Agriculture Committee on May 13th, 2021

[The Chair, Liberal, Pat Finnigan]

I call this meeting to order.

Welcome to meeting number 33 of the House of Commons Standing Committee on Agriculture and Agri-Food. Pursuant to Standing Order 108(2) and the motion adopted by the committee on Thursday, February 4, 2021, the committee is commencing its study on the environmental contribution of agriculture.

Today's meeting is taking place in a hybrid format, pursuant to the House order of January 25, 2021, and therefore members are attending in person in the room and remotely using the Zoom application. The proceedings will be made available via the House of Commons website, and the webcast will always show the person speaking rather than the entirety of the committee. I would like to take this opportunity to remind all participants to this meeting that taking screenshots or photos of your screen is not permitted.

To ensure an orderly meeting, I would like to outline a few rules. Before speaking, you should wait until I recognize you by name. If you are on the video conference, please click on the microphone icon to unmute your mike. For those in the room, your microphone will be controlled as normal by the proceedings and verification officer. Just a reminder that all comments by members and witnesses should be addressed through the chair. When you are not speaking, your mike should be on mute.

With that, I'd like to welcome our witnesses for the first hour. We have from Enviro-Stewards Inc., Bruce Taylor, president; and also from Nutrien Ltd., Candace Laing, vice-president, sustainability and stakeholder relations. Welcome.

With that, we'll start with opening statements of up to seven and a half minutes.

We'll start with Enviro-Stewards. Mr. Taylor, you have the screen.

[Bruce Taylor, President, Enviro-Stewards Inc.]

Thank you.

I sent a slide deck ahead of time. Could we show that, or could I share a screen?

[The Clerk of the Committee, Ms. Alexie Labelle]

Actually, the committee doesn't accept slides during the appearances, since they're virtual.

[Bruce Taylor]

Okay, I'll get started then.

Thank you very much for inviting me. It's a pleasure to be here.

Enviro-Stewards is an engineering company in Elmira, just north of Waterloo, Ontario, but we work across North America.

Today I'd like to outline a practical way to get to climate neutral and beyond for the agricultural sector. Our mission is to cultivate resilient business and improve lives. If you're interested, we have a TED talk on the development work we do in East Africa, but our paying work is in North America.

For example, Maple Leaf Foods is the world's first large food company to be carbon neutral. We got them there in November 2019. To do that, we assessed 35 facilities with them for conservation measures. Because they pursued a conservation-first approach, it's actually saving them money instead of costing them money to be carbon neutral. They're not waiting until 2030, 2040 or 2050. They're doing it now. It's actually economically viable to do it now.

I'd like to illustrate, first of all, a challenge I see in the typical procurement process. When people are buying water conservation for agri-food, or energy conservation, or food loss, typically the tendering is low cost. For example, we did 60 factories for York Region, for water conservation. We saved 36% of the water per factory, including many food and beverage manufacturers.

You can win many of the RFQs by saving 0% of the water. It's much easier to provide a quote to save 0% than 36%. As a consequence, anybody who's competent actually loses because they're at a competitive disadvantage in the typical tendering process. People think that the best energy audit to get is the cheapest one. The cheapest one will have the most expense when you get to the implementation, because the only way to do it is to implement what's always been done before.

You'll see in the technical brief I sent that we did one in London, Ontario, where we can heat an entire arena with the heat they're rejecting now by using a different approach from normal. What I want to put in your minds is that when you're doing your tendering, it's not the cost of the audit, it's the value of what's found that you need to do.

There was a bit of a better attempt when Agriculture and Agri-Food put out an RFP for a food waste challenge. It was better because it had the amount, so cost wasn't the issue. It was about who could give them the best proposal, and it gave the three criteria. I'll come back to that challenge in a minute.

