What is your end date for this consultation process and when would you expect to conclude it?

Hon. Leona Dombrowsky: Actually, the consultation ended September 30. This is an important issue and we do want to move on it. I guess we really didn't have anything to say about the timing when we received the report. It was right at the beginning of the harvest season, when things are very busy on the farm. That's why we did allow, over the course of the summer, some time for our stakeholders to consider what was in the report. That's why we set September 30 as the deadline.

We are still reviewing the documents that we have received and now beginning to review what their priorities are and setting our own. So as I indicated, I would expect that certainly in the weeks ahead, I'm sure before the end of the year—I can't be any more specific that that today—I will be bringing forward my plan. I also have to now speak with folks at the agency. So there's a good deal of work.

The way that we have operated in this file is that we want—I use the Latin phrase "festina lente," which is "make haste slowly"—to make sure that as we move forward, we do it in a thoughtful way, that we consider all of the points that have been brought to our attention so that we don't have to go back and retrace our steps and fix it later on.

Mr. Ted Arnott: You indicated in your answer that some of the industry stakeholders, in the context of your consultation, have expressed the view that they are opposed to some of the Auditor General's recommendations. Which ones have they indicated that they are opposed to? Which groups have indicated opposition? Do you agree with those groups?

Hon. Leona Dombrowsky: The deputy is helping me with my marked-up document.

There is one recommendation that—and we're going to go back to the BSE crisis. At that time, we knew that cattle farmers were in trouble, so, in order to deal with that and get them money that they needed to keep their operation going, dollars were sent out. This was before the CAIS program actually came into effect, and these dollars were provided to producers with the expectation that when the risk management program became implemented, they would participate. So dollars were paid on that basis.

Now, not all producers chose to participate in the risk management program. What that means now is that potentially they are in a situation of overpayment, where they received dollars that the government provided in good faith, and they've chosen now not to participate in a program where their—and typically what happens when that kind of an advance is made is that then, when people participate in a program and they get a payment, their advances are recovered at that time. If they choose not to, then those dollars are still on our books.

The Provincial Auditor, in recommendation number 7, has said that AgriCorp—we have made the decision as a government not to pursue farmers who are in an overpayment situation with a collection agency, and you can read recommendation number 7 in the auditor's report. The Provincial Auditor is saying that we should engage a collection agency to go after these overpayments. It also indicates that we should implement procedures to offset any debts owing to the ministry or AgriCorp by deducting them from farm support programs.

What I will say to you is, again, when we provided the $130 million for the cattle, hog, and horticulture farmers, and we did that because they had suffered some years of hardship and not making any money, it seemed rather counterproductive to say to these folks, "Oh, by the way, we're going to provide you with this payment to help you out because we know how difficult it is, but, by the way, we're going to claw it back because you owe us some money." So we've made that decision as well.

What we've heard from some of our stakeholders is that they would prefer that the government not follow the direction that was provided by the Provincial Auditor with respect to a collection agency, and that in those times when there are significant hardships, that may not be the best time to recover an overpayment. So that's one example.

Another recommendation that was presented by the auditor, and again there's some mixed feeling about it—you have heard in your riding, I'm sure, and I've heard it, where they say, "You know, this CAIS program is so complicated I had to go and hire an accountant." Well, actually, in the province of Quebec, if you want to participate in their risk management program, you do have to hire an agent or an accountant who is familiar with the program. What the Provincial Auditor identifies in the document is that when agents are engaged—a lot of the delays and problems that people have with AgriCorp and getting their money on time come from the fact that the forms haven't been filled out correctly or things have been forgotten. The incidence of that happening when agents or accountants are employed is significantly reduced. So the auditor said, "You know what? We think the law they have in Quebec that says that if you want to participate you have to have an agent is a good one."

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I'm sure you can appreciate that some of the feedback I've received from our partners is that, no, they don't think that it should be a requirement that they would have to engage an agent to do their paperwork if they want to participate in a risk management program.

So those are two examples of where the Provincial Auditor has provided some recommendation and where our stakeholders would have a difference of opinion.

Mr. Ted Arnott: How would you define the word "overpayment" in a risk management program that's administered by AgriCorp? What does that mean to the ministry? I have my sense of what an overpayment is, but what does the ministry see—

Hon. Leona Dombrowsky: I would be very happy to invite one of the staff from the ministry to tell you exactly what we consider to be an overpayment.

Mr. Ted Arnott: To me, an overpayment is an error that is made by the administrative functional branch, whether it be government or another outside agency, whereby someone who has applied for money or is in receipt of money received more than they would have normally been entitled to under the parameters of the program. Am I wrong?

The Chair (Mr. Tim Hudak): Could the civil servant introduce herself and state her position to the committee and then please respond to Mr. Arnott's question? Thank you.

Ms. Christine Kuepfer: My name is Christine Kuepfer. I'm the director of the farm finance branch, which is the branch responsible for overseeing the relationship with AgriCorp and the BRM programs.

You're correct that an overpayment results from when a farmer receives more money than they're entitled to. There are a variety of reasons, though, for which this could occur. As you know, the programs are calculated based on income tax information and other sorts of particular financial information about the farm, and if we receive amendments to that later on, that that data has changed, then the payment would be recalculated and that sometimes can result in an overpayment situation. In other words, it's been calculated differently, and their entitlement would have been lower than what they would have received. So that is one example of when they would have received an overpayment.

Mr. Ted Arnott: These risk management programs typically are a fixed, allotted amount of money. They're not open-ended programs, with an unlimited amount of money allocated to them on an annual basis, are they?

