Thank you, Mr. Chair.

Today I have with me deputy minister Andrea Lyon; assistant deputy ministers Greg Meredith and Pierre Corriveau; and of course Paul Mayers with the CFIA.

It's been a busy time in Canadian agriculture since we last met. We've had the Canada-Korea Free Trade Agreement come into force on January 1 of this year, the passage of the Agricultural Growth Act, and a very successful trade mission with Canadian industry to Southeast Asia in March.

Just two weeks ago we announced that the CWB had reached a strategic partnership to secure the resources they need to become an independent, strong, and global competitor in the grains sector. This agreement with G3 Global Grain Group is expected to increase Canada's grain export capacity, adding hundreds of jobs and hundreds of millions of dollars of economic growth across the Prairies. The stronger CWB unit will continue to offer farmers an opportunity to build equity in this new company, simply by continuing to deliver their grain.

With this agreement our government has fully delivered on our commitment to marketing freedom by increasing marketing choice for western Canadian grain farmers, as well as keeping the CWB as a strong, viable option for farmers. As I said in Winnipeg, this announcement is a win for Canada's producers and a win for Canada's economy.

Agriculture continues to drive the Canadian economy. Of course, the main estimates are always about looking ahead. When we do so, we see a bright future for this great, dynamic sector.

Demand is growing around the world for the high-quality food that our Canadian farmers and food processors continue to deliver. To allow them to capture that demand, we've sharpened the focus on strategic investments that promote innovation, competitiveness, and market development initiatives, while continuing to proactively manage their risk.

The estimates you have before you reflect this transformational change. Powered by a $3-billion funding envelope over five years, Growing Forward 2 is really moving the goalsticks, driving our economy and the sustainability of the sector overall.

A great example of this is the agri-risk initiative, or ARI. This is a new tool introduced under Growing Forward 2. Rather than taking action after the fact, the idea is to get out front and centre, and support bankable, predictable insurance tools that producers can use to proactively manage their risk.

A number of initiatives are already in place, including livestock price insurance, implemented in the western provinces of Saskatchewan, Alberta, and British Columbia, who bought on. At last count, cattle producers there have insured close to one million head, valued at $1.7 billion.

Last week our government introduced the budget, which commits a further $30 million over two years to grow Canada's marketing presence around the globe. This new support will help expand the activities of the market access secretariat and those of the CFIA to jointly support this agricultural sector in continuing to maintain as well as expand and diversify into new markets, while capitalizing on opportunities created by the trade agreements we're signing. This will also include new agricultural trade commissioners, and a more proactive role in setting international, science-based standards. The funding will also help expand our successful agri-marketing program to help farmers to further enhance marketing capacity at home and abroad.

To help our new generation of farmers take our industry into the future, the budget also increases the lifetime capital gains exemption from $800,000 to $1 million. On average, a farmer will save some $27,000 when selling a property valued at that $1 million-plus mark. This measure will ease the tax burden as our aging producers considering retirement pass the farm to the next generation.

A strong farm gate is fundamental to helping producers capture the incredible opportunities that are opening up here and abroad. That's why our government continues to push hard on the trade file, to get our foot in those doors before our competitors do. Our collaborative efforts are promoting decisions that are science-based, helping Canadian producers to export more product and grow the economy overall. Last year Canada's agriculture and food exports hit a new record of $56.4 billion.

We continue to deliver on our government's aggressive trade agreement strategy. Since 2006 this government has successfully concluded negotiations on free trade agreements with 38 countries, while having ongoing negotiations with another 32. To date Canada has concluded trade agreements with countries representing close to half of the world's agriculture and agrifood marketplace. Our historic trade agreements with Korea and the European Union will open the doors to vitally important markets on two different continents. On January 1 the Canada-Korea trade agreement came into place. This agreement will level the playing field for exporters in this key market by eliminating tariffs on our canola, beef, pork, and grains.

Upon implementation of the agreement with the EU, Canada will be one of the only developed countries in the world to have preferential access to the world's two largest economies—the EU, and of course the United States. Industry has estimated that this agreement will increase Canadian agriculture and agrifood exports to the EU by some $1.5 billion a year.

We are also working hard to create a new trade opportunity through our ongoing participation in negotiations for the Trans-Pacific Partnership.

Of course, when it comes to enhancing our trade routes, we must practise what we preach here at home as well, and I certainly applaud the work this committee is doing on interprovincial trade barriers and ask that the report, the recommendations you table, be strong.

Transport is a key pillar of our government's strategy to build a modern grain industry that's equipped to compete in the global marketplace. We continue to build a modern grain industry with ongoing reform of the Canadian Grain Commission.

We introduced Bill C-48, the modernization of Canada's grain industry act, building on changes we passed in 2012 to streamline and modernize the operations of the CGC and reduce the regulatory burden for grain producers. Bill C-48 will enhance producer protection, grain quality, and safety assurance, while further streamlining the operations overall of the CGC. While parliamentary games from the NDP are stopping this bill from reaching committee, the government remains committed to advancing this important legislation.

As well as trade and transportation, farmers need research and innovation to compete in the global marketplace. ln today's environment, collaboration is key.That's why we're building on our very successful research cluster model. We almost doubled our investments in these clusters under GF2 as well as adding four new ones. Those investments of $127 million have leveraged $60 million in industry investments. GF2 is also driving innovation through industry-led R and D, agri-science projects, and funds to help get great ideas off the drawing board and into the marketplace. There are also the cost-shared innovation projects with the provinces and territories, and of course our world-class scientists who continue to deliver new ideas and tools to advance the sector.

A key catalyst for innovation is the Agricultural Growth Act, which received royal assent about two months ago. Bill C-18 will drive innovation by strengthening intellectual property rights for plant breeders so Canadian producers can and will have the best possible varieties available. At the same time, farmers retain the right to save, clean, and store seed for their own operation. Bill C-18 will level the playing field for our producers and will encourage foreign breeders to release their varieties into Canada much sooner. We've already seen the results with Bayer CropScience announcing a $10 million investment in Canadian cereal crop breeding. Bill C-18 aIso brings innovation to our delivery of the advance payments program, giving farmers a more flexible tool to manage their cashflows while cutting red tape and improving efficiencies.

As well, to speed up the innovation pipeline, we are modernizing the variety registration system to help seed companies get farmers the tools they need to compete faster and more efficiently.

I'm confident these reforms will take down barriers to innovation while continuing to support our high-quality Canadian brand in the world markets.

Mr. Chair, all of this is great news for Canada's agriculture and food sector and for Canada's economy. The future is bright for this dynamic industry. The department's economic outlook points to a strong future for the agricultural sector with Canadian farmers' incomes and balance sheets at record levels. Agriculture has become more global in focus, more outward-looking, and much more confident. The credit for that goes to a new generation of farmers, processors, and other business people who have stepped up to the challenges of feeding a hungry world.

Our job as government, Mr. Chair, and mine as minister, has been to clear the road for that to happen. We've come a long way, but there's always work to be done. We're now starting to look at what the next-generation agricultural framework will look like. Powered by an aggressive trade and innovation agenda, we will continue to drive transformational change throughout this core economic sector to reap a bumper harvest for Canada's economy.

Thank you, Mr. Chair. I look forward to any questions or comments the panel may have.

Gerry Ritz

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