Canadian Federal Government Taking Measures to Reduce Impact of COVID-19 on Agriculture

On April 13, the Canadian Federal Government announced the distribution of federal funds to assist farms in paying temporary workers. This monetary assistance helps compensate workers during the quarantine.

Canada, especially Western Canada, is grappling with the new reality of the COVID-19 pandemic and its impact on the 2020 growing season. Western Canada accounts for over 80% of farmable land, and the industry is heavily reliant on beef and pork exports, especially to the United States. With production and processing facilities shut down, companies are experiencing complications in distribution, which may have a significant impact on the supply chain in the upcoming months.

Labour shortages are the main issue for most farms, both in the field and in processing facilities. Many enterprises are reliant on migrant farmworkers, who travel seasonally to Canada, primarily from Mexico and Jamaica. With many farms experiencing a delay in worker arrivals and a decrease in the number of workers available, perishable crops are especially susceptible to production issues down the road.

Labour Shortages

Over 60,000 temporary, seasonal workers migrate to Canada annually for employment. Many workers are employed by the same farm year after year, receiving industry-specific training from vegetable production to winemaking. For farmers who rely on this labor, the past few weeks have been incredibly difficult. Especially when dealing with perishable crops, labor shortages can be the deciding factor in a crop’s. For one farmer, a field of asparagus is worth $40,000. But without the necessary labor to harvest, the crop will go to waste.

Labour shortages in Canadian agriculture are especially tricky because there is no natural alternative. Many farmers already express frustration with the system, since the main reason they employ temporary migrant workers is because it is nearly impossible to find Canadians who want the job. Agricultural labor can be incredibly hard work and involves significant training.

Trained employees are familiar with all aspects of the business, including the proper use of equipment, which can be a tricky skill to master. As unemployment rises in response to COVID-19 business shutdowns, it may seem like an obvious solution to employ people on farms. But most people lack the skills necessary, and farmers do not have the time or resources to train them quickly.

New Funding

As a possible solution, the Canadian Federal Government proposed new funding to assist farms struggling with income disruption as a result of the pandemic. However, the effectiveness of the bailout is debatable. Many farmers argue that it is not enough to make a difference. The money is supposed to help pay workers during the shutdown, specifically workers who have recently arrived and are in quarantine.

Because all incoming employees are subject to a two week isolation period, farms are responsible for supplying resources until work can begin. However, migrant worker activists argue that the funds may be misused, allowing farmers to collect the money without providing adequate income for workers. The distribution method may assist farms in the short term, but it is questionable as to how much it will help in the upcoming weeks.

Production Issues

It is still too early to tell the severity of the impact of COVID-19 on Canadian food production. Certain crops, like wheat and soy, are already operated in industrial systems, requiring minimal human contact. However, fruit and vegetable farmers are warning of production issues if they continue to struggle to find workers. Similarly, in the meat industry, beef processing facilities, like Cargill, may struggle to keep up with demand amidst closures.

Before the announcement of new funds for temporary workers, the Canadian Federal Government had initially temporarily banned incoming migrant workers. This decision was quickly reversed due to outcry from Canadian farmers. While the monetary assistance is significant for farm businesses in the short term, more lasting solutions to the labour shortage problem will be required. Without enough workers, Canada is subject to an incredibly volatile market, where production and distribution issues may impact food supply both domestically and internationally.

Next Steps for Canadian Agriculture

The Canadian Federal Government is taking measures to reduce the impact of COVID-19 on agriculture, primarily through the distribution of emergency funds to support farmers during the shutdown. Additional solutions, such as alternative labour resources, are also being considered. However, there has been a mixed response to these efforts.

Some farmers feel like the aid is not enough, while others think that the solutions do not apply to them. Additionally, there has been a growing concern by some activist groups concerning the rights of migrant workers. As the situation unfolds, the role of the Canadian Federal Government will be essential to limiting supply chain disruption and production issues in the next few months.

Emily Folk

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Ottawa may soon pass ‘supply management’ law to effectively maintain inflated dairy prices

Published on November 12, 2024

Todayville

From the Fraser Institute

By Jerome Gessaroli

Many Canadians today face an unsettling reality. While Canada has long been known as a land of plenty, rising living costs and food insecurity are becoming increasingly common concerns. And a piece of federal legislation—which may soon become law—threatens to make the situation even worse.

According to Statistics Canada, rising prices are now “greatly affecting” nearly half of Canadians who are subsequently struggling to cover basic living costs. Even more alarming, 53 per cent are worried about feeding their families. For policymakers, few national priorities are more pressing than the ability of Canadians to feed themselves.

Between 2020 and 2023, food prices surged by 24 per cent, outpacing the overall inflation rate of 15 per cent. Over the past year, more than one million people visited Ontario food banks—a 25 per cent increase from the previous year.