Hon. Leona Dombrowsky: The risk management programs are an entitlement program. They're different than an ad hoc program, such as the cattle, hog and horticulture program, which is a fixed amount of money and when the money is gone the program is over. However, with the Canadian agriculture income stabilization program, that is demand-driven. That is why, in any given year, the budget for that can fluctuate, depending on the needs within the industry.

Mr. Ted Arnott: But there were some farmers who would have been turned down and not received funding. I've had constituents who have come to my office to tell me that they think that when an overpayment has been established and not recovered, that means another farmer, who might be in real need as well, is unable to access the provincial government's support. You're telling me that's not correct in this case.

Hon. Leona Dombrowsky: No, that would not be the case. Because someone is in overpayment, that does not have any impact on the dollars that we are then able to provide to those who do qualify.

We have an agreement with the federal government, and those dollars flow based on a formula, a program, where we all, right across Canada, agree what the rules are. The federal government pays 60% of the cost; the provincial government pays 40%. That doesn't change, depending on how much money—we pay that. That's something that we requisition every year. We are not able to accurately say, "This is how much we will need for CAIS payments or for production insurance."

Mr. Ted Arnott: I appreciate that explanation.

You indicated that the recommendation of the Auditor General is that the ministry employ collection agencies to attempt to recover these overpayments, and that one of the interest groups is suggesting that that shouldn't be done. Has there been any effort on the part of AgriCorp or the government, short of approaching a collection agency, to attempt to recover these overpayments?

Hon. Leona Dombrowsky: Yes, and I'm going to ask, Deputy, if you would respond to that please.

Dr. Bruce Archibald: Certainly. The ministry employs a number of different approaches to try to deal with overpayments. The general policy is that in future programs that individual could be eligible. If there is a payment triggered, we look to recover any overpayment at that time. There are times, under extenuating circumstances or extreme sorts of conditions, such as we had last year when we did the one-time cattle, hog and horticulture payment, when the industry asked the minister to waive that policy because of the extreme situation facing many cattle and hog payments, which is the minister's prerogative, and she chose to do that. So it isn't all the time and all programs, but as a general policy we try to collect payments from people when there are future payments that are eligible.

We've had a number of discussions with various farm organizations to try to do this in the most fair way to individuals, not trying to be aggressive in terms of our collection policies, but also recognizing that there is a legitimate overpayment due to the province, and at appropriate times, when we can start to recover that, we do. So we have recovered a number of overpayments using those kinds of programs, and that's the general approach. But there are options that the minister can use to make exemptions on those.

Mr. Ted Arnott: Are you in a position to inform this committee of the size of the largest overpayment that was established and, in turn, recovered? Again, I've heard rumours that we're talking six or seven figures and I've heard rumours that some of these overpayments have not been recovered.

Dr. Bruce Archibald: I can't provide you that at this time, but we can certainly, through the clerk, provide you the information in terms of what the level of overpayment has been and where we are in terms of recoveries to date. We will do this in a way that is aggregated data, because obviously we need to protect personal financial information and privacy, but we can get—

Mr. Ted Arnott: That's why I asked if you're in a position. Again, I characterize them as rumours, but I'm telling you straight goods. I've had constituents in my office who've told me that this is taking place and I wanted to bring it to your attention. I'm well aware the staff at AgriCorp are working, in many cases, long days into the evenings, weekends, when there's a backlog, to deal with these kinds of applications, and the hard work that is being done there in order to fulfill their mandate and to serve the farm families and to support the farm families who are in need. Again, I think their efforts need to be acknowledged. I am informed that the computer system they use is antiquated and I'm wondering if you would agree with that statement and if you could advise the committee of whatever steps are being taken to modernize the computer system so as to provide better client service to those applicants who are using AgriCorp's service.

The Chair (Mr. Tim Hudak): That question does conclude Mr. Arnott's time. Is it possible for you to give a brief answer to that question? Or we could come back to you, Minister, in your summation.

Hon. Leona Dombrowsky: Can we come back to it?

The Chair (Mr. Tim Hudak): Your preference. Is it a brief answer or is it a longer answer?

Hon. Leona Dombrowsky: I'll make it brief. I'm glad that he recognized the good work of folks there. They do work very hard. I'm going to ask the deputy to address the IT system.

Dr. Bruce Archibald: AgriCorp does have an IT system; Zephyr is the name of it. It has grown as the programs have grown over the years. It is an area where we're working very aggressively with AgriCorp and with the government's IT cluster to find ways to strengthen the performance of that system. We're also looking at upgrading as well.

The Chair (Mr. Tim Hudak): Terrific. Thank you, Mr. Arnott. That's your 30-minute segment. We now proceed to the third party. M. Bisson, you have 30 minutes.

Mr. Gilles Bisson: Welcome, Minister, to our committee; always good to have you here. You said earlier on—I just want to make sure that I've got the quote right, here—that agriculture is the sector that built this province. I guess my question is, can you tell me how many new farms have been created in the last four years?

Hon. Leona Dombrowsky: Is there anyone here who can tell us that?

Interjection: Not off the top.

Mr. Gilles Bisson: Can you guess how many new farms—

Hon. Leona Dombrowsky: What I can say to the member is that we will attempt to get that information for him.

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The Chair (Mr. Tim Hudak): Terrific.

Mr. Gilles Bisson: I find it somewhat odd, if it's such an important sector, that the minister wouldn't know how many new farms, in a ballpark figure, have been started in the last four years. Do you have a ballpark figure?

Hon. Leona Dombrowsky: I just want to be accurate. I'll be happy to provide that.

Mr. Gilles Bisson: Okay, so if you could provide that.

I'd just be interested to know: Can you tell me what kind of new investment, above what we've seen over the last four years, is new as far as money levered from the farm sector itself? I'm not talking about government money but new investments on the part of the farm sector itself in the Ontario economy over the last, let's say, four years. Can you provide us that?

