October 16, 2008

Two things are basic to any civilization and differentiate us from hunter-gatherer societies. One is shelter. The second is food. Without these two things, no civilization can last very long. And of the two, food is the more important.

That’s why ensuing a basic domestic food supply is vital to Canada’s national interest, and vital to our long-term survival as a nation.

However, our ability to produce our own food is being threatened by two things: economics and sprawl. Both are a threat to our food sovereignty and to our food security. The first threat, that being economic, is a lack of profitability in the agricultural sector. The second threat, that being sprawl, means that we are ripping up the very land that can ensure a domestic food supply.

Let me first start by discussing the first threat to our food sovereignty, and that is the unprofitability of the sector. Farming in Canada is not profitable, and from a rational point of view, should simply not exist. I’ve come to the conclusion that the only reason why a domestic industry still exists is because of an emotional attachment to the land and to a way of life.

Last year, Canada’s 230,000 farms generated $400 million in profit on $40 billion in sales. While on first glance this may seem like a healthy business, this is a sector in crisis. $400 million in net income, or profit, divided amongst 230,000 farms is an average profit of $1700 per farm. These numbers are even worse when you realize that most farmers and their families don’t pay themselves, and rely on their profit as “salary”. In addition, farmers make major investments in their farm businesses, and for many the return on investment has been less than what a GIC would return. No wonder many farmers often have to make ends meet by working off the farm. And the previous years were not better either. In 2006, a $68 million loss was had on $37 billion in revenues and in 2005, 2.3 billion in profit was had on $37 billion in revenues.

Thirty years ago, in 1974, Canada’s farming sector generated, in 2008 dollars, $16.5 billion profit on $38 billion in sales. In other words, last year, farmers made only 1/30 the profit they made 30 years ago, and last year was the best in the last five for Canadian farmers. This drop in income during the last thirty years has occurred despite the increase in population from 22 to 32 million, and despite the per capita growth in the economy.

Let’s compare that to the manufacturing sector, which has been receiving a lot of press recently. There is no doubt that Canada’s manufacturing sector has been suffering and the challenges have been significant, so I think a compare and contrast with that sector will illustrate how in trouble our farming industry is.

Last year, in 2007, Canada’s manufacturing sector generated $45B in profit on $600B in revenues. Compare that to $400 million in profit on $40 billion in sales. Manufacturing’s profit margins were 7.5% last year, while agriculture’s was just under 1%. So which sector is in bigger trouble?
Let’s compare that to the profits made in the gambling sector. Last year, profits from gambling amounted to $7 billion, 15 times the amount that Canada’s farmers made. There is something inherently wrong with the setup of a society when governments make 15 times as much from gambling, as those who put food on your table make from farming.

Clearly, at a macro-economic level, Canada’s agricultural policy isn’t working.

There is, however, one bright light in the agricultural sector and that is the sector we call supply management. Supply management was introduced by Eugene Whalen in the early 1970s. Milk, eggs, chickens, turkeys, and hatching eggs are all under supply management in Canada.

Supply management is a system where the market is managed by government controls. The essential pillars of this system is the restriction of imports through a tariff wall. Supply managed farms are the only ones were you widely find profitable family-run farms and farms where younger farmers are getting started.

But outside of supply management, Canadian farm incomes have dropped dramatically in the recent years.

What are the causes? One problem is that our farmers have inherently higher input costs than other jurisdictions, especially in the developing world. We have higher standards, from more stringent food safety standards to stricter environmental controls, and higher land costs, especially in Ontario. These all create higher baseline input costs for the Canadian farmer. Another problem is depressed commodity prices, a result of the “green revolution” - the massive increase in global agricultural output due to new technologies. Yet another problem lies in the fact that European and American governments provide greater subsidies and support for their farmers than do we.

Some say that the solution is for more productivity. My guess is that the greatest productivity gains have been had. No other sector has increased its productivity over the last 50 years like agriculture. Any additional gains would probably not be sufficient to compensate for the drop in farm income and could likely only be achieved through even larger farm operations, leaving no room for the family farm.

Others say that the solution is to move to freer trade by eliminating import restrictions, let the cheapest producers prevail and allow the marketplace to determine what food will be sold here. The problem with this is that Americans and Europeans have been reluctant to eliminate trade distorting policies, and that’s why the recent Doha round of trade negotiations collapsed.

