Agriculture Committee on April 29th, 2021

[The Chair, Liberal, Pat Finnigan]

You have three seconds left.

Thank you, Mr. Perron.

Now we go to Mr. MacGregor for six minutes.

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

Thank you, Mr. Chair.

Mr. Ghatala, I'll start with you. I think I may have missed it in your conversation and referral to the committee of what the state of the industry is like for advanced biofuels. Could you clarify your position on Bill C-206?

[Fred Ghatala]

I'm supportive, yes.

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

Thank you.

As my colleagues have alluded, we have heard a lot of testimony about the lack of viable alternatives out there. I'm really interested in on-farm generation of biofuels. One challenge is setting up the distribution and infrastructure. It takes some time. Every time we've gone through a big societal shift from one fuel source to another it's taken some time to set up the distribution network.

What kinds of opportunities exist for on-farm generation of biofuels whereby farmers can use existing compost methods, collection of methane, to fill their own storage tanks for on-farm use? Is that a rapidly scalable technology in the next five years or so?

[Fred Ghatala]

Primarily, biofuel feedstocks are produced on the farm. In the case of canola oilseeds, they are crushed, refined and then are able to turned into biodiesel and eventually renewable diesel that can then be used in farm equipment. There's clearly a loop to enable on-farm biomass products to be used on the farm in the form of diesel. Certainly there would be an opportunity to use on-farm produced biogas through digesters, especially if they're integrated with animal operations. There's certainly an opportunity for that. I would see an offset system as a way to really encourage that, through a financial incentive to participate in the carbon economy. The opportunities are certainly there.

What I think was made clear by Mr. Ammeter and Mr. Carey is that grain needs to be dried. It often needs to be dried extremely quickly, so the efficiency of natural gas is very key to allow that to occur.

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

I guess what I'm curious about is whether it is theoretically possible for a farm—a large enough farm—to have a closed-loop system whereby the processes on the farm are able to produce enough biogas, stored in their own on-site tanks, to actually 100% power a grain dryer?

[Fred Ghatala]

I'm not able to specifically comment on the feasibility of it. I would expect that it is possible.

I would also suppose that if grain needs to be dried very fast—if it's a wet harvest year and that impacts the bottom line of the farm—then you're absolutely going to want to use the high BTUs that natural gas and eventually RNG will provide.

I'm certain that innovation could occur, but at the end of the day, if grain is wet, it needs to be dried quickly.

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

Yes. That's what we've heard, loudly and clearly. Thank you.

I'll turn to the CFIB.

The survey you've done among your members, I think is quite clear. In terms of how we find ways for agriculture to be a key player in fighting climate change, has the CFIB ever done any surveys, or does it have any available data, on the types of alternative policies that are popular among your members?

What do farmers want to see, in terms of federal policy, whereby they are actually contributing to the fight against climate change? What kinds of policies are they supportive of?

[Virginia Labbie]

We've certainly asked our members what they've done to protect the environment.

As I mentioned in our opening remarks, we regularly survey our farm members, and they provide us with hundreds of comments about their issues of concern. I think farmers recognize that they're part of the solution, not part of the problem.

I just want to read a few comments from some of our members.

This is from a member in Saskatchewan: “Farmers always look after the environment. If we didn't our livelihoods would be gone. Things such as direct seeding has made a huge impact by better conserving our soils and sequestering carbon, and greatly reducing fuel usage.” That's one member's comment.

Farmers care about protecting the environment. We know that they've done a number of things. We've received hundreds of comments. Many farmers say they have purchased new and better equipment. They've adopted minimum and zero-tillage practices. They've used technology to maximize efficiency and reduce inputs. They maintain and protect wildlife habitat. They've increased manure management, protected waterways and recycled more farm materials.

We've done a number of surveys on the environment, and we know that our members are making those investments. It's important that policy-makers recognize the substantial progress in the agriculture sector and recognize that the sector is part of the solution, not the problem.

We worry in this case that by imposing costly carbon taxes on the sector, this has really stymied many farm businesses' viability, profitability and their ability to invest in new technology.

That's one of the points that I wanted to make. As we move towards $170 per tonne, that takes away their ability to invest in new equipment. Again, we support the intentions of this bill as a positive first step in addressing the unfairness of a federal carbon tax.

[The Chair, Liberal, Pat Finnigan]

Thank you, Ms. Labbie.

We'll move to our second round, and we'll start with Mr. Epp for five minutes.

Go ahead, Mr. Epp.

[Dave Epp, Conservative, Chatham-Kent—Leamington, ON]

Thank you, Mr. Chair. I'm going to be splitting my time with my colleague, MP Kurek.

I'll start with the CFIB. Of your 95,000 members, you said about 6,000 are from the agriculture sector. We've heard a lot of testimony that the ag sector are price-takers.

