Agriculture Committee on April 30th, 2018

[Paul Thiel, Vice-President, Product Development & Regulatory Science, Bayer CropScience Inc.]

Honourable members of the standing committee, it's a pleasure to join you today. Thank you for the opportunity to speak about advancements in our agricultural industry to support Canada's ambitious target of $75 billion in agrifood exports by 2025.

I represent Bayer CropScience. Our company proudly offers an outstanding range of products, including high-value seeds, innovative crop protection solutions based on chemical and biological modes of action, as well as an extensive backup to service modern agriculture.

Capturing our export potential is underpinned by a stable and predictable domestic regulatory system that enables farmers access to these innovative tools and technologies to keep them competitive. Our regulatory system is renowned around the world for its rigorous evaluation process of crop protection products. This global reputation can be weakened when proposed re-evaluation decisions are published or made in Canada with ultra-conservative end points and incomplete data. These decisions can also result in the loss of tools available to our growers, and this will inevitably reduce the productivity, sustainability, and competitiveness of Canadian agriculture. This will make it difficult to reach our export targets.

The Pest Management Regulatory Agency's re-evaluation process does not afford an opportunity for registrants or other affected stakeholders to address potential risk concerns prior to the publishing of these proposed re-evaluation decisions. This is unacceptable, as it sends an unclear signal to foreign jurisdictions and can erode public trust both at home and abroad. Furthermore, to increase public trust in our regulatory processes, we would ask the government to allocate resources to improve communication efforts to the general public on how these processes are used in Canada and how these decisions are made by our regulators.

Another key consideration is ensuring that our export markets accept the technologies and innovations that have been approved by Canadian regulators and adopted by our growers. When access to export markets is hindered due to delays in regulatory approvals between jurisdictions, it can deter investment in innovation, restrict the adoption of new technologies, and impede exports. Harmonized international approvals for both biotech traits and other technologies, including the promulgation of maximum residue limits, are necessary to support these technologies. Over the past 20 years there have been too many incidents of non-tariff measures facing Canadian exports, and we believe that Canada can play a larger role in supporting the development of emerging regulatory frameworks in key export markets.

In order to help facilitate this dialogue, we also need to identify areas where our own regulatory system needs improvement, and take bold steps to modernize these processes that we already have in place.

We've heard today that modern plant breeding innovations will allow researchers to precisely add, delete, or replace specific characteristics to better meet the needs of farmers and consumers while protecting the environment. Bayer supports a modern science-based framework and believes the focus of regulation for products of modern plant breeding should be based on the scientific risk assessments within existing legislation. This type of framework helps protect both human health and the environment while enabling fair and predictable regulation of plants derived using these modern innovations. We encourage the government to continue to engage with key export markets to help drive science-based decision-making through regulatory alignment and transparency.

Bayer has a long-standing record of investing in research and development in Canada, made possible by a strong environment for intellectual property protection and by a farming environment that is representative of other parts of the world. We enjoy access to a skilled workforce and to collaboration with leading public and private researchers. Canadian farmers have validated these advancements by readily adopting new technologies as they come to market and placing trust in our innovations.

The government can help enhance innovation by further streamlining internal priorities and processes. Collaboration between departments will eliminate potential areas of duplication, while providing more clarity on reporting requirements. There have been cases in which uncertainties have led to unnecessary delays and have impacted research projects. Furthermore, continued dialogue with other countries is needed to ensure that researchers are able to transfer materials between research sites in different jurisdictions. Taking these steps will help bring new solutions to growers faster.

I would like to end my remarks by sharing an example of the positive impact our investments in research and development have had in Canada. Bayer is the largest provider of canola seed to the Canadian market. Our InVigor brand has contributed significantly to the growth of canola in Canada while improving sustainability and enabling growers to adopt minimum- and zero-tillage practices. Furthermore, we have developed varieties with healthier oil profiles and technologies for pod shatter reduction, assisting in harvest.

As a leader in Canadian agriculture, we are committed to being an active partner in advancing science to meet the needs of Canadian farmers and consumers here at home and abroad.

I look forward to answering your questions. Thank you.

[The Chair, Liberal, Pat Finnigan]

Thank you very much, Mr. Thiel.

We'll go to questions.

Mr. Dreeshen, you have six minutes.

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

Thank you to our guests for being here this afternoon.

