Agriculture Committee on April 30th, 2018

[The Chair, Liberal, Pat Finnigan]

I want to welcome everyone to this meeting of the Standing Committee on Agriculture and Agri-Food.

Pursuant to Standing Order 108(2), we are beginning the study on the advancements of technology and research in the agriculture industry that can support Canadian exports.

Today, from the Canada Grains Council, we have Ms. Krista Thomas. Welcome to our committee.

Krista Thomas is the director of plant innovation.

From CropLife Canada, we are hearing from Pierre Petelle, its president and chief executive officer.

Welcome to this meeting, Mr. Petelle.

We also have two substitutes on the committee, including Raj Saini.

We also have Mr. Larry Bagnell replacing Mr. Francis Drouin.

We'll start with our seven-minute opening statement.

Mr. Petelle, you can begin if you like.

[Pierre Petelle, President and Chief Executive Officer, CropLife Canada]

Thank you, Mr. Chair, and thank you to members of the committee.

On behalf of CropLife Canada and its member companies, we appreciate the invitation to be here today.

CropLife Canada is the trade association that represents the manufacturers, developers, and distributors of plant science innovations. These are the pest control product tools, and the products of modern plant breeding that are used in agriculture, urban, and other public settings.

Our mission is to enable the plant science industry to bring the benefits of its technologies to farmers and the public. Those benefits manifest themselves in many different forms, including driving agricultural exports, creating high-skills jobs, strengthening the Canadian economy, increasing tax revenues for governments, improving environmental sustainability, and increasing access to safe and affordable food for Canadians.

We're pleased to see the committee undertake this study as agriculture is often left behind when discussion of technology and research takes place. The truth is that agriculture and agrifood are sectors that have been revolutionized by technological change.

If we take a look at history, Canadian farmers have always been among the early adopters of technology. This has helped make them leaders in producing safe, affordable, and sustainable food for Canadian consumers and the world.

Technologies like pest control products and biotech crops have played an important role in sustainability, increasing agricultural production in Canada while maintaining the high safety standards we have established in this country. These advancements have resulted in economic gains, environmental protection, and cost savings for consumers. For example, plant science technology alone contributes $9.8 billion to Canada's GDP every year. These technologies have also allowed farmers to be more productive on existing farmland. In fact, without pesticides and biotech crops, Canadian farmers would need to cultivate 50% more land than we do today. This would be devastating for Canada's biodiversity.

Consumers also benefit from these technologies. Without plant science technologies, Canadians would pay about 55% more for food on average. That's roughly $4,400 a year per family. Canadians currently enjoy better access to a nutritious and affordable food supply than at any other time in our history, thanks to modern agriculture.

This renewed focus on agriculture and technology is timely in light of the Advisory Council on Economic Growth's report to the government and the work under way by the Economic Strategy Table on Agri-Food.

While we still await final reports from the economic strategy tables, the work of the Barton report is done, and its recommendations are clear.

The Barton report highlights the agrifood sector as an important area of potential growth for the Canadian economy, and says that innovation is the key to unleashing agriculture's potential. No surprise there. Canada is, however, not the only country pursuing innovations in agriculture. As others pursue advancements in data analytics, automation, and genomics, Canada must act quickly or risk being left behind.

The Barton report identifies several barriers to success for Canada's agrifood sector, one of which is increasing productivity. Agriculture must continue to adopt new technologies and innovation, such as pest control products and products of modern plant breeding to increase productivity.

One of the other key barriers to success identified in the report is expanding trade. Canada needs preferential trade agreements in high potential markets, with China being at the top of that list. Without access to these markets, Canada cannot successfully leverage its major competitive advantages, namely its large agricultural land base, access to natural resources, and innovative farmers.

However, access to markets cannot be limited to just removing tariffs. We need ongoing and enhanced engagement on non-tariff barriers that countries readily utilize. One only needs to look at the issue of durum wheat into Italy to recognize a tariff removal is not always enough to secure ensured access to markets.

Canada is respected around the world for its strong science-based regulatory system when it comes to agriculture and food. This commitment to science-based regulation must continue, and we must seize opportunities to improve the efficiencies and streamline regulatory approaches where possible to drive greater innovation and competitiveness.

We believe there are many opportunities when it comes to products of modern plant breeding and pesticides to modernize and streamline these approaches, to drive greater innovation while still protecting human health and the environment.

