Agriculture Committee on Feb. 28th, 2007

[Harvey Brooks]

For our stakeholders, the primary issue is to make sure they have a solution that satisfies CFIA, in terms of the federal regulation, and that they have plans in place that will do so, except for some fine-tuning.

We have been providing some verbal comfort to them with regard to the ability to make expenditures, but I believe they would take more comfort in a signed agreement, with full knowledge of the parameters of the eligible expenses. We've tried to provide some comfort to them verbally, but we're still working out some details.

[The Chair, Conservative, James Bezan]

Mr. Atamanenko, you have seven minutes.

[Alex Atamanenko, NDP, British Columbia Southern Interior, BC]

Thank you very much for being here.

There was a state of panic here a few weeks ago, when other folks appeared, as to whether the timelines would be met and whether this would happen.

I have a question. Mr. Donner, I believe your minister came out with a statement that was very supportive of the biofuel industry. He also mentioned that he would like to encourage smaller business and value-added, and he gave an example of a company.

Was that your operation, Mr. Horner, as far as biofuels from SRM? If that's the case, could you talk a bit about it? It sounded very exciting when I read the article.

Before you start, my question is, can you use all of the SRM, or only a small part and the rest of it has to go somewhere else? That's the impression I had when some other folks appeared last time.

[David Horner]

Thank you for the question.

We can process all the SRM; we can't process all the SRM from the whole province in one facility.

Certainly the strategy is that the SRM facility, which we would build in conjunction with Ranchers Meat, would be in partnership with Ranchers Meat, the province, the federal government, and the producers, so that we'd also be able to take in dead stock and so on from producers at lower or no cost, if we can get some funding there.

But certainly, strategically placed, SRM-handling facilities that use the thermal hydrolysis system could be spotted all over Alberta, which would take care of all the SRM material. There would not be any need for rendering or landfilling especially, and as I say, you would end up with a value-added product.

That product can be further researched and fractionized down to where you can start looking at thinks like pharmaceutical products from animal waste. Wouldn't that be something?

[Alex Atamanenko, NDP, British Columbia Southern Interior, BC]

So what you're saying is that through this process of thermal hydrolysis, we have the technology.

[David Horner]

Yes.

[Alex Atamanenko, NDP, British Columbia Southern Interior, BC]

Would part of the product also be biofuel? So fertilizers and biofuel—

[David Horner]

The showcase facility would incorporate a biogas facility to show how all the animal waste material, not just the SRM material, can be utilized to produce green power, electricity, and organic fertilizers. Basically it's a closed-loop system where there is no waste material, period, and you end up with value-added products from all of these streams.

[Alex Atamanenko, NDP, British Columbia Southern Interior, BC]

Mr. Donner, this idea seems to be the answer in the long run.

Have there been discussions about funding for a pilot project, in other words to get one operation going in conjunction with two levels of government and private industry, and then showcase this, as was mentioned, so that it could be applied right across our country?

[John Donner]

You mentioned my minister's excitement about bioenergy. Certainly we have a bioenergy program that includes the development of biodigestion.

We have a pilot project through the Alberta Research Council, which has a demonstration facility for an integrated manure management system. It's part of the platform that we're talking about here for developing this entire system of managing waste and turning it into value.

In terms of resourcing this, I've indicated that over a third of the resources for SRM removal go in support of these kinds of technologies. We're going to be looking for applications. We're not looking to fund one plant, but certainly the vision of complimenting a rendering system and collection with regional thermal hydrolysis, creating a dynamic market for SRM, is part of how we see alleviating the cost pressure to producers and translating the value, which these gentlemen are talking about, to the producing community.

[Alex Atamanenko, NDP, British Columbia Southern Interior, BC]

So are we going to see something, on paper at least, before July?

[John Donner]

It'll be up to these gentlemen to respond to the applications, but we're hoping to get those applications out PDQ.

[Stan Schellenberger]

The problem is timing and applications, and we've been talking both to the federal and provincial governments. The deadline is set. It does take eight to ten months to a year to build a facility. We've known about this for quite a number of months now. We've been chasing our good people in government, but you can see there's a level of frustration amongst producers and producer-owned plants that we have this challenge.

Methane production from protein, when you put it in these biodigesters, is much better than manure. In fact, if you add up to 23% of protein from a packing plant into a biodigester, you get a surge of methane because the little archaea really like this product. So instead of landfilling that and trying then to capture the methane, which is a greenhouse gas, you immediately capture it all and produce electricity and all the other things that come with that.

The frustration is timing. We need to get started with this and hope we have enough money. The problem often is that you just get enough money from these programs to be dangerous. You can't get enough to actually build it and operate, and that's the frustration that a lot of the greenfield start-up projects tend to suffer.

[Harvey Brooks]

Just to address the issue of technology and the handling of the SRMs, I would like to add that we have one of the newest plants in Canada in Saskatchewan, Natural Valley Farms in Neudorf. They have a solution that sees almost the entirety of the SRMs, and in fact all the animal waste, remain on farm. It's composted on site, and after composting it is then filtered, fed into the boiler system, and burnt as a fuel, and they capture the heat from that as well. So it is a self-contained solution that uses the latest technology.

