Agriculture Committee on Feb. 7th, 2008

[Ken Boshcoff, Liberal, Thunder Bay—Rainy River, ON]

Mr. Chair, the point was raised that there is a backlog in the Senate, and I tried to find out what the backlog for this process was in terms of other bills. My question is absolutely relevant to this in terms of the process of moving it through.

[The Chair, Conservative, James Bezan]

I would say we are talking about Bill C-33, Minister. You don't have to talk about the other bills that Mr. Boshcoff has alluded to. We're talking about this process and moving it forward from here.

Mr. Boshcoff should keep his comments about Bill C-33 and the way forward and the attributes of the bill.

[Ken Boshcoff, Liberal, Thunder Bay—Rainy River, ON]

With all respect, Mr. Chairman, I didn't raise the point about the backlog of the process, in terms of the expeditiousness. If the minister happens to be chronologically challenged, that is not my problem.

Thank you.

[Gerry Ritz, Conservative, Battlefords—Lloydminster, SK]

Being chronologically challenged is the least of my worries, thank you. My wife could probably give you a more fulsome list, Ken.

[The Chair, Conservative, James Bezan]

You have 30 seconds left, Mr. Boshcoff.

[Ken Boshcoff, Liberal, Thunder Bay—Rainy River, ON]

The question is from the Canadian Vehicle Manufacturers' Association: could the bill not be broadened to improve infrastructure for E85 and other renewable fuels?

[Gerry Ritz, Conservative, Battlefords—Lloydminster, SK]

Since we're talking about blending it 2% and 5%, I don't understand why we would want to broaden anything at this point. Let's get the industry up and running. Let's make sure we have our market share. I think distribution will take care of itself once we have the product.

For lack of better terminology, it's a bit of a chicken-and-egg scenario. This is the first step of many we intend to take. We're certainly cognizant of the fact that there has to be a distribution system parallel to the other, as we get up to E85. We're a long way from E85.

There are a couple of sites at this moment in Ottawa. I happen to have one on the farm here at the Carling Building that my car fuels up with all the time, E85. We do have another site at Iogen here in Ottawa as well.

The vehicles being produced are E85-compatible. They can go to that extent, so there's no problem at all as we seek to expand the 5% and up. It's what the industry can bear.

I'm cognizant of the arguments that as we move those goalposts, the hue and cry that we're not going to produce food, we're going to produce energy, comes more to bear. We have to walk before we can run; this is the first step.

[The Chair, Conservative, James Bezan]

Time has expired.

Minister Ritz, just for clarification on Mr. Boshcoff's point, the 5% and 2% content is based on an average of all fuels, is it not?

[Gerry Ritz, Conservative, Battlefords—Lloydminster, SK]

Yes, it is, and includes heating oil too, on the biodiesel side.

[The Chair, Conservative, James Bezan]

Okay, and just for Mr. Boshcoff--

[Gerry Ritz, Conservative, Battlefords—Lloydminster, SK]

It's significant. As I said, three billion litres of product are going to be required to meet those two goals.

[The Chair, Conservative, James Bezan]

Just for Mr. Boshcoff's information, the Canadian Vehicle Manufacturers' Association will be appearing before the committee on February 26.

We turn it over to Mr. Lauzon.

[Guy Lauzon, Conservative, Stormont—Dundas—South Glengarry, ON]

Thank you very much, Mr. Chair.

Welcome, Minister and guests.

Minister, the hallmark of your ministry so far as minister has been to put farmers first. That seems to be the way you operate the department. I respect that and think it's the way we should go. That's why I'm a little confused when we get different elements from our official opposition. They tell us we're going too fast, and then when we debate this in the House they tell us we're going too slow and not far enough.

One of the points that was made during the second reading of the bill in the House was that this was going to affect the food supply. I have a quote here from the president of the Canola Council, JoAnne Buth. She says there's enough canola production in Canada--primarily in western Canada--to fill about 70% of the 2% mandate without impacting the amount that goes for food. So that tells me the official opposition's position that this is going to have an impact on food is probably not tremendously credible.

Do you have an opinion on that?

[Gerry Ritz, Conservative, Battlefords—Lloydminster, SK]

I tend to agree with the industry. We had fulsome discussions with them as to what could be produced. There are a lot of groups out there saying if this is so great for the environment why aren't we going further, faster. As I said, this is the first step in a long chain of events that need to take place.

