Evidence of meeting #20 for Agriculture and Agri-Food in the 40th Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was winter.
A recording is available from Parliament.
12:10 p.m.
Liberal
The Vice-Chair Liberal Mark Eyking
Mr. Bellavance, you have just a half a minute left of your time.
Mr. Fowler, could you be short?
12:10 p.m.
Professor, Department of Plant Sciences, University of Saskatchewan
Well, as you know, this is a very complex issue. The question of GMOs goes beyond the biological significance of being able to move genes from one species to another, but goes into the political area. You people are much more adept, I think, at dealing with the politics than I am.
I could give you a whole list of pros and cons. I am leader of a very large Genome Canada project right now that is dealing with these issues, and I'd certainly be glad to discuss it with you, because I think the science offers an awful lot of opportunities. It's the application of the science that tends to get us into these questions. As I said, they tend to be more political than scientific.
12:15 p.m.
Liberal
The Vice-Chair Liberal Mark Eyking
Fair enough, Mr. Fowler.
We're going to go to the NDP now. Mr. Atamanenko, for seven minutes.
12:15 p.m.
NDP
Alex Atamanenko NDP British Columbia Southern Interior, BC
Thank you very much, gentlemen, for being here.
When we talk about exports and access to markets, all of that is tied in with our lack of competitiveness. We want to improve that.
Mr. Martin, you talked about losing market share in the food processing industry, and you gave some statistics showing the value-added ratio is five to one in the United States and three to one here. Why would it be different? Is it because of the wages? And if so, does that mean we have to pay lower wages in Canada to be competitive?
I know that in the Niagara Peninsula, the last food processor recently shut down. So how do we keep food processors alive, so they can process local food in this case? This is a problem now. These folks don't have a place to send their tree fruit, their peaches.
You talked about the tree fruit industry and losing market share. I have been quoted as saying that a lot of this is due to trade agreements. For example, under our free trade agreement and NAFTA, we used to have in-season tariffs for vegetable producers, who could make a living. Now, with our agreements, that's no longer the case.
In the apple industry, American apples are being dumped here. In the area I come from, in the southern Okanagan, many people are converting to grapes because they can't compete otherwise. And this is a result of trade agreements. Yet at the same time, we're saying that we need more agreements and more exports.
I'd like you to comment on this whole idea of market share. Are some of these agreements obstacles? We have this whole local food movement in Canada. Should we be trying not only to protect our local farmers, but also encourage them to make a living here in Canada?
Maybe I'll stop there, because I have other questions, if I have time.
12:15 p.m.
Senior Fellow, George Morris Centre
The answer to your first question is that issue of value added per dollar of wages has nothing to do with wages or farm prices. It has everything to do with the quality of capital we have to work with. We don't have economies of scale. We have vegetable processing plants in Canada that may have three automatic colour sorters, whereas in the U.S. they have 25. And there's quality control equipment that we're not investing in here in Canada, all of which would increase our ability to add value.
It's the value-adding component of this that we're missing out on, not the other two parts of the coefficient. We're simply falling behind. It goes back to that business of our capital investment having been less than depreciation. So we're losing our capital base. I'm on three boards of directors. I would never allow a company to have that kind of investment performance ever, and here we have a whole sector with that investment performance.
Secondly, with respect to the issue of the loss of market share, I talk to people in California and to the apple growers in Washington, and I can find no evidence of dumping in the absolute sense that it's meant. What I find is that they are doing many things to take the best product and to separate it—to pre-condition it, to post-condition it, and to harvest it.
There is no definition of “tree ripened”, by the way, at all. But there are lots of measures you can use in terms of pressure, sweetness, acidity, and so forth. And those folks down there are doing it. Most of our producers are not. They are not dumping, but are charging premiums and taking away market share because they're producing down there what some consumers want.
That's fundamentally what the problem is. It's an issue of supply chain management and of investment in technology, and so forth. I don't think it has anything to do with the trade agreement, frankly.
12:20 p.m.
NDP
Alex Atamanenko NDP British Columbia Southern Interior, BC
So you believe we should have complete open-market access even if we've lost, in British Columbia, a thousand onion producers in the last decade or so?