Hon. Leona Dombrowsky: That would be an exhaustive list.

Mr. Gilles Bisson: Just to be clear—just so we don't end up asking for more than we're asking—we know that every year the farming community spends X amount of dollars outside of government dollars—their own money—in running their farms and making the key investments necessary to run their farms. What I'm looking for is new investments above and beyond what is normally done. Are you able to track how much new investment has come into Ontario on the part of investments directly by Ontario farmers or people associated with the farm industry in Ontario over the last four years, year over year?

Hon. Leona Dombrowsky: I'm looking to my staff because I don't know that I'm quite clear on it yet. Are you looking at—

Mr. Gilles Bisson: To be clear, I agree with you. The farming community and the—excuse me, you were saying? Or are you just coughing? I didn't quite—

Hon. Leona Dombrowsky: I'm just clearing my throat.

Mr. Gilles Bisson: Okay; sorry. I agree with you and your opening statement, and again I want to get it right because agriculture is the sector that built this province. And I agree with you. Specifically, what I'm looking for is that you know and I know and other Ontarians know that every year the farm community spends dollars in order to invest in their own farms—either by way of machinery or whatever investments are needed to run their particular farms. I imagine your ministry tracks that in some way, that we know year over year how much has been spent in, let's say, 2004, 2005, 2006 etc. So is there a way of being able to provide this committee with how much money has been invested year over year by the private sector in the farm agribusiness, let's say, for the last four years?

Hon. Leona Dombrowsky: I have some information here. I don't know that it answers your question directly. I think it' a good question. I can share with you, for example, that Ferrero Canada has come to Ontario. They've invested $200 million in a new facility because of the raw materials they use to produce their chocolate products and other products—they produce Tic-Tacs too—that they can source right here in Ontario. Is that the kind of investment that you're looking for?

Mr. Gilles Bisson: What I'm looking for is that we know that the farm community invests their own money in their operating farms so much per year. We must be able to track that in some way. Then there are the businesses associated with the farms, those that produce the goods that come from the farms into the different products that are in the food chain. I'm wondering if you're able to provide this committee with how much money we know is being invested by the farmers themselves, and the supportive businesses, year over year over the last four years. I'm just interested to see to what degree that type of investment is happening.

Hon. Leona Dombrowsky: It was a late night, Mr. Chair, I confess, so—

Mr. Gilles Bisson: For all of us, sister. In fact, some of us celebrated more than others.

Hon. Leona Dombrowsky: I'm not trying to be difficult here, and I really do want to answer the member's question. We talked about Ferrero. They have invested $220 million to build a new plant. Tim Hortons is investing $125 million in Guelph. Kellogg invested $97 million in the Quinte region. Royal Canin built a new $73-million pet nutrition manufacturing plant that brought 190 full-time jobs to Wellington county. Further investment in an expansion of $20 million is expected, actually, next year.

Mr. Gilles Bisson: That's part of the answer. It sounds like you're tracking some of these investments. I'm looking at specifically two types of investment: how much the farm community itself, the person who operates the farm, is spending in Ontario, basically overall year per year for the last four years; and then, on top of that, those people who are basically in the business of supplying services or adding value to the goods that they produce.

Hon. Leona Dombrowsky: Can I ask: Is it sort of like a question that for every dollar a farmer spends, it generates seven dollars in the community?

Mr. Gilles Bisson: No; I'm trying to get a sense of the health of the farm community. I'm just anecdotally looking at what farmers are having to deal with day per day. It's becoming more and more difficult for them to keep on the family farm. So I'm trying to get a sense, for this committee: How much money is being spent by the farm community, the farmers themselves, people who own and operate their own farms, year per year? We must have a way of being able to track that.

The Chair (Mr. Tim Hudak): There's some information that a minister will have at hand and there's some information that the minister may not track directly.

Hon. Leona Dombrowsky: We will read Hansard very carefully and we will do our best to get the member the information that he's looking for.

The Chair (Mr. Tim Hudak): I think there should be some sort of—if there's not an exact figure, an estimate would be helpful.

Mr. Gilles Bisson: No, that's fine.

Would you say that the farm community today is stronger than it was, let's say, 20 years ago and this is a pox on all our houses?

Hon. Leona Dombrowsky: I'm glad you asked the question because I think that there are sectors in the industry that are stronger today than they were 20 years ago. I'll even go back 40 years, when I grew up on a farm, and—

Mr. Gilles Bisson: We're not that old, Minister, neither one of us.

Hon. Leona Dombrowsky: I do think that there are sectors that are. I'll just take the organic sector as an example. It is one part of the industry that is growing by double digits year over year. There's no question that there are other sectors that, in one year they can be doing very well and another year it can—because they are the subject of the markets. I've said on many occasions that the agriculture industry is, in my view, the only industry that's the subject of two climates: the economic climate and the natural climate. The economy can be good, but if the weather's been bad and they don't have the yields, they suffer. If they have a bumper crop but the markets are really bad, they still suffer. When you talk over the last 20 years, I think that some years, some sectors have done well and other years the same sectors have not done well for very different reasons.

Mr. Gilles Bisson: But for the average farmer, for the average person who—he and she—is individually running their own family farm, would you say they're having a better time than they did 20 years ago, economically, on average, or they're having a worse time?

Hon. Leona Dombrowsky: Again, when you say "the average farmer," I would say that the average farmer in supply management is doing better, which is why we were absolutely committed to fighting for supply management at the World Trade Organization talks.

Mr. Gilles Bisson: If I were to parade 10 farmers at random into this committee and ask them how they're doing as of 20 years ago, do you think they'd echo the same comment you just made?

