Agriculture Committee on April 27th, 2021

[Dan Kelly]

You know, propane is a great solution. Look at rural settings mostly. There are still 300,000 homes that are heating with furnace oil. Switching those homes to propane is going to have an immediate impact. Look at northern communities that are using diesel for power generation. We are incurring costs for cleaning up spills on an annual basis. Propane could replace those at a cheaper price and with no impact on the environment.

Propane has no impact on the environment. A release of propane simply dissipates into the atmosphere. It has no impact on land, air or water. Looking at the exports, we export as much propane in Canada as we consume. We have a great abundant resource here in this country that can be used across the world to help reduce GHGs. China is a great example.

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

Thanks very much. I'll switch over to canola.

Mr. Ammeter, I was just wondering if you could expand upon the impact that the carbon tax has had on some of your members, some of the specific financial impacts. If you know what the average bill might be, or even if you just provide some anecdotal evidence, that would be great.

[Mike Ammeter]

Thanks for the question.

I think I mentioned that I'm from Alberta, and we have had a carbon tax. We had it for a few years, and then we didn't have a carbon tax. It's been a bit of back and forth.

To nail down the actual cost, I did a little bit of digging into my own billing, and it was quite difficult to determine what I actually personally had paid. One thing I can tell you is that the government's price for carbon on natural gas will cost Canadian agriculture approximately $18.5 billion by 2030. These are the numbers that our organization has come up with. It's difficult to do on a specific farm, but as an aggregate, that's the kind of number we're looking at.

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

Just to further respond to your testimony, I think I could probably speak for most of your members. They want to fight climate change, as I know everyone listening today does, but currently, there is not a feasible alternative, is there? What alternatives are you aware of specifically with respect to grain drying that do not use fossil fuels?

[Mike Ammeter]

I would have to say that I'm not aware of any. As I said in my testimony, I did an upgrade on my dryer a number of years ago, and as far as I know, I am as current, if you will, or as up-to-date as possible with the latest technology on my dryer for efficiency. There's just nothing else available.

I hope I farm long enough to see if we have something different. I don't know if we will come up with something different, but if we do, if it works, if it's efficient and if it's cost-effective, I'm sure we would adopt that.

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

Changes in your industry, like in all industries, take time as well. It's great, as you told us, that you've invested in a higher-efficiency grain dryer. Are all farmers doing that, or is that transition taking time as well?

[Mike Ammeter]

It does take time. All these things cost money, and if money were no object, I'm sure every farm in the Prairies that has a grain dryer would be up to the latest and greatest, but we have so many different demands on us: upgrading equipment here and there, new tractors, combines and what have you. There's such a demand, so you have to prioritize.

Maybe I'd like to upgrade my dryer this year, but I currently need something else that's far more urgent, and that's just an exercise that all farms go through. You have to prioritize, but as I said, if money were no object, I'm sure we'd have the latest, greatest, with all the bells and whistles.

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

Yes. In some ways taking money out of the farmer's pocket through the carbon tax is actually counterproductive because it gives you less money to invest in capital improvements.

Would that be correct?

[Mike Ammeter]

Yes, that's completely fair to say.

Our money comes from the crops we grow when we sell them. Having an extra cost is the Achilles heel, if you will, of the crop sector, of agriculture like that. I am a price-taker. I cannot add a surcharge if I sell a load of grain and I need another $100 to cover my costs. I can't do that. That just does not happen. Therefore, that comes out of my pocket.

As I said before, we're always doing this juggling act, so, yes, if I have fewer dollars, it might mean my upgrade will be next year.

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

Perfect.

To finally continue on your testimony here, it's clear that you would rather have an exemption than a credit whereby the money goes to Ottawa and comes back to you. Is that fair as well?

[Mike Ammeter]

Yes, that's far simpler.

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

Thank you very much.

[The Chair, Liberal, Pat Finnigan]

Thank you, Mr. Lawrence.

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

[Francis Drouin, Liberal, Glengarry—Prescott—Russell, ON]

Thank you, Mr. Chair.

Mr. Ammeter, I will apologize. I should know this because I see Dave here on this call. We don't chat about canola farming. We normally chat about policies that impact canola farming.

