Agriculture Committee on Dec. 5th, 2013

[Dick Harris, Conservative, Cariboo—Prince George, BC]

Okay.

Thank you.

[The Chair, Conservative, Bev Shipley]

Thank you, Mr. Harris.

Now we'll move to Madame Raynault for five minutes, please.

[Francine Raynault, NDP, Joliette, QC]

Thank you, Mr. Chair.

My question is for all witnesses.

As you know, Canada and the European Union have signed an agreement-in-principle on October 18. What aspects of this agreement do you consider the greatest sources of concern for your respective industries?

This question is for the Canadian Renewable Fuels Association and for the Canadian Sugar Institute.

[W. Scott Thurlow]

I don't have any concerns with the agreement. I have concerns with European policy. I think the agreement is the best way to resolve the disputes that I would have with European policy.

Coming around full circle, they have policy differences that we can borrow from. They have policy differences that we should absolutely ignore and fight. But in terms of the actual agreement itself, I have absolutely no concerns. I think it's a very good agreement, from what I've seen of it.

[Sandra Marsden]

We are very pleased with the outcome of the agreement. It's a highly technical agreement, but it's giving us some hope for the future. It's the first trade agreement that is actually creating some new market access opportunity.

The only risk is delay. It has to be ratified amongst all EU member states. Anything that slows it down is disappointing.

[Francine Raynault, NDP, Joliette, QC]

The shortest time is about two years.

Furthermore, what is your assessment of the economic losses that could potentially result for your industries from the concessions we have granted?

[Sandra Marsden]

Certainly there aren't on the sugar side. As I think I mentioned, we already live in a global market that's highly distorted. This will not change those distortions, but CETA is tipping the scale more in our favour. It's helping move that balance, which has always been challenging for us.

[W. Scott Thurlow]

Our orbit is North America from a fuels perspective. It would be incredibly uneconomic for European biofuels to come into Canada. There is more potential for our growth in terms of renewable chemicals and sustainable products to go into the European market.

In terms of the actual potential for loss, as I believe was said, it's tough to figure out what the prices of commodities are seven years out. If we could, we'd all be doing very well.

All of my products are price-set in Chicago. We trade on that and we spot-trade. We very rarely get out that far. If there is a commodity advantage, it's up to the free market to sort that out. With opening markets and opening regulation, the best products will win.

[Francine Raynault, NDP, Joliette, QC]

Mr. Thurlow, even though we aim to reduce emissions of CO₂, we still depend a lot on fossil fuels. How does Canada compare with other countries with respect to the use of energy sources that offer an alternative to fossil fuels?

[W. Scott Thurlow]

We're fairly new at the game in terms of the expanded use of renewables. Brazil got the ball rolling in the early 1970s. They're the ones who are absolutely the leaders in this regard in that they have very high ethanol blends. They can blend as much as E85 for a very high percentage of their vehicles.

The Americans obviously also have a higher blend level than we do. There are some challenges with the U.S. policy system. Canada's system, introduced by this government, is a 5% blend for ethanol and a 2% blend for renewable diesel. We would like to see the number for renewal diesel go up to 5%. We need to build out infrastructure to help meet the corporate average fuel economy standards that American and Canadian auto manufacturers will have to meet by 2017.

The Europeans are now talking about E25 as the sweet spot for personal vehicles. We would like to see fuels in the E20 to E30 range. That will make sure that consumers who are purchasing technology in 2017 to 2025 are able to get the fuels they need to deliver the maximum fuel economy to support the technology in those cars.

[The Chair, Conservative, Bev Shipley]

We'll go to Mr. Zimmer, please, for five minutes.

[Bob Zimmer, Conservative, Prince George—Peace River, BC]

Thank you all for coming to committee today. It's a pleasure to have you here.

Sandra, I have a question specifically on the non-GMO beet and whether there are any issues with capacity in that new beet that's going to have to be produced. Do you see any issues with capacity in terms of your growers meeting that demand and meeting the volumes at a price point that's competitive?

[Sandra Marsden]

I think I'll pass that question on to Mr. Walton.

[Mike Walton]

That's yet to be determined. The growers are all currently growing GMO beets. I believe this year every grower in North America is growing GMO beets. So unless there's a real market to go after, they would not revert to non-GMO beets at this stage. It wouldn't be economic for them.

[Bob Zimmer, Conservative, Prince George—Peace River, BC]

Okay.

There obviously are non-GMO beets. What's the volume difference between GMO beets in terms of sugar production and non-GMO beets?

[Mike Walton]

You're talking about yield?

[Bob Zimmer, Conservative, Prince George—Peace River, BC]

Yes.

[Mike Walton]

There is a slightly better yield. It's new to us and it's new to the industry; GMO beet technology is not very old. We've seen improved yields. We're able to get close to the market of what we need in sugar with fewer acres, which gives better returns to the growers.

It hasn't been tested in terms of being able to give you a percentage today. We don't have a long enough track record to give you anything definitive on that.

[Bob Zimmer, Conservative, Prince George—Peace River, BC]

Would it be a 10% higher yield, or would it be 20%, or...?

[Mike Walton]

I don't have any numbers, but it wouldn't be in that magnitude.

[Bob Zimmer, Conservative, Prince George—Peace River, BC]

Okay.

Do you have anything else, Sandra?

[Sandra Marsden]

In terms of the GMO issues, it's difficult to project out seven years, but I think a couple of things can change. Certainly the EU environment could change. They have approved the trait that is used in Canada. It's not that it can't be sold there, it's just this lack of consumer acceptance. So that may change.

As well, certainly the domestic industry will, I imagine, evaluate the potential to grow non-GMO beets to see if it's economic.

[Bob Zimmer, Conservative, Prince George—Peace River, BC]

I guess it depends on where you are and whether the Europeans have changed first. If they haven't yet, then you can also respond by producing a non-GMO product.

[Mike Walton]

It's complicated, because the rotation crops have to be GMO as well. It's not just the sugar beet in the cycle. They rotate the crops and it all has to be in unison. It's complicated. It's not just sugar cycle.

[Bob Zimmer, Conservative, Prince George—Peace River, BC]

Sure.

I have a question for Scott now. Some of us had the privilege of being at the first biofuel-powered flight announcement here in Ottawa, which was quite amazing really. It didn't have any blend. It was 100%—they were talking about it anyway—and it was a mustard seed-based fuel.

Where do you see that going in terms of 100% fuel? I guess we have to produce a demand, and then the demand will be met by the industry, but can it be produced at the volumes...? You already said you lack adequate infrastructure to meet even the demand that's coming in 2017. Where are you with the capacity in terms of the demands put on you now, let alone a 100% biofuel product?