Agriculture Committee on May 7th, 2014

[Ruth Ellen Brosseau, NDP, Berthier—Maskinongé, QC]

Carla, you had quite a few recommendations. Is it possible to have your statement...? I guess we'll have it in the blues, but I wonder whether you could again go over the regulatory management modernization that needs to be done. I would like those comments again, please.

[Carla Ventin]

Sure. I will provide a translation of my statement in both official languages following this meeting.

The key for us in regulatory modernization is that Health Canada holds our regulations, and these regulations have not been updated for a very long time. So we see delays in product approvals, and innovative products are just not being approved.

The two recommendations that we had were to reinstate the $17.4 million to Health Canada, which used to be given from Agriculture and Agri-Food Canada to Health Canada specifically for food regulatory reform. The result of that was very positive. We saw a lot of movement, for example, on food additives. Whereas we used to have food additives in the queue for up to 10 years to get approval, now it's down to about two to three years. That's fantastic.

[The Chair, Conservative, Bev Shipley]

Thank you. That was very good.

Now we'll go to Mr. Payne, please, for five minutes.

[LaVar Payne, Conservative, Medicine Hat, AB]

Thank you, Mr. Chair.

I'd like to thank all the witnesses for appearing on video. I was a bit concerned about the innovation here when we lost the video. That is a big part of innovation, I believe, in helping our committees.

Welcome, Gerald. How are you doing?

[Gerald Third]

How are you?

[LaVar Payne, Conservative, Medicine Hat, AB]

I'm good.

[Gerald Third]

That's wonderful.

[LaVar Payne, Conservative, Medicine Hat, AB]

I know that our government has given a fair number of dollars to the sugar beets facilities. One thing, I understand, is that we were turning sugar beets into aspartic acid. Can you give us an update on what is going on there, if you have any insight into it?

[Gerald Third]

Certainly.

The aspartic acid program that was initiated here a few years back has hit a typical roadblock, and that is that it's competing with a petroleum-based product. As long as the petroleum-based products are hovering in the $100-per-barrel range, it is not practical to make aspartic or polyaspartic acid from sugar beet residue. Once the cost of a barrel of oil goes up, then it becomes competitive, but right now that particular project is stalled because of the price of a barrel of oil and the competitive nature of it.

[LaVar Payne, Conservative, Medicine Hat, AB]

I was there last year and made an announcement of some funding you got for some research that was going on. Is this a different piece of research, for petrochemicals, from that for which the funding was provided?

[Gerald Third]

Yes, the aspartic acid project was put on by a different organization a few years back. It is very active in Taber, but it has stalled. The research funding we received, for which we were extremely grateful for, was for bio-glycol to convert sugar beets into glycol, which would be plastic for the food industry, for cosmetics, etc. That was that project.

[LaVar Payne, Conservative, Medicine Hat, AB]

How is that project going?

[Gerald Third]

We reached a crossroads. I referred to the pre-commercialization roadblock. While the research works phenomenally well, we found enormous hurdles and hills to climb during that valley of death, so to speak, between getting from the lab bench and pilot plant stage we are at to commercialization.

Those are enormous obstacles, and there was nothing for us. We wrote this book specifically because of the number of hurdles and challenges we faced, and there were no answers. We had to carve this road ourselves.

[LaVar Payne, Conservative, Medicine Hat, AB]

It's an interesting challenge, obviously.

Mr. Graham, I have Canadian Fertilizers Limited in my backyard, almost. They make nitrogen and ammonia fertilizers. You talked about some projects in Alberta, about farmers and reduction of greenhouse gases. Do you have any more details that you could provide us on that subject? Do you have any data to show where there has been a reduction, or how much, and how many farmers have been involved?

[Clyde Graham]

Sure.

We talk to hundreds of farmers in Alberta. We're trying to set the table to allow farmers to participate in an offset program, whereby they can get offset payments through the Alberta government offset program.

We don't have any projects under way, although we have an announcement with Capital Power Corporation, and we're hopeful that this project will get under way this year. It is a difficult process, in that there's a lot of paperwork and documentation under the Alberta system, but we've also had a lot of support from the Alberta government to work with us and work with the growers to get them ready to take advantage of this opportunity.

