Agriculture Committee on May 12th, 2014

[Pierre Lemieux, Conservative, Glengarry—Prescott—Russell, ON]

I'm assuming that these priorities came primarily from industry. In other words, your stakeholders identified to you what innovation and science-related projects would be of the greatest benefit to them.

Would that be a fair statement?

[Leanne Wilson]

Yes, that would.

We have an annual process. We involve our stakeholders, our growers, and we invite researchers as well. It's kind of a workshop exercise. The priorities definitely come from the grower end, and they're validated or vetted by the researchers to show that it's going to be good science or that the science hasn't already been done.

[Pierre Lemieux, Conservative, Glengarry—Prescott—Russell, ON]

From how you answered my previous question, it sounds like there's a team approach, in terms of how or where the research is actually conducted. In other words, you have other stakeholders around the table, including AAFC researchers, university researchers, and private industry researchers, who are collaborating, working together, on these projects that are the priorities of your industry.

[Leanne Wilson]

Yes, very much so.

[Pierre Lemieux, Conservative, Glengarry—Prescott—Russell, ON]

It sounds like a winning solution to me.

[The Chair, Conservative, Bev Shipley]

On that winning note, thank you very much.

Thank you very much, Mr. Lemieux.

Now I'll go to Mr. Garrison, for five minutes, please.

[Randall Garrison, NDP, Esquimalt—Juan de Fuca, BC]

I want to go back to one of the recommendations from the Canadian Renewable Fuels Association, your last recommendation about a comprehensive bioeconomy strategy.

Can you tell us a bit more of what you see that looking like and how you see us getting to that strategy?

[Wilson Scott Thurlow]

In five minutes or less, that's going to be difficult.

[Randall Garrison, NDP, Esquimalt—Juan de Fuca, BC]

Take all the time you like.

[Wilson Scott Thurlow]

I don't think I need to do that.

I think the crisis we've identified within the bioeconomy—and that includes forestry; that includes the automotive sector; it includes chemicals, pesticides, and crop life and the agriculture industry—is that we all have different champions in government, and they don't always necessarily work with one another when they're developing policies. Even within one department you can have different subdepartments that are working at loggerheads with one another.

What we appreciate most about the European and American policies is that they do take a fundamental assumption, which is that we need to have sustainable products, and we need to use those sustainable products to expand our available resources for the future. That is kind of a condition precedent under which all public policy is undertaken. That is the ask that we have of Canada's government in the future. We would like to have a bioeconomy strategy, in the same way that we have a digital strategy, in the same way that we have any other strategy. It's important that we do so because it sends an important signal into the international markets that Canada is serious about the bioeconomy.

[Randall Garrison, NDP, Esquimalt—Juan de Fuca, BC]

I was interested to hear you say the first thing you look at in the morning is prices. That raises the question to me about whether the market system actually provides good signals for the renewable fuels industry; in other words, it's influenced by a lot of other outside factors.

[Wilson Scott Thurlow]

Like the price of food, the most important price for renewable fuels production is the price of energy. We are making energy more affordable in the long term. We are recycling carbon within the natural environment, and using that product again in the hope of reducing our overall environmental footprint.

You're absolutely correct. There are some things that we simply can't control. What we can do, though, is best prepare ourselves for when those price signals change,so that we aren't exposed.

[Randall Garrison, NDP, Esquimalt—Juan de Fuca, BC]

What do you think the role for the Canadian government is in responding to those kinds of signals?

[Wilson Scott Thurlow]

Well, I would tell you, and I would tell the committee, that the absolutely most important thing the Government of Canada has done and can continue to do is to have mandated requirements for inclusion of renewable content. As I said earlier, we'd like to see the 2% diesel mandate go up to 5%. On the ethanol side, we'd like to see the availability of renewable fuels up into the E20, E30 percentage for the octane potential that's there. That's something we want consumers to be able to have the choice to have. Right now they don't have a choice for those higher blends.

[Randall Garrison, NDP, Esquimalt—Juan de Fuca, BC]

In terms of research for our product innovation, you said that obviously the private sector is the largest source of capital, yet you made an interesting comment about the government programs serving as a beacon to attract capital.

Can you give some examples of where that has worked, or where it might work?

[Wilson Scott Thurlow]

Certainly.

I think there is a strong biocluster in the Sarnia area. That started from the Sarnia ethanol plant and the chemical industry that was there. All of those projects had some government support. I think there are strong research elements. For example, the Enerkem system started at a university. These funding initiatives are important for ensuring that the most viable renewable fuels technologies get the international exposure to attract those other angel investments.

[Randall Garrison, NDP, Esquimalt—Juan de Fuca, BC]

Okay.

[The Chair, Conservative, Bev Shipley]

You have a little less than a minute, so a short question.

[Randall Garrison, NDP, Esquimalt—Juan de Fuca, BC]

I'll go quickly.

You mentioned the conversion, essentially, of garbage to fuels. Is your association actually working and sponsoring research in this area?

[Wilson Scott Thurlow]

We don't sponsor research per se. We simply encourage governments to support more of it. There is a lot of different positions in Canada right now that are converting waste into various forms of energy, or heat, or fuels. Certainly, we are interested in anything that reduces waste and reduces the CO₂ footprint that we have on society. I think the Enerkem footprint is a fantastic one, because it takes a municipal solid waste problem and turns it into a renewable fuel solution.

[Randall Garrison, NDP, Esquimalt—Juan de Fuca, BC]

Thank you.

[The Chair, Conservative, Bev Shipley]

Thank you very much, Mr. Garrison. You're right on time. I appreciate that very much.

I want to thank our witnesses for coming out for our first hour today.

With that, we'll take a two-minute recess while we switch places and get ready for the next hour.

[The Chair, Conservative, Bev Shipley]

I want to welcome our witnesses for the second hour.