In the last panel we had, there was a discussion about various groups that actually look at moving agriculture backwards. The analogy I presented was that we simply take a look at what happens when they get ahead of industry—I'm from Alberta, and we saw what happened with the oil sands activists—and industry isn't there to stand up for the real scientific aspects that are taking place.

Again, Mr. Thiel, there was a discussion about neonicotinoids, and you spoke about canola. I mean, that's where the beekeepers take the bees, to where the canola is, so the real reasons, and the discussions and concerns we have, are I think critical discussions that need to take place.

I'm just wondering what we are doing in order to ensure that the proper scientific information gets out to the public. The reason I say that—I mean, I am a farmer, but I also come from a rural area—is that I've had people write me letters about how we should get rid of neonicotinoids, because in Ontario and Europe that's what they're doing. I've realized that people don't understand agriculture anymore. I was a teacher as well, so I also know that you're going to teach those things that you know.

Industry has to be challenged with going in and getting the right messages out there. Otherwise, you're going to see these fancy lessons put up from all these activist groups about how farmers are doing evil things to animals and how all of these things are causing problems around the world. It's all complete nonsense. Where is industry standing up to protect the integrity of our Canadian agriculture and agriculture around the world?

[Paul Thiel]

Thank you very much for the comments. I think I'm in complete agreement with everything you said.

At Bayer we've recently undertaken two steps to try to address these very concerns. First, I'd like to speak to a global initiative we've undertaken that we refer to as our “transparency” initiative. In this, we have now made available to the global public our environmental safety and human safety studies, which we submit to the authorities and which are generally considered to be protected information under the guise of the regulations within the country. We have opened that up to the public. Anyone can go online into a global database and request copies of these studies. We think it's important to try to get our science out there alongside the other scientific information that is being presented. We have not been putting our science in front of the public. So I think that's one step.

The second step I'd like to discuss is something we've coined “benefits beyond efficacy”. If you are a consumer of canola oil, living in an urban setting, you may want to understand more than just the fact that this insecticide controls something called a flea beetle on canola. That's wonderful for a grower, but what does it mean for me? We're trying to look more holistically at the role of our products both on the farm and off the farm, trying to create the story of value, and trying to arrive at a more trustful relationship.

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

The other point is that in so many cases this is a non-tariff trade barrier. There are other countries or other groups that are trying to protect their technology; therefore, if they can demonize ours or other technologies, then they're able to get advantages there.

Are there things that our trade negotiators should be doing when they see that happening, and do you work closely with our trade negotiators so that this is being presented in the way it should be?

[Paul Thiel]

Yes. We have a very good relationship with many of the trade offices around the world. I would highlight our role in Brussels. I would also highlight the input we have had, the opportunity to contribute to trade missions, particularly China.

Certainly the government has been very open to our participation and support.

Coming back to one comment I made in my opening statement, I think the government could do more to get the public to have trust in the regulations that are in place. We are a very good, sound, and science-based regulator with a global reputation. It's one that the citizens of this country should have trust in, but they question it, partly because they don't understand it.

[The Chair, Liberal, Pat Finnigan]

Thank you.

Now we have Mr. Longfield for six minutes.

[Lloyd Longfield, Liberal, Guelph, ON]

Thank you, both, for being here.

I'd like to start with Mr. Smith.

Guelph has the NSF group, the former Guelph Food Technology Centre. You outlined that as part of an overall network across Canada.

I'm wondering about the connection of that network to financial networks, like the venture networks. Bioenterprise is one that helps these start-up companies. I wonder how that can be used to increase our export potential, and whether you're using Innovation Canada in any way yet—and I know it's a new organization. Could you highlight the flow of the technical development, the financial supports, and the assistance to get to export markets?

[Dr. Jim Smith]

I think it's something that is underutilized

Most of the companies we work with are small to medium-sized companies. Most of them tend to work with their own resources, their family resources, and many are not looking to grow significantly.

One of the things we're doing in Prince Edward Island now is working collaboratively with a few different organizations. There are Food Island Partnership, Canada's Smartest Kitchen, and the National Research Council. All of these organizations have a mandate towards improving the food industry and to grow it.

Food Island Partnership, in particular, is taking a leading role in exactly what you've just mentioned. As I say, from our point, it's more the technical support. We're relying on them to coordinate a much broader support for the industry.

So, that's what's being done in P.E.I.

