Evidence of meeting #30 for Agriculture and Agri-Food in the 43rd Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was farmers.

A recording is available from Parliament.

On the agenda

MPs speaking

Also speaking

Matt Parry  Director General, Policy Development and Analysis Directorate, Strategic Policy Branch, Department of Agriculture and Agri-Food
Phil King  Director General, Sales Tax Division, Tax Policy Branch, Department of Finance
Gervais Coulombe  Senior Director, Excise, Sales Tax Division, Tax Policy Branch, Department of Finance
Judy Meltzer  Director General, Carbon Markets Bureau, Environmental Protection Branch, Department of the Environment
Serge Buy  Chief Executive Officer, Agri-Food Innovation Council

4:45 p.m.

Liberal

Neil Ellis Liberal Bay of Quinte, ON

I have one quick, last question. I believe this would be for Mr. King.

If Bill C-206 passes, what message does this send to other sectors?

4:45 p.m.

Director General, Sales Tax Division, Tax Policy Branch, Department of Finance

Phil King

Passing it would be a parliamentary decision, so it's not for me to say what message it would send. That's for Parliament or the government to address.

4:45 p.m.

Liberal

Neil Ellis Liberal Bay of Quinte, ON

Okay. Thank you.

That's the end of my questions, Chair.

4:45 p.m.

Liberal

The Chair Liberal Pat Finnigan

Thank you, Mr. Ellis. We're doing great with time.

If I may, I'll add a question or statement. I don't know if any of the witnesses can help me.

There was, to me, some misleading information. I heard that because natural gas or propane has a low humidity content, the grain would dry a lot faster with these fuels than with others. From my days on the farm—and I've been around a few dryers—I know that the flame doesn't directly dry the grain. It goes through a heat exchanger, so to me that's irrelevant to the fuel.

Also, biofuel and biomass heating have been around for a long time. Actually, I've had a biomass boiler for over 30 years, and there's been a lot of improvement. I've seen one on the island and it burns straw. I think there was also some statement saying that if we removed the straw, we'd lose some valuable nutrients, but we do that all the time when we want to sell straw or other products.

I'm just curious if this could be accelerated, because there's already technology out there. It's more of a statement, but if somebody wants to comment on that, I'll take it. If not, we can move on.

I want to thank Mr. Goodlet and Matt Parry from the Department of Agriculture and Agri-Food, Phil King and Gervais Coulombe from the Department of Finance, and Judy Meltzer from the Department of the Environment. Thank you all for being here.

We will suspend for a few minutes and then come back with our final witness. Don't go too far; we'll be back shortly.

4:55 p.m.

Liberal

The Chair Liberal Pat Finnigan

We're ready to go to our next panel.

We're joined by Serge Buy, chief executive officer of the Agri-Food Innovation Council.

We would like to welcome you back to our committee, Mr. Buy.

You have five minutes for your opening remarks.

4:55 p.m.

Serge Buy Chief Executive Officer, Agri-Food Innovation Council

Thank you, Mr. Chair.

Thank you for inviting me again to appear in front of your committee. The last time I presented was in February. There was a snowstorm, and I think I reflected on the challenges of the Internet in rural regions. I am proud to say that we've had an upgrade in our region, so I should be fine on my Internet today. As well, there is no snow.

When I appeared the last time, it was to discuss processing capacity. I note that your report has come out, and I would really like to congratulate the committee on a great report that came out, with substantial recommendations. My hope is that the government will reach out to stakeholders in order to discuss implementation—stakeholders such as us.

That would be great to see, but I'm here to discuss Bill C-206, Mr. Chair.

I wanted to mention first that the intent of the draft legislation is to extend the exemption on the carbon tax to some farming operations that use propane and natural gas. As you know, reducing GHG emissions is a priority. It's a priority for Canada. It is a priority for farmers. However, when there are no viable options, farmers shouldn't be penalized for doing what they do best: feeding Canadians and contributing to our economy.

We are certainly supportive of this legislation, and we are supportive for the following reasons.

At this point, there are no viable options that are scalable to serve the whole sector. While there are some new technologies, they still need to be researched, especially in terms of how they adapt to our particular conditions in Canada.

The scalability of those new technologies is also an issue. We're simply not there yet, and we must be realistic that we will not be able to scale up those new technologies in the near future.

We've researched the issue, Mr. Chair. We've consulted our members, and there was an almost unanimous response from our members on this issue. Increasing the costs for farmers will lead to some abandoning agriculture, and this will have a negative impact on our jobs, on the trade balance and also on our food security, an issue that we should really consider specifically.

The AIC recently held a webinar on agrifood and climate change. It included international experts such as Dr. Ould-Dada, deputy director at the UN food and agriculture organization; Dr. Ringler, who is with the International Food Policy Research Institute; and Dr. Sally Rockey, a long-time senior civil servant in the U.S. and now executive director of the Foundation for Food and Agricultural Research.

