Thank you, Mr. Chairman.
Honourable members of the committee, good afternoon. My name is Glen Metzler and I am the CEO of API Labs, a company based in Lethbridge, Alberta, whose bold mission is to establish a fully fledged commercial poppy industry for Canada. I'm joined by Mr. Ryan Mercer of Mercer Seeds. He is an Alberta farmer, past president of the Alberta Seed Growers Association, and a board member for API Labs.
Forty years ago the canola industry was non-existent in Canada. Through Canadian innovation, we are now responsible for 25% of all farm gate sales and contribute nearly $27 billion to the Canadian economy. We would like to repeat this success with new crops like poppy seed production in Canada. This would offer diversification to the existing crop rotation, create export and economic opportunities, and further our collective mission to lead the world in agricultural practice. Here is how.
As a food crop, the value of poppy resides in the oil-rich seeds, which have a long tradition in a number of global cuisines. Today poppies are only commercially cultivated in a few countries, rendering them an import commodity for every other country on the globe. Canada and all of North America import 100% of their culinary poppy seeds. These seeds come from a number of sources. The integrity of the supply chain from seed to crop to packaged product is always a critical aspect of food safety.
Supporting commercially viable domestic poppy seed cultivation as a food crop would ensure our supply chain in Canada and present opportunities for export. Although poppy seeds are mainly processed as a condiment, additional novel uses, such as high-quality food grade oil, animal feed supplements, biofuel, and cosmetic and industrial applications may also be developed. Annual global exports for poppy seed are approximately 250,000 tonnes with an average price of $3,300 per tonne. Our company has already received opening orders for up to 10,000 tonnes per year, but we cannot get products to foreign markets without Health Canada approval. More on that in a minute.
For its part, Canada is the only G7 country that does not commercially produce or process poppies. The opportunity to move into new crops and sectors is synonymous with economic growth and is aligned with the federal Minister of Agriculture's partnership strategy and the Minister of Innovation, Science and Economic Development's innovation strategy. Countries such as the U.K., Portugal, France, and Australia have all established commercial poppy cultivation. Surely we can match and compete with the success seen in these countries.
The economic benefits of poppy cultivation are clear: job creation, capital expenditure projects, value-added processing, and a positive economic multiplier effect. Commercial poppy cultivation represents an untapped potential for crop diversification, for economic growth, and for harnessing the power of agriculture innovation to increase Canadian exports.
Since 2007, API Labs has been working towards the goal of commercializing poppy cultivation in Canada. We have built an excellent R and D program, and since 2015 we've been on the cusp of commercializing our technology for the benefit of Albertans and Canadians—but here is our central challenge. The federal government is encouraging innovation with one hand, but with the other hand, in our experience, it has blocked our ability to commercialize our innovation.
For example, API Labs has received over $2 million in investment and loans from the federal government, including a repayable loan under the Canadian agriculture adaptation program that cannot be paid back without a commercial revenue stream.
We have also raised several times that amount from investors and farmers from the prairies who are eager to add poppy seed to their crop rotation, but since 2015 we've been struggling to get the necessary regulatory approvals from Health Canada for the commercialization of poppy seed cultivation. Health Canada has given us approval to conduct research and development in this sector for the last several years, but they continue to delay and deny approval for us to commercialize. Our current application is only for eight hectares, as a basis to eventually scale up our production.
We're really frustrated and disappointed at the lack of progress. Surely this government and all parties want to recognize the value of agricultural innovation to help include our small, medium, and large producers as champions in a global marketplace. Let us get the right policy mix here at home for our farmers and businesses and all Canadians.
To achieve a thriving domestic poppy seed industry in Canada, we would respectfully make the following three policy recommendations for your consideration in your report.
First, we need to encourage private sector partnerships with academic institutions.
Second, we should also introduce more innovative financing mechanisms for small and medium-sized enterprises to raise private capital—for example, flow-through shares.
Third and most importantly, we must create a clear and transparent approvals system for agricultural products that are covered by the Health Canada jurisdiction.
Thank you for your time. I look forward to your questions.