Agriculture Committee on April 30th, 2018

[Pierre Petelle]

I can start. For us, as I mentioned in my remarks, there are key markets that are absolutely critical, China being one of them. We need government to continue to try to get those markets secured for Canada, and give us that competitive advantage over larger competitors, like the U.S. That's an absolutely essential step.

I think, before that, though, yes, we compete with the U.S., we compete with Australia, but we also can work together a lot on regulatory approaches. We've done that on pesticides over the years, and made that process much more predictable and streamlined, and I think there's a lot of room for that on the plant biotech side, where that co-operation is still fairly new. You can have a system where competitive markets are still working together so that the regulatory approaches are consistent and predictable, and then focus on niche markets for Canada, or position Canada to be ahead of some of its competitors.

[The Chair, Liberal, Pat Finnigan]

Thank you, Mr. Petelle.

[Lloyd Longfield, Liberal, Guelph, ON]

Thank you. That's why you come back. Those are great answers.

[The Chair, Liberal, Pat Finnigan]

Now we have Mr. MacGregor for six minutes.

[Alistair MacGregor, NDP, Cowichan—Malahat—Langford, BC]

Thank you to the witnesses for appearing.

Ms. Thomas, you said something in your comments about the need to address the speed to market, and of course, the people you represent are very well aware of what's been happening with our transportation sector, particularly the railways. I know this study is on technology and innovation and how we reach that goal in 2025, but if we don't have a transportation system that can keep up with our exports, we're not going anywhere. Given the feedback that you've received from your members, is there anywhere we can apply better practices in technology and innovation to our transportation sector, in order to help us move our product to market? I understand from previous testimony on other studies, our reputation has taken a hit as sometimes being unreliable in meeting the demands of our customers abroad.

Do you have any comments on that?

[Krista Thomas]

I'm not an expert in this topic, but absolutely, the strengths of Canada's grain abroad relate to our quality and our predictability of delivery. Any efforts that can be made to help ensure growers can get their grain to market and that we're meeting the needs of our customers are critical. We know markets can change very quickly, and it's important to have a nimble system that can respond to emerging market demands. The comments I've made around seed innovation need to be underscored and supported by having a functional transportation system.

Our members are looking forward to seeing some movement on that, hopefully in short order.

[Alistair MacGregor, NDP, Cowichan—Malahat—Langford, BC]

Maybe I'll get both of you to comment. I just want to dig deeper into gene editing versus GMO.

You mentioned that, of course, a novel food requires a lot more time for regulatory approval. Am I right in saying that, by using the CRISPR technology, as you mentioned, by changing one word or a letter within a book, the end product is not really recognized as a novel food and is therefore a bit faster?

[Krista Thomas]

I'll have to make a distinction between the global regulatory environment and Canada.

For many countries around the world, we're still early days, and there is still uncertainty, but, to the extent that there is a trend, companies are making a distinction between products that contain foreign DNA and those that don't. When gene editing is used just to change an existing gene within a plant, it seems more likely that these will be treated like conventional products.

In Canada we have a product-based system, so our regulators are not too concerned with the methodology used but rather the trait in the final product and whether that's new and different enough to warrant a pre-market safety assessment.

[Alistair MacGregor, NDP, Cowichan—Malahat—Langford, BC]

Mr. Petelle, do you have any comments on that question?

[Pierre Petelle]

Yes, I think that's a critical distinction, because on the plant biotech side, that has served us well. It wasn't the fact that it was a GMO that it needed to be regulated, it was the fact that you created a herbicide-tolerant crop. That was the novelty of what was being created, and that's why we needed to regulate it, so it has served us well in the whole GMO debate and discussion.

Now that we get into this more refined approach, it raises some questions in terms that you could have even that one-letter change creating a very novel crop, but does it still need to have the same A to Z regulatory review with the same data requirements?

That's the nuance, and that's the discussion we're having with officials at CFIA, that we think there are different tiers of approaches to take with these gene-edited products, everything from a full assessment, just like a biotech crop with foreign DNA, right down to either no regulation at all to different layers in between. I think even that would be a great improvement, because then we would know what those tiers are, and again, it would provide that predictability, and we would know approximately the time required for each of those levels.

Those are the more detailed discussions that we are having with officials and that we would like support on.