Hon. Leona Dombrowsky: I think some would, yes.

Mr. Gilles Bisson: Maybe if you pick them. I only make the comment because what got me going at the beginning of the comment—I understand that your job as minister is to be the promoter of this industry, and for that I commend you; that's not the argument. But I've been here a member for 18 or 19 years now, and I've been, like you, around this province for a few years. I get the real sense, talking to farmers, that they're struggling. A lot of them are trying to keep the farm afloat. The family farm is becoming more and more under siege, because of, yes, market conditions, in large part, but also because of some Ontario situations as well. What you're seeing is a stronger agribusiness that's moving in and taking over what used to be the family farm. That's why I'm asking the question.

I agree with you that this Legislature 50 years ago, by and large, was made up of rural members who came from the family farm, and basically that was a large part of what this whole economy was about. I ask the question again: Do you think that the average family farm is in better shape today than it was 20 years ago? I ask you the question again directly.

Hon. Leona Dombrowsky: I will give you the very same answer: In some sectors, the answer will be yes.

Mr. Gilles Bisson: All right, and one of these days we'll have the opportunity of parading 10 family farms here at random, and I think they would disagree with you. Anyway, I won't belabour the point. Let's not look at this through rose-coloured glasses. I understand that there's lots to be proud of in Ontario. I understand that there are lots of successes that we can point to, both people operating the family farm and the agribusiness in government. But let's not kid ourselves: People are struggling in this industry. I think that we don't do them any service by trying to paint a picture that's far more positive than what it actually is. If you want to comment on that, I'll go to my next question.

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Hon. Leona Dombrowsky: I would like to comment on that. There's no question that our government recognizes that there are challenges in the agriculture sector. That is why over the last four to five years we have invested over $1.2 billion to support farmers. We value the sector, we value the work that they do, and I think it's fair to say that when their representatives come to us to say, "We want to continue to build this industry; these are the kinds of investments that we need to make," we have been there.

With respect to the challenges in various sectors—you know, I live among farmers, my kids work with farmers. I talk with them on a regular basis. We were at the plowing match and I had an opportunity—I don't know if you made it to the plowing match—to speak with farmers from right across the province, so we did gain an appreciation for some of the challenges that are out there. But I would also say of this sector and of farmers, the ones that I talked to, it can be tough, but they are proud of what they do, they are proud of what they produce here in the province, they are proud of the fact that we have the safest and best quality food of anywhere in the world, and what they look for from their government is a partner to help them and to ensure that they can continue to do that.

Mr. Gilles Bisson: Listen, I don't want to be sounding as if I think everything is bad in the farm business, because there are some good stories out there to be told. But I think what farmers want is a bit of straight talk from us, the politicians. The first part to fixing the problem is admitting that we've got one. Quite frankly, there are a lot of family farms in your area of the province, as there are in my area of the province, that are struggling. The family farm as we knew it, 20, 30, or 40 years ago, is in nowhere near the type of shape that it was back then. Yes, because of changing markets, and yes, because we've decided to make our food safety system safer, which padded the cost to the producer etc. But I just think sometimes that we try very hard to make ourselves look good, and we forget at the end of the day that all the farmer is looking for is a bit of straight talk and a little bit of help. So let's just move on to the things that we need to do.

You led off by having a chat about—and you mentioned it just now in regards to the work that farmers do in order to make sure that they're producing and distributing the safest possible goods. Of course, we as a society, this Legislature and the government of Canada have said, "We need to put in place regulation and laws that ensure that there is a quality to the food that is produced so that the consumer is not at risk." I don't think there's anybody in this Legislature and nobody in the House of Commons who's going to disagree with that basic premise. The difficulty for the farmer is how to pay for it. They agree with you and they agree with me that we want to have safer food products, but they're somewhat frustrated by the inability to be able to pay, in some cases, for the steps that they've got to take to get to that goal that we've set out.

I guess my question is the following—and this, again, is just an observation on my part: What kind of efforts do we really put in in this Legislature or in the government of Canada? When we do put in place a new regulation or a new law that means the farmer has to change the way they do business, what kind of steps are we really taking in order to say: "All right, how's this going to play out on the bottom line to the farmer?" What can we do to help them get there so that they're not in a position of having to say at the end of the day, "Well, family farm, no longer a dream. We need to shut it down."

Hon. Leona Dombrowsky: They're directing me to my book, but I think I know what I want to say here.

Mr. Gilles Bisson: It's always better, Minister, to listen to your gut. You understand this.

Hon. Leona Dombrowsky: Well, through you, Mr. Chair, to the honourable member, he raises a very important point. When we first came to government, I would say that the one piece of legislation that I heard about most in my riding from farmers was the Nutrient Management Act. I think the real sore point with that was that the law was passed and the regulations came into place, but there was no money to help them. So that's why we did put out some—

Dr. Bruce Archibald: It was $23.7 million.

Hon. Leona Dombrowsky: —$23.7 million. And did we not top that up when it was oversubscribed by a couple of million? Anyway, we'll get that to you. So that's one example. I think we all agree that the Nutrient Management Act was the right thing to do, but as the honourable member has indicated, it did put some significant pressure on those operations that were then required to comply.

I will offer as an example one that my ministry has dealt with particularly—the Food Safety and Quality Act. We knew that that was going to add to the cost of processing meat products in Ontario. If people have to pay more to get their meat processed, that goes right back to the producer. That is why we implemented, I believe it's $26.5 million, for the program that—I don't think that's the one I want. I just want to make sure I get the number right for the—$25 million. This was to assist meat plant operators to meet the new requirements so they wouldn't have to pass on the additional costs of making their facilities food-safe to the users of the facilities—the farmers.

