Agriculture Committee on April 20th, 2021

[Marc-André Viau]

I don't know why you're telling me that we don't want to give farmers a break, given that we just said the preferred option is the one put forward by the government and upheld by the Supreme Court, which means that meaning that while carbon pricing remains in place, farmers are compensated. The end result is that they receive compensation, thus ensuring that their income is maintained.

[The Chair, Liberal, Pat Finnigan]

You have about five seconds.

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

I'll cede my time. Thank you.

[The Chair, Liberal, Pat Finnigan]

Thank you, Mr. Lawrence.

Thank you, Mr. Viau.

Now we'll go to Mr. Louis for six minutes.

Mr. Louis, you're on mute.

[Tim Louis, Liberal, Kitchener—Conestoga, ON]

For the first time in a year and half or whatever it is, I did it: I finally was the one who was on mute. My apologies. I just got excited about talking to the witnesses.

Thank you to everyone for being here. I very much appreciate it. I'm so excited I did not unmute my microphone.

I'd like to begin by addressing Ms. Ross and maybe ask some questions.

We all know that farmers are on the front line of worsening climate impacts and unpredictable weather posing threats to our sector. So many of the farmers I'm speaking to—we are all around the country—are practising a lot of beneficial management practices to reduce GHGs. They're sequestering carbon. They are increasing their resilience and with more government support will be able to practice more climate-friendly farming practices. We even heard witnesses in the last panel talk about wet harvests and the ongoing higher risks of these conditions.

We're all looking for a more productive, competitive and resilient farm sector. We're looking also for alternatives to lowering emissions and supporting that innovation. All the parties in Canada have agreed that we need to price pollution, and now exemptions already exist on farm fuels. As discussed, with this bill we'd be exempting for heating, but another way to make the agriculture sector more competitive would be to lower emissions and costs in other ways. You touched on a few. I wondered if you could expand on them.

Part of your organization's six high-impact program proposals included doing more with less nitrogen, increasing adoption of cover cropping, normalizing rotational grazing, and protecting wetlands. Could you expand on some of those ways in which we could also become more competitive and lower our emissions in that sector?

[Karen Ross]

Yes. Thanks for the question, Mr. Louis. I'd be happy to.

We have to remember that farm fuels, of course, demand part of the GHG portfolio in agriculture, but it's only 14%. The rest of our sector's emissions come from other sources, predominantly nitrogen management, crop production and livestock. I like the question, because I think it's important that within this whole context we think about the major emission sources and how we can work with farmers directly to support changes in practices to reduce emissions.

What the budget adopted yesterday was direct support for farmers for five priorities that we advanced. Cover cropping is a practice adopted by many Canadian farmers but is not yet scaled. With direct upfront support for farmers, we can scale this practice. It's better for soil health, water management and pest control, but it also helps to reduce emissions.

Rotational grazing is a practice that is quite well understood, again with high upfront costs associated with infrastructure—more fencing, more water bowls where necessary. Therefore, supporting farmers to share in those upfront costs to then adopt practices that further reduce emissions on our farms is a great way to go.

In terms of improved nitrogen management, nitrous oxide from the use of nitrogen fertilizer, or nitrogen fertilizer waste, is the largest single growing source of emissions in our sector. Let's not lose sight of that one. We need an agronomist to work closely with farmers to improve nitrogen management to be more efficient in our use so that we're not wasting nitrogen. That's better for farmers and it's also better for the environment.

Finally, around wetlands and trees, it's so important. Keeping trees and wetlands on farms is powerful in terms of maintaining a GHG sink. Farmers can play a huge role in that if they're supported with the economic costs of not farming that land, of not making revenue off of that land.

Taken together, Mr. Louis, in our analysis we worked really closely with some of Canada's best GHG modellers and agriculture economists. For the first time ever, we produced a report in Canada that quantifies the GHG reduction potential of these practices if scaled with the right kinds of supports that we saw in the budget. We're looking at 10 megatonnes. That's huge. That's just under one-seventh of our total emissions across a season or two. It's a powerful way to support farmers to really be climate heroes and to really be part of our collective climate solution in Canada.

[Tim Louis, Liberal, Kitchener—Conestoga, ON]

They want to be. I think you touched on it. They basically need that financial support. Even education-wise, in our riding here, the Grand River Conservation Authority has a really good relationship with the farmers and they were doing their part. It's that support and the programs that are in our budget, like the nature smart climate solutions fund or the agricultural clean-tech fund that, hopefully, can make this sector more resilient and also more protected.