[Alistair MacGregor, NDP, Cowichan—Malahat—Langford, BC]

When you look at the global market and where those private investment dollars are flowing, is there a great deal of excitement out there about gene editing technology? Would you say that is a higher priority for investment dollars now rather than what's going on in the GMO world? When we make a recommendation, where should we recommend the federal government put its attention?

[Pierre Petelle]

I'm going to answer that a little bit both ways.

For us, biotechnology is still one that is going to be used for the foreseeable future. It's not as if gene editing is coming in and replacing that completely, so we still need that predictability and fair treatment of the biotech crops.

We think we need a slightly more nimble system that can address some of these new technologies like gene editing, and I think that can be done within the current structure. That doesn't require even regulatory change, or certainly not legislative change, to make those changes that we're asking for. We think the system needs to be able to handle both of those.

In terms of where the companies are investing, it probably varies. You'll be able to ask one of them shortly, the biggest one. As Krista mentioned, it's also the small, private breeders, too, who are able to use these technologies as a much less expensive process and also get in the game, so they need that predictability, and they need to bring those innovations.

[The Chair, Liberal, Pat Finnigan]

Thank you.

Mr. Breton, I believe you will share your time with Mr. Saini.

[Pierre Breton, Liberal, Shefford, QC]

Yes, Mr. Chair.

I thank the witnesses for joining us today.

I find some of the information on your website interesting. I would like to share one piece of information in particular with my parliamentary colleagues.

Mr. Petelle, while many sectors are contributing to the increase in greenhouse gas emissions in Canada, your industry is using plant science innovations to reduce those emissions by nearly 30 million tonnes per year. Well done! That's really great. In addition, your industry contributes to the creation of nearly 131,000 jobs in Canada. Congratulations. Those statistics are very noteworthy.

I would like to briefly talk to you about research and development. In Canada, resources are becoming increasingly limited. The number of emerging countries is increasing, and many countries want to take advantage of the situation.

We talked about innovation earlier. What do you think about public investments in research and development to help your industry? Are they sufficient? Would you like to see more in terms of investments? Could that approach ensure better productivity and competitiveness of your industry?

Mr. Petelle, you can start, and Ms. Thomas could also comment if there is time.

I will then yield the floor to my colleague Mr. Saini.

[Pierre Petelle]

Thank you for your question.

I think from our perspective on public versus private research, this is always an area that raises questions, public research dollars on what we call "base agricultural research", the commercial benefit that is difficult to quantify. We see a tremendous role for government and academia there.

On taking those basic things to the commercial step, we think there are a lot of places where that partnership can exist between government and industry. We've seen examples of that in the past, and certainly our members are open to different models of R and D in Canada.

I think from our perspective, our members are poised; they're undergoing tremendous change right now in our industry. Mergers and acquisitions are going on almost monthly it seems. On the commitment to R and D, the percentage of total sales our industry puts back into R and D is among the highest of any other sector; close to 11% of total sales go back into R and D. That's almost in lockstep with the pharmaceutical industry. Certainly the members are poised to invest, and continue to do that R and D. As I said, they need the environment in which to do so. I think of some of the recent announcements, such as the supercluster for example. While we're not directly involved, some of our members are, and are very welcoming to that protein supercluster announced in Saskatchewan.

[Pierre Breton, Liberal, Shefford, QC]

Thank you very much.

[Raj Saini, Liberal, Kitchener Centre, ON]

I just have one question. I'm going to preface some of my remarks from the Barton report, which I know, Mr. Petelle, you wrote about. I want to get a better understanding because I'm not a full member of this committee; I'm just substituting today.

Right now we're the fifth largest agricultural exporter in the world, and we're the 11th largest processed food agricultural exporter in the world. We used to be third, and Brazil is now third. We're 11th, behind Holland. Can you explain to me why that is, when you realize the full potential of this industry, especially since 2008-09? You had sectoral stagnation in many different parts of the economy, but this is one part of the economy, going forward worldwide, not even insofar as Canada is concerned. From the reports I've read, in the next 40 years we will be producing more food than we did in the last 10,000 years. With that potential.... You referenced China. China only has one free trade deal; it's with Australia. In terms of the other countries, why are we slipping as opposed to advancing?