I'll give a couple of examples in the food industry. The winery at Southbrook Vineyards is already LEED gold certified. It's organic, biodynamic and regenerative. They had a normal energy audit done. Their normal audit said they could save 5% with a 20-year payback. After that, we found and installed measures that cut the electricity by 40% and the gas by 40%. Interestingly, they had bought solar panels to replace the rest of their energy. They cancelled one-third of them. They didn't need them anymore because they're not using that energy. That saved half an acre of vineyard from getting covered with solar panels.

If you do a cheap audit, you're going to end up with the wrong solution at the end of the pipe. In their case, it was four months. It's two months if you value the wine that would have been lost by covering it with solar panels.

We're advocating this prevention-first approach. It's much more lucrative. That gets into the design of these programs. Most of the programs are designed to put money into capital and to basically make unattractive projects attractive. We did one project where, under one program, it was $2,500 to assess a factory for what should be done and $500,000 to implement it. All it did was implement stuff that would have been implemented anyway because they didn't have time to find what they should do.

If you take the time to find what you should do, you don't even need the capital funding. Our average payback for everything we've ever done is one year. If you find those ones, you don't need the capital, so it's much less expensive to provide the programs, and you can get what you're wanting to buy in the first place. I'm happy to comment on the design of these programs.

On social justice, after you reduce as much as you can.... In our own office, we've reduced our greenhouse gas footprint by 78% per employee through conservation. To get the last bit, you need to offset that. We sustainably offset it, but what are you going to do with that? Most of the programs in Canada are designed to benefit Canadians and Canadian companies instead of the people who are suffering from the climate change that we've caused in developing countries.

For example, we went to South Sudan and repaired solar panels on the roof of an orphanage. We get twice as much electricity, because there's twice as much sunlight in South Sudan. A generator was shut off that used to be running just to run the water pump. Instead of buying fuel for the generator, food is now bought for the kids. Socially, economically and environmentally, it's much better, but we get zero credit on any environmental program in Canada. We would get it only if we put it on our own roof in Elmira and had limited daylight all winter.

We have these XPrizes for carbon. The best way to sequester carbon is to just leave it as coal. It's never going to be more inert than that.

Planting trees is great. We should do that, but how about not cutting down trees in the first place? When you go to developing countries, they're cutting down trees to boil the water to make it safe to drink. If you just gave them safe water in the first place, you don't have to deforest, you don't have to....If we get smart about it, we actually get much better impacts on all of the sustainable development goals, not just one at a time.

On the food loss angle, this is probably your biggest opportunity. You probably know the big numbers, that one-third of all the food on the planet is wasted. If it were a country, the third-largest greenhouse gas emitter would be food loss, after China and the United States. The second-largest water consumer on the planet is the growing of food that's wasted. In Canada, it's $49 billion per year of lost value.

Almost 100% of the effort has been on how we divert that from landfill, because if it gets to landfill, it's going to turn to methane gas. If you divert 100% from landfill, you still waste one-third of the food. It's still the third-largest greenhouse gas emitter; it's still the second-largest water consumer on the planet, and you still lose most of that $49 billion. The only way to not do that is to not waste the food in the first place, and there are almost no programs targeting that.

We did Campbell Soup in Toronto. We first did energy and water, with a process integration. We found savings of $1.6 million per year of energy and water. Then we did food. We found them $700,000 per year of food that didn't have to be wasted. That food was going to a waste energy plant, but it's 4,000 tonnes less greenhouse gas to keep it as food, because it was in that supply chain.

We leveraged that, and the Walmart Foundation co-funded us to do 50 audits across Canada. This was a program administered by CFIA and the Provision Coalition. We went to 50 factories—

[The Chair, Liberal, Pat Finnigan]

Mr. Taylor, I'm sorry. Your time is up, but you'll get a chance to.... There will be questions after.

We'll go to Ms. Laing, for seven and a half minutes.

[Candace Laing, Vice-President, Sustainability and Stakeholder Relations, Nutrien Ltd.]

Thank you, Mr. Chair. Thanks for the invitation to appear.

