Agriculture Committee on Sept. 20th, 2018

[Lloyd Longfield, Liberal, Guelph, ON]

Yes, I saw that.

[Andrew Casey]

—and 30% of the fuel on that flight was Agrisoma fuel. Earlier in the year, Qantas Airways did likewise from Melbourne to Los Angeles, and I think it was the same mix.

There are a couple of challenges for sure. One is whether you can produce enough to meet the growing demand. I suspect you could probably not produce enough oilseed to meet the demand from aviation. Maybe you can buy off sectors of it, for sure, and then the technology could be used for other fuels as well. As you pointed out, it could be used for cars, and there's also another company that's just making a lubricant type of oil using the same sort of technology.

For sure, the challenge is going to be how much feedstock you can produce to meet the growing demand, especially as global fuel prices go up and the demand becomes insatiable. That will be the challenge.

[Lloyd Longfield, Liberal, Guelph, ON]

At the same time, Bombardier is developing fuel-efficient transport planes, which combine reduced fuel consumption with giving us an alternate. That is an example of the carbon economy transition we're working on. To change behaviour, you have to change the economics. You have to put a price on pollution, and you have to look at how you incent the development of some of these scientific opportunities.

[Andrew Casey]

That's right. When it comes to aviation, it's unlikely the airlines are going to pay more unless there's an incentive to do so. The incentive can be public reputation, and there's certainly a price that you can put on that. However, when you move into the world of carbon taxes and other things, that's probably what's going to drive the market to an extent at some point in time.

[Lloyd Longfield, Liberal, Guelph, ON]

Right. Mr. Ruest, I think you're bang on the mark that regulations get in the way of export development because of non-scientific pressures being put onto the market.

We toured a Syngenta farm this summer. We had an all-party tour, with one of our senators also attending. We take product off the market, like the neonics or the glyphosates, but we don't have solutions in place for replacement, or the cost and time required to develop alternate solutions. Could you comment on your company's investments in the areas of fertilizing and protecting crops?

[Jean-Marc Ruest]

We're not in the development of products per se. We are a retailer of those products to our farm customers, so I guess we have a frontline view of how producers use those products. We offer agronomic services as well, to assist producers in the development of their crops.

The point you make is a very valid one though. If we deregister these products that are in wide use and are critical to farming practice as we currently know it, what then? The pests they're intended to control, whether they're insects or weeds, will grow and propagate themselves, so something will have to be done. There needs to be an analysis then of what product will be used and what the consequence will be of that new product or practice. It may mean further passes on a field with a less efficient product, thereby increasing carbon emissions. Are we in a better place then?

[Lloyd Longfield, Liberal, Guelph, ON]

I'm thinking of the Eureka Project—I believe that's what it's called—at the University of Manitoba, where there's a cluster of businesses. I said Syngenta but I should have said Bayer. Bayer, and now Monsanto as part of Bayer, are developing solutions in conjunction with companies such as yours. We need to have the innovations happening both from the seed providers and the farmers and the crop protection companies. It's all hands on deck to develop these solutions, and then to mix metaphors, we pull the rug out from under them with some kind of non-scientific regulation being put to bear.

[Jean-Marc Ruest]

I couldn't agree more.

[Lloyd Longfield, Liberal, Guelph, ON]

Okay, so we have some challenges. This committee is really promoting agriculture and protecting our export development and our technology, and then we have the health committee, to name another committee, that has different agendas in terms of approvals and regulations. We have to have some very difficult discussions if we're going to get from A to B in terms of export. Then finally there is the social innovation with Mr. Dugré and the building of public trust, which is really one of the main solutions we have to develop.

[The Chair, Liberal, Pat Finnigan]

Thank you, Mr. Longfield.

We have two minutes for Mr. Dreeshen.

[Earl Dreeshen, Conservative, Red Deer—Mountain View, AB]

Thank you very much, and welcome to our guests.

One of the issues, and the main thing we're talking about, is the difference between physical science and political science. A physical scientist is never going to say there's a zero per cent chance, and of course that's when the political scientist jumps in. That is one of the concerns. How do we get this message past our anti-GMO activists or the anti-modern agriculture advocates? We know there are dollars on their side putting pressure on that as well.

Neonicotinoids are certainly an issue. In Alberta, that's exactly what you want to have coating your canola, and that's exactly where you want to have your bees, so that they help in the production, yet we have changes that are completely destroying that technology, which is a great tool.