I am fully convinced that given the innovation and efficiency of our farmers in Canada, we can easily meet this target and go beyond it, but we want to make sure the physical capacities are there. We have to be cognizant of the fact that every year is a new adventure when it comes to weather, and so forth, across the country. We also want to be very careful that we don't set the stage so high that our producers can't meet it and we have to start importing, because once you start opening those gates to imports it's pretty hard to turn them off again.

So that's a lot of what has gone into the mix, Mr. Lauzon.

[Guy Lauzon, Conservative, Stormont—Dundas—South Glengarry, ON]

Thank you very much.

Earlier, in answering a question you mentioned KVD, which leads to my next question. We heard from the Canadian biotechnology sector in the fall that the removal of KVD would allow new varieties to be grown throughout Canada, significantly increasing the crop yield. I think you alluded to that. Could you expand a little more on what the removal of KVD would mean to production?

[Gerry Ritz, Conservative, Battlefords—Lloydminster, SK]

It's more reflective of what could happen in western Canada, of course, where the big acres are. That's the only place left on the globe where KVD is still in play. Ontario was fortunate enough to have a removal of KVD requirements in 1989, so we've seen a tremendous leap ahead in new varieties in the Ontario market. I think the same thing can happen in western Canada. Economies of scale will kick in. As I said, there were a number of winter wheat varieties developed.

Brian Fowler, a crop scientist at the University of Saskatchewan in Saskatoon, developed some six or seven new varieties. Field trials were done, but he wasn't able to go into production with them in Canada because of KVD. They're all being produced in North Dakota, Montana, and places south of the border.

Getting rid of KVD also removes the requirement for KVD on imports, so we can start to bring those in and gain back some of the ground we've lost over the last number of years in getting products specifically developed for the ethanol lines.

A tremendous amount of work is being done on the cellulosic side that gets away from grains as a feedstock and starts to use the straw and residue. We have a project slated for Saskatchewan. I had a meeting yesterday with Jeff Passmore of Iogen. There's a project slated for north-central Saskatchewan that will make use of farmers' straw, wood chips from the mills, and so on.

So I think there's a tremendous opportunity to use both lines. If we're concerned about the food line, then we need to develop the cellulosic line.

[Guy Lauzon, Conservative, Stormont—Dundas—South Glengarry, ON]

If we remove the need for KVD, that will help the farmer's bottom line as well. There's an extra expense there that obviously ends up being against the farmer's bottom line.

[Gerry Ritz, Conservative, Battlefords—Lloydminster, SK]

I would like to think so. Right now there is a tremendous number of opportunities, more so in the niche markets around the globe. Even domestically there are far more opportunities in niche markets that are not being filled because we don't have the product to do it.

We've moved away from the hewers of wood and drawers of water analogy that used to work, with big-volume shipments to other countries, and so on. That's not happening any more to the same extent. They're all asking for a specific product blended in a certain way, and getting rid of KVD will allow us to fill those markets in a more fulsome way and return those dollars to the farm gate.

Let's do it.

[Guy Lauzon, Conservative, Stormont—Dundas—South Glengarry, ON]

Thank you very much.

[The Chair, Conservative, James Bezan]

Thank you.

Madame Thaï Thi Lac.

[Ève-Mary Thaï Thi Lac, Bloc, Saint-Hyacinthe—Bagot, QC]

Good morning, Mr. Minister.

In a 2006 study, Agriculture Canada estimated that to reach the objective of 5% of fuel consumption by 2010, that is, 2.74 billion litres of ethanol and 0.36 billion litres of biofuel, we would need 4.6 million tonnes of corn, 2.3 million tonnes of wheat and 0.56 million tonnes of canola.

Do you think that Canada can produce these quantities?

[Gerry Ritz, Conservative, Battlefords—Lloydminster, SK]

Yes.

[Ève-Mary Thaï Thi Lac, Bloc, Saint-Hyacinthe—Bagot, QC]

Fine.

[Gerry Ritz, Conservative, Battlefords—Lloydminster, SK]

Absolutely.

[Ève-Mary Thaï Thi Lac, Bloc, Saint-Hyacinthe—Bagot, QC]

How much land will be needed to grow these crops?