[Pierre Petelle]

That's a million-dollar question. It's a lot of what we've talked about here—the regulatory environment, the ease of getting some of these innovations to market—but it's broader than that, and I'm not going to pretend that this will solve all the issues. There is taxation and how you treat the corporations. There are environmental regulations. There is transportation, the rail. There are a lot of factors that affect our ability to get there. I think that's why some of the wording in the Barton report said that we need to fix some of the low-hanging fruit and work on the tougher ones as we move along.

From our perspective—and I'll focus on getting Canada from fifth to second on exports—we know that we can produce more food sustainably on the same land. I've brought the statistics for almost every crop in Canada. We have easily doubled or tripled yields in many of the crops, using the exact same input on that land. Our industry is able to innovate and get us there. We just need to make sure that an environment is established that will help us do that.

With all of the changes that are happening right now, and some of our competitors that are making bold statements about where they want to be in this hierarchy, we need to also have those bold statements from Canada. We need the accompanying encouragement at the regulatory level, for example, to be part of that as opposed to being on the sidelines, just regulating on health and environment and letting the rest of the elected officials and certain departments focus on increasing our position from fifth to second.

[The Chair, Liberal, Pat Finnigan]

Thank you.

Mr. Peschisolido.

[Joe Peschisolido, Liberal, Steveston—Richmond East, BC]

Madam Thomas and Mr. Petelle, thank you for being here. It was very helpful for me to have a better understanding of the issue.

Canada's population is such that we produce a whole lot more than we consume. Mr. Longfield and Mr. Saini were discussing, both in a positive way, how government can be helpful in expanding innovation and research to increase exports.

I'll ask the question a little bit differently. Since we need to export, are there any impediments—other countries, or just issues—that the government can be helpful to you in eliminating?

[Krista Thomas]

As I mentioned in my opening remarks, it's very important for us to be able to work closely with the Government of Canada to resolve non-tariff trade barriers. I mentioned two objectives for the Canada Grains Council around seed innovation. One is the domestic environment, and the other is the international trading environment. Sometimes these goals appear to be in conflict, but they support one another. Without a global trading environment, without aligned regulations and a supportive environment, we have a trickle-down effect, which is impacting innovators in Canada.

We are very appreciative of the relationship we have with government staff, who support us in advocating for clear and predictable regulatory requirements abroad, and working in international forums to align regulations. We feel it's very important for them to continue to be resourced to do that work.

[Pierre Petelle]

Just to build on that, we sit at a lot of international tables, the Codex Alimentarius Commission being one of them. They are establishing maximum residue levels. We need to make sure that those resources exist; that the expertise exists within Canada; and that as a management regulatory agency, for example, they have the mandate and the resources to participate at those international tables. It's absolutely critical.

There is also another element in how government can help. We talked about whether it's GMO or gene-edited, and there is a whole public perception issue out there. There are detractors, whether it's GMO or gene-edited, or whatever, who have lots to say about this topic. Frankly, we need the support of the regulators, the government, to defend the decisions they make, whether it's on a biotech crop, a gene-edited crop, or a crop that's just been traditionally bred. We need governments to stand behind their decisions, because this impacts innovation and the attractiveness of Canada to companies deciding where to invest.

[Joe Peschisolido, Liberal, Steveston—Richmond East, BC]

This is actually a very good segue, Mr. Petelle. I have a document here, an enclosure on rethinking the delivery of regulatory programs. Can you elaborate a little bit on how this approach can do two things: change the perception in the public's eye and help to improve efficiency in getting products to market?

[Krista Thomas]

Those proposals you have there would again help to clarify the existing regulatory approach in Canada and move us away from a case-by-case approach where, if you're a plant breeder, you're not sure exactly whether you will be regulated in Canada, whether you will be subject to a pre-market safety assessment, or what the requirements will be. If those outcomes were achieved, that certainty would be available to you, and that would help to drive innovation.

We're also hoping that the government will be more vocal in speaking about the importance of innovation in agriculture because it is critical. It is a very competitive market, and our R and D strengths are something that will differentiate us going forward.

[Pierre Petelle]

There are groups that would like to see agriculture move backwards in terms of technology. They're fine with every other sector, seemingly, moving ahead with technological advancements, but for some reason agriculture and food production is something that's out of Old MacDonald.

We, of course, take that battle on, and we convey information as best we can, but at some point we need regulators and government to also help with that, and to convey that the food farmers are producing is safe and that the technologies and approaches we take are protective of human health and the environment.