12:20 p.m.
Senior Fellow, George Morris Centre
I'm not going to make any kind of generalized statement like that, because we'd need to know the situation. I would never suggest that we give complete open-market access at all.
12:20 p.m.
NDP
Alex Atamanenko NDP British Columbia Southern Interior, BC
Thank you.
I'm going to switch to coalbed methane, Mr. Pryce. I just had a meeting with some folks in my area who are concerned about coalbed methane exploration. As I understand it, that's upstream, right? There was concern, and because of the exploration there's a group mobilizing against this. They've talked to a rancher in Alberta who's had her aquifer water destroyed by exploration. They're really concerned about the destruction of the aquifer and the effects of that on agriculture, because the water is taken to produce coalbed methane and there's less water there for irrigation purposes in agriculture.
I'm wondering if your organization has done any studies or if you have any research on that.
12:20 p.m.
Vice-President, Western Canada Operations, Canadian Association of Petroleum Producers
There are probably a number of points there. I'm familiar with some of the concerns that folks have raised in the agricultural community. Part of the challenge is understanding and confidence and trust around what goes on and what the regulations are. From our perspective--I think I mentioned it in my brief--we can't access that water unless we can demonstrate that we're not going to have an impact on it. So it requires rigorous testing of the aquifer to show that it can deliver the water needs we might have.
With coalbed methane, on the other hand, one of the issues is that in order to get the gas to produce, if the formation is water-wet you might have to remove the water in order to let the gas flow. Right now the rules are not in place to allow us to produce from water-wet CBM formations. It's a strategy that needs to be brought to bear if we're ever going to get reasonable appropriate access to that hydrocarbon resource. But right now the rules aren't in place to allow us to access that.
12:20 p.m.
Conservative
Brian Storseth Conservative Westlock—St. Paul, AB
I was wondering if you could give Mr. Pryce 30 more seconds, because this is a very important issue that's being raised. It's a public health issue that's been raised in Alberta several times.
12:20 p.m.
Liberal
12:20 p.m.
Vice-President, Western Canada Operations, Canadian Association of Petroleum Producers
Thank you.
Obviously there is a lot of interest in Alberta and British Columbia in particular around what's going to happen with the development of this resource. Alberta Environment has spent an awful lot of time and money in scientific effort to understand whether or not there is an impact on the quality of the reservoir and whether or not there are impacts on local water wells. Their conclusions to date are that there are not impacts on that.
People will have to take that science on face value. I'm just reporting what they have said.
12:20 p.m.
Liberal
The Vice-Chair Liberal Mark Eyking
Thank you very much, Mr. Pryce.
We will now go to the Conservatives for seven minutes. Mr. Hoback, please.
12:20 p.m.
Conservative
Randy Hoback Conservative Prince Albert, SK
Thank you, Chair.
Gentlemen, thank you for taking time out of your busy schedules to be here. You're definitely providing a lot of useful information. I wish we had more time to ask the questions, because I think there's a lot more to garner from what you have to say.
I'm going to go to Mr. Fowler, and just talk about the plant breeding and some of the varieties in that area. I have a few questions, so we'll have to be fairly quick.
One of the things I want to ask you about is that there's a variety of winter wheat that a few buddies of mine were looking at down in Montana, and they said it came out of Saskatchewan and was actually one of your varieties. Can you explain how one of your varieties would end up in the U.S. but not end up in Canada?
12:20 p.m.
Professor, Department of Plant Sciences, University of Saskatchewan
It's registered for production. I have a number of varieties that are grown in the United States. When I first started my breeding program in winter wheat there was not any winter wheat being grown outside of southern Alberta. The U.S. was the main source of germ plasm for the breeding program, and all we're doing is returning the favour.
Climate does not change at the border. There's absolutely no way you're going to stop people from moving varieties back and forth, legally or illegally. So my philosophy has been that the best way to move these things forward is to go through the legal processes, which means the Americans are allowed to grow these varieties.
There's a second reason that I released these varieties in the United States, and that is that I was unable to move them into the milling market in Canada. The only way I could move them into any market in Canada was in the feed and fuel. They're going into the milling market in the U.S., and because they are accepted in the milling market, they can move back into Canada as food. We can't do that in western Canada.