Help me understand something. I understand that grain drying is for corn and soya because that's what every farmer in my riding grows. When you're drying canola, obviously, you're trying to take the humidity out, but is it a long process? When it's time to harvest, are you spending days grain drying? Help me understand how that works.

[Mike Ammeter]

Yes, actually it can be literally days or weeks. Probably our worst harvest in recent memory was in 2019. Some of you may have seen that it had the tag line or the name “harvest from hell”. We were just on a mad scramble.

Typically you try to keep ahead of the harvesting combines with the dryer, but sometimes you can't so you end up putting your grain in your bins from the combines, but it's not really in a condition for long-term storage. It's a mad scramble, because you are trying to get this grain back out of the bin because you don't have much time. You pull it back out. It goes off to the dryer, and then it goes back into the dry bin.

Typically harvests should wrap up in October. In 2019 I was drying grain in November, December and January. I would go get a load here and a load there, run it through the dryer, and try to keep on top of that.

It's an awful lot of work and an awful lot of time.

[Francis Drouin, Liberal, Glengarry—Prescott—Russell, ON]

Thanks. I appreciate the education there.

You mentioned the figure $18 billion. Obviously, that would be if variables don't change. If we continue adapting the technologies of today, that's the $18 billion cost in 2030. That would be the cost to your particular industry. Is that right?

[Mike Ammeter]

Yes. Maybe Dave would like to jump in. He can flesh that out a little bit more for you.

[Francis Drouin, Liberal, Glengarry—Prescott—Russell, ON]

I always talk to Dave. It's okay.

No, no—he can jump in.

[Dave Carey, Vice-President, Government and Industry Relations, Canadian Canola Growers Association]

Thank you, Mr. Chair.

The number would be based on 2018 usage rates and prices. That is the analysis we did internally.

We are now in the final stages of getting third party analysis done by the accounting firm MNP, which will be canola-specific using verified third party methodology that will look at everything. We're here talking about Bill C-206 specifically, but as soon as the price of carbon goes up, the price of freight goes up, the price of custom-haul trucking goes up and the price of everything goes up, so all of that will be accounted for.

The $18 billion is not on the back of a napkin. We stand by it, but we will have a robust report from MNP very soon that articulates all of those things.

[Francis Drouin, Liberal, Glengarry—Prescott—Russell, ON]

Great. Thanks.

I know we are talking about Bill C-206, but, Mr. Ammeter, would you welcome partnerships with investments from the government to say, “Okay, let's look at the pain points where the carbon tax is costing you”?

Obviously, what we're trying to do is not necessarily to penalize you. We're just trying to decarbonize the economy.

Would you welcome some investments in partnerships in order to find some new technologies to try to decarbonize the agricultural sector?

[Mike Ammeter]

Yes, I don't think there's any question about that, if we can get some help. That's always the critical issue: How do I pay for these things? I want to do something different, I want to do something better, but there are only so many dollars to go around. Critical things like this....

I'd love to see a different energy source for drying grain that is cost-effective and does the job. The first thing you do is look into it, but if it proves itself, I'm sure that could be adopted. Farmers are very good at that. If they see something that makes them a nickel, that's cost-effective and fits into their business, they'll do it very quickly.

[Francis Drouin, Liberal, Glengarry—Prescott—Russell, ON]

As chair, are you starting to have some conversations with our U.S. counterparts now that President Biden has said that the U.S. is moving ahead and rejoining the Paris Agreement? Are you discussing that with some folks down south to see what the Americans are thinking and what model they may be adapting?

[Mike Ammeter]

Personally, I haven't. Maybe Dave can speak to that point.

[Dave Carey]

Yes, we always keep in close contact with the U.S. associations. When it comes to canola, we're a bit different, because we control 60% of the world's global trade. Our biggest competitor, when it comes to canola, is actually Australia, which did repeal its carbon tax a number of years ago.

We're all looking to see what the U.S. administration will do. Most of our engagements of late have been around biofuels and the clean fuel regulations, as this committee is well aware of, but we're certainly keeping an eye on what's happening in the U.S.

[Francis Drouin, Liberal, Glengarry—Prescott—Russell, ON]

Thank you, Mr. Chair.

I think I'm about to run out of time in four seconds, so I'll say thank you to our witnesses.