[Alex Atamanenko, NDP, British Columbia Southern Interior, BC]

Do I have another...?

[The Chair, Conservative, James Bezan]

Yes, a little bit of time.

[Alex Atamanenko, NDP, British Columbia Southern Interior, BC]

My next question deals with the challenges facing especially smaller businesses, processors, and one of you gentlemen mentioned the reality that more animals might go south for slaughter.

Is the feeling on the ground that there is a danger of some of our small packing houses going out of business because they're unable to meet the deadline, they don't have the funding of the large companies? And is there something in place as part of this agreement, or otherwise, to assist them in time so that we don't have job losses and we don't have more animals going south and plants shutting down in our small communities?

If anybody could answer that, it would be great.

[Dr. Brian Evans]

I'll seek assistance from others involved in that type of programming.

Mr. Chair, in responding to that, I would just come back to the important fact that with the smaller facilities, of course, in preparing the legislation, in addition to the 12-month window from last June until July of this year, there's been an additional six months beyond that to again help them and try to resolve a number of the issues you've raised.

I think the purpose of the legislation has been very clear and very well supported by all, and perhaps one of the dynamics that we continue to hear as a challenge for people is that unlike most legislation, which is very prescriptive and gives you very little room to figure out how you're going to do something, this legislation was worked on for an extended period of time to provide for these flexibilities, to look at new technology, to be open and adaptive and conceptual, to say that there are many ways we can achieve the outcome and to create that R and D environment and find that alternate use.

Maybe we've done a disservice by being so flexible because it's created this dynamic of everybody looking at opportunities, but the ability to do composting, to do biofuels, and to do these thermo and other processes I think is actually, at the end of the day, a win-win for us.

But again, to address the issue of whether all the smaller facilities will be able to take advantage, I think we've heard clearly, both from the provinces and some of the industry people, that it may not in fact be the case in the longer term.

In terms of other programming, I don't know, Graham or Susie, if there's anything you would share from a departmental perspective in terms of the support that has been ongoing from government to the various industry sectors as we continue the longer strategy of full recovery from BSE.

[The Chair, Conservative, James Bezan]

Be really, really quick, because we are out of time on this round.

[John Donner]

I would just point out that we have some provincial funding targeted to provincial assistance. As has been noted, the thermal hydrolysis has accelerated from when we thought it would be available. That is part of what's happened over the last three years; the imminence of that technology and its reality has really changed the nature of the market.

[The Chair, Conservative, James Bezan]

Mr. Brooks.

[Harvey Brooks]

Just to reiterate our points again, the two federally inspected slaughter plants account for over 95% of our slaughter in the province. So when we talk about the other 85 or so plants in the province, we are talking of smaller numbers—very small numbers in some cases.

Those who have the ability to keep the SRMs onsite for landfill or composting, I believe, will have a reasonably lower cost solution. For those who have to transport it off-site, we are hoping the renderer in Saskatoon will be a solution for them.

But as I said, the geographic dispersion of our smaller processors essentially means they cover the bottom half of the province. So we are still working toward that solution.

[The Chair, Conservative, James Bezan]

Mr. Easter for five minutes, please.

[Wayne Easter, Liberal, Malpeque, PE]

Thank you, Mr. Chair, and thank you, folks, for coming.

I think you're aware that this meeting was really called as an emergency meeting as a result of our absolute shock at what the industry told us at a meeting a little over a week ago.

I think Mr. Evans outlined in his presentation the tremendous market recovery we've had and the absolute need to meet our targets.

The two things that shook us were that no one, in terms of the whole industry who was here, seemed to be able to tell us where the $80 million was, where it was being spent, and how far along the line we were in terms of meeting our commitments. What was even more shocking was the fact that no one seemed to know who was in charge.

We know who will bear the cost at the end of the day, and Denis Laycraft said that if we don't meet these obligations, “The reality on July 13 is that the product that was worth $150 to $200 a head is going to be worth about minus $60 to minus $80 a tonne. In the U.S. it's still going to be worth $150 to $200 a tonne, so they're going to be competing for those cattle.”

As usual, the cost is going to be borne by the farm community. That's clear.

So my first question is, who has ultimate authority and responsibility for this issue in this country? Is it the federal minister?

[Dr. Brian Evans]

Thank you, honourable member.

Certainly, from my perspective, in terms of the design of the regulation and its ability to achieve the outcomes necessary to sustain public confidence in our food supply domestically and with our international trading partners, and in terms of our ability to leverage that into economic recovery, I would say unequivocally we have a federal lead in achieving that.

Again, when we get into the area of the matching funding and the disbursement of funding to support that, it becomes a shared jurisdiction among all agricultural ministers. I don't know if others would see it differently, but that would be my perspective.

In terms of CFIA's role specifically, honourable member, as I said, we did put together an implementation task force led by Freeman Libby, with us today. So we do take significant lead responsibility in ensuring that the issues are identified and that we have mechanisms to address them.