Another example I would offer has been with the Clean Water Act. Within the Clean Water Act, there has been a component for stewardship. We have committees now across the province that are considering if there are threats. There are people on those committees from the agriculture community to ensure that if there is a circumstance where a farmer is regulated in a way that removes some of his land from production, and he would be required to do something to protect the water source, there would be some resources made available for that.

Another example would be, again, with the species at risk—

Mr. Gilles Bisson: I'm getting a longer answer than my question.

The Chair (Mr. Tim Hudak): Are you satisfied with the answer?

Mr. Gilles Bisson: I was trying to get somewhere, and it's good stickhandling on this side.

The Chair (Mr. Tim Hudak): Would you like the minister to complete her answer?

Mr. Gilles Bisson: Yes, I'm finished. I was getting somewhere, but—

Hon. Leona Dombrowsky: I thought it was a good question—

Mr. Gilles Bisson: It is, but—

Hon. Leona Dombrowsky: —and I thought it was important that people understand that we do recognize—because you did ask—that there are costs associated with regulations, and I'm just providing some examples of how we would hope to mitigate some of those costs for industry partners.

Mr. Gilles Bisson: It seems to me that we're doing it only after—it's almost like the cart before the horse. Pardon the pun. Often, we as legislators here—and this is a pox on all our houses; it's not just you as the minister. It has been done by other governments, and it has been done by all members of this assembly and the House of Commons as well—good intentions of making sure that we pass some law or regulation that basically makes our food production system safer. God, it looks good to get your name on a bill as a minister or a private member, whatever it might be. You've gone out and done something for your citizens and humanity. But we don't have a process here to figure out what this means at the end to the average farmer.

The point I'm getting at is that it seems to me we need to have a bit of straight talk with the farm community, less gobbledegook from our end, less political spin as they would term it out in the media world, and say, "Listen, here's where we want to go. Do you agree with us that this is a good step?" I think most times farmers would say yes because they're responsible business operators.

The question becomes, "All right. How are we going to get there? Is it a question that we can do it in one year, because you may have to raise, as an individual farmer, hundreds of thousands of dollars to get to the goal we've set?" The farmer, he or she, may say, "Yes, this is a great idea, but I can't raise that money in a year. I may need two years to get there. I may need three years to get there. Maybe I'm never going to get there, and I need the government, if it's going to put this regulation or law in place, to assist me with the investment." I know we're doing some of that, and you listed some of the things we've done, and I think those are positive things.

My only point is that the farm community is under tremendous stress financially because of what's going on in the world economy and, as you said, what's happening with our climate and generally within the business. As we add on to that more requirements on the part of the farm community to meet points of law and a regulatory framework, we need to figure out how this is all going to work. You've seen it, because you've been around here for a while. We passed, for example, as you said, the Nutrient Management Act. Nobody thought about what this is going to mean to the farmer at the end of the day, and it was left to other governments after that to figure out how we undo this mess. We want to get to the goal, but the farm community can't afford it.

All I'm saying is, as a minister, as a government—and we as legislators—what are you prepared to recommend that basically says we need some sort of checks and balances system so that, if we set in place a direction and a goal, we in fact have a mechanism to get people there and it's not going to put them out of business?

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Hon. Leona Dombrowsky: I'd like to attempt a response there: a very, very valid issue. I believe that, as I indicated in my remarks, the examples that demonstrate—we have recognized that legislation—

Mr. Gilles Bisson: But do you think we're doing enough? That's my question.

Hon. Leona Dombrowsky: —and regulation—

Mr. Gilles Bisson: Do you think we're doing enough?

Hon. Leona Dombrowsky: —actually—

Mr. Gilles Bisson: I'm prepared to say not, and I take my responsibility for that.

Hon. Leona Dombrowsky: If I may, Mr. Chair—I respect that that's your opinion. It's not my job to ask questions here, of course, but my response is that if you say not, then based on what? And I'm going to ask, have you heard from farmers who say they didn't get enough from the nutrient management plan program that they were required to—

Mr. Gilles Bisson: I can give you a list.

Hon. Leona Dombrowsky: Well, have you heard from farmers who would say that land has been taken out of production as a result of the Clean Water Act, and they have not been compensated? Have you heard from farmers who would say that the species-at-risk legislation and regulations have impacted them in a way that has affected their bottom line? Until I hear those things, it's very difficult to make an assessment: Is it enough? There is an amount of money set aside. It is based on the input we received from the stakeholders when these bills were taken to committee, taken on the road. We listened very carefully, and as a result of their good input we have stewardship programs in place attached to those two pieces of legislation.

Mr. Gilles Bisson: Sorry, I don't agree with your assessment on that. I first of all want to give credit where credit is due. This government, as other governments, has tried to mitigate the financial effect on farmers when it comes to new initiatives, and you raised some of those new ones around the species-at-risk legislation, nutrient management and others. All I'm saying is that we're doing it after the barn door is open and the horse has bolted, kind of.

You're saying the responsibility is that of the farm community to come before committees when we propose legislation. Too often, they're far too busy working to even know what's going on. All I'm suggesting is that at the very beginning of the process—and this is not just to blame; this is not saying it's just your government that created this problem. I'm saying it's a pox on all our houses. We need to be much more conscious, when drafting regulation and law, that we figure out how we're going to make this happen so that at the end of the day we are supporting the family farm, to get to the goals that we put together. And maybe we as legislators don't have it right sometimes. That's all I'm suggesting.

I want to go on to my next question, because you've kind of answered what I wanted to say. I was listening intently to the discussion you were having with Mr. Arnott, the member from Halton Hills. He raised the issue, and I think it's a very important issue, of the buy local, Buy Ontario initiative by your ministry. I think we all agree that nobody in this Legislature disagrees that we need to do all we can to be able to become as self-sufficient as we can about buying our own products. That means we need to market those, we need to promote them and we need to have programs in order to make all that happen.

