Agriculture Committee on April 29th, 2021

[Tom L. Green]

Yes. Carbon pricing has been in place in my province since 2008. We have seen that when carbon pricing was imposed, all sectors started to make changes to their operations. New technologies arrive on the market and manufacturers can sell their products to other provinces and countries.

So there has been a positive side effect to carbon pricing. According to our analysis, as well as that done by the Canadian Institute for Climate Choices, we will see energy costs go down in the long term, even with carbon pricing, because there will be gains in efficiency. Moreover, Canada is very well placed in terms of renewable energy sources.

[Lyne Bessette, Liberal, Brome—Missisquoi, QC]

Thank you.

Representatives of the agriculture sector have stated that natural gas should be exempted from the carbon tax because it is a relatively clean fuel.

Is this true? If this is the case, why do you think that natural gas and propane weren't exempted in the bill from the start?

[Tom L. Green]

Propane and natural gas are both greenhouse gases. I do a lot of work on methane. Natural gas is mainly composed of methane, which is a much more potent gas than CO₂. When there are methane leaks, it is a huge problem.

Since we have to reduce greenhouse gas emissions in all economic sectors, we should be seeking to eliminate them where we can in all sectors.

[Lyne Bessette, Liberal, Brome—Missisquoi, QC]

Thank you very much, Mr. Green.

I turn now to Ms. Turcotte.

Some witnesses have told our committee that we don't yet have a practical alternative to use as fuel for drying grain and heating enclosures.

Where is science at on this? Does your organization know of any possible solutions that would help us make the transition?

[Isabelle Turcotte]

Thank you for the question.

As I stated in my presentation earlier, agriculture is not a sector that I follow closely. Nonetheless, we know of a company in Manitoba that manufactures a grain dryer that would enable farmers to reduce their greenhouse gas emissions.

We can confirm that carbon pricing has been effective. We established that carbon pricing sends out a price signal which has created, for those entrepreneurs seeking opportunities, an incentive to offer new technology on the market. This technology, along with the financial support provided in the 2021 budget, will be made available to farmers.

This dynamic increases with carbon pricing. What's more, when the price increases gradually over time, it creates a stable environment for investments. This is what we are seeing in all economic sectors, including those with big industrial GHG emitters.

It is true that emissions are hard to bring down in some sectors because their emissions are linked to processes. However, we should not let this factor stop us, because we know full well that all of the countries that signed the Paris Agreement see economic opportunities in decarbonizing the economy. These countries are looking for market opportunities and are investing in research and development so that their businesses can become leaders in the field.

[The Chair, Liberal, Pat Finnigan]

Ms. Bessette, Ms. Turcotte, thank you.

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

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

Thank you very much, Mr. Chair.

I would like to thank all the witnesses who are here with us today. We are happy to have you.

Ms. Turcotte, I have a question for you also. You were talking about the need to reduce greenhouse gases and I think we all agree that this is the ultimate goal. You also mentioned that grain dryers that reduce GHG emissions are being manufactured in Manitoba. Can you tell us how these new grain dryers work?

[Isabelle Turcotte]

From what I have read, the dryers use biomass.

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

All right. They use biomass. We have looked at this possibility at previous meetings. Agricultural biomass is not really viable, as it is used to fertilize the soil. You could perhaps bring in forestry biomass, but that would entail other problems.

Since gasoline and diesel are already exempt, wouldn't logic dictate that propane and natural gas also be exempted because they produce, at least theoretically, less pollution? I have the same question for Mr. Green, who has also spoken about this issue. Ms. Turcotte, let's start with you. What are your thoughts on this?

[Isabelle Turcotte]

I would compare this to the type of protection given to our big GHG emitters under the pricing system based on performance. Every sector is given an emission intensity rate. Regardless of whether their emission rates are higher or lower than the set intensity rate, emitters are encouraged to make efforts to reduce their emissions, because they can exchange their carbon credits if they're under the set rate and if they continue to improve their environmental record. Our standards do actually offer some protection, but the signal, the incentive to do more, remains. We could have used the same concept or type of system for all fossil fuels. However, the decision was made to go in a different direction for certain fossil fuels in the agriculture sector.

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

Thank you very much.

Ms. Turcotte, you and Mr. Green mentioned certain amounts announced in the budget.

My next question is for Mr. Green. Both of you have stated that giving an exemption sends a bad signal and that funds have been earmarked in the budget. There is $10 million for clean energy, $50 million for grain dryers and $100 million in rebates.

Mr. Green, given Canada's vast size and the number of farmers, don't these amounts seem like small potatoes to you?

[Tom L. Green]

I wanted to stress the fact that this was a good approach. As to the amount of funds, your committee could recommend an increase. I agree that it will be expensive to make the transition everywhere in Canada by 2030. But the funds will continue to give a signal, which is very important for this initiative.

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

Don't you think that billing farmers upfront and then giving them a rebate will make them dependent on the government and keep them waiting? This is perhaps not the best analogy, but it brings to mind the compensation offered in the wake of the trade accords that Canada signed, compensation that farmers have to wait five, six or eight years for.

Farmers are also wary of this type of situation. They are asking us to give them some room to manoeuvre so that they are able to innovate. I believe you stated earlier that farmers are already investing in more efficient grain dryers, but that they have no alternate fuels to replace propane or natural gas that would be cost-effective and good for their bottom line. By making these fuels exempt, couldn't we also invest these funds and keep farmers from being buried under paperwork by having to request rebates?

What are your thoughts on this issue?

