Agriculture Committee on March 9th, 2021

[The Chair, Liberal, Pat Finnigan]

Welcome to meeting number 21 of the House of Commons Standing Committee on Agriculture and Agri-Food.

Pursuant to the order of reference of Wednesday, February 24, 2021, and the motion adopted by the committee on February 25, 2021, the committee is beginning its study of Bill C-206, an act to amend the Greenhouse Gas Pollution Pricing Act (qualifying farming fuel).

Today's meeting is taking place in a hybrid format pursuant to the House order of January 25, 2021. Therefore, members could be attending in person in the room, or remotely using the Zoom application.

Proceedings will be made available via the House of Commons website.

I'd like to take this opportunity to remind all participants in this meeting that screenshots—taking photos of your screen—are not permitted.

To ensure an orderly meeting, I would like to outline a few rules.

Before speaking, please wait until I recognize you by name. If you are on the videoconference, please click on the microphone to unmute yourself. Those in the room, your microphone will be controlled as normal by the proceedings and verification officer. A reminder that all comments by members and witnesses should be addressed through the chair.

I would like now to welcome our witness, member of Parliament for Northumberland—Peterborough South and sponsor of Bill C-206, Mr. Philip Lawrence.

Welcome, Mr. Lawrence. You may give an opening statement of up to seven and a half minutes.

[Philip Lawrence, Conservative, Northumberland—Peterborough South, ON]

Perfect. Thank you, Mr. Chair.

It is an honour and a privilege, friends, to join you at the Standing Committee on Agriculture and Agri-Food to speak about my private member's bill, Bill C-206.

It has been a pleasure throughout this private members process, especially as a new MP, to get to talk to farmers and stakeholders from coast to coast to coast. Do you know what? In talking to farmers, nearly all farmers, in fact, every farmer, supported Bill C-206.

After all, we have to remember that our farmers are the backbone of our communities, the engine of our economies. They work early mornings and late nights to put food on our table and clothes on our back. They have continued to ensure throughout COVID-19 and really at any time in recent history that our food supply has been protected. While we have battled the pandemic along with the farmers, they have not paused their work. They continue to plant their fields, feed their livestock—

[The Chair, Liberal, Pat Finnigan]

Mr. Lawrence, I'm sorry. I guess there are sound issues.

Madam Clerk, did you want to deal with that?

[The Clerk of the Committee, Ms. Alexie Labelle]

It seems that the microphone is not selected in the Zoom screen.

[Philip Lawrence, Conservative, Northumberland—Peterborough South, ON]

My apologies. That's my fault.

[The Chair, Liberal, Pat Finnigan]

Did everybody hear it? Is there an issue with translation?

I think it's good.

[The Clerk]

Now we cannot hear anything. For the translation, the interpreters have his speaking notes.

[Philip Lawrence, Conservative, Northumberland—Peterborough South, ON]

I think I've resolved the issue. Can everyone hear me now? Shall I continue, Mr. Chair?

[The Clerk]

Yes.

[The Chair, Liberal, Pat Finnigan]

Go ahead, Mr. Lawrence.

[Philip Lawrence, Conservative, Northumberland—Peterborough South, ON]

Our agriculture industry accounts for almost 7% of our total GDP. It is more vital to our economy than many might realize. We are the fifth largest exporter of agriculture in the world. The agri-food and agriculture industry employs 2.3 million Canadians. That's one in eight jobs in Canada. We are one of the world's largest producers of flax seed, canola, pulses and oats.

While the farmers' work has been unwavering, they have faced many challenges, known colloquially in August and the autumn of 2019 as the harvest from hell. They've also faced some global trade wars that have reduced their markets. In addition to that, they've been fighting the pandemic along with all of us. Some of those barriers were unpreventable. However, one that is very controllable and where we can help Canadians is that they currently bear an inequitable share of the burden of the carbon tax.

The greenhouse gas pollution pricing currently allows qualifying farmers an exemption on certain farm fuels such as gasoline and diesel; however, it fails to extend that exemption to other fuels such as natural gas and propane. This is challenging on many different fronts, as farmers quite often don't have other options and their only option for their particular industrial equipment may be natural gas and propane.