We would very much like to discuss that with the committee today. Canada's regulators cannot be divorced from the broader Government of Canada objectives to innovate our way to $75 billion in agrifood exports. They need the help of elected officials like you to help deflect the inevitable criticism from our detractors at the slightest mention of economic considerations.

We believe that government policy on building agriculture exports and promoting innovation should help build on our accomplishments to date, and recognize how far we've come. Technological advancements, such as those in crop protection and plant biotech, have helped create an agriculture production system that is more sustainable than it has ever been before.

Canadian farmers' adoption of technology has also driven greater food production than ever before, which has spurred economic growth throughout the country. It has also helped ensure that Canadians pay some of the lowest food prices and have access to one of the safest food supplies in the world.

Canada can, and should, be a leader when it comes to feeding a growing world population and competing in markets around the globe. We need the right policies at home, however, to make that happen.

I thank you for your time and look forward to any questions that the committee might have.

[The Chair, Liberal, Pat Finnigan]

Thank you, Mr. Petelle.

Now, Ms. Thomas, you have up to seven minutes.

[Krista Thomas, Director of Plant Innovation, Canada Grains Council]

Thank you, Mr. Chair. It's a pleasure to have an opportunity to appear before you this afternoon.

My name is Krista Thomas. I'm the director of plant innovation with the Canada Grains Council. The Canada Grains Council is Canada's national umbrella organization for the grains sector, with over 30 members representing seed and life science companies and associations, grower groups, commodity organizations, and grain companies. Accordingly, we work on issues that are important to the entire value chain and that impact the grains, cereals, oilseeds, and pulses grown in Canada.

One of the Grains Council's most important areas of focus today is seed innovation. You might ask exactly what is meant by seed innovation. Does that refer to biotechnology, or GMOs? Yes, it absolutely does, but I'm also referring to the very latest, cutting-edge tools to be added to the plant breeders' tool box, those based on gene editing systems such as CRISPR-Cas9.

The CGC has two main objectives for seed innovation. The first is to create a domestic environment that drives innovation in the crop sector, which means having pre-market regulatory programs that are predictable and clear and that do not inadvertently prevent or delay innovators from acting on new opportunities. Second, with up to 90% of our commodities destined for international markets, Canada needs to think and work collectively with other countries on regulation, because failing to do so will leave a patchwork of divergent regulatory approaches leading to trade disruptions and an unpredictable environment for innovators, growers, and exporters.

This is a very timely discussion to be having today. Canada has set a very ambitious target of reaching $75 billion in agrifood exports annually by 2025. Grains contribute over $22 billion of these exports today. That's more than any other agrifood sector. Accordingly, we want to do our fair share or more to help us reach that target. This means activities such as working closely with the Government of Canada to address non-tariff trade barriers such as maximum residue limits for crop protection products, as Pierre mentioned, but our members also believe that seed innovation will play a driving role.

In particular, gene editing can speed up the development of new crop varieties. For some crops, this means a variety development in two years instead of 10. In addition, many products of gene editing might not fall under the same complex global regulatory and trading environment that we have today for products of biotechnology or GMOs. This opens up more opportunities for innovation in small or orphan crops and a wider range of small or medium-sized companies.

The types of benefits possible through seed innovation include agronomic traits that are certainly beneficial to the grains sector. Traits such as higher yield or better weed control, greater disease resistance, or stress tolerance allow growers to produce more every year while using the same or smaller amounts of land and inputs. However, seed innovation is also delivering more consumer-focused traits to help meet the demand for healthier food, such as higher fibre flour or oil with healthier fat profiles. These, too, offer opportunities for grain growers and for value-added products.

Lastly, we are also seeing innovation in areas that will help farms be more environmentally sustainable, adapt to climate change, or help to reduce food waste.

With all these benefits available, with Canada's strengths in agricultural research, and with our leadership role and success in biotechnology, Canada should also be among the global leaders in gene editing systems for crop development, but today we are worried that Canada is at risk of falling behind our key trading partners and that Canada might lose its share of investment in new crop innovation.

We're very encouraged by the efforts of the economic strategy tables and superclusters to encourage innovation in Canada and by the acknowledgement in budget 2018 of the role that regulatory programs play, either in supporting or hindering innovation. However, our members have identified a pressing need to update and provide greater clarity and predictability around Canada's pre-market programs for regulating products of seed innovation. This, in turn, will better support Canada to engage our trading partners, and align internationally—where possible—in support of a predictable global trading environment.