My name is Candace Laing, and I am Nutrien's vice-president of sustainability and stakeholder relations, coming to you today from Saskatoon. I would like to acknowledge I'm coming to you from Treaty 6 territory and the traditional homeland of the Métis.

As a bit of background for anyone who is less familiar with our company, which is just a little over three years old, Nutrien was created through a merger of equals between Agrium and the Potash Corporation of Saskatchewan, previously two of Canada's leading agriculture and mining companies. Together, as Nutrien, we've become the world's largest provider of crop inputs and services. Our business spans operating segments including our retail division, known as Nutrien Ag Solutions, and the manufacturing and mining of potash, nitrogen and phosphate fertilizers.

Though our company has grown—we now span 13 countries and three continents—our operations in Canada remain extensive. We have six potash mines in Saskatchewan, four nitrogen manufacturing facilities in Alberta, and nearly 300 ag retail outlets, primarily across western Canada. This is in addition to two corporate offices in Calgary and Saskatoon.

Our purpose as a company is to grow our world from the ground up. With nearly 10 billion people expected by 2050, we have a big challenge in front of us. Feeding this growing population without increasing land use and while tackling climate change is one of our biggest challenges and greatest opportunities. The future of agriculture depends on industry leaders, partners and governments taking concrete actions to support sustainable farming practices. Last month at Nutrien, we launched our feeding the future plan. This includes commitments to help reduce our carbon footprint. We see these commitments as critical in driving the next shift in agriculture. We've set out to decrease emissions directly related to our operations, while supporting growers with our products and services so they can store more carbon in their soil and reduce emissions with better nutrient management.

Some of our commitments, set to be achieved by 2030, include enabling growers to adopt sustainable agriculture on 75 million acres globally; a comprehensive carbon program that empowers growers to accelerate climate-smart agriculture and soil carbon sequestration, where growers are rewarded for their efforts through the generation of carbon credits and assets; and at least a 30% reduction in our greenhouse gas emissions per tonne of product produced, while we're also pursuing the transition to low-carbon fertilizers.

[Technical difficulty—Editor] speak to the emissions-reduction and sequestration opportunity in crop production, and what Nutrien is doing to accelerate the nature-based climate solutions from agriculture and reward growers for those efforts.

This growing season we are piloting our carbon program. We targeted 100,000 acres in North America, 20,000 acres of which were in Alberta, Saskatchewan and Manitoba. Interest from growers has been extremely encouraging and exceeds our target for acres applied. We are now executing our pilots on 200,000 acres across North America, 45,000 acres of which are in Canada.

The carbon program empowers growers to accelerate climate-smart agriculture and soil carbon sequestration. At Nutrien we work directly with our growers to build customized crop plans that reduce their carbon footprint. We assist in verifying carbon performance, and currently we are paying growers directly for their participation, anticipating we need to be ready to support [Technical difficulty—Editor] in a compliance or voluntary offset market.

Nutrien's long-term goal is to put learning from these pilots to work and scale the program globally to build real, lasting change and impacts. A significant component of our pilots includes troubleshooting existing offset protocols and their barriers to adoption. The nitrous oxide emissions reduction protocol, or NERP, in Alberta's carbon compliance framework is world leading, yet it has not been transacted on in 10 years due, in part, to the significant administrative burden and relatively low return on investment for growers.

Early findings from our pilots have shown us two things. First is the value of digital tools. They capture and create credible evidence, making it easier for growers to measure their carbon reduction progress. Digital [Technical difficulty—Editor] when most offset protocols, like NERP, were first developed. Embedding them, as we are, with existing and new protocols will make carbon credits more accessible to growers.

Second, we have learned that protocols must be stackable. Our pilots stack soil organic carbon and nitrogen management protocols to deliver the highest emissions reductions. Stacking protocols makes economic sense for the grower, who may not see enough value and return in a single protocol in order to invest in the practice changes.

We are in regular communication with Environment and Climate Change Canada and Agriculture and Agri-Food Canada on our findings, as well as with provincial governments. The NERP has not been prioritized for development in our federal offset program, but at Nutrien we are hopeful that learnings from our pilots will accelerate this.