We have presented many of our farmers, especially those in many parts of Southern Ontario, with a Faustian bargain: Keep farming and make so little money that you have to take one, or even two off-farm jobs to pay the bills, or sell your land for great profit. Given this choice, it is a wonder that many farms still remain.

So what are some potential solutions?

First, farm groups and associations have got to merge, in order to provide one powerful voice for Canadian agriculture. There are only 230,000 farms left in Canada, and yet the farming industry is represented by a myriad of different groups and associations, often contradicting each other.

Second, governments need to implement a “Made in Canada” branding strategy for Canadian food products, something I’m proud to say that our government is acting on. In the next short while, we will be coming out with new food labelling regulations, one for Product of Canada and one for Made in Canada, so that Canadian consumers can make an informed choice.

Third, governments need to encourage greater secondary and tertiary production of food products in Canada. The recent beef border closure highlighted what risks there are in moving food processing outside of the country.

Fourth, and most importantly, governments need to address the fundamental problem in Canadian agriculture: low farm incomes. Ultimately, the solution to low farm incomes is not going to come from greater efficiencies and lower input costs, but from higher revenue. That higher revenue must come from somewhere, whether that be from governments or consumers. This can be accomplished by reducing subsidies abroad, by increasing subsidies domestically, or by restricting imports by imposing tariffs. Ultimately, any solution to the lack of profits in the farming sector will mean that consumers will have to pay a little more for food. With consumers paying only 10% of their household budgets for food, this is not too much to ask. Today, the average households spends about $7,000 a year on food, and as a proportion of total household spending it is the lowest ever. In the 1960s, food represented the largest proportion of household expenditure, accounting for nearly 20% of total spending. However, this proportion has declined constantly since then to just over 10% of total spending today.

Let me address one question many bring up at this point: If other countries produce cheaper food, why not simply import? Why even produce our own food?

My response is very simple. No country, no civilization has survived long without the ability to produce its own food. History has shown that a society’s ability to survive is linked to the security and certainty of its food supply. This food supply is at too great a risk of disruption - from trade wars and other threats - if we rely exclusively on imports. Obviously, certain food stuffs, like oranges, and bananas, cannot be grown here, or only grown here marginally, and will always need to be imported. But basic foodstuffs that can be grown here should be grown here.

We protect our airlines, our cable companies, our telephone companies, our newspapers, our healthcare and our cultural sector. These are all protected because they are considered essential to our national interest. What is more vital to our national interest than food? Food and shelter are more fundamental than anything else.

Let me now focus on the second threat to our food sovereignty and that is the threat of urban sprawl. One of the biggest threats to agriculture in Canada is urban sprawl. If you don’t have the land to grow food, you can’t grow it.

Urban sprawl is a threat to agriculture for the following reasons.

First and obviously, urban sprawl is destroying much of the prime farmland needed to grow our own food. While much of the food eaten today is imported and while much of farming is unprofitable, we cannot let the short-term economic problems in agriculture cloud our judgement about the long-term. Nothing is more vital to our long-term national interest than the ability to produce our own basic food supply. Good farmland, good soil, good climate and consistent rainfall are needed to do that, precisely what we have in southern Ontario.

As I said before, we cannot assume the long-term security of our imported food supply. Only 60 years ago Western Europe - one of the world’s great breadbaskets - faced starvation. A disruption to imported foodstuffs would be devastating; Cuba has survived five decades without American automobiles, but would not survive a month without food.

Secondly, urban sprawl is destroying thousands of acres of habitat for flora and fauna. Halton alone are home to over a dozen species at risk of complete extinction, including the Great Egret, the Jefferson Salamander and the Green Snake. All are at risk of extinction due to habitat loss, most of it caused by urban sprawl. Most of this sprawl is taking place in the Carolinian forest zone, an area with the highest bio-density in Canada and in this country found only in Southern Ontario.

While farmland is not native wilderness, along its windrows and forest cover it nevertheless provides much habitat for a wide variety of species. Furthermore, farmland is one generation away from wilderness. Left fallow, it reverts back to its natural state in thirty or forty years, but land paved under will never go back to its natural state.