With my remaining time, I want to switch to Équiterre. In my riding, we have a company called Bioen, which is producing an anaerobic digestive system that turns organic waste into renewable energy through anaerobic digestion. This company has already commissioned 345,000 annual tonnes of waste processing capacity and nine million watts of electrical generating capacity to date.

Can you talk about some of the innovations, such as anaerobic digestion and biogas, that we can invest in to help make this transition?

[Émile Boisseau-Bouvier]

Thank you very much, Mr. Louis.

Indeed, as you have pointed out, there are fossil fuel alternatives that have not yet been used on a large scale. The example you gave is a very good one. There is also the Triple Green Products company, which was mentioned a little earlier.

Other sources of electricity can sometimes be used, even though, as was mentioned several times, grain drying is only seasonal. There are problems involved in installing an electrical infrastructure on a farm, but there are several possibilities…

[The Chair, Liberal, Pat Finnigan]

Excuse me, but unfortunately your time is up.

Mr. Perron, you have the floor for six minutes.

[Yves Perron, Bloc, Berthier—Maskinongé, QC]

Thank you, Mr Chair.

I'd like Mr. Boisseau-Bouvier to continue with what he was saying about alternatives.

[Émile Boisseau-Bouvier]

It's true that there are alternatives, whether biomass, electricity or simply more energy-efficient measures to enhance existing systems and thus decrease the use of fossil fuels.

[Yves Perron, Bloc, Berthier—Maskinongé, QC]

Okay.

I began by letting you finish your comments and forgot to thank all the witnesses for having accepted our invitation. So I'll digress briefly to thank them now.

What have you got to say to producers like Mr. Lowe and the previous group of witnesses, who are telling us that it's difficult to make the alternatives viable?

[Marc-André Viau]

Good afternoon, Mr. Perron. Thank you for your question.

It's true that some alternatives are not viable at the moment. In Quebec, for example, electrifying some farms means extending the three-phase network, and that's extremely expensive. If we were to ask the producers and farmers to pay these costs, it would definitely not be viable.

That's why we are really making an effort to encourage governments to support the farm sector. Before the tabling of the federal budget, my colleague Ms. Karen Ross of Farmers for Climate Solutions proposed investments of $300 million. Those announced were not on this scale, but they are nevertheless significant, as I said earlier. They were welcomed by the Canadian Federation of Agriculture and other federations.

[Yves Perron, Bloc, Berthier—Maskinongé, QC]

Okay.

I understand, and to some extent I'm at where you are on this. There's still hesitation about dropping the price on pollution. It's a principle almost everyone agrees with. However, we can look at the current measures and strike a better balance.

For example, the Greenhouse Gas Pollution Pricing Act currently has some exemptions, for things like fuel for tractors. Bill C-206 could include propane and natural gas, which in fact create less pollution than methods that are already exempt, and for which producers tell us that they have no economically viable alternatives.

No one is talking about eliminating the carbon tax, Quebec's carbon exchange and things like that; far from it. But might there not be an interim solution in the form of an exemption for these fuels, combined with massive investment in support of energy transition, and R and D to improve the processes?

You mentioned extending the three-phase network. Consideration could also be given to developing smaller infrastructures to deal with biomass, for use on a seasonal basis.

I'd like to know what you think about this.

[Marc-André Viau]

Your comment, like the study of this bill, is very apt.

I repeat, the problem is a real one. As there is no alternative, what are we to do?

You mentioned the time span, which is precisely what is missing from this bill. There is no discussion of the time span. There is an exemption for these fuels, but no time period is specified. We've already said that we are in favour of the solution put forward yesterday by the government because it combines two elements: direct assistance and transitional assistance. Transitional assistance is generally used to reduce the time period during which direct assistance is provided, as the shift to innovation development assistance accelerates. As that progresses, direct assistance is reduced.

[Yves Perron, Bloc, Berthier—Maskinongé, QC]

This discussion is genuinely interesting.

My understanding is that if a time span was specified, then a major incentive allowing the state to support a transition would be less of a problem for you, although I'm pleased that it will bother you anyway.

[Marc-André Viau]

As I was saying a short while ago, any proposal to weaken carbon pricing is related to an equally important issue, because there are significant impacts on farming. Any mechanism that would affect this pricing would, we believe, be problematic.

Nevertheless, it would be worthwhile to consider the time span issue.

[Yves Perron, Bloc, Berthier—Maskinongé, QC]

The idea is to avoid extremes on either side. We need to move forward calmly to reduce greenhouse gases. It's urgent, and we're all very much aware of it.

