The federal government should put money directly into new packing plants and create a tax incentive program for private investors in new smaller plants, says the Senate agriculture committee.
The government’s loan loss reserve program does not provide enough help for those trying to raise capital to build a new plant, said the Liberal-dominated committee chaired by southern Alberta senator Joyce Fairbairn.
In a report on cattle slaughter capacity tabled May 19 the senators recommended a “capital matching program” for approved new plants, although committee members seemed unclear about how it would work.
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Fairbairn told a news conference it should be a grant program. Nova Scotia Liberal Terry Mercer said the government would have to be careful not to attract trade challenges from the United States because of perceived subsidies. He suggested investment in tracing or food safety systems.
Still, the overall conclusion of the committee after months of public hearings was that Canada needs more slaughter capacity and that farmers or co-operatives wanting to get into the business should receive more help.
“Never again should our industry be held hostage by the closing of borders, be it producers, feeders or truckers,” said Fairbairn.
At the same time, the senators warned that the new capacity should not exceed what is viable once the border opens again to some live cattle exports. The committee did not suggest how expansion could be managed to ensure its viability.
Many of its recommendations reflected proposals made during an appearance by the Canadian Co-operatives Association including creation of an investment plan offering a tax incentive to people investing in a co-op and funding from Ottawa to help co-ops interested in new packing plants develop business plans and hire expert help.
The committee also recommended that the Canadian Food Inspection Agency develop traceability systems that would be available to packing plants within five years.
Senators said the CFIA should work with provinces and the industry to develop a domestic meat inspection code that would allow interprovincial trade in products from plants that meet the national standard but not the international standard now required of domestically traded meat.
Fairbairn told the news conference government and industry should use the beef crisis as an incentive to find rules that increase interprovincial trade in meat products.
“There is a door open to taking action and it has to happen.”
In fact, negotiations have been under way for years between CFIA, the provinces and industry over implementing a national meat code that would allow plants to trade interprovincially even if they did not meet existing federal standards.
A sticking point is that CFIA insists all plants should meet the standard while some provinces insist many of their smaller rural plants could not afford such an upgrade.