We have all of this new technology. We have blockchain technology, which we haven't talked about. We have CRISPR technology, which is associated with it. How do we get ahead of that, to make sure the messages we have are going to get through to the general public?

I'll ask Mr. Casey and then perhaps Mr. Ruest.

[Andrew Casey]

There are a couple of pieces there that I would like to discuss. One is the opposition, as I'll call it. Instead of the “anti” group, I'll call it the opposition.

I came to BIOTECanada from the forest products industry. That's where I was for eight years, doing policy and trade at the Forest Products Association of Canada. Environmentalists played a huge role in improving the Canadian forest products industry's environmental performance. They're the ones who held the industry's feet to the fire and told them to do better. The industry then figured out it was a competitive advantage to be better from an environmental standpoint. They improved their practices to the point where Canada is one of the leading forest products producers in the world, from an environmental performance standpoint.

I wouldn't want to denigrate the opposition to a point where we don't have it. There is still a very important role to be played there in terms of raising the questions that need to be answered. It ups the game for our regulators as well, such that they have to be as diligent as possible.

It ties to a point that Mr. Ruest made earlier, as well as to my answer to Mr. Breton. It's about this investment piece. If we stick our heads in the sand and say we can't do it because of what may happen.... Other countries are well aware of this economic opportunity and are developing their technologies as well. They're supporting their industries. They have bioeconomy strategies in place to support their industries. That's where the investment will go. It will go to those countries. We will continue to produce oilseeds and grains just as we always have, but we'll miss out on that piece. How do we create companies here? The investment is not going to be here.

Unlike other industries, like forestry, mining, and oil and gas, a lot of this technology that we're talking about is on computers. It could be moved anywhere in the world. If we're not bringing the investment here, that technology will go where the investment is and where the people are. That will be a huge loss, because we'll miss out on the economic benefits of commercializing that here. If we get the regulatory process right and a bioeconomy strategy right, we could be a leader in that space.

[The Chair, Liberal, Pat Finnigan]

That's it for time, so thank you, Mr. Dreeshen.

[Earl Dreeshen, Conservative, Red Deer—Mountain View, AB]

All right. Thank you very much.

[The Chair, Liberal, Pat Finnigan]

Thank you for having joined us, Mr. Ruest, Mr. Casey and Mr. Dugré.

We will now suspend the meeting to prepare for the second part.

[The Chair, Liberal, Pat Finnigan]

Order. We'll get going on the second round.

For the second hour today, we have with us Mr. Howard Mains, Canadian public policy adviser, Association of Equipment Manufacturers. Also, from the Saskatchewan Association of Rural Municipalities, we have, by video conference, Mr. Ray Orb, president.

Thank you for being with us today.

Mr. Mains, do you want to open it up? You have seven minutes for your opening statement.

[Howard Mains, Canadian Public Policy Advisor, Association of Equipment Manufacturers]

Thank you very much.

Thank you, Mr. Chair and honourable members of the committee, for allowing the Association of Equipment Manufacturers to appear this morning at this committee.

As an introduction, allow me to say a few words about the member companies of the Association of Equipment Manufacturers. AEM represents the manufacturers of equipment that is used in the construction, utilities, mining, forestry and agricultural sectors.

I was speaking with a few of your members, and we've met with members over the years. For example, in the riding of Guelph, our members include Skyjack, with 500 employees; Blount, with 500 employees; and Hitachi, with 150 employees.

I was checking out some websites this morning. I'm glad to note that the honourable member from Vancouver Island was sitting on a member company tractor. We won't name names.

[Voices]

Oh, oh!

[Howard Mains]

Also, the member from Glengarry—Prescott—Russell was standing in front of a milking parlour that I think was made by one of our member companies.

The important thing to note is that the equipment manufacturers manufacture equipment that is used in many sectors, but in particular, today I wish to talk to you about the agricultural sector. I do have a study. It's only in English yet. I can pass it to the clerk later on, but it's only in English. It goes into great detail about the macro issues that are before the sector. Collectively, AEM member companies support around 150,00 jobs in Canada—that's direct employment—and contribute about $44 billion annually to the Canadian economy.

This morning I wish to touch upon three things: first, the importance of trade as an engine of growth for agriculture; second, the innovative achievements of Canadian equipment manufacturers; and third, the challenges facing equipment manufacturers and farmers today in areas such as access to rural broadband.

