Agriculture Committee on April 27th, 2021

[Katie Ward]

Our policy in our organization favours a rebate; however, we do feel that farmers, who are facing no other options in the face of a difficult harvest, should not bear this burden.

[The Chair, Liberal, Pat Finnigan]

Thank you, Ms. Ward, and thank you, Mr. Lawrence.

Go ahead, Mr. Blois, for six minutes.

[Kody Blois, Liberal, Kings—Hants, NS]

Thank you, Mr. Chair.

Thank you to the witnesses for their testimony today.

I'll start with the Canadian Horticultural Council. In my riding of Kings—Hants, horticulture is one of the commodity groups that is very prominent.

Has the price on pollution encouraged producers, or incentivized them, to change some behaviour?

I'll tell you quickly the story I have, as it relates to greenhouses. I visited a number of farms in my riding that have looked at improving the actual infrastructure of the greenhouses, such that they actually spend less on things like propane or diesel heating.

Are those examples where at least this conversation regarding price on pollution has encouraged some adoption of change for your producers?

[Linda Delli Santi]

I'd like to take this one, because we're in the area I know, namely, greenhouses.

A lot of the things you are mentioning or envisioning, like screens, double screens to keep the heat in, using glass that has more insulation properties, etc., they have already been adopted by most of the large commercial greenhouses, at least in British Columbia and Ontario.

Those things have been adopted already, and it's not necessarily driven by the price on carbon as the price to do business. It made good sense for sustainability and emissions, and also for the bank deposits for the actual company.

[Kody Blois, Liberal, Kings—Hants, NS]

Absolutely, and in my own riding, that's exactly what I was hearing from the producers, because we don't have a federal backstop, but indeed, we do have a price on pollution.

It's exhibited sometimes through electricity costs. I've seen some of my producers making these investments that not only help reduce emissions but indeed are good for the bottom line.

Maybe I'll put this question to Mr. Coristine. Regarding the price on pollution, I understand it creates some challenges. Broadly speaking, in about 35 or 40 seconds, what is CHC's plan? What does it think is best to be part of the climate solution in order to get to some of these targets we're shooting for?

[Aaron Coristine]

The response and call to action is both dynamic and integrative. A primary focus could be on alternative energy sources to minimize our carbon footprint and maximize our efficiency and affordability, which could in turn increase our bottom line and lower our cost of production.

Going to clean fuel as well as improving our ability to sequester and reuse carbon would have significant impacts in the growing industry moving forward. It would also address the costs, from an energy and economic standpoint, for industries such as grain.

[Kody Blois, Liberal, Kings—Hants, NS]

Some of the things you mentioned, indeed, will have an intrinsic cost. Even on clean fuel standards, that potentially has some additional costs.

Where is CHC in relation to, let's say the United States, because there is going to be a dramatic change? We've seen it already in terms of the Biden administration working and seeing agriculture as a mechanism, not only to support economic growth but to be part of climate solutions.

In terms of alignment, do you have any position, broadly, on where the U.S. is going? You talked about international equivalency, and that's important for your export market.

Have you any broad stroke comments on where you see the United States going, and whether or not we can align policy in that regard?

[Aaron Coristine]

It is just as important for us to set our strategic goals and objectives to, if not mirror, at least align with the targets that the United States is looking to implement and achieve.

Although we would like to have similar accomplishments and achievements at the end of it, our targets may differ. As far as CHC is concerned, in terms of climate, it is important to see how the Americans are looking to implement the changes they are discussing, and then how best we can execute that across our agricultural industry.

[Kody Blois, Liberal, Kings—Hants, NS]

I'll go to you, Ms. Ward. Again, as others have mentioned, thank you for your advocacy through Farmers for Climate Solutions, as you've mentioned.

You've talked about a rebate. Can you clarify that for me? Do you see that as a rebate where exactly what a farmer would necessarily pay into the price on pollution, they would they get all of that back? Otherwise, would it be collected similar to the way that the price of pollution works writ large in society and then go back on a per capita basis to the farmer, such that there is still an incentive to change behaviour? I understand intrinsically the idea that it gets captured in all of society. Larger producers like the agriculture sector can be disadvantaged in that.

Do you see a rebate per capita or just exactly back to the farm...?

[Katie Ward]

We would like to see the mechanism set up so that farmers are not bearing this burden on their own. Farming causes.... Depending on whose estimates you're using, we're at anywhere between 8% and 12% of Canada's GHG emissions, yet we're pretty unique in being a price-taker. There's only so much that we can absorb in terms of costs on our farms without impacting our already really thin net incomes and our margins.

