Evidence of meeting #14 for Agriculture and Agri-Food in the 39th Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was biofuels.
A recording is available from Parliament.
10:25 a.m.
Researcher, National Farmers Union
I want to respond to that, if I could.
10:25 a.m.
Conservative
The Chair Conservative James Bezan
You can, but very briefly. We do have time considerations, because other committee members want to get on the floor. Mr. Storseth's time has expired, so you can make just a very brief comment of about 15 to 20 seconds.
10:30 a.m.
Researcher, National Farmers Union
On the subsidy part of it, the Manitoba government provides a 20¢-per-litre subsidy and the federal government 10¢, so that's 30¢. That is how my analysis comes to $1 million per job per year.
If we're going to spend that money, there are a lot better places to spend it in terms of providing jobs. We could be doing geothermal heating. We could be doing a number of proven initiatives that work.
I'm surprised at Brian. The gist of his party is to remove subsidies and now he's talking about adding to subsidies. I'm really confused.
10:30 a.m.
Conservative
The Chair Conservative James Bezan
Thank you.
We do have to move on.
Madame Thi Lac, pour cinq minutes.
10:30 a.m.
Bloc
Ève-Mary Thaï Thi Lac Bloc Saint-Hyacinthe—Bagot, QC
Good morning. Thank you all for coming here today and providing us with your presentation.
I am aware that it is absolutely essential that we be made aware of the use of new fuels. My question is for Mr. Friesen and Mr. Sigurdson.
We have heard conflicting testimony about the transition to biofuels. People on either side of the issue refer to studies that support their arguments. We have to assess the real impact on the rural regions. We support the bill in principle, because we are indeed trying to reduce our dependency on oil, but it will be crucial that our farmers be able to survive this transition. I would like to hear your opinion on the real impact that these changes will have on the rural regions.
10:30 a.m.
President, Canadian Federation of Agriculture
We think it's going to be very positive.
I've been sitting here listening to an awful lot of distraction from the positive nature of what we think this initiative can add to agriculture.
We don't need any studies. We've been complaining that we weren't out of the gate faster than we were and have been looking at the U.S. and Brazil enviously, wondering why the heck we weren't there.
Instead of being a fire hose on this initiative, I think it behooves us, if we have concerns, to get together and work out those concerns. But let's not dump on the entire initiative. We think it can be very positive for a grains and oilseeds sector that for the last six years has been losing money. Finally they're getting some money for what they're producing and are making a profit. If that is adding a challenge to other sectors, let's find solutions for those sectors.
As for a food shortage, we currently do not have a food shortage in the world. We may have a distribution problem. We may have a poverty problem in areas of some countries and in parts of Canada, but we do not have a food shortage.
Are the stocks to use ratios at an all-time low? Yes, they are, but you know, they were at an all-time low, according to history, when the price of grain starting going down. We have million and millions of acres of set-aside in the U.S. We have millions of acres of set-aside in the EU. We have farmers now finally getting a return on investment when they spend some money on fertilizer so they can actually increase their production on a per-acre basis. We're going to be able to deal with these challenges.
Last week we were at this committee talking about the demand for fertilizer. That tells me that farmers are going to increase their production because they're seeing a return on their investment.
Having said all that, we think this is a positive initiative. Yes, it is a challenge to the livestock sector currently, but they have, as I said earlier, other challenges.
Our farmer members talk to U.S. farmers, and they see that farmers made money on corn over the last six years. They were participating in the ownership of manufacturing companies. They saw profits there. Yes, they used a lot of taxpayer dollars, and that's why we're going to have to have competitive policy. But we've been looking at them enviously.
Let's find solutions to the concerns we have, and let's move ahead with this as quickly as we can, because our members are waiting for more and more action.
10:30 a.m.
Researcher, National Farmers Union
No, she asked me the question. I'm sorry.
10:35 a.m.
Conservative
10:35 a.m.
Researcher, National Farmers Union
Biofuels are highly dependent on the fossil fuels, and you cannot call something that dependent on fossil fuels alternate energy. The studies I cited.... There's almost a new one a week stating the problems with ethanol.
Paul Crutzen of the OECD did a study. He's a Nobel prize-winning scientist, and he determined there was more CO2 from biodiesel in Europe than from the straight use of fuel.
Anyway, Brazil has sugar cane. The United States has corn and surplus corn. We are net importers of corn, as I said, from the Manitoba-Saskatchewan border east, and it makes very little sense to me that we would build an ethanol plant in southern Ontario or in Quebec or anywhere and then import the corn to supply the feedstock for that.
With regard to the impact on farmers, a lot of farmers in the communities in western Canada get together and put a few thousand dollars into these things, and that's about as far as it goes. These are expensive things to set up. And what happened in Manitoba is that Husky got the total mandate. In Saskatchewan, Husky has a big portion of the mandate there as well for ethanol.