They all agreed with the following statement: It is important to consider food security when implementing measures to reduce GHG emissions in agriculture, and sustained investments in research and innovation are essential to support reductions in GHG emissions in agriculture and adaptation to climate change.

We certainly agree with those two statements from our experts, and we believe that the committee should reflect on those and pass [Technical difficulty—Editor]. However, we also believe that the exemption should go to other types of farming.

The exemption right now is limited to some types of farming, and we believe that it is not fair to penalize other types of farmers, such as farmers who have barns and need heat for animals. It's not fair for them to be left aside. There are other types of farmers who also do important work and provide Canada and Canadians with an important service that is required, and we believe that they should also be considered in and supported through this legislation.

As well, Mr. Chair, we believe that the measure should be permanent. This was a topic of some discussion within our council, but ultimately the great majority of our members who responded to the survey indicated that it was important to extend the protection on a permanent basis.

The rationale for this is simple. Farmers make significant investments in material and equipment. For them to have a temporary measure will increase concerns and affect their ability to plan financially and get new machinery. As no machinery and no technology is scalable at this point to enable them, in a viable manner, to have other sources of fuel, such as clean and renewable fuel, we believe that the measure should be permanent to give them certainty—and I stress the word certainty—that there will be no changes in the near future.

Mr. Chair, there are greener alternatives, and there are various alternatives such as gasification systems, low-temperature pyrolysis, anaerobic digesters and battery-based equipment. There certainly are different alternatives, but there are several factors that work against those alternatives. I mentioned that they're often not viable. The price is simply too high and the price to scale them is not feasible.

We also have to remember that our farmers compete internationally against the U.S., Russia, Brazil and other countries. We have to be careful on that—

5 p.m.

Liberal

The Chair Liberal Pat Finnigan

Mr. Buy, thank you. We'll have to move on to the question period. Thanks for your opening statement.

We'll go to Mr. Epp for six minutes.

Go ahead, Mr. Epp.

5 p.m.

Conservative

Dave Epp Conservative Chatham-Kent—Leamington, ON

Thank you very much, Mr. Chair.

Thank you, Mr. Buy, for your excellent testimony and also an excellent brief. I note that it would be very difficult to describe your organization as a fly-by-night organization, given that, if I do the math right, you've been around for 101 years. Thanks to your organization for its service to the agriculture and agri-food value chain.

Initially, in your brief, you talk about requiring a time frame of at least a decade. Can you expand on that? Why do you require a decade for the exemption for natural gas and propane?

5 p.m.

Chief Executive Officer, Agri-Food Innovation Council

Serge Buy

We are aware that there are new technologies, and we are aware that new technologies will be in place at some point that will potentially offer Canadian farmers other options. We do not believe that it will happen soon.

They need to be researched. They need to be tested. They need to be adapted, on occasion, to our Canadian reality. Then, after that, they need to be scaled up in terms of production, in terms of the capacity to distribute and in terms of manufacturing. It will take time, and we are very conservative in saying 10 years.

5:05 p.m.

Conservative

Dave Epp Conservative Chatham-Kent—Leamington, ON

You also mentioned the implications for Canada's food security. If this issue is not approached properly, there could be implications. Obviously, we all know that Canada competes internationally. We're in a northern climate. Can you expand upon your views and the potential risks around food security?

5:05 p.m.

Chief Executive Officer, Agri-Food Innovation Council

Serge Buy

Well, you know, Mr. Epp, last spring something happened to me that I never thought was possible. I went to the grocery store to buy flour, and I couldn't find any on the shelves. For the first time, a lot of Canadians like me found ourselves unable to buy things that should normally have been sold. Food security in Canada is certainly a new issue, maybe not for northern populations or for people in poverty, but for a good portion of Canadians it certainly is a new issue. We've had some significant challenges in distribution and with other issues.

Here, the impact is simple. If some producers decide to close, and if some producers decide to abandon or change their focus to other types of farming, the whole system will be affected. We are very concerned about that. If suddenly a lot of the grain operators decide that heating silos to maintain the dryness in the grain is not sustainable, and suddenly they start closing, what is our economy going to do? How are we going to produce the grains that feed our cattle, that feed other animals and that we consume ourselves? This is what we are talking about—food security.

I note that it's not just me talking about it. I quoted three different experts from the UN. Those are internationally recognized experts. We have to be careful with measures to limit GHG emissions.

5:05 p.m.

Conservative

Dave Epp Conservative Chatham-Kent—Leamington, ON

Thank you.

