Agriculture Committee on June 8th, 2021

[The Chair, Liberal, Pat Finnigan]

Welcome to meeting number 38 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 resuming 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. 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.

So you are aware—

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

Mr. Chair, we have no interpretation.

[The Chair, Liberal, Pat Finnigan]

There is no interpretation?

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

Mr. Chair, do you want to suspend the meeting while we sort out the interpretation issues?

[The Chair, Liberal, Pat Finnigan]

Okay, let's suspend the meeting.

We're going to suspend the meeting until we fix the glitch with the interpretation.

[The Chair, Liberal, Pat Finnigan]

I call the meeting back to order.

I will start about halfway through if that's okay. You know the guidelines pretty well, so I'll continue.

I would like to take this opportunity to remind all participants at this meeting that screenshots, or taking photos of your screen, are not permitted.

To ensure an orderly meeting, I would like to outline a few rules. Before speaking, please 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 must be addressed through the chair. When you are not speaking, your mike should be on mute.

Before we go to our witnesses, I want to remind members that the deadline for sending amendments with regard to Bill C-205 is Friday, June 11, at noon. Amendments must be sent to the clerk. If you want advice on the admissibility of an amendment, you may contact legislative clerk Jacques Maziade. If you need assistance with drafting amendments, you may contact legislative counsel Alexandra Schorah. I don't know if there will be any questions, but I wanted to remind all of you.

That being said, I will now welcome today's witnesses.

From ALUS, I believe it's Alternative Land Use Services, we have Bryan Gilvesy, chief executive officer; and from Farmers Edge Inc., we have Wade Barnes, chief executive officer, and Bruce Ringrose, head of sustainability and stakeholder relations.

Welcome to all of you. We'll go with a seven and a half minute opening statement.

Go ahead, Mr. Gilvesy.

[Bryan Gilvesy, Chief Executive Officer, ALUS]

Thank you very much for the opportunity to be here today.

I am a veteran farmer from here in Norfolk County, Ontario. I also serve as an executive in residence at the Ivey business school. Most importantly, today I come here as the CEO of ALUS.

To contextualize my position in ALUS, I was the third participant farmer in this program back in 2006. I've grown up with this program, through my community, to the point that I now run it.

ALUS stands for Alternative Land Use Services. The ALUS concept was born in 2008 in Manitoba farm country as the farmers' conservation plan. The acronym simply means a farmer shall use his land in an alternate way and produce a service—an ecosystem service—that we believe has market value.

ALUS has since grown into six provinces and more than 30 communities. ALUS is a Canadian charity that works with rural partners like counties, conservation authorities, watershed districts and other NGOs to help farmers and ranchers across Canada restore and enhance nature on their farmland, or in fact modify how the land is farmed.

It's important to realize that the biggest distinction of ALUS is a single one: In every community where we operate, we establish a partnership advisory committee made up of 50% farmers and other community leaders to adjudicate the program within their local area. This has become the secret sauce to delivering a robust environmental program that's growing rapidly across the country.

There is no doubt that Canada's farmers are on the front lines of climate change. Changing seasons and severe weather are all affecting the production of food and farmers' livelihoods. ALUS farmers and ranchers are fighting back against climate change. They are providing nature-based climate solutions that benefit all Canadians. Our wetland, grassland, sustainable grazing and tree projects all lower greenhouse gas emissions and sequester carbon, along with a host of other benefits, like creating new wildlife habitat—including for species at risk and pollinators—retaining and slowing stormwater to protect local and downstream communities, and improving air and water quality.

Our organization is lucky to work with many researchers across Canada who are helping us better understand the impacts from our farmers' projects. What our farmers see and what our researchers are now documenting is how quickly they get results. When projects are properly planned and managed, the benefits accrue quickly. After one year, our restoration projects can have the diversity and abundance of pollinators and species that eat crop pests equal to an undisturbed area. Better yet, we know from our research partners that converting land that isn't economic for farming back to nature helps farmers produce more food, even with less land, due to the extra pollination and crop protection that nature provides.

Researchers are also helping us identify the most promising areas for climate and water outcomes, which ensures that dollars go as far as possible. All evidence is pointing in one direction, which is that investing in nature through farmers is a smart strategy given the returns our communities receive. Turning the tide on climate change requires all hands on deck, or in this case, farmers who can put their hands in the dirt to make a difference.

Since 2015, our program has grown to now include 31 community partnerships in six provinces, including the participation to date of over 1,100 farmers and impacting over 125 square kilometres of land. As an organization, we have grown to deliver financial support to farmers, first from our humble beginnings under the umbrella of Delta Waterfowl foundation and then when we became independent as a Weston Family initiative. Now we are funded by over 30 partners. Of note, ALUS has taken great care to find market value for farmers' work, as evidenced by support from corporations such as Cargill, A&W, Danone, RBC and TD.

Obviously, over the years we have learned many lessons that I'd like to share with you today as the committee contemplates what the Government of Canada could implement in collaboration with producers to recognize the important role agriculture plays in this area.

First is that to be effective, programming must create value at the farm gate and not be seen as a temporary incentive program. These are not subsidies or incentives. We want to reward farmers for producing the ecosystem services that can solve the world's most pressing problems.

Second is to acknowledge that the creativity, skills and experience of the people on the land to manage nature-based solutions results in powerful grassroots solutions, the likes of which we have not seen before. The PAC process has proven that working through community collaboratives provides leverage and allows for local solutions that can help communities adapt to a changing climate.

Third, it's not only about carbon. To maximize the real value farmers can produce with their nature-based solutions, we need to recognize all the value they produce, including biodiversity, water quality and climate resilience.

Fourth, support, extension and technical advice through community contact is essential. Our