Thank you for the invitation to be here today. I look forward to your questions.

[The Chair, Liberal, Pat Finnigan]

Thank you, Ms. Thomas.

Since you didn't use your seven minutes, could you define what the difference is between gene editing and GMO, and is that controversial? Please elaborate on what that new technology is about.

[Krista Thomas]

Yes, absolutely.

To give a very simple example, if we were to think of a plant genome as being like a book or a novel, techniques of biotechnology—or techniques used to produce GMOs—are like inserting a brand new sentence into that book. Typically, it means inserting a gene from a non-sexually compatible species into a plant.

New techniques, like gene editing, have been in development just in the past five or six years. To go back to the book analogy, they would allow a change to a letter within that book, or perhaps changing a word within a sentence. They're very precise tools that can make very targeted changes to an existing plant gene.

[The Chair, Liberal, Pat Finnigan]

Let's start with the questioning, for up to six minutes.

Mr. Berthold, you can go ahead.

[Luc Berthold, Conservative, Mégantic—L'Érable, QC]

Thank you very much, Mr. Chair.

Mr. Petelle and Ms. Thomas, thank you for being here. We are conducting a study that is really important for the future of Canada's agricultural exports.

In your opinion, what country is currently the most innovative in agriculture? Why is it not Canada?

[Pierre Petelle]

I can start, and then Krista can add.

Canada is not the biggest market, obviously. When we look at crop protection, for example, we're about 3% to 4% of the global market. Even though Canada exports a lot—we're a big agricultural producer relative to other parts of the world—we're not that big, so we need to make sure that we're at the very forefront in speed to market, and in our regulatory process. All those things need to be at least as good as the bigger markets.

To answer your question directly, the U.S. would probably fit that bill. At least on the plant breeding side, they have made very clear statements about the technology that Krista was referring to. They've said very publicly that these will be treated differently from biotech crops. The regulatory process won't be the same, it won't be as heavy, and it won't be as burdensome. Our interpretation of that is, therefore, they'll be faster to market and have much more predictability in getting those approved. That's where we talk about being left behind.

If that's the case in the U.S., which is a much bigger market, and they start to get approvals of some of these new technologies while we're still wondering how to deal with them here in our system, we will definitely be left behind.

[Krista Thomas]

I'm going to speak about seed innovation because that's the area I'm most familiar with.

Globally, a number of countries are in a similar position to Canada, asking how these new products should be regulated, and if these products will fall under existing legislation for biotechnology. A number of countries have been able to come forward with clarity for innovators. We see that Australia, the U.S., and a number of countries in Latin America have been able to produce guidance so that innovators in those jurisdictions understand whether the products they're developing will be regulated or not. They have a sense of the types of requirements they'll need to meet, and how long that process will take.

There are no products of gene editing currently commercialized, but we would anticipate that the first products will be in the United States. These are products developed by both small start-up companies and larger multinational companies.

[Luc Berthold, Conservative, Mégantic—L'Érable, QC]

Okay, so the red tape and all the regulations—the things we have to improve first—are how we approve new products. I can understand that from both of you. Is that right?

[Pierre Petelle]

Yes. It's the predictability. From our members' perspective, especially the larger companies, they really need to know what steps are going to be followed and how their innovation is going to be handled in the regulatory process. That will also give them some parameters around timelines, because the timing is really critical. If they know it's going to be 12 months for a review to get approval, they can build their business case around that. If it's going into a black box of uncertainty, that's the worst enemy for innovation. It's just very difficult to convince head offices to—

[Luc Berthold, Conservative, Mégantic—L'Érable, QC]

Am I right that those big companies will decide to invest in countries where the regulations are easier than in Canada?

[Pierre Petelle]

Well, you're going to hear directly from one of our members after us. From our perspective, I think it's not so much that it's easier, it's that it's predictable.

Canada's system is world renowned. I want to make it clear, both on the pesticides and plant biotechnology, that it has served us very well. Canada is viewed very highly all around the world in terms of its decisions.

What we want to make sure, though, is that we continue to adapt. Especially on the plant biotech, we have brand new technology here that doesn't necessarily fit that cookie-cutter approach. We need some flexibility, and we need recognition from the regulators that they have a role to play in innovation. Yes, they're to protect health and environment. Of course, that's their primary mandate. But if we all want to strive to get Canadian agriculture exports to a bold new number, all of those technologies are going through the regulator first. Whether it's that seed, or what needs to be put on the seed to protect it, it all has to go through those regulators. If they are completely divorced from this broader goal of innovation and growing agriculture, they could easily stifle that.