Can you comment on that? Are there a lot of other sectors that you represent that are also price-takers, in the similar vein that the ag sector is, or does the ag sector kind of share this spot somewhat uniquely?

[Jasmin Guénette]

I think that the ag sector is a price-taker sector like no other.

[Dave Epp, Conservative, Chatham-Kent—Leamington, ON]

Thank you very much.

I'm a bit of a numbers guy. We hear different implications about the cost of Bill C-206. You've estimated $14,000 per average farm, but that's carbon tax across the board. We heard AAFC say $290 to $810, and that is specifically for grain drying. However, the denominators that they used were all farmers—all census farmers—as opposed to grain farmers.

Do you have any more data on the actual cost for the average grain operation, the carbon tax for grain drying on the average farm?

[Virginia Labbie]

,When we surveyed our members, we asked them to estimate the total cost to their farm business. We don't break it down by grain drying or that sort of thing.

As you know, a lot of the increases in the federal carbon tax have a ripple effect throughout the whole sector. We know that the Canadian trucking industry, for example, will pay $538 million in carbon pricing in just this year alone. We know that western Canadian farmers will face $169 million to $182 million per year on rail costs alone by the time the carbon tax hits $170 per tonne by 2030. We know that all those costs just ripple down and hit farmers at the end of the line—

[Dave Epp, Conservative, Chatham-Kent—Leamington, ON]

Thank you. I apologize. My time is somewhat limited.

Mr. Ghatala, I looked at your website. In your fifth bullet point, you say that “Canadian biofuel producers and marketers work with an integrated North American market”. Can you comment on the feasibility or the wisdom of pursuing alone, from a Canadian perspective, a price on pollution, carbon taxing and carbon pricing?

[Fred Ghatala]

It's certainly an integrated market. Biofuels trade north and south across the border. Certainly, a lot of the renewable fuels produced in Canada go to the United States, where their carbon intensity is valued. That's why policies like the clean fuel standard and other efforts try to keep some of that advanced renewable fuel production here in Canada—

[Dave Epp, Conservative, Chatham-Kent—Leamington, ON]

Thank you, sir.

I'm going to cede the rest of my time to my colleague, Mr. Kurek. Thank you.

[Damien Kurek, Conservative, Battle River—Crowfoot, AB]

Thank you very much.

Thank you to the witnesses. It has been a very informative hour.

For the CFIB, I think you've emphasized some of the numbers and the costs for farmers that are associated with the carbon tax. My question is twofold. I will try to sneak in two questions here and ask if you have any comments.

One is on the fact that farmers are leading the way in innovation surrounding environmental stewardship and low-carbon practices, but the way this bill is structured is, specifically, to ensure that farmers, during a difficult year, have a bit of a break at a time when generally costs have gone up because of challenging weather and scenarios like that.

Would the CFIB have any comments on that and the impacts that Bill C-206 would have?

[Virginia Labbie]

I think it's important that we provide carbon tax relief. I think it's important to note that farmers don't just dry grain during wet harvest conditions in bad years. They also dry grain to meet storage and quality specs. This is something that can provide relief every year. We know that our corn growers face huge increases in carbon tax costs to dry corn, which is a high-moisture product.

Again, this is an important step to provide some relief for farmers when they must dry grain in those wet harvest years like 2019 or in those regular years where they just need to maintain storage and quality specs.

[Damien Kurek, Conservative, Battle River—Crowfoot, AB]

Yes, and I think one of the challenges that we have seen really exacerbated during the COVID-19 pandemic is the need for a secure food supply chain. Certainly, farmers are the very base step of ensuring that we have that strong national food supply chain.

Do you have any comments on how this bill might ensure that the supply chain in this country remains strong?

[The Chair, Liberal, Pat Finnigan]

You have 14 seconds.

[Virginia Labbie]

I think that just giving them more money to invest in their businesses and giving them some tax relief is an important thing to ensure that we have a successful and competitive food supply moving forward.

Thank you.

[The Chair, Liberal, Pat Finnigan]

Thank you, Ms. Labbie.

Thank you, Mr. Kurek.

We will now go to Mr. Ellis for five minutes.

Go ahead.

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

Thank you, Mr. Chair.

My first question is for the CFIB. I want to thank them for advocating for small businesses. As a past small business member, I was a member of their organization, and I felt that they did lobby fairly for small businesses.

My first question is about your survey of your membership. You noted you had 95,000 members, but 6,000 agri-food businesses. Did your survey include only agri-food businesses? I guess the sense is, how many businesses were involved in the survey you did? That's the survey you sent us today, I think.

[Virginia Labbie]

That's correct. We referenced a number of surveys. We did a national energy and environment survey. There were 371 respondents.

What I'm quoting you today for statistics are our farm members' views. These are farmers. We also did a survey in February of last year, and there were 241 respondents in that survey. Again, these are only farmer respondents that are responding to our surveys. These are grain farmers, livestock owners and those kinds of folks who are responding to our surveys.