Why should we care about flora and fauna? In one word, bees. Bees are one type of species that are under threat of extinction if we as North Americans, if we as humanity on this planet continue to destroy habitat. Without bees, pollination of thousands of different types of crops would simply not happen. And the same goes for other types of flora and fauna that are at risk of extinction, flora and fauna that are vital to the production of food.

Thirdly, sprawl represents a threat to the Great Lakes. There are signs that the Great Lakes - containing almost 20% of the world’s freshwater - are under threat from urban sprawl. The water levels in all five Great Lakes are below long-term averages and some are at record lows. All this growth is draining our aquifers and destroying our watersheds. Indeed, the biggest threat to the Great Lakes may come not from pressures to divert water to the dry American Southwest, but rather from explosive urban growth in Ontario. We simply do not know how this will affect the climate and rainfall in the Great Lakes basin and how this will affect agriculture.

A fourth and perhaps strongest argument against sprawl is the global threat presented by rising greenhouse gas emissions. In destroying this farmland, in creating this sprawl, we are constructing a high-carbon infrastructure system of highways and sprawling communities that will not only prevent us from reducing our greenhouse gasses, but will in fact ensure we only increase them. Rising GHGs will have a profound impact on climate and a profound impact on agriculture. Areas previously able to grow food won’t be able to, and areas that currently don’t grow food might be able to. We simply don’t know that will exactly happen, but it will have a major impact on agriculture. Just think about what happens to agriculture in Halton if the average frost day arrives 1 week later and arrives one week earlier in 40 years.

A fifth argument against sprawl is that it is not economically affordable. We must face the harsh economic reality that we have been subsidizing sprawl. Over the last fifty years we have built an infrastructure system of highways and sprawling communities that we cannot afford to maintain. There have been major bridge collapses in Montreal and Minneapolis. Closer to home, dozens of bridges and roads are in need of replacement. Even with record government revenues from one of the greatest periods of economic growth, there is simply not enough money to maintain all of this infrastructure. As a result, property taxes continue to march upward. And the reasons why property taxes are rising more rapidly in places like Mississauga than Toronto or Wellington-Halton are simple. Statistics Canada's latest 2006 census results show that the city of Toronto has a population density of almost 4,000 persons per square km, while the corresponding number for Mississauga is 2,300. In other words, the ability of a city like Mississauga, built on low density sprawl, to raise property taxes from its population base is only half of that of Toronto . Furthermore, municipalities are subsidizing development. The province has prevented them from charging developers the full cost of development. One study of an Ontario town found that for every dollar in development charges collected, a $1.40 in services were put in. Guess where the other 40 cents are coming from? From existing ratepayers, who are, in effect, subsidizing development. More growth means paying more in property taxes. In addition, our infrastructure system of highways and sprawling communities were built during that half-century period when oil was cheap. Oil has just broken through the $100 a barrel barrier. What happens to sprawling suburbia and the commuter lifestyle when oil reaches $200 a barrel and gas reaches $3 a litre? Clearly, urban sprawl is not economically sustainable.

So what can be done? At a basic level, there are two solutions – adopt a zero population growth policy or significantly overhaul urban and transit planning.

The first solution, zero population growth, does not entail zero economic growth. Environmentalists, like Pulitzer Prize winner Jared Diamond, have pointed this out and Scandinavian countries are evidence of this fact. In Canada, we have a below replacement birth rate but a growing population due to immigration. Since our birth rate is below replacement, Canada needs immigration to maintain population levels. A zero population growth policy would entail adjusting immigrations rates so a constant population level of about 33 million is maintained. Levels of immigration could be adjusted regularly to meet this goal, and as demographics change, immigration rates would be adjusted up or down to maintain this constant population. However, at this juncture, there appears little appetite to reduce population growth rates.

Since there is little appetite to reduce our population growth, the only other solution – one which allows for population growth while minimizing environmental damage – is to overhaul urban and transit planning. In other words, we need to ensure that the vast majority of any additional population growth is absorbed within the existing built up urban areas in the GTA, while committing billions from provincial and federal governments for public transit. Cities like Toronto and Mississauga will have to significantly increase their populations, while undertaking significant expansions of public transit systems. This will result in higher populations and densities in cities like Toronto and Mississauga, an easing in the flow of commuters and goods, and in turn, an end to sprawl. But it requires a major rethink of urban planning and massive investments in public transit.