Adopting the NERP will also help the federal government achieve its goal of reducing nitrous oxide emissions from fertilizer by 30% by 2030. Let me be clear: Reducing N2O emissions by 30% is extremely ambitious and perhaps even unachievable without compromising crop yields and thereby threatening global food security and our position as a global leader in agriculture. However, we believe that by creating a value in carbon assets from agriculture, we can make significant progress. More to the point, we can help Canada tap into the significant opportunity in agriculture to deliver on our nationally determined contributions.

In summary, our recommendations to the committee are as follows.

Number one, partner and work with us. Enable Nutrien’s carbon program by helping create a suite of stackable, accessible agricultural protocols within the federal offset system that combine both nitrogen management and carbon sequestration.

Second, ensure that any policies to reduce agricultural greenhouse gas emissions use the carrot and not the stick. We need policy support to help us scale climate solutions while we maintain productivity and enhance grower resilience.

We have an opportunity to give credit to Canadian producers, who are already among the most sustainable in the world.

With that, I'd like to thank members of Parliament for their time today, and I am pleased to answer any questions.

[The Chair, Liberal, Pat Finnigan]

Thank you, Ms. Laing. You must have had a timer, because you are right on time. Thank you so much. There is a bit of an issue with your sound, and I think the technician will probably be in touch with you on that.

We will go to our question rounds. The first round, for six minutes, will start with Mr. Epp.

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

Thank you, Mr. Chair.

Thank you to the witnesses for your testimony.

I'd like to begin with Mr. Taylor, please.

My understanding of the agriculture value chain is that it begins with the suppliers and goes to primary producers, then on to value adders or food processors, and then on to our retail sector, either through the wholesale or direct retail markets.

Am I correct in understanding that your business is primarily focused on only one area, value-adding or food manufacturers, or do you do any work in primary agriculture as well?

[Bruce Taylor]

We submitted an application under the Agriculture and Agri-Food program, the food waste reduction challenge, which included the Holland Marsh Growers' Association, where we've done a bunch of work in the past. We've previously worked with the Ontario Tender Fruit Growers and others. We start there.

Interestingly, if you save something in a manufacturing plant, you automatically save it all the way back to the field, because you're making the same output with less input. The primary agriculture manufacturing and distribution centres are where we make our primary impact. About half of the total food loss in Canada is in that wedge.

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

Thank you.

I'll go to Ms. Laing.

I am assuming that you are familiar with the 4R strategy. Where does that fit into your request to us to make the initiative stackable and complementary? How does that fit into your ask of government?

[Candace Laing]

The 4R nutrient stewardship, as a suite of best management practices, is built into the protocol to reduce nitrous oxide emissions—the NERP. We would encourage that the NERP be incorporated and then stacked, along with protocols that look at soil organic carbon.

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

Thank you.

We heard testimony at our last study that Ag Canada officials have basically stated that since 2005, greenhouse gas emissions from agriculture have remained steady.

[The Chair, Liberal, Pat Finnigan]

Mr. Epp, could I ask you to pull away a little from your mike?

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

How's that? Is that a lot better for the interpreters?

[The Chair, Liberal, Pat Finnigan]

Yes, I hear that it's good. Thank you, Mr. Epp. Sorry to interrupt.

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

No worries—I'm sure you'll double the time back.

Canada's track record, according to AAFC officials, is that greenhouse gas emissions from agriculture have remained steady since 2005, yet our output has obviously been increased. Nutrien's goal is a 30% reduction per tonne. Can you talk about the rate of drop? Obviously, that rate of drop has been happening over the last 15 years already. Can you comment on that and going forward?

[Candace Laing]

Certainly. If I don't quite answer your question, please reframe it.