Regionally, ACOA is certainly very involved with discussions, and Food Island Partnership is very much involved with them. Again, to provide that broader range of support to the industry, one of the things we think is key is to identify those companies that are really interested in growing and have the wherewithal, the resources, or access to the resources, as you mentioned, to grow, because that's where we see the largest growth potential being. If a company has 30, 40, or 50 people, something like that, and they want to double the size of the company, that's where, I think, we could have a lot of potential to grow our food processing industry in Canada.

[Lloyd Longfield, Liberal, Guelph, ON]

I'm halfway through my time. I'd like to go further, but thank you for getting all that forward. Connecting the innovation and agriculture departments together with export is something we're trying to do as a government.

Mr. Thiel, thank you, first of all, for having me up to Ennotville and showing me the experimental farm north of Guelph.

I'm looking at the modern agricultural tools, the digital farming, and the honey bee health being part of what that group is working on. Could you dive a little into the digital farming opportunities, or the honey bee health and how important that is to bear?

[Paul Thiel]

Quickly on the honey bee health topic, we take honey bee health very seriously. We're the single largest contractor of pollination services in Canada. Without bees, our business would be at jeopardy, so we spend a lot of time trying to understand it and making investment in ensuring honey bee health.

I think digital farming is a big opportunity for us in Canada. Digital farming is going to allow growers to make better decisions about how to farm their land, where to farm, what to do on their land. It's going to create a very positive story of sustainability that goes along with our products. We have the technology in Canada to support the investment made by many people in digital farming. It is a reality today. We've launched a digital farming tool this year that allows growers to make better applications of fungicides to their canola on the fly, reducing costs and improving the sustainability.

[Lloyd Longfield, Liberal, Guelph, ON]

In terms of public trust, as Mr. Dreeshen was saying, if the public knew how important honey bees were to your products, as well as neonics to improve your yields, the two of them can work together. In fact, they have to work together.

[Paul Thiel]

I agree.

[Lloyd Longfield, Liberal, Guelph, ON]

I wasn't expecting that you would disagree.

The public trust is such a big thing.

I know that in Germany, Bayer must have dealt with this. Are there any lessons from Germany that we can take into North America, or that maybe you are bringing across from Germany through the Bayer network?

[Paul Thiel]

I'm not sure there are many lessons we're bringing. There are things we have learned to avoid in North America.

I think our transparency is a demonstration of what we're trying to do. We perhaps have tried to hide behind the cloak of scientific data that the government has and everybody should trust us. I think we have to be more open and transparent, which we are trying to do, because notwithstanding the role of science—and we talk about science-based regulation—that's only part of the process. Ensuring we have public trust in what goes on the farmers' land and what winds up on the grocery shelf, I think is of paramount importance.

[Lloyd Longfield, Liberal, Guelph, ON]

Absolutely. Thank you very much.

[The Chair, Liberal, Pat Finnigan]

Thank you very much.

Now, Mr. MacGregor, for six minutes.

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

Thank you, Chair.

Mr. Thiel, I'll start with you, and because I want to get to Mr. Smith, I want to package just two questions into it.

You made mention in your opening statement that you want to see the elimination of duplication in federal departments. Can you provide the committee with a few concrete examples of where that might exist?

With regard to my second question, Bayer is very much a global player. You have offices, and your reach extends, in many different countries. I previously had a phone call with the Canadian Seed Growers' Association. They mentioned that France and Portugal were two countries that were very forward looking in looking for future opportunities in innovation, seed development, and so on.

Can you provide this committee with any examples of countries we could be looking to as examples of technology and innovation, given that Bayer has such a global reach?

[Paul Thiel]

I'll start with your second question. Of course, I'll certainly advocate for Canada as a country in which we have all kinds of innovation taking place. I lived in France for a number of years and it is extremely progressive on the science side, although it doesn't always find its way into the marketplace. We have to ensure that we draw a distinction between those two scenarios. My colleague on the panel today mentioned applied science and the idea of taking things that we can get into the hands of growers. There's a role for pure research and it's absolutely paramount because it underpins what we do, but at some point we also have to be able to transfer that technology into the hands of the growers in a tool that they're able to use and they're able to benefit from.

The other comment is about duplicity. Duplicity often comes through a lack of coordination between various departments or various ministries across the government. I'm sometimes challenged by the sheer size in navigating my way around Bayer. I don't know what it would be like to try to navigate my way around government, but too often we have instances where the right hand and the left hand don't seem to be communicating. I'll use the neonicotinoid example. Right now we have one branch that seems to be looking at alternatives to neonicotinoids, and at the same time, another branch that is looking to take away the very products that are identified as alternatives. That puts industry in a very difficult position, and more importantly, it puts our customer, the grower, in an extraordinarily difficult position because losing one tool is challenging enough, but losing the alternatives to that tool is even more challenging.