Technology plays an important role in increasing sustainable measures in agriculture and environmental protection. AEM is supportive of the government's goals announced in budget 2017 to reach $75 billion in agri-food exports annually by 2025. As well, the 2016 advisory council report led by Dominic Barton identified agriculture and agri-food as a sector of great economic growth potential.

At a Canada 2020 event this past June, Dominic Barton shared McKinsey analytics research identifying a number of growth opportunities where agribusiness investment is likely to focus. The four areas of greatest growth opportunity include protein in Asia, functional foods, aquaculture and agricultural equipment. Given these global growth opportunities, agricultural equipment and the agriculture sector as a whole will continue to be key for future Canadian economic growth.

The council recommendations also advised the government to begin developing strategies to clear a path for growth of high-potential sectors like agriculture. In our view, to achieve these goals, the Government of Canada must be committed to setting strategic goals for 2025 for the ministers of agriculture; health; international trade; innovation, science and economic development; and environment and climate change. Across departments, well-defined and measured performance targets, such as employment and exports, will be necessary for these goals to become a reality. Indeed, performance measurement is one of the principles of the Canadian government's policy on results directive.

AEM member companies operate and export globally, and I would note that in Guelph, Skyjack, when we were visiting there, exports to 142 countries, I believe. Therefore, international trade and continued regulatory alignment between Canada and the United States continues to be a priority for AEM members. AEM continues to be a strong supporter of NAFTA and is advocating for a modernized agreement in both the United States and Canada.

AEM continues to spearhead industry efforts to discourage tariffs, which harm not only manufacturers but also our customers. It is of vital importance to our industry that farm equipment works seamlessly across the Canadian-American border, and that manufacturers are able to freely export products to other markets.

I will now turn to innovations in equipment manufacturing. Innovative technologies integrated into farm equipment have helped increase agricultural productivity while making the industry more sustainable than ever. Canadian farmers rely on the equipment designed and developed by AEM members for access to clean technologies and innovative tools to reduce greenhouse gas emissions from agricultural production.

Members of this committee will have seen first-hand during their tour of the CNH Saskatoon plant how this investment in innovation makes its way to the shop floor and into equipment. Modern manufacturing processes now allow for the production of equipment that is unique to the individual farmer's needs. As we enter the next phase of farming, which is often referred to as farming 3.0, precision agriculture, big data and artificial intelligence will be critical and revolutionary.

Recently, AEM commissioned a study analyzing the future trends of agriculture over the next 10 to 25 years. The current environment is ripe for digital transformation. Pressures to increase food production will continue to increase, farmers need to adapt to changing clients, and consumers want to know more about their food. It is an exciting time to be in agriculture.

Although it can be difficult to predict exactly what the future of agriculture will look like, we can agree that it will be different from today and certainly different from the time when I was farming 35 years ago.

[The Chair, Liberal, Pat Finnigan]

We're out of time, and if I don't cut you off here I'm going to run short on questions, but I'm sure you'll have a chance to talk about your product as we go.

Now we have Mr. Ray Orb by video conference for up to seven minutes.

Thank you.

[Ray Orb, President, Saskatchewan Association of Rural Municipalities]

Thank you.

Good morning. I'd like to thank the standing committee for the opportunity this morning to discuss technology in agriculture that can support Canadian exports—in our case, Saskatchewan exports.

My name is Ray Orb. I am the president of the Saskatchewan Association of Rural Municipalities, known as SARM. Incorporated in 1905, SARM has been the voice of rural Saskatchewan for over 100 years. We represent all 296 rural municipalities in our province. Our RMs cover 53% of the province's land mass. Our smallest rural municipality serves a population of 76, while our largest serves over 8,000. We work on behalf of our member municipalities to help identify solutions to the challenges in rural Saskatchewan.

As an association, we are mandated to work in agriculture, and agriculture is an important sector in our province. Saskatchewan is a key producer of Canada's wheat, oats, flaxseed and barley, and is also home to grain farms, cattle ranches, and dairy production. Our province also boasts a thriving microbrewery industry. According to a recent report by Economic Development Regina, craft beer was a multi-million dollar industry in Saskatchewan in 2017 and is expected to be on the rise, and that's not surprising. Agriculture is a way of life in our province.

Our landscape has changed over the course of the last century. Advancements in technology have created a huge opportunity for farmers, ranchers and rural Saskatchewan, but right now most of rural Saskatchewan does not have the broadband infrastructure to support technology and technology adaptation. Rural broadband is an essential investment that would allow farmers and ranchers to capitalize on technological advances. For our producers looking to compete in the global marketplace, broadband, smart phones and technologies are critical.