We'll start off with Patti Miller, president of the Canola Council of Canada. We do have on video conference, from Edmonton, Ron Pidskalny, executive director, and then from Calgary, Doug Wray, chair of the Canadian Forage and Grassland Association.

We need a couple of minutes to make sure we have you guys hooked up, so I'll turn to Patti Miller first to make her presentation.

Welcome, Patti. You have seven minutes.

[Patti Miller, President, Canola Council of Canada]

Thanks.

Good afternoon. It's a pleasure to be here to share with you the canola industry's approach to innovation and competitiveness. I really appreciate the invitation to talk with you about something that's so crucial to the sustained profitability of our industry.

First, I'd like to remind you of who we are. The Canola Council is a full-value chain organization representing the entire canola sector in Canada: the life science companies that develop new seed varieties; the 43,000 canola growers who grow the crop; the processors that transform seed into oil and meal; and exporters who buy the crop from producers and market it around the world. Public and private sector investment and collaboration in innovation have been fundamental to the growth of our industry, and the economic impact has been significant.

Canola was developed by Canadian scientists using conventional breeding techniques in the mid-seventies, and today it returns the most income to farmers of any agricultural product in Canada. It contributes $19.3 billion to the Canadian economy annually, and supports almost a quarter of a million jobs. Last year, a record 18 million tonnes was grown by Canadian farmers, and this expansion has brought with it significant investment in Canada. For example, there's been more than $1.6 billion invested in processing capacity in the last few years, reflecting confidence in the opportunity provided by this sector.

The canola industries work together through the council to develop strategic plans with really specific measurable goals. Innovation has always been fundamental to these goals and plans. It's how we became competitive and it's how we'll stay competitive. Our latest strategy is called “Keep it Coming 2025”. It outlines our industry's vision of where we're going and what's needed to get there over the next 10 years.

I'll take a few minutes to describe the role of innovation in this plan. Our first priority is sustainable and reliable supply, more specifically, to sustainably and profitably increase canola production in Canada to meet global demand of 26 million tonnes of canola by increasing yield to an average of 52 bushels an acre, also to improve the quality characteristics of the seed, oil, and meal to meet new and existing customer requirements. Right now, the average annual yield in the Prairies is about 34 bushels an acre. We believe that in 10 years we can take that to 52 bushels. This will require better genetics and improved agronomic practices. Life science companies, our members, are investing heavily in Canada in research that will increase yields and create crops that are more resilient to stresses like drought, pests, and disease.

Sustainable supply will also depend significantly on improved agronomy. Research from the first canola research cluster, which was funded under Growing Forward 1 by government and industry, has given us new results that show it's possible to produce at least another 10 bushels an acre through improved agronomy. Our current canola research cluster, also jointly funded by the federal government and industry, will help us deliver those extra bushels and set us up for the future.

In the next several years, we'll see the convergence of genomics, metabolomics, biologics, high resolution sensor technology, robotics, nanotechnology, big data, and bioinformatics that will unleash even more innovation for canola producers and farmers in general. It will be critical that the government, academia, and industry continue to work together in these areas, not only in investment of resources, but also in collaboration on the research itself. New approaches to technology transfer are also going to be required. As a council, we'll focus our efforts on getting the right technology to the right growers at the right time. This is an extremely sophisticated industry and it's critical that growers make decisions that are specific to their farm in order to farm profitably.

Industry and government are investing, but the federal government's role in shaping the regulatory environment is also very crucial. The current variety registration review, initiated by Minister Ritz, is an important part of ensuring the regulatory framework responds to the needs of the value chain. It's essential that the value chain has the flexibility to adapt processes that encourage innovation. Of course, increasing canola supply is just one of three priorities in our plan, and just one of the areas where innovation is crucial.

Our second priority is differentiated value. Canola is only 5% of global trade in vegetable oil, but because of our investment in understanding the impact of canola oil on human health—on cardiovascular disease, diabetes management, and obesity—the world is chasing canola's healthy reputation.

To maintain our market share and to return the most value to our industry, innovation must continue so that our products evolve to meet demand. We will continue promoting canola as a premium product by uncovering and discovering more about its health profile and by demonstrating its quality characteristics. Continued research through our canola research cluster is an essential part of being able to communicate how canola oil improves health. It also demonstrates the value of canola meal to livestock producers. We look forward to continuing this partnership so that our customers understand the value of this crop.

Our third priority is stable and open trade. Ninety per cent of the canola crop is exported in the form of seed, oil, and meal. Trade is critical to our industry, and research and innovation play an important part in our efforts for stable and open trade. A key way of stabilizing trade and opening up new doors is to promote science-based decisions in regulatory environments around the world. That means investing in research to ensure that our customers are satisfied with the quality of our products, and to ensure that food safety measurements reflect the inherent safety of our crop. Efforts by the government to conclude agreements with Europe and Korea are critical for the Canadian canola industry to continue to prosper from international demand. Concluding agreements with Japan and the TPP are equally important for our industry.

In conclusion, we're leveraging the canola industry's greatest strength; namely, the willingness of our entire value chain to pull together toward the same goals. Innovation has been the cornerstone to our success, and the research partnership we have with the federal government is critical to achieving our future goals. We call our new strategic plan “Keep It Coming 2025” because that's what the marketplace is telling us to do, and we know it's what our industry must do if we want to be the global go-to solution for the food industry seeking healthier oils and high-quality animal feed.

Thanks.

[The Chair, Conservative, Bev Shipley]

Thank you very much, Patti.

We're going to go to the Canadian Forage and Grassland Association. From Edmonton, Alberta, we have Ron Pidskalny, and from Calgary, we have Doug Wray, chair.

I'm not sure who's doing the presentation, so I'll leave that up to you folks.