You mentioned specifically that the heating of barns was carved out. I know we've had discussions with the previous panel and at other times as to potential confusion around some other eligible farm equipment. I would assume that your members would think that wind fans for orchards and vineyards, irrigation equipment and other things like that, powered by natural gas and propane, would be considered farm equipment.

5:05 p.m.

Chief Executive Officer, Agri-Food Innovation Council

Serge Buy

Absolutely.

5:05 p.m.

Conservative

Dave Epp Conservative Chatham-Kent—Leamington, ON

Thank you.

Talking about alternatives, there are some alternatives on the horizon. Can you talk to me about the efficiency, and how the agriculture community responds to incentives, be they financial incentives to explore alternatives versus taxes or punitive measures? For example, can you talk about the efficiency of an exemption considered under Bill C-206 versus a pay and rebate program?

5:05 p.m.

Chief Executive Officer, Agri-Food Innovation Council

Serge Buy

You know, incentives are great and we need to have an approach that is mixed. The exemption is essential, because the farming community cannot turn around quickly. However, incentives will be needed to support adoption.

If I look at the Bioscience Association of Manitoba, that's one of the things it indicated in its response to us. A mixed approach of incentives and exemptions will probably be required in the future to support adoption.

However, the adoption is not just incentives. It's also information. It's also trust. It's also testing. It's also seeing it working.

It will take time, Mr. Epp.

5:05 p.m.

Conservative

Dave Epp Conservative Chatham-Kent—Leamington, ON

You reference Canadian-made solutions. What do you mean by that?

5:05 p.m.

Chief Executive Officer, Agri-Food Innovation Council

Serge Buy

Well, it's interesting. There are some solutions in Europe, but the problem is they are not fully tested in Canada, and some of them are not fully working in the same way in our climate.

We have to be a bit careful on this. We would be probably more to likely support Canadian-made solutions. We need to invest in those solutions, but not only Canadian-made but Canadian-commercialized solutions. Too often, we find a solution, we find an idea, and it goes somewhere else.

5:05 p.m.

Conservative

Dave Epp Conservative Chatham-Kent—Leamington, ON

Thank you.

I'm going to ask one more question. Can you speculate, I guess, if the current method of rebates remains in place, can you comment on the level of confidence the ag community has that rebates will stay at $170 per tonne, if no viable alternatives are there for farmers?

5:10 p.m.

Chief Executive Officer, Agri-Food Innovation Council

Serge Buy

There is a lot of concern in the farming community, Mr. Epp. You have heard it quite a bit. We need the exemption to be there. That's what the farming community wants and has asked for.

5:10 p.m.

Liberal

The Chair Liberal Pat Finnigan

Thank you, Mr. Buy.

Thank you, Mr. Epp.

Ms. Bessette, you have the floor for six minutes.

5:10 p.m.

Liberal

Lyne Bessette Liberal Brome—Missisquoi, QC

Thank you, Mr. Chair.

Mr. Buy, thank you for joining us today as we study Bill C-206.

In its brief, the council states that the exemption proposed in Bill C-206 should be permanent, since the temporary measures deter capital investment.

Wouldn't it be advisable to discourage investment in equipment, such as grain dryers, if that equipment will become obsolete during the transition?

5:10 p.m.

Chief Executive Officer, Agri-Food Innovation Council

Serge Buy

Ms. Bessette, you're saying that we should stop drying grain at this point until new technologies are in place. I think that we should be careful about that. We shouldn't prevent the purchase of this equipment [Technical difficulty—Editor]. We must keep producing grain. The government is encouraging us to increase food and agri-food product exports to $70 billion. That's fine. However, to do so, we must continue and forge ahead. If farmers were asked to wait for new technologies before investing, it wouldn't help the situation.

May 4th, 2021 / 5:10 p.m.

Liberal

Lyne Bessette Liberal Brome—Missisquoi, QC

Thank you.

You also recommend government investments in agricultural research. The 2021 budget includes several of these types of investments, such as over $300 million in research and $50 million to fund more energy efficient grain dryers.

In your opinion, how will these investments affect the agricultural sector in the medium term?

Could we speed up the transition by investing more money?

5:10 p.m.

Chief Executive Officer, Agri-Food Innovation Council

Serge Buy

I must congratulate the government on some of its investments. We aren't here just to criticize, but to express an opinion. Some investments have been very good in this area. However, to implement a more permanent solution for the entire sector, such as grain drying systems that use alternative technologies, we'll need more than $50 million here or $300 million there. It will require a much greater effort in this area and it will take a lot longer.

I would advise the government to keep investing and working with the agricultural community on these types of things.

5:10 p.m.

Liberal

Lyne Bessette Liberal Brome—Missisquoi, QC

Thank you.

In your recommendations, you wrote that extension services must be strengthened to help farmers adopt new technologies.

Could you tell us about this recommendation, please?