The science says that natural gas and propane are often cleaner fuels than diesel or gasoline. Why would we not include them in this exemption? Farmers, after all, are stewards of our land and, along with our indigenous people, were some of the first environmentalists standing up for the land and also for the animals and plants located on their properties.

Farmers have been leaders in environmental technologies. They've led with such technologies as no-till to prevent soil erosion, or precision-led, satellite-led agriculture that reduces the use of fossil fuels. In fact, the Canadian agriculture industry has already achieved net zero decades ahead of many other industries.

Beyond the fact that the carbon tax presents a significant cost to our farmers, it has tremendous pricing barriers for our farmers as well. Many times our farmers are price-takers, and so, unlike other industries, they cannot simply push the carbon tax on to the consumers. They absorb it themselves, which can be a make or break for many of them, making them uncompetitive in some cases.

We've seen the result of higher taxation on farmers as farm debt has doubled in the last 20 years. Farmers are struggling now. Farmers want to reinvest in our communities, to spend money at the feed stores, the tractor dealerships and local restaurants to keep the rural economies flowing through these very difficult times. Rural Canada needs more support, not more taxes.

Our farmers deserve a break. Bill C-206 aims to fix what seems to me, to put it gently, an oversight in the initial carbon tax legislation. By expanding the farmers' exemption from the carbon tax we are securing their continued innovation in environmental protection, the protection of Canada's food supply, the livelihood of farmers.

What may seem like an insignificant amount of money to the government may very well be make or break for many of our farmers. I have seen carbon tax bills of tens of thousands of dollars. This is having a tremendous impact on our farmers across Canada.

In closing, Mr. Chair, I would like to thank the farmers for everything they do. Conservatives will continue to advocate for farmers and common sense solutions. I hope to see, this time, not just all parties, but all members support Bill C-206.

Thank you. I look forward to your questions.

[The Chair, Liberal, Pat Finnigan]

Thank you, Mr. Lawrence.

Now we'll go to the question round.

To start us off for six minutes is Lianne Rood.

[Lianne Rood, Conservative, Lambton—Kent—Middlesex, ON]

Thank you, Mr. Chair.

I'll be splitting my time today with Mr. Steinley.

Thank you, Mr. Lawrence, for appearing today on your bill. As you know, I spoke to your bill, so I'm interested also in hearing a couple of things that you didn't touch on in your bill. Of course, you said this bill is going to help farmers. This is on-farm use that directly affects their bottom lines.

Does this bill extend an exemption for farmers for heating their barns with propane and natural gas?

[Philip Lawrence, Conservative, Northumberland—Peterborough South, ON]

Thanks very much, Ms. Rood, and thank you for your support. I really appreciate it, and the support of the rest of the members who supported the bill.

The tone we want to strike is one of collaboration, so we would welcome amendments. Currently, it does not include barn heating, but we would like to work on that with the committee to increase the scope of this, as we want to continue the tone of openness, transparency and collaboration with this legislation. I am certainly open to any suggestions that will help our farmers.

[Lianne Rood, Conservative, Lambton—Kent—Middlesex, ON]

Thank you very much.

My second question is one that I kind of alluded to at the beginning. I'm curious to know whether you've been hearing from farmers, as I have in my own riding of Lambton—Kent—Middlesex, on the difference this would make to their profit margins, if this change were to be made, and the viability of their businesses going forward.

[Philip Lawrence, Conservative, Northumberland—Peterborough South, ON]

Yes. We've certainly seen a number of agriculture stakeholder groups, including those out in Saskatchewan and Manitoba, who have shared numbers that range from 8% all the way up to 12% or even 15% in terms of the the net income that will be impacted.

As powerful as those numbers are, it's much more powerful, to me, when I am actually talking to farmers about the impact. As I said, I have talked to many, many farmers—I don't have an exact count, but it's many—and not one of them has indicated that they don't support this legislation.