Do you believe that we would get more support from the farming community if we didn't reduce income?

I don't know if you heard the testimony earlier…

[The Chair, Liberal, Pat Finnigan]

I am sorry to interrupt you, Mr. Perron, but your speaking time is up.

[Yves Perron, Bloc, Berthier—Maskinongé, QC]

Thank you.

[The Chair, Liberal, Pat Finnigan]

Thank you, Mr. Perron.

Mr. MacGregor, you have six minutes.

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

Thank you so much, Chair.

Farmers for Climate Solutions, first of all, I appreciated your opening statement. I'm glad to see farmers, particularly members of your organization, putting themselves in a place of prominence in leading this conversation. I, too, believe that our agricultural producers have a key role to play over the next decade and beyond in showing what they can do to be one of our leading weapons in fighting climate change.

I want to drill down on this question of the alternatives to grain drying. I know my questions are very similar to what you've already been asked by my colleagues. Our previous round of witnesses, particularly the Grain Growers of Canada, were quite adamant that there are no viable alternatives to grain drying.

In your opening statement you did say that you support a price on pollution. I do as well. You also mentioned that you understood the financial crunch that many farmers have.

I'm trying to sort through the two different narratives here. I mentioned to our previous witnesses that there seem to be some grain drying systems that use crop residue as a fuel source. Are those some of the alternatives that we should be looking at, particularly with respect to this $50 million that has been earmarked in the budget to try to find more efficiency in this?

Any way that you can help illuminate this issue for us would be greatly appreciated.

[Karen Ross]

Thanks. I don't know about illuminating issues entirely, but I'd love to contribute. Thanks for the question, Mr. MacGregor.

Listen, this question about alternatives existing in Canada is troubling. I'll provide one example. We have actually already had a Canadian precedent, a public program in Alberta called the efficient grain dryer program, which funded 39 retrofits to grain dryers in Alberta. The program was poorly funded or short term and not that well publicized, but retrofits are possible, are definitely happening and are an alternative that helps to at least reduce the carbon tax that farmers would be paying on grain drying.

You mentioned biofuels. There's a made-in-Manitoba solution scalable to any size of farm. It relies on biomass produced on-farm to dry grain.

These are the kinds of innovations that I think we all wish our sector had decades ago so that we could have adopted them even before the price on pollution came into place, but we didn't. It is with these kinds of programs that we're going to see the innovation we need in our sector.

In terms of helping to solve this issue, Mr. MacGregor, I think one key thing to keep in mind is absolutely that retrofits to existing grain dryers that help to reduce emissions also help to avoid the carbon tax. When it comes to biomass and systems that use biofuel produced on-farm, I think we proceed with caution. Of course, that eliminates the carbon tax. We need to be sure that the life-cycle effect confirms that it actually reduces overall emissions too. That's obviously the ultimate goal.

Overall, farmers who are in our network and who have retrofitted and who are using alternatives have significantly lower fuel bills now too. In the long run, this actually makes really strong economic sense.

Ultimately, the way I see it, there's no choice in front of us, right? Our sector is transitioning no matter what, because the market is demanding it domestically and internationally. From the biggest to the smallest buyers, we're seeing essentially everybody asking for lower-GHG foods. The role for government policy, I strongly believe, is either to better support farmers to stimulate that innovation to help support those steep upfront costs so ultimately we can lower our fuel costs, practices that make more economic sense, rather than....

Maybe I won't present a “rather than”, Mr. MacGregor. I'll just conclude by saying that ultimately the urgency of climate change requires all hands on deck, all policies possible. I think what we were seeing yesterday was a substantial investment that helps to minimize the financial burden of the price of pollution on farmers, using natural gas and propane while also directly supporting the transition to reduce emissions. That's a win-win. That's what we need to see.

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

Yes, absolutely. I couldn't agree with you more.

When you look at the budgetary announcement yesterday, you see that they are announcing that $100 million in the first year. Bill C-206 has a very narrow scope; when you look at it, it really is essentially about grain drying. I guess the government is recognizing that some money has to be returned to farmers during this transition phase. When you're holding up the budgetary announcements of yesterday and Bill C-206, couldn't you plausibly argue that Bill C-206 is in fact an interim measure while we help farmers in the transition?

[Karen Ross]

I think that's what the rebate serves to do. The rebate serves to recognize the upfront cost of the tax right now and the tight margins that farmers are facing, but also stimulates. It doesn't shy away from acknowledging that farmers want to and can reduce emissions. We need to start now. We have nine growing seasons left to Paris, and our emissions are rising across the board.