With that in mind, I was just listening to the Minister of International Trade, Madame Pupatello, in the House on the motion that was in the House. She was making an argument that's not necessarily tied directly to farm products, as far as what we eat. She made the argument that when we propose from our side of the House that we need to have a Buy Ontario policy, that's not doable; that's not something that's good, because Ontario has to trade with other trading partners. In fact, it would be a hindrance to the Ontario economy if we were to have a Buy Ontario policy. So if the Minister of International Trade is saying the Buy Ontario policy is not a good idea, how do you square that up? How do you feel about that?

Hon. Leona Dombrowsky: I will never, ever apologize for being a cheerleader for Ontario agriculture products.

Mr. Gilles Bisson: What about your ministers?

Hon. Leona Dombrowsky: We know we have the safest and the best. I think when we talk to our farmers, we hear from them that—and we just left the topic of the regulatory requirements that we have in place. We have set the bar very high for our producers and they're meeting it, and as a result of that we have the safest food. Our government has a focus in terms of building healthier, stronger Ontarians. That's why we have the Smoke-Free Ontario Act. That's we have banned trans fats in schools and junk food and we require exercise.

Encouraging Ontarians to consider purchasing the safest, best-quality food is also a part of that strategy—

Mr. Gilles Bisson: Sorry, I'm running out of time and you're not answering my question. My specific question is—

Hon. Leona Dombrowsky: With respect, Mr. Chair, I don't tell him how to ask the question. I'm—

Mr. Gilles Bisson: But I asked the question—

Hon. Leona Dombrowsky: I'm offering my response; you've asked me, "How does that square?" What I am saying is—

Mr. Gilles Bisson: Minister, with all due respect, this is my 30 minutes and I'm asking—

The Chair (Mr. Tim Hudak): Folks, I'll chair the committee.

Mr. Gilles Bisson: Thank you.

The Chair (Mr. Tim Hudak): This is the members' time, and if the members aren't satisfied with the answer from a minister, then I do let them ask—

Mr. Gilles Bisson: So how much time do I have? Because I have one other question.

The Chair (Mr. Tim Hudak): Three minutes.

Mr. Gilles Bisson: Three minutes? I'll come back to this point later. I appreciate what you're trying to say, but I think it doesn't square well with what your Minister of International Trade is saying.

Here's my question: Does the ministry keep records about how many family farms are in production in Ontario year by year? Is that kept in any kind of way?

Hon. Leona Dombrowsky: We would have records in terms of how many farms we have—

Mr. Gilles Bisson: Can you please provide this committee with the stats? Probably going back about five or 10 years, I would think, would give us a good picture. Let's say 10—

The Chair (Mr. Tim Hudak): The last 10 years—

Mr. Gilles Bisson: Yes, how many farms in production, per year, over the last 10 years. Thank you.

Those are all my questions. I'll now let you have the rest of my time—

The Chair (Mr. Tim Hudak): Thank you very much for your time.

Mr. Gilles Bisson: —and you can wax eloquent about the great job you're doing, I'm sure.

Hon. Leona Dombrowsky: I'd be happy to.

The Chair (Mr. Tim Hudak): Minister, this is your time for summation and to respond to issues that the members have brought forward. You do have 30 minutes to respond. It's 26 minutes before 6 o'clock, so if you use the full four minutes, we might squeak past 6 a little bit.

Hon. Leona Dombrowsky: Thank you very much, Mr. Chair. I want to thank the members today for their interest and attention and very good questions.

There were some points that I did not have time to make in my opening remarks, and I was hoping that I could pick up a little bit of that. You might, Mr. Chair, be particularly interested, because I want to talk about industry renewal in the Niagara region, and I know that's a region that's very important to you.

We're all concerned over the particularly difficult economic challenges that this region has faced as a result of the high Canadian dollar, and we were all very disappointed to hear of CanGro's closure and, more recently, of the nearly century-old John Deere Welland Works that has moved to Mexico. We recognize that plant closures and downsizing can have significant impacts on our agri-food sector and our rural economies.

The Niagara region is such an important part of Ontario's agri-food industry. Niagara's greenhouse industry alone burgeons with 14 million square feet under glass and is the largest horticulture sector in Canada.

There's a wonderful history of agriculture here. It is blessed with an ideal growing climate, rich soil, an excellent calibre of growers and its natural tourism draw. I know none of this is a surprise to you, Mr. Chair. This region is already known for its diversity and innovation.

The McGuinty government believes in the future of Niagara, and that is why, in March of 2007, we provided $12.5 million to support the Vineland Research and Innovation Centre, with another $12.5 million announced in this year's annual budget. I know that's a facility that's particularly important to you. We believe, with this investment, that we are helping to create a world-class hub for horticulture science and innovation in Ontario, right in the heart of Niagara.

Our government has also made significant investments in the wine industry. For example, we are providing $10 million over five years to promote Ontario's wines and encourage wine tourism.

We worked closely with the federal government to acquire up to $22.3 million for the Canada-Ontario orchards and vineyards transition program. These funds complement investments that Ontario has made, such as the $3.8 million we announced in June for the Ontario juice grape pullout. I think that it's an important example of where we do work co-operatively with our federal partner to ensure that there are appropriate investments made to support the agriculture industry in Ontario and certainly in the Niagara region.

I am confident that the Niagara region will continue to grow and show outstanding leadership as one of Canada's most dynamic and productive agri-tourism and agri-food centres.

Our government has invested more than $55 million in program payments to the Niagara region, and we are invested in its current and future prosperity.

