Agriculture Committee on April 29th, 2021

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

Ms. Labbie, I heard that in your testimony. I don't mean to be rude. I have only so much time. My understanding is that CFIB is against the price on pollution across all small businesses. I've heard your testimony here today.

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

On a point of order, Mr. Chair, the honourable member asked a question. I would be very curious to hear the answer, yet he doesn't seem to be willing to let the witness answer.

[The Chair, Liberal, Pat Finnigan]

This is the member's time, so I'll have to let the member manage his time.

Thank you for the point of order.

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

Thank you, Mr. Chair.

Ms. Labbie, I'm just trying to ask direct questions and I'm trying to get direct answers to the extent that I can. I guess my concern with this bill—and it's not withstanding the fact that Mr. Lawrence does have some good intentions of trying to help support agricultural producers. We just had a session, our last panel, talking about how the actual price mechanism is incentivizing the industry to change. We just heard from Mr. Ghatala about the innovation and the small businesses that are benefiting from the fact that there is a clean fuel standard and there are prices on pollution that are actually driving innovation in the sector for small businesses.

Does CFIB see this as an exemption only in agriculture, or does your organization just not stand for this policy at all?

[Virginia Labbie]

Perhaps I could defer to Jasmin Guénette, our national affairs—

[Jasmin Guénette]

We are here today to express our support for this particular bill. We want to see policies implemented that are fair to small businesses, that help small businesses cope with the cost and cope with the current pandemic. When we take a position and when we present that position to a committee such as the one today, we do so based on our members' views. Our members believe that the system currently in place needs to be more fair to them and they hope to see Bill C-206 pass—

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

I appreciate that. You support the bill. You've made that clear.

In the testimony, you talked about COVID-19 and some of the impacts. I certainly would agree with tourism. I would agree with hospitality. Do you see agriculture as being one of the hardest-hit sectors? Very quickly, notwithstanding that for the men and women in this sector there have been challenges and the government was there to provide support, do you see agriculture being one of the hardest-hit industries vis-à-vis COVID?

[Jasmin Guénette]

Right now, 78% of agribusinesses are fully open. We are still a long way from having a sector that is fully 100% open. Right now, only 54 of them are fully staffed, which is something that is difficult for many businesses, and only 59% of agribusinesses are—

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

Okay. I appreciate that. I need to move on. I have only so much time. You have my apologies.

I want to go to Mr. Ghatala.

I think that there's a reasonable way to look at how we can try to incentivize farmers and producers by having a price on pollution, perhaps by looking at how we rebate back to farmers, not unlike what we do broadly in society around the price on pollution to incentivize change. Along with perhaps working with international communities—such as the United States—to set a minimum price on pollution, how do you see that other countries that choose not to levy any type of expectation on their domestic producers are not rewarded in the international marketplace?

Do you have any broad thoughts on that in the 25 seconds I have left?

[Fred Ghatala]

Thanks.

We support anything that allows growers to participate in producing advanced biofuels, and Canada's agriculture has extremely low carbon intensity due to the practices they do, so allowing them to participate is fundamental. Anything that helps them invest in on-farm advanced practices is very supportable—

[The Chair, Liberal, Pat Finnigan]

Thank you, Mr. Ghatala.

Thank you, Mr. Blois.

Now we'll move to Monsieur Perron

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

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

Thank you, Mr. Chair.

I want to thank the witnesses for joining us. We appreciate it.

I'll start with you, Mr. Guénette. You said that small businesses are struggling under the current model. The most recent budget announced $10 million for clean energy, $50 million to improve grain drying, and $100 million for partial tax rebates.

In your opinion, are these amounts sufficient?

[Jasmin Guénette]

Thank you for your question.

The measures and amounts announced in the budget send a signal that the government acknowledges that propane is an issue. This is a step in the right direction.

If you ask CFIB members whether they prefer a credit system or exemptions, they'll tell you that they prefer exemptions.

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

It seems clear that your members don't want to be held hostage, so to speak, to an offset program for which they must fill out additional paperwork and increase their administrative operating costs, as we've seen with other programs. Is that right?

[Jasmin Guénette]

A credit system could further increase the already heavy burden on entrepreneurs. Our members would prefer a simpler system, such as an exemption system.

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

Could you get your members on board if there were government support for a transition to research and development, even if there were no pricing?

[Jasmin Guénette]

We would need to see how these things are presented and implemented. With all due respect, rather than talking about policies that don't exist yet, I think that we need to talk about the benefit of the proposal before us today. It addresses an immediate, urgent and essential need for agricultural entrepreneurs.

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

We feel the same way, if that reassures you, Mr. Guénette. That's exactly why I'm talking about hypothetical things that could be implemented as an alternative to punitive taxation.

Mr. Ghatala, you're an expert on biofuels. I'm very interested in this topic.

Do you think that, with the current technology, you could incorporate a certain amount of biogas into grain drying, which currently requires propane and natural gas, without changing the facilities? It would be similar to the process used with cars and the 10% maximum. Is this feasible?

[Fred Ghatala]

Yes, I understand that renewable natural gas and even clean hydrogen can be used and mixed in the pipelines with natural gas, so it's certainly foreseeable that could be part of the energy mix for grain drying.

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

Do you think that this could be done through an incentive program, even if Bill C-206 were passed, which would exempt propane and natural gas for now?

[Fred Ghatala]

Yes, clearly I would expect that this could be a good creation of on-farm offsets in a federal offset system, something that would encourage low-carbon natural gas, RNG, renewable natural gas, to be used.

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

Okay.

The agricultural sector representatives whom we hear from almost unanimously state that they don't have an economically viable alternative for their business at this time. We're trying to apply the principle of group decision-making. Sending the bill to producers, who, as price takers, are simply seeing their profit margins shrink, seems very punitive. It would be possible to pass Bill C-206 while implementing an incentive program.

I'm glad that we have an expert on biofuels here.

What are our options, Mr. Ghatala? In your opinion, how soon could we implement an economically viable alternative for businesses, especially when it comes to grain drying?

[Fred Ghatala]

Yes, I think efforts are quite under way to incorporate renewable natural gas. The representatives from the Canadian Canola Growers, Mr. Ammeter and Mr. Carey, referenced farmers wanting to pursue innovation to drive down emissions on the farm. The nice thing about using RNG and other renewable natural gas sources is that they can integrate with the current systems that are in place. I think an incentive-based approach to have that occur really makes sense.

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

How long would it take to make the transition?

Can we completely get rid of fossil fuels?

[Fred Ghatala]

I think up to 15% renewable natural gas would be achievable pre-2030. Some of these things will definitely be incentives-based in order to maintain the competitiveness of Canadian farmers to provide that feedstock. I think an incentive approach rather than a requirement that increases the on-farm fuel cost is part of the way to aid that transition.