As a farmer, I certainly wouldn't want to invest in an ethanol plant so I could sell them low-valued grain so they could succeed, and that's really what would have to take place here.
10:35 a.m.
Conservative
Larry Miller Conservative Bruce—Grey—Owen Sound, ON
Thank you, Mr. Chairman.
I'd like to thank all the witnesses for coming here today.
We've heard, for the most part, a reasonably balanced approach to Bill C-33.
Mr. Friesen recognized that there are some problems in there. I liked your comments that we have to look at the whole picture. I think that was good.
Mr. Sigurdson, I'm not just sure how many days or weeks you spent trying to drum up every negative thing you could find on the biofuel industry, but I would just suggest that, as a farmer myself, maybe you should concentrate on the whole approach for your members. Farmers have to be diverse and learn to change and adapt with the times. I'd suggest that might be a more balanced approach.
One thing that has come out here today is a comment I've heard before that one of the reasons for the increase in grain prices is biofuels. I think that's probably a fair statement. It certainly has had some impact. But we all know that the grain prices seem to have hills and valleys.
Something I'm hearing out there more and more, and I'd like some comments on this, is that a lot of people seem to think that maybe the biofuels industry may take some of those hills and valleys out over time. Are there any comments out there, Mr. Phillips, Mr. Quaiattini, or Mr. Chorney?
10:35 a.m.
Vice-President, Canadian Canola Growers Association
Our view on the biodiesel side of it is that as canola oil has been recognized as being a very healthy oil, our premium market is the food market, and we absolutely recognize that. Our hope is that the biodiesel industry and the biofuels policies that we're looking for in this bill that is being pushed forward will lower the limits that our price will fall. I'm hoping we'll never see $5 canola again. I understand that $13 canola is a good return from a producer's perspective, but these things happen in cycles, as you're well aware, and our view and our hope is that this biodiesel strategy that is part of Bill C-33 is a step forward in reducing the bottom end of our cycle.
10:35 a.m.
Executive Director, Grain Growers of Canada
I think it will provide a much stronger floor base underneath. This is what you'll see happening.
Beyond that, I want to talk about the income back to the farmers. Brian mentioned 2 million to 2.5 million tonnes of canola being used. We're paying $40 to $50 a tonne for freight to ocean. That alone is $80 million to $100 million back in our pockets as well.
I think Tim wants in on this too, Mr. Miller.
10:40 a.m.
President and Chief Executive Officer, Biox Corporation
In support of that, I'd like to just make a very brief comment. I won't burn your time.
What is important about this bill is that it allows petroleum and feedstock to decouple. It allows the biodiesel industry to be predicated on the feedstock market that these gentlemen are producing. So it allows the decoupling. We have seen in the world with decoupled markets that renewable fuels are actually cheaper than petroleum-based. We don't know where petroleum is going to go, but we know with the mandate it will decouple. We have this opportunity to settle down, predicating on what the feedstock market is costing, not on what the commodity price is set at by large oil and gas companies. That is just a small point.
10:40 a.m.
Conservative
Larry Miller Conservative Bruce—Grey—Owen Sound, ON
Mr. Friesen, I liked your comment that no one out there wants grain growers' or oilseed producers' prices to go down in order to save or to help the livestock industry. I'm glad to hear you say that, because although we recognize the problems in there, we don't want one sector of agriculture to suffer for the others.
It's a fair statement, I think you would agree. Obviously CFA's approach to this is quite the opposite of the NFU's. I guess you'd agree with that.
You touched a little on co-ops, and I'd like you to comment on them, and possibly Mr. Chorney or Mr. Quaiattini as well. What can we do here to promote more co-ops? I've always been a believer that if you get something farm grown, it takes that big business aspect out of it and basically puts more return to the grassroots producers. Perhaps you could comment on that.
10:40 a.m.
Conservative
10:40 a.m.
President, Canadian Federation of Agriculture
The one place where I think the National Farmers Union agrees with the Canadian Federation of Agriculture is farmer empowerment. What better way to empower farmers than to have a Cargill ethanol plant and Loblaws bid for the same bushel of corn. I'll leave it at that.
On the co-op investment plan, yes, we think a fairly small amount of money on a national level in the way of tax concessions would generate a lot of investment capital for co-ops and strengthen farmers' positions in co-ops, and then further result in accruing a lot of investment in rural development as well. We think this would be an excellent initiative to tie together with the biofuel initiative.
February 12th, 2008 / 10:40 a.m.
Liberal
Ken Boshcoff Liberal Thunder Bay—Rainy River, ON
Thank you very much, Mr. Chair.
Today is February 11. The first reading was on December 3, so it has been almost 70 days. I'm just wondering if you are concerned that the government is deliberately holding this up or delaying or stonewalling this.
10:40 a.m.
President, Canadian Renewable Fuels Association
I have no concern at all that the government is holding this bill up.