Amid this crisis, a recent academic report highlighted an unforgivable waste. Since 2012, Canada’s dairy system has discarded 6.8 billion litres of milk—worth about $15 billion. This is not just mismanagement, it’s a policy failure. And inexcusably, the federal government knows how to address rising prices on key food staples but instead turns a blind eye.

Canada’s dairy sector operates under a “supply management” system that controls production through quotas and restricts imports via tariffs. Marketing boards work within this system to manage distribution and set the prices farmers receive. Together, these mechanisms effectively limit competition from both domestic and foreign producers.

This rigid regulated system suppresses competition and efficiency—both are essential for lower prices. Hardest hit are low-income Canadians as they spend a greater share of their income on essentials such as groceries. One estimate ranks Canada as having the sixth-highest milk prices worldwide.

The price gap between the United States and Canada for one litre of milk is around C$1.57. A simple calculation shows that if we could reduce the price gap by half, to $0.79, Canadians would save nearly $1.9 billion annually. And eliminating the price gap would save a family of four $360 a year. There would be further savings if the government also liberalized markets for other dairy products such as cheese, butter and yogurt. These lower costs would make a real difference for millions of Canadians.

Which brings us back to the legislation pending on Parliament Hill. Instead of addressing the high food costs, Ottawa is moving in the opposite direction. Bill C-282, sponsored by the Bloc Quebecois, has passed the House of Commons and is now before the Senate. If enacted, it would stop Canadian trade negotiators from letting other countries sell more supply-managed products in Canada as part of any future trade deal, effectively increasing protection for Canadian industries and creating another legal barrier to reform. While the governing Liberals hold ultimate responsibility for this bill, all parties to some degree support it.

Supply management is already causing trade friction. The U.S. and New Zealand have filed disputes (under the Canada-United States-Mexico Agreement and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership) accusing Canada of failing to meet its commitments on dairy products. If Canada is found in violation, it could face tariffs or other trade restrictions in unrelated sectors. Dairy was also a sticking point in negotiations with the United Kingdom, leading the British to suspend talks on a free trade deal. The costs of defending supply management could ripple farther than agriculture, hurting other Canadian businesses and driving up consumer costs.

Dairy farmers, of course, have invested heavily in the system, and change could be financially painful. Industry groups including the Dairy Farmers of Canada carry significant political influence, especially in Ontario and Quebec, making it politically costly for any party to propose reforms. The concerns of farmers are valid and must be addressed—but they should not stand in the way of opening up these heavily regulated agricultural sectors. With reasonable financial assistance, a gradual transition could ease the burden. After all, New Zealand, with just 5 million people, managed to deregulate its dairy sector and now exports 95 per cent of its milk to 130 countries. There’s no reason Canada could not do something similar.

Bill C-282 is a flawed piece of legislation. Supply management already hurts the most vulnerable Canadians and is the root cause of two trade disputes that threaten harm to other Canadian industries. If passed, this law will further tie the government’s hands in negotiating future free trade agreements. So, who benefits from it? Certainly not Canadians struggling with food insecurity. The government’s refusal to modernize an outdated inefficient system forces Canadians to pay more for basic food staples. If we continue down this path, the economic damage could spread to other sectors, leaving Canadians to bear an ever-increasing financial burden.

Author:

Jerome Gessaroli

Agriculture

2024 harvest wrap-up: Minister Sigurdson

Published on November 6, 2024

Government of Alberta

As the 2024 growing season comes to a close, Minister of Agriculture and Irrigation RJ Sigurdson issued the following statement:

“While many Albertans were enjoying beautiful fall days with above-average temperatures, farmers were working around the clock to get crops off their fields before the weather turned. I commend their continued dedication to growing quality crops, putting food on tables across the province and around the world.

“Favourable weather conditions in August and early September allowed for a rapid start to harvest, leading to quick and efficient completion.

“The final yield estimates show that while the South, North West and Peace regions were slightly above average, the yields in the Central and North East regions were below average.

“Crop quality for oats and dry peas is currently exceeding the five-year average, with a higher rate of these crops grading in the top two grade categories. In contrast, spring wheat, durum, barley and canola are all grading in the top two grades at rates lower than the five-year average.

“Crop grading is a process that determines the quality of a grain crop based on visual inspection and instrument analysis. Factors like frost damage, colour, moisture content and sprouting all impact grade and affect how the grain will perform during processing or how the end product will turn out. Alberta generally produces high-quality crops.

“Farmers faced many challenges over the last few years and, for some areas of the province, 2024 was a difficult growing season. But Alberta producers are innovative and resilient. They work constantly to meet challenges head-on and drive sustainable growth in our agricultural sector.

“Alberta farmers help feed the world, and I’m proud of the reputation for safe, high-quality agricultural products that this industry has built for itself. Thank you to our producers, and congratulations on another successful harvest!”