When you apply nitrogen fertilizer in the soil, you can lose nitrous oxide, which is a potent greenhouse gas, 300 times more potent than CO₂. But if you use 4R nutrient principles and are more efficient in your fertilizer application, more of the nitrogen goes into the crop and less into the air, and you can reduce your emissions. That's the 15% to 25% reduction that we were talking about.

But more importantly for growers in Alberta, if they take those actions they will also produce more grain from the fertilizer they use, and that can increase their profitability. That was shown by the study done with George Morris indicating that, depending on how aggressive they are, they could increase their profitability by nearly $90 an acre, which is very significant—more significant than the offset payments that they might receive as well.

[LaVar Payne, Conservative, Medicine Hat, AB]

All right. Thank you.

[The Chair, Conservative, Bev Shipley]

Your five minutes is up. Thank you very much.

Now we'll go to Mr. Eyking for five minutes, please.

[Mark Eyking, Liberal, Sydney—Victoria, NS]

Thank you, Chair.

Thank you, folks, for coming today. We're sorry for the delay because of the votes in the House, but here we go.

My first question is to you, Carla. It's about the cutbacks. You mentioned cutbacks, I think by Health Canada, slowing down product introduction.

But you also stated that there were cutbacks or that there was no approval of funding under Growing Forward 2—was it?—for research. Can you give me a quick snapshot of what is happening? If research has been cut back and approval mechanisms are cut, how is that going to impact your products, especially if we're going to be looking at introducing products into European markets?

[Carla Ventin]

What I was referring to is that Agriculture and Agri-Food Canada provided $17.4 million to Health Canada specifically for food regulatory reform, and that worked very well. As I mentioned earlier, we saw a lot of improvements with food additives.

So the approval process for this was sped up. That was extremely important. Why is it important? It is because you cannot encourage innovation in Canada if it may take up to 10 years to get your product approved.

I'm not talking about compromising safety, because safety is a priority not only of the government but also of companies, of course. To encourage innovation by food manufacturers, you want to be able to say that once you actually produce some innovative product, it will take x amount of time to get it on store shelves.

The problem is these delays. In Growing Forward 2 there were no funds provided to Health Canada to modernize the food regulations.

It is a bit odd that Agriculture Canada would be providing money to another department, but that's just the way our industry is governed. Our home is in Agriculture and Agri-Food Canada, and Health Canada holds our regulations.

[Mark Eyking, Liberal, Sydney—Victoria, NS]

Thank you.

My next question is probably going to be to Carla but also to the Canadian Food and Wine Institute. There is some talk maybe of legislation that might be introduced or motions introduced in the House dealing with the mandatory labelling of GMOs. Right now, it's voluntary, GMOs are. To some extent, this is happening in Europe.

But how critical would your industry be or what kind of problems would your industries have if all of a sudden for some reason there was mandatory labelling for GMOs? Because we're talking about research here and the research so far is that GMO foods are fine to eat. There's no problem with them.

[Carla Ventin]

Right. So how do you start off here?

Just with GM labelling, as you say, there are no credible studies that say that GM foods are any different or less safe than conventionally made food. So that's one thing.

Another key thing on the GM labelling issue is choice. We already have a voluntary GM labelling system, as you know, in Canada, and we have the Canadian Organic Standards. So if you want to buy GM-free, you go to the grocery store or wherever you shop and you can buy that. So there already is the choice aspect.

How would it impact? There will be a huge cost if there's mandatory GM labelling on food products. I've seen figures that between 70% to 80% of packaged foods currently have some percentage of GM ingredients. So there would be a cost along the whole value chain and ultimately to consumers.

[Mark Eyking, Liberal, Sydney—Victoria, NS]

To the Food and Wine Institute....

[Dr. Marc Nantel]

I'll let Nigel handle this one.

[Nigel Corish]

Yes, thank you.

I agree in large part with what Carla was saying. I think that from our perspective, we work predominantly with the small and medium-sized processors, growers, value-adders. The costs will be incurred. It will be passed down the value chain, without a doubt. It will be a challenge for them. So without further evidence to indicate whether GMO products do have an impact, it's hard to say from a more holistic perspective but in terms of the financial impacts to the processors, there certainly will be one. To what extent, I can't comment, but we would see certainly some impact to them.

Would it impact innovation? I'm not sure about that. Would it impact competitiveness? Perhaps.

So, yes, I think that's my input on that. Thank you.

[The Chair, Conservative, Bev Shipley]

Thank you very much, Mr. Eyking.