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Our government continues to make significant investments in rural communities right across the province. OMAFRA and many of her sister ministries provide support to rural Ontario through initiatives such as the $80-million Eastern Ontario development fund and $40 million for the Rural Connections broadband program. We've invested $3 million in funding to assist Ontario's food and beverage processing sector to adopt innovative technologies and boost their energy efficiency. This will help processors reduce costs and increase their competitiveness.

We've dedicated significant resources to attract new investment in Ontario's food processing, bioproducts and rural manufacturing sectors. Last year, the ministry assisted in attracting a total of $303 million in new investment in the food processing sector, resulting in the creation or retention of 4,545 jobs.

I don't know if that goes at all to the question that Mr. Bisson asked?

Interjection.

Hon. Leona Dombrowsky: Good.

Including rural manufacturing and bioproduct sectors, $466.6 million has been invested in new investment and has created 6,372 jobs.

I'm going to speak a bit about broadband, because I know for many of our rural members that's an important issue. As key ministry partners, OMAFRA, the Ministry of Small Business and Consumer Services and the Ministry of Government Services have laid the foundation to enable Ontario to increase the availability of affordable, high-speed broadband technologies to rural and remote areas of the province. Building on investments made in 2007-08, OMAFRA is providing $30 million over four years to the broadband initiative as part of a provincial digital strategy. This investment leverages the existing $10-million Rural Connections program that has already successfully initiated 18 municipally led projects across rural southern Ontario.

We recognize that expanding broadband coverage will give individuals and communities more opportunities to fully participate in the knowledge economy. Whether it is the rural entrepreneur trying to expand her business, the farmer looking to download information or grow his market, or the rural library, teacher or student who relies on broadband for their research and education, they all deserve to have the same level and capacity of broadband service as the urban areas enjoy. In this day and age, we need to open all the information portals that we can to help our rural communities compete on a level playing field and thereby prosper.

I'm going to talk a bit about infrastructure. We hear a lot about infrastructure—very, very important right across this great province. But as it pertains to rural Ontario, we continue to strengthen infrastructure under the Canada-Ontario municipal rural infrastructure fund, and that's commonly known as COMRIF. The government of Ontario has committed up to $298 million to invest in this project. This has supported some 280 infrastructure projects. On top of that, our government recently signed on to the new national Building Canada framework agreement. This $6.2-billion long-term plan will help address infrastructure needs and priorities in the province of Ontario up to 2014. Under the communities component, Canada and Ontario will both contribute $362 million toward smaller projects in communities with populations less than 100,000.

The rural economic development program is something that is particular—the McGuinty government recognizes the importance of increasing economic activity in communities that lie beyond large urban centres. Our rural economic development program has a history of successful investments that have helped rural communities across the province overcome barriers to economic development. In 2008-09, OMAFRA will invest $19.9 million in RED. This investment is consistent with the government's priority relating to jobs and prosperity. Since October 2003, the RED program has invested $60.3 million in 185 rural communities to support economic development projects. This has resulted in $566 million in new economic activity in rural Ontario. We have also helped more than 23,000 young people gain skills and valuable work experience through our investment of more than $17 million in the rural summer jobs program.

My ministry's staff provides front-line support on a variety of strong programs that are helping rural communities make self-improvements. These include—and I know many members would have had occasion to participate in what we call a BR&E—business retention and expansion projects. This is an internationally recognized tool for retaining and growing businesses in the community. More than 140 projects in 90 communities have been undertaken since 2005. The community economic analysis uses data, reports and web-based analysis tools to evaluate local strengths and weaknesses in support of economic planning. More than 2,500 economic development practitioners have used this site in the last year.

Another important program—the First Impressions Community Exchange—is a secret-shopper approach between matched communities. Visiting teams from each community conduct structured visits and report back to each other about their findings and recommendations. Our staff has helped to facilitate participation by more than 150 communities since 2005. This program was recognized with a public service quality award for innovation in public service. I know that I speak on behalf of members here in congratulating members of the public service for their good work in this regard.

Working with farmers: The McGuinty government has worked hard to improve the quality of life in rural communities, to build good relationships with Ontario farmers and to provide new opportunities for them. Just last month, the Premier and I attended with leaders from our agri-food industry at the International Plowing Match in Teeswater. It was a great day. I love the International Plowing Match because it showcases the contributions that our rural communities and farm families make to our society. It reminds us that our farmers grow the food that feeds us and sustains us. What a great responsibility they have taken on, and what a great honour we owe them.

Ontario's farmers have helped build a world-class agri-food sector in this province. By recognizing their hard work and investing in their innovative ideas, we can help farmers pursue new markets, attract investment and strengthen our rural communities. We continue to nurture innovation on the farm with the Premier's Award for Agri-Food Innovation Excellence. This is a very important program. Since its launch in 2006, this program has attracted more than 350 applications highlighting on-farm innovations. They have ranged from biogas systems to cutting-edge, freeze-dry technology, from specially adapted high tunnels to innovations for the honeybee industry.

You can read about the 55 innovations we recognized earlier this year in the information package that I sent you recently. Last month, we announced that applications are being accepted for the third year of this program, and I do encourage all members of the Legislature to spread the word about this very positive program for your rural constituents. And I would remind the members here that there is a significant cash incentive to promoting the Premier's Award for Agri-Food Innovation Excellence. Each recipient of a regional award—and there are 55—will receive $5,000 each year. The Premier's award brings with it a $100,000 cash award, and the minister's award is $50,000. This is each year for those applicants.

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This is a $2.5-million commitment of our government over the next five years. I'm very happy to say that for those people who have been recognized—and this is not necessarily large or expensive on-farm innovation, but it certainly makes our industry partners feel very special, that what they have done is showcased in this way, and it provides a tremendous opportunity for other farmers to look at, in some cases, very inexpensive, innovative ideas that can assist them in their operation as well.