Another one that is just finally coming to an end after nearly eight years is Environment Canada coming to us with regulation around plant pathogens and how we're able to use them in research. The Agriculture Canada researchers who were using these very pathogens themselves were unaware of what was coming. Eight years later, we finally have a resolution in place. A lot of it is ensuring that communication across sectors; a sectoral approach to regulation is critically important.

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

Thank you.

Mr. Smith, when you were giving the slide show, I was really interested in the part where you mentioned that, on average, you helped introduce 370 new products to market. I wonder if you could give examples of some of those new products, and examples where value-added technology is working well in Canada and where we could make recommendations as a committee. Where I come from, the Cowichan Valley, we have some local areas on Vancouver Island where local organizations are helping farmers collectively come together to realize value-added potential in their products so that they can really maximize the amount of dollars they earn. I'm very interested in this on a personal level, and also on behalf of my constituents.

[Dr. Jim Smith]

For brevity, probably one of the best examples from Prince Edward Island is Island Abbey Foods. They produce a product called “honibe”, which is a solid honey. They came to us a number of years ago and asked if it was possible to make a solid honey. Honey bottles are often made of glass, and when we drop them we can break them and it's a mess. Also, honey picks up moisture like crazy. They were interested in finding out whether they could do this, especially for people who are camping. They came to us and we said, “Okay, let's look into it.” We worked together and developed a technique to dehydrate honey, which produced a lozenge, which first of all was intended as a sweetener. More recently they have developed it into a lozenge that can be used for natural products, semi-pharmaceutical type products, and that has been very successful. That particular company has grown to a staff of 60, from people who had no knowledge of the food industry before they got into that. This person was an information technology specialist, but he wondered if it was possible, because he thought there was a market for something such as that because it's natural. It has really taken off, and it's sold and exported around the world as well.

There are lots of examples. We have another client working with us now, incubating at BioFoodTech. They're making Fauxmage, a non-dairy cheese, and there's a huge market for it. It's a vegan-type product, and that is a huge growth area. They can't keep that product on the shelves, because there's so much demand for it.

[The Chair, Liberal, Pat Finnigan]

Thank you.

Now we have Monsieur Breton for six minutes.

[Pierre Breton, Liberal, Shefford, QC]

Mr. Smith, had you finished answering Mr. MacGregor? Do you have anything else to add? Your comments were interesting, and I could let you continue.

[Dr. Jim Smith]

Thank you. Yes, I would like to continue. As well as the fruit-related examples, there's one example I think is very important, because it shows you the unexpected consequences. We've been working for many years on what's called “supercritical fluid extraction”, which is the use of high-pressure carbon dioxide to extract different value-added products from oats. This is with an Alberta company called Ceapro, which is well known. We've developed that technology in collaboration with them.

We've been working in this technology. We've had a local company do lots of modifications to the equipment we've had, and because of that they've developed expertise in manufacturing this equipment. Now they're selling it to the cannabis industry for extraction of cannabinoids. This equipment sells for between $1 million to $2 million apiece. It's a very successful new business for this company. It was unexpected, but it's built on developing that technology around the extraction from food.

I think that for the honey product, and of course for the supercritical extraction, intellectual property is very important. Mostly in the food industry, unfortunately it's very difficult to claim intellectual property. It's usually a trade secret because it's very difficult to make a case for many new products unless they're highly technological. The honibe product was.

Another client working with us is doing a process for aging whisky very successfully. This particular process reduces the time to age whisky to develop into a product that tastes like a 10-year-old whisky, and it's done within 40 minutes. This has been taken up by a company from Scotland that is selling products in North America, and they've started a test market this year in the U.S. of 10,000 cases of this product to see how well it does. They've had very good results with it, and they can individualize the product quality. ...too much detail, but it's a very interesting process, and it's probably going to be used around the world to age spirits.

[Pierre Breton, Liberal, Shefford, QC]

Thank you, Mr. Smith.

I would like to give Mr. Thiel an opportunity to answer another question related to research and development.

Businesses often tend to invest a great deal in research and development or in innovation during the production phase. How important is that phase? As for innovation, could research and development be done more upstream?

You have about two minutes to answer.