[Tom L. Green]

Yes, there are other ways to offer the rebate. We have to retain the principle of a signal given by carbon pricing so that farmers who find ways to reduce their fossil fuel costs can be compensated and that inventors of new technologies are motivated to present alternate solutions on the market.

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

I would suggest that more government support could help stimulate research and development.

I now have a question for Mr. Charlebois, seeing as my time is running out.

Mr. Charlebois, I was struck by your presentation. Indeed, I am struck each time that we meet. You spoke of carbon sequestration on farms. You said that this should be recognized. Given that I have very little time, I will just ask you a quick question.

Don't you think it is time to highlight this contribution and try to help farmers by recognizing their role as stewards of the environment by offering them a financial incentive? This could lead to innovation and better results.

What is your take on this?

[Dr. Sylvain Charlebois]

Absolutely, Mr. Perron. That's what the carbon tax does. Producers are seen as polluters, but they really aren't. They need nature to make a living. However, in my opinion, we're missing the opportunity to acknowledge their contribution to the environment.

There's the propane issue and all those sorts of things, but that's not all. Things have changed dramatically on the farm over the past 30 years. I don't think that we're taking the opportunity to acknowledge and properly assess their contribution in this area.

[The Chair, Liberal, Pat Finnigan]

Thank you, Mr. Charlebois and Mr. Perron.

Go ahead, Mr. MacGregor, for six minutes.

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

Thank you so much, Chair.

Mr. Green, maybe I'll start with you. I very much agree with you that carbon pricing is there to send a powerful signal that we need to change our ways and that it creates an incentive to find a less costly and ultimately less polluting way for people to operate in their lives. It has worked for me. I moved to an electric vehicle, and I'm already celebrating the reduced gasoline costs from that purchase each and every month.

I guess the problem I've had is that, in terms of the alternatives, your testimony has been refuted by farmers who actually dry their grain. If we're trying to incentivize farmers into alternatives, I agree that's a very worthy goal, but right now, for farmers who dry tonnes and tonnes of grain every year.... I did reference the biomass system that exists, and they said they're not really aware of that, and they're not sure that it can be scaled up to the level they actually need. It would also require them to take the crop residue off their fields each year, which would be an additional cost, but it would also rob their fields of that important carbon content that is needed to feed next year's crops.

I know that you've had versions of this question from my colleagues, but if there are no viable alternatives at this moment—this is what we're hearing first-hand from farmers—wouldn't Bill C-206 serve a useful purpose in giving them a financial break in the meantime, until these technologies come into existence?

[Tom L. Green]

The way the carbon price has been designed is that it started at $20 a tonne and has been going up gradually year by year. This creates time to adapt.

I'm in favour of supporting farmers in this transition process through the revenue recycling, grants, research and so on that the federal government and others are undertaking. This makes sense to me. However, we have a bit of a chicken and egg problem. If you remove the carbon price here, there's no incentive to move forward with those technologies. Perhaps on some farms, farmers will start using an electric heat pump to heat their barns. Maybe the electricity connection isn't good enough for the scale of heat or electricity they will need. However, the utility won't be willing to expand until it knows that there's going to be demand for that, so we need to create these price signals across the economy.

However, there is a problem. I'm appearing today before the agriculture committee, but I could be before other committees in different sectors, and people could be asking whether we should be doing this, because the technologies are still nascent and need to be developed.

As I said, we need these price signals across the economy, and we need to move across all sectors. We're running out of time on climate change, and I think the committee can come forward to government with different ways of supporting farmers through this that maintain the pricing signal. Also, we don't want to create the idea that if you push hard enough, you'll get your own carve-out for carbon pricing, because pretty soon the overall scheme will be undermined.

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

I'll stop for a comment. You raise some fair points, but I think when it comes to agricultural emissions, we can be concentrating our efforts in far more efficient ways. Madam Turcotte already illustrated the release that comes from inefficient fertilizer use and the production of fertilizer. There are so many other emissions coming from farms that I think can be tackled. Also, we should give farmers recognition for good agricultural practices, regenerative farming, use of cover crops and no till. There are so many ways we can start giving them credit for the work they do. In my opinion, this is a very small and narrow band.

Professor Charlebois, I want to turn to you because there has often been a comparison between Bill C-206 and the measures that were announced in budget 2021 last week. Looking at the rebates being offered through budget 2021 and at what Bill C-206 is offering, can you, in the last minute and 15 seconds I have, give us your opinion on those two measures and which one you think is the best?

[Dr. Sylvain Charlebois]

I absolutely agree with you, Mr. MacGregor, about targeting. I don't think that propane is the right target. There are other things we can look at in farming that would probably be more beneficial for the environment.

The budget last week was satisfactory, I guess, and a good step forward, but I would argue that agriculture needs more support to become greener. My sense is that the budget last week was really more of a suggestion than anything else. As I said, it's a step in the right direction with the right tone, but more is needed to really make a difference. You're looking at several sectors, so to make a difference you need more capacity.

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

We heard testimony from Farmers for Climate Solutions, an organization that I very much admire for what they're doing. They said much the same thing. When you compare Canada's efforts with what European Union countries are doing, they are really leading the way with the kinds of supports they're giving agriculture and really fomenting the green revolution.

[Dr. Sylvain Charlebois]

It's nowhere near enough, though.

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

I see that my time is up, so thank you.

[The Chair, Liberal, Pat Finnigan]

Thank you, Mr. MacGregor.

I didn't notice you, Mr. Kurek, from the start, but I want to welcome you. I'm sorry. You were at the bottom of the screen, and I didn't see you.

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

Go ahead, Mr. Epp.