[Krista Thomas]

If I may add, I agree that the predictability and the clarity is key. I think that's important not only for large investment, but also for small companies and public breeders as well, which are trying to do more with limited budgets.

For instance, in some of our small crops, we may have only one or two plant breeders working in a certain crop in Canada with a limited budget. If you're uncertain whether a product you wish to create will be regulated in Canada, that makes a major difference in terms of your investment decisions at the very early planning stages of R and D.

What we are hearing from colleagues in the plant breeding community is that this is already a concern in Canada, where we do have a unique approach. There are products that are subject to pre-market safety assessments in Canada that are not regulated by any other country in the world.

[The Chair, Liberal, Pat Finnigan]

That was right on time.

Thank you, Mr. Berthold.

Now, Mr. Longfield, for six minutes.

[Lloyd Longfield, Liberal, Guelph, ON]

Thank you both for being here, and for coming back as well. You've contributed a lot to our studies in the past, and we've had a lot of similar conversations about how we can be competitive in the regulatory environment where we are competing against other partners.

I was looking at testimony from a previous meeting where the CRISPR market was discussed.

I'll direct this first to Ms. Thomas.

You mentioned CRISPR as well, and that this market could be developed quickly, within a year. The Americans are even looking at possibly not going through the same regulatory process for that product, streamlining the process, and then we will have to compete against them.

Would you be able to expand on that at all?

[Krista Thomas]

At the end of March, the USDA published some guidance that outlined what their regulatory direction for products of gene editing—like products derived using the CRISPR system—would be. That statement spoke very strongly about the importance of encouraging innovation to encourage economic development in rural communities, and to ensure that regulation was not stronger than it needed to be to assure safety.

The approach we see from the USDA is that products developed using CRISPR that could also be developed using traditional breeding methods will not be subject to regulation. There are a few exceptions around plant pest risk, but that's the general approach they're taking.

What that means for companies operating in the U.S. is that they have a clear direction, so they can move forward to commercializing their products with greater certainty.

[Lloyd Longfield, Liberal, Guelph, ON]

Therefore, in Canada...?

[Krista Thomas]

Therefore, in Canada, if you are developing a product that you know will not be regulated in the U.S., you may have uncertainty. You may not know if it's regulated or not. Our Canadian regulatory approach has many strengths, and flexibility is one of those, but too much flexibility can cause uncertainty.

Our regulators in Canada go to great efforts to help companies and will invite companies to come in and talk to them, but it can often be a lengthier process. If the decision is to regulate in Canada as a novel product, a novel food, that means that product could take a year or two longer to come to market and the company would face much higher costs.

[Lloyd Longfield, Liberal, Guelph, ON]

Great, thank you. So, stability is one of the key things we have to bring forward in this study.

Mr. Petelle, when we're talking about new varieties of grains, for instance, you mentioned fibre. There are also different proteins depending on the type of wheat and what the end market could be for pizza dough, versus bread dough, versus other products for use of wheat. When we're developing export markets, how important is it for us to be able to create some types of value-added or market-specific products to enter into new markets?

[Pierre Petelle]

Yes, that's a good question, because I think, traditionally, with these large acreage crops, the companies invested in broad appeal, whereas these new technologies, because of the speed at which you can make the changes you need, do open up potentially many more niche markets in satisfying consumer demands right down to specific profiles and characteristics they are looking for, without having to have multi-million dollars' worth of studies to get there. If Canada is positioned as one of those nations where we know that the system is predictable and fair, and it's fast to get those approved, Canada can be that go-to market where those niche products are born and grown.

[Lloyd Longfield, Liberal, Guelph, ON]

One of our strategic advantages is our research capabilities in order to develop new products and new varieties, but we also have to back that up with speed to market.

[Pierre Petelle]

Absolutely. As I was saying earlier, for our members, predictability and timeliness are the two most critical factors for innovation.

[Lloyd Longfield, Liberal, Guelph, ON]

Have either one of you looked at where our key opportunities are? Maybe building on Mr. Petelle's question, where do we see the biggest opportunity for Canada to develop export by product or by region? Do changes in the American trade focus give us an opportunity? Taking wheat off certain parts of the market, globally...I'm thinking of Indonesia or Central Asia.... Maybe there are opportunities for us because of climate change. What are the opportunities we should include in our study?