12:25 p.m.
Conservative
Randy Hoback Conservative Prince Albert, SK
Yet I understand these varieties are definitely used for milling in the States. In fact, they're exported to Canada in flour. Is that correct?
12:25 p.m.
Professor, Department of Plant Sciences, University of Saskatchewan
That's correct.
12:25 p.m.
Conservative
Randy Hoback Conservative Prince Albert, SK
So you're telling me that with our system, the way we have it set up here, it's basically a disincentive for you to actually register varieties here in Canada. It's easier to get them into the States.
I notice you talked about the yield difference in the varieties, going from 50 to 75 bushels. Is that correct?
12:25 p.m.
Professor, Department of Plant Sciences, University of Saskatchewan
With winter wheat, because it starts off in the fall and is established in the spring, it has a big jump on spring wheat. So it takes much better advantage of the moisture that's available and has a longer growing season. Wherever winter wheat can be grown in the world, it is the first option.
We see the same advantage here. In Manitoba, if you take a look at the Statistics Canada estimates of average yield for Manitoba winter wheat, the yield is 50% higher. These are real numbers. In Saskatchewan, it's 30%. In Alberta, it's 20%. Of course, winter wheat is priced lower than spring wheat, so we have to have that yield advantage if farmers are going to grow it.
12:25 p.m.
Conservative
Randy Hoback Conservative Prince Albert, SK
Fifty percent higher. I'll just take it back to the farm gate for my colleagues. On my farm, I think the average is about 40 bushels an acre, so 50% is another 20 bushels. Right now I think we're getting $5 a bushel through the Wheat Board. So let's say $4 a bushel. That's another $80 an acre on 1,000 acres. That's another $80,000 that would be in my pocket if I was allowed to have that variety. Is that correct?
12:25 p.m.
Professor, Department of Plant Sciences, University of Saskatchewan
That's why winter wheat has been expanding. Even if it goes into the feed market and you're paid less, there's a big advantage to growing winter wheat where you are able to grow it successfully.
The other point is, we talk about the United States and Canada. In Canada we have a very simple interpretation of wheat production in western Canada: you're either for the Wheat Board or you're against the Wheat Board. If you want to take it down to the next level, everybody grows hard red spring wheat and durum wheat. Well, there is a whole raft of different quality types that are grown throughout the world. This is where the problem exists in western Canada.
I go to Quebec and I see the success that some of the organic and low-pesticide groups are having in getting their product into the system. I just wish we could do that in western Canada, because we've got the same opportunity to go ahead and develop those industries. We can't because the Canadian Wheat Board has a buy-back system that allows people to go into those markets. They actively discourage those types of varieties from being available.
12:25 p.m.
Conservative
Randy Hoback Conservative Prince Albert, SK
Again, it comes back to this big elephant in the room called the Canadian Wheat Board. That's what you're saying. Coming out of western Canada, that's one thing I hear in the farm gates, and I hear it everywhere else. It handcuffs the producer from doing so many things in his operation.
For example, in my operation, I grew all wheat last year, and I'm still carrying about 80% of my wheat because of the quotas, or the contracts haven't opened up for me to move it. Cash flow becomes a very interesting game when you're doing that.
You also talked about niche markets and the inability for us to get into these niche markets for wheat because of the licensing. There are high dollars in some of these niche markets, because that's what a niche market is.
12:25 p.m.
Professor, Department of Plant Sciences, University of Saskatchewan
Yes. It's not just whether wheat makes a good loaf of bread or not. In this day and age, there's an awful lot of interest in who produced the wheat and how it was produced, so there are different quality characteristics that consumers emphasize. You just have to go into some of the stores in the wealthier areas of this country and look at the products on the shelf there. Most of them are organic. Again, I keep going back to Quebec because I have some people I work very closely with there. In Saint-Hyacinthe, Pierre Gélinas took me down to the grocery store there, and over a third of the space in that supermarket was designated for flour-based products.
12:25 p.m.
An hon. member
Yes, locally grown.