These increases in densities and populations are required to provide the level of transit ridership needed to justify the operational costs of major dedicated right-of-way public transit systems. These transit systems do not come without a price. Tens of billions in public monies would be required to build the kind of public transit system needed to move people and goods around these denser cities. This level of investment is beyond municipal means and would require commitments from both federal and provincial governments. But the alternative – more sprawl – comes with an even higher price.

A denser population does not necessarily require turning these cities into Le Corbusier’s canyon of towering skyscrapers, where entire neighbourhoods are levelled to make way for forty story condo towers, as was done in the building of post-war St. James Town in Toronto. These increases in population can be accommodated by building five to eight story densities along major transit corridors throughout the city, along streets like Yonge and Bloor in Toronto or Eglinton and Hurontario in Mississauga. Either way – 40 story condos in the core of the city or five to eight story structures throughout the city – these cities would be the better city for it. Pursuing intensification by building skyscrapers would create downtown cores of Manhattan-like density, not necessarily a bad thing. Manhattan is an eminently liveable and exciting city. Alternatively, pursuing intensification with five to eight story densities would create cities more akin to London or Paris, also eminently liveable. Either one of these two approaches – skyscrapers in the core or consistent five to eight story density along major corridors – is viable. But what is not viable is building more single unit, tract housing on agricultural lands. The era of building tract housing must come to an end if we are ever to tackle our environmental and economic challenges. What happens in Toronto and Mississauga will have a profound impact on us in Wellington and Halton.

We don't have a lot of land. This seems a ridiculous statement to make, until one realizes that much of Canada is inhospitable to human habitation. That's why we have almost 20 million Canadians crammed into the St. Lawrence Lowlands of Ontario and Quebec.

Others argue that halting sprawl and creating denser communities would result in more expensive housing. This is true if one is committed to the idea that every family deserves to live in a single-detached home on a large lot. However, families can and do live comfortably in multi-storey buildings across much of Europe and Asia. A condo-townhouse along a public transit corridor costs just as much as single detached home on a larger lot. Arguably, these denser communities - a good mix of residential and commercial supported by public transit - result in a much higher quality of life.

Building more single unit, tract housing, on agricultural lands simply cannot continue. The era of building tract housing must come to an end if we are ever to tackle our agricultural and economic challenges. Most importantly, it must come to an end if we are to preserve and protect the land to pass on to our children. Doing otherwise would leave them with a lack of food security and a sprawling infrastructure system they can ill afford to maintain. We can do better than leave this to future generations.

So, those are the two threats to our food sovereignty: a lack of profitability in farming and urban sprawl. We as governments, as Canadians, must tackle these problems so that we can ensure that future generations have access to a secure domestic food supply and that Canada’s vital national interests are protected.

Let me conclude by leaving you with some thoughts.

We must reinvigorate our connection to the land. Our land is beautiful and we cannot ever re-create it. The land has influenced our culture and imbued our sense of identity. How can one read and understand Archibald Lampman, Ross Sinclair, Robertson Davies, Michael Ondaatje, or any of the other greats of Canadian literature if one has no connection to the land? If one has never seen the undulating hills of Wellington County, or the vastness of the Peel-Halton plain, once the breadbasket of Ontario , how can one understand what it means to be Canadian? The land in which we live is intrinsically tied to who we are as Canadians. The way we treat it is a reflection of who we are as a people.

A healthy democracy and a good society require a vibrant agricultural sector. Farming is what settled this country, carving out of the wilderness small towns and townships, counties and cities, building the society we have today. The essential nature of farming is something the French understand, embodied in their word “terroir”, translated as our word “earth”, but something richer in meaning. It is something that was once put to me by a local farmer who talked about “good ground”. It was best put by one of the intellectual forces behind democracy on this continent who said in 1785,

“Cultivators of the earth are the most valuable citizens. They are the most vigorous, the most independent, the most virtuous, and they are tied to their country and wedded to its liberty and interests by the most lasting bonds.”

Thank you.