We see huge opportunity for technology in the agriculture industry—for example, in precision farming. Precision farming provides diagnostics and sensor technologies that ensure just the right amount of input from water, fertilizer, medicines and crop protection products. This enhances crop quality and animal welfare and improves yields. Precision agriculture better targets inputs and increases yields, and it allows for better planning and decision-making. Without reliable broadband service, it is impossible for producers to use these technologies to their fullest extent.

An additional opportunity for technologies in agriculture exists with GPS capacity and capabilities. GPS-controlled tractor steering and optimized route planning minimize soil erosion and compaction while improving crop yields, but we have yet to see mainstream use of autonomous self-driving tractors. The first hands-free crop has already been grown in a project in the United Kingdom. Also in the U.K., livestock farmers are already benefiting from technology that can help them optimize their cattle's diet and monitor fertility and calving actively, so that both beef and dairy herds will be healthier and more productive. Mortality rates during calving could be reduced by up to 80%.

Again, it comes back to the need for reliable high-speed Internet access in rural areas that would have farmers and ranchers connected to their farms, each other and the globe. If agriculture producers had access to existing agronomic tools tailored to individual farms and fields, it would allow them to get forecasts and agronomic insights to make sustainable decisions and their operations seamless.

Another area important to agriculture and technology is plant science: the study of plant systems. Western Canada has a short, dry growing season, which makes efficient plant growth critical to prairie producers. The University of Saskatchewan's department of plant sciences is the only plant science department in Canada capable of offering such diverse experience in plant studies.

Scientists at the department of plant sciences and the crop development centre conduct research to develop new crop varieties that will thrive under prairie growing conditions. Current innovation studies include the creation of tools that protect crops from insects, weeds and diseases, as well as developing stronger, healthier, and more useful varieties of crops.

The university works with institutions such as the plant biotechnology institute at the National Research Council, the Agriculture and Agri-Food Canada research station, the protein, oil and starch pilot plant, and the Canadian Light Source, all of which allow for interdisciplinary research to support innovation. These types of innovations help farmers to sustainably grow healthy foods both for Canadians and for other countries, which feeds the world and drives economic growth.

It all comes down to good connectivity. Without a reliable, consistent and affordable high-speed Internet connection, these technologies are just not available. In 2016 it was reported that 82% of Canadians had access to broadband. The remaining 18% were largely in rural communities, leaving many producers without reliable access.

As the chair of the rural forum of the Federation of Canadian Municipalities, I note that the FCM has long advocated for increased federal involvement in developing the telecommunications infrastructure that is critical to the vibrancy of Canada's rural communities. Broadband Internet access has become fundamental to modern life and has the power to transform rural Canada. Modern networks contribute to economic growth by improving productivity, providing new services, supporting innovation and improving market access, especially in the agriculture industry.

[The Chair, Liberal, Pat Finnigan]

Unfortunately, Mr. Orb, we're out of time, so I'm going to have to cut you off. I'm sorry about that. You'll have a chance, of course, to reply to some of the questions from our members.

We'll start with Mr. Bev Shipley for six minutes.

[Bev Shipley, Lambton—Kent—Middlesex, CPC]

Thank you, Howard and Ray. It's good to see both of you again.

I want to follow up on where Mr. Orb was leading. In terms of high-speed Internet, we know it's an issue. We're into an agriculture industry where we have a generation of young people who see and are enticed by the incredible opportunities in this industry, not just in the primary production but in the breadth of the industry as a whole.

Mr. Mains, part of what you're talking about is that follow-through, not only on what the farmers use but where our products go and how you handle that in terms of processing equipment.

In terms of the producers who cannot have the high-speed Internet, in my area, which is very heavily agricultural, I have producers in dairy who are spending $30,000 to $40,000 because they can't put the innovation in unless they run cable up, the high-speed cable. In terms of farmers who are in the cash crop industry, what are they to do? That's the other issue. We have this gap in time.

What can the industries do, Mr. Mains, in terms of the production of this high-tech industry we're talking about? How do we close that gap? Any ideas...?

[Howard Mains]

Based on conversations I've had with colleagues in the United States, I can say that you would be surprised by some of the states and counties south of the border that also don't have the access to broadband that they need. This is the problem that Mr. Orb has pointed to. It's a huge problem, and it's going to become a greater one for the—

[Bev Shipley]

Can equipment become more sensitive to help take low-speed and process it better? That technology is going up and the injection of high speed is slow.