When we look at our emissions in agriculture, I think we often hear that up to a quarter of global emissions are from agriculture, 3% of which are from production and use of fertilizers globally. One of our challenges is that whether we look at a national inventory or a company's emissions baseline, we are looking at estimates of our emissions. They're not measured directly but are estimated based on global emissions factors, and they don't necessarily capture reductions from differences in nitrogen use. Emissions factors that we use globally draw on available science, and the science will improve as we actually enhance measurement on the farm.

We are anticipating and monitoring some work globally, out of New Zealand and the Netherlands, which are experimenting to determine emissions levels from nitrogen-based fertilizer application. That emerging research will lead to a new set of emissions values that are lower than what we use now from the Intergovernmental Panel on Climate Change refinement estimates, so there's a potential for lower values to be applied as well, which we're focused on.

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

Thank you.

You asked the government to use the carrot instead of the stick. Can you comment about the pace of regulation, the pace of change and cost structures? How quickly can we produce food more sustainably? When you talk about the carrot, what tool is the best tool, in your estimation, that we could use?

[Candace Laing]

That's a great question.

There are some barriers to the speed and scaling of climate-smart agriculture. One of them is basic digitization. We have a lot of precision agriculture and technology, but actually measuring and getting sustainable outcomes out of the farm level is one of the challenges. I will often sound like a farmer, because my whole family farms, but we also need to think about what would incent growers to share their data, which we need in order to scale sustainable agricultural practices. Really, carbon finance is a key lever that will bring speed to the scaling of sustainable agriculture and our being able to realize environmental outcomes.

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

Thank you. I'd like to get one more question in, if I can.

You talked about the changes in your nitrogen-processing capability. Are there any other changes you've been making in your potash and phosphate operations that would contribute?

[Candace Laing]

In our potash operation we have a focus on renewable energy and self-generation/co-generation, because scope 2 emissions are most material in that business unit, but when we look at our corporate footprint and what is most material, it's emissions out of nitrogen production. That's where we're focused on a decarbonization road map of various projects for abatement, and other options as well.

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

Thank you.

I see the chair nodding, so I won't try it.

Thanks.

[The Chair, Liberal, Pat Finnigan]

Thank you, Mr. Epp.

Thank you, Ms. Laing.

We will now go to Mr. Louis for six minutes.

Go ahead, Mr. Louis.

[Tim Louis, Liberal, Kitchener—Conestoga, ON]

Thank you, Mr. Chair.

Just the fact that we want to keep asking questions is a testament to the level of expertise on this panel. I appreciate both witnesses' time. Thank you.

I will address my questions to Mr. Taylor, because we've actually had conversations before in the riding of Kitchener—Conestoga. I can hear the passion that both witnesses bring here, and it's much appreciated.

You talked about companies becoming climate positive. We've had discussions about companies with higher profit margins and smaller carbon footprints at the same time, and the levels of innovation that can bring. My initial question would be around the scalability of this. Can these procedures work for smaller producers and large companies as well, as far as energy efficiency, water efficiency and food losses? What is the scalability on this?

[Bruce Taylor]

Yes, it works from.... We're doing some right now in a circular food economy demonstration project where there might be half a dozen employees, right up to Campbell's or Molson or Labatt, with thousands of employees. It's the same thing. The percentage is the same but the magnitude is different. Right now we have an offer in. We did the 50 assessments across Canada.

To give you an idea of the scale, if you put a grocery bag beside the CN Tower and another one beside it, you would get to London, Ontario, before you ran out of grocery bags, every year, just with what we found in those 50 factories. Each of those 50 factories would save $230,000 per year on their operating costs with under a one-year payback, which protects every job in those factories from moving to another country.

With Campbell Soup, we implemented some of the stuff, but before we could implement the rest they decided to move their factory to a different country. How much harder would that decision have been if we'd embedded all of that and there was $2.5 million in additional profits on the books when they were making that decision?

What we need to do is embed this efficiency in the factories. The best way to do that is to find that efficiency. Invest in finding that efficiency. That is my advice, whether you're a mom-and-pop or whether you're a multinational.