So this is a very successful program. It has been very well received within the sector. We do encourage all members to get the word out, get the information out about the Premier's award.

I want to speak as well about Growing Forward. This is something I'm sure you've read about and that you will hear about from your constituents, those of you who are in rural ridings. This July, I had the opportunity to attend the federal-provincial-territorial agriculture ministers' meeting in Quebec City, where we reached an important milestone by completing the new national agreement. You will remember that, in 2003, the agriculture policy framework was signed by the previous government. You would have heard it referred to as the APF, and out of the APF came CAIS—and I know we've all heard of CAIS. That agreement expired this year, and so Ministers of Agriculture from across Canada, along with our federal colleague, worked to put together the second iteration of the APF. It is called Growing Forward.

Growing Forward is, in my view, a new and improved version of the APF. It is designed to do some specific things. It is designed to give farmers and food processors the opportunity to capture business success, both domestically and in export markets. It also includes programs that will help the agri-food sector adapt and respond more quickly and effectively to changing consumer markets.

Growing Forward is also committed to reducing the government's regulatory burden and giving entrepreneurs better tools for their business planning. So to the question that I received earlier around regulatory burden: It is on the radar, and I did very much appreciate the member identifying it as an important issue.

It is also intended to focus on supporting enhanced food safety systems and continued implementation of on-farm environmental actions. It is also designed to commit provinces to work with the sector to put traceability and biosecurity systems in place.

That is a very ambitious set of goals, but I am confident that we will get there. I'm confident because of the conversations I have had with our industry partners when they have very clearly indicated that they want to move in this direction, and they are looking for some support and a partner to get them there. We look forward to ironing out the details of the new framework with the new federal government.

At this time, Mr. Chair, I think I have covered most of my notes. I would also like to say that over the course of the last year and a half, this government—and I personally have had the privilege and honour of representing the province of Ontario and this great industry at the World Trade Organization talks. I was in Hong Kong and, on two occasions, in Geneva. I was able to carry the message from the Legislative Assembly, because all members in this assembly voted unanimously to support a resolution in support of supply management. So I had the honour, the privilege and the duty to carry that message to the negotiating table and make Ontario's position very clear on behalf of all of the members of the assembly and their very strong support for supply management.

I think everyone at this table knows that the WTO talks did not end with an agreement. That certainly is unfortunate. It has been our position in Ontario, however, that we were looking for an ambitious resolution. We certainly wanted better market access for our non-supply-managed sectors. We wanted to address the issue of trade-distorting subsidies, but we certainly were of the mind that it should not happen at the expense of supply management.

I think it's very important that I state that for the record. I want to thank all members of the assembly for their support of the supply-managed sector. I was asked earlier today about those sectors that are doing well. We certainly have a strong and vibrant supply management sector in the agriculture industry in the province of Ontario. We continue to be committed to that, as well as the other sectors in doing all that we can to ensure that they will continue to thrive.

Those would conclude my remarks today, Mr. Chair.

The Chair (Mr. Tim Hudak): You do have 10 minutes left, Minister, but if you're finished, we will finish the hearings for today and then come back next week.

Minister, thank you very much. Deputy and all the staff from the Ministry of Agriculture, Food and Rural Affairs, thank you very much for being here this afternoon.

As a reminder, folks, we will next convene on Tuesday, October 22. With the new rules for House proceedings, that means we'll meet at 9 a.m. until 10:25 a.m. and then reconvene between 4 and 6 p.m.

Folks, thanks very much. You have—

Interjection.

The Chair (Mr. Tim Hudak): The 21st, sorry. That's right. Today is Wednesday the 15th. Tuesday the 21st—thank you to my very capable clerk for catching that.

Folks, thanks very much. Have a good evening. The committee is now adjourned.

The committee adjourned at 1755.

CONTENTS

Wednesday 15 October 2008

Ministry of Agriculture, Food and Rural Affairs E-403

Hon. Leona Dombrowsky, minister
Dr. Bruce Archibald, deputy minister
Ms. Karen Chan, chief administrative officer and assistant deputy minister
Ms. Christine Kuepfer, director, farm finance branch

STANDING COMMITTEE ON ESTIMATES

Chair / Président

Mr. Tim Hudak (Niagara West—Glanbrook / Niagara-Ouest—Glanbrook PC)

Vice-Chair / Vice-Président

Mr. Garfield Dunlop (Simcoe North / Simcoe-Nord PC)

Mr. Gilles Bisson (Timmins—James Bay / Timmins—Baie James ND)

Mr. Kim Craitor (Niagara Falls L)

Mr. Bob Delaney (Mississauga—Streetsville L)

Mr. Garfield Dunlop (Simcoe North / Simcoe-Nord PC)

Mr. Tim Hudak (Niagara West—Glanbrook / Niagara-Ouest—Glanbrook PC)

Mrs. Amrit Mangat (Mississauga—Brampton South / Mississauga—Brampton-Sud L)

Mr. Phil McNeely (Ottawa—Orléans L)

Mr. John O'Toole (Durham PC)

Mr. Lou Rinaldi (Northumberland—Quinte West L)

Substitutions / Membres remplaçants

Mr. Ted Arnott (Wellington—Halton Hills PC)

Mrs. Liz Sandals (Guelph L)

Also taking part / Autres participants et participantes

Mrs. Maria Van Bommel (Lambton—Kent—Middlesex L)

Clerk / Greffière

Ms. Sylwia Przezdziecki

Staff / Personnel

Ms. Carrie Hull, research officer,
Research and Information Services