I might say that these are farmers who support the Green Party, the NDP, the Liberal Party and the Conservative Party of Canada. They have all agreed that this bill is essential and something that they want.

[Lianne Rood, Conservative, Lambton—Kent—Middlesex, ON]

Thank you very much, Mr. Lawrence.

I will defer the rest of my time to Mr. Steinley.

[Warren Steinley, Conservative, Regina—Lewvan, SK]

Thank you very much, Lianne.

Thank you, Mr. Lawrence, for being here.

This will dovetail into my questions. The Agricultural Producers Association of Saskatchewan is familiar to this committee. Their president, Todd Lewis, presented to this committee on capacity growth. They did a release in January 2021 about the carbon tax, in which they said:

It’s not good news. It’s a significant hit. It’s pretty significant when you’re talking about $10 an acre on an average annual basis. What’s so important about it is that it’s not expansive, [it] just directly [affects our] bottom line.

APAS's numbers say that by 2030, because of the carbon tax, the price could be $12.50 per acre. This cost is carried entirely by farmers and affects their bottom line. In your bill this is something that's very important to producers in Saskatchewan. Could you elaborate on whether you have talked to APAS and whether the numbers he is talking about are reflective of farmers across the country?

[Philip Lawrence, Conservative, Northumberland—Peterborough South, ON]

Yes, we've talked to agriculture stakeholders across the country, of course particularly those who would be affected by the federal change in the carbon tax. Nearly all of them said that this will have an impact.

One of the things I'm proud of with our private member's bill is that we've seen a real change in the dialogue. Initially, of course, the government said that this was insignificant and that it wasn't needed for a solution. However, we've seen a marked change in even the way the government is discussing this. I think it's a consensus now that the way in which the carbon tax is currently structured unfairly impacts farmers and those who are working as hard as they can every day to deliver our food supply.

[Warren Steinley, Conservative, Regina—Lewvan, SK]

Obviously, this is something we're doing because right now it's not an option to repeal the carbon tax. Repealing the carbon tax is what we hear out in Saskatchewan as the first choice. Thank you for bringing this bill forward to have some easement of the cost being borne by Saskatchewan producers.

Some people say that producers get a rebate, so what's the big deal if they're going to get the money back that they're putting forward? We saw recently, though, that lots of people in provinces across this country receive less of a rebate than what they paid in carbon taxes. If there's going to be a rebate—that will be some of the argument of our colleagues—why would you take the money in the first place if you're just going to give it back ? Most of the time when the government gives a rebate, it's not as much as what has been paid in the first place.

Have you heard some of the producers talk about a rebate? Is there a similar feeling that if you're going to give the money back, then why take it in the first place?

[Philip Lawrence, Conservative, Northumberland—Peterborough South, ON]

Yes, exactly. I actually had the opportunity on the finance committee to interview Mr. Scott Ross from the Canadian Federation of Agriculture. His position was, “Our membership has been pretty clear that their preference [is] for an exemption”—not a credit. I think I can read that in.

I think it's pretty clear that Canadians would rather just keep the money in the pockets of farmers as opposed to it going to Ottawa and then coming back. Sometimes that money gets stuck in Ottawa. Why would we not just go ahead and leave it right in the pockets of farmers?

[The Chair, Liberal, Pat Finnigan]

Thank you, Mr. Lawrence and Mr. Steinley.

Now we have Mr. Ellis for six minutes.

[Neil Ellis, Liberal, Bay of Quinte, ON]

I'm having trouble with technology again today. It has only taken me a year to figure this out.

Thank you, Mr. Lawrence, for showing up at the committee today. It's a pleasure to have you here today. As you know, our ridings border each other so we do have a lot in common. It's great to see you again. We've run into each other many times.

I have a quick question, Mr. Lawrence. Can you give us some examples of eligible farming activities under the Greenhouse Gas Pollution Pricing Act?

[Philip Lawrence, Conservative, Northumberland—Peterborough South, ON]

I certainly can. I'm just going to—

[Neil Ellis, Liberal, Bay of Quinte, ON]

I'm sorry. You're breaking up big time.