We would really like to see that rebated in terms of costs that farmers are paying, but we absolutely acknowledge that we need to have incentives, just like every other industry, to reduce our emissions. It's going to help solve the problem before—

[Kody Blois, Liberal, Kings—Hants, NS]

I'm sorry. I have about 30 seconds and I want to get one final question in.

You mentioned some of the incentives in the fall economic statement and the budget. There is nearly a billion dollars in these incentives. I would share that same view with you that these types of mechanisms to partner with industry are going to be important to help us get to where we need to. Is that fair to say?

[Katie Ward]

I think that's fair to say, especially on the amount that was allocated towards incentivizing the purchase of cleaner-burning grain-drying equipment. I think it's going to have a huge impact for folks in the Prairies especially.

[The Chair, Liberal, Pat Finnigan]

Thank you, Ms. Ward.

Thank you, Mr. Blois.

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

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

Thank you, Mr. Chair.

I thank the witnesses for being with us.

I will continue with Ms. Ward.

Ms. Ward, in your opening remarks, you mentioned that you support the carbon tax, but you would like to see a fuel rebate. In addition, you mentioned that Bill C-206 may no longer be needed given the new budget.

What is your organization's official position on the passage of Bill C-206?

Thank you.

[Katie Ward]

Thank you for the question.

Our concern is that in our understanding Bill C-206 as it stands right now does not necessarily accommodate for barn heating the way that the budget rebate is intended to cover, and for the recategorization of heating fuels in particular. We're envisioning that there would be a fair amount of work to do in terms of amendments to make Bill C-206 as beneficial for farmers as the mechanisms that were explained in the budget as we understand them right now.

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

I understand. So you would like to see heating fuels included.

Wouldn't it be advantageous if we adopted that, since it's used for grain drying?

[Katie Ward]

I understand.

The position of the NFU is that while carbon pricing is not necessarily the most effective mechanism, as we feel that incentivizing emissions reductions at the source would be more beneficial, at the same time, an exemption without programs put in place to put in those incentives for the transition on the emissions reduction is not going to result in the emission reductions that we need, because we're already facing the results of the extreme weather that climate change is causing on our farms.

I think honestly that reducing emissions before they happen is going to save the government more money in the long run and save farmers more money in the long run when we're not facing disaster relief claims on our farms.

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

Thank you very much for your answer.

Are there currently any alternatives to heating? We have found that there are few alternatives on the grain drying side, among others.

Also on the heating side, if there were a financial support program that allowed for the implementation of new technologies, are there any that could be implemented quickly in the industries?

[Katie Ward]

In terms of greenhouse heating, I might defer to my colleagues on the Horticultural Council for that in particular. I know there's increasing research being done on biomass fuels and some ideas in that vein, and there is increasing commercialization happening. I believe there's a company in Manitoba that is bringing a product to market, but I would have to get back to you with more details.

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

Mr. Coristine, would you like to complete the response?

Are you still there, Mr. Coristine?

[Aaron Coristine]

Yes, I'm here. I was just listening to the translation.

In terms of heating, it was briefly touched upon. There's a lot of research and development going into bio-based fuels being more circular of an operation, utilizing them in the greenhouse industry, or maybe even grain, by burning some of that organic material to provide the fuel. Pyrolysis is another avenue that's being actively researched.

We're putting investments in, hopeful that the upfront costs, which we are not only willing to pay but that go with our initiative to identify and develop avenues, will have a net reduction in our carbon footprint. Even though it is an exorbitant upfront cost, we remain steadfast in our mission and commitment to identify these avenues, whether it's heating or lighting, to minimize our impact and optimize our operations.

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

What do you think of Bill C-206?? Do you agree with Ms. Ward that it is incomplete? Do you think it is a good first step toward helping you?

[Aaron Coristine]

Yes, absolutely. I think it's a great start. I think, clearly, a lot of hard work and insight has been put into it. Ideally, there'd be a 100% exemption. As well, this would be extended to heating and cooling of all sorts in farming practices. As it stands, 80% is a good start. Margins are thin in certain sectors of agriculture. By keeping it at 20%, it's an absolute value. As our carbon pricing increases, our bottom line decreases, so we need to be very aware of that.

[The Chair, Liberal, Pat Finnigan]

Thank you, Mr. Perron.

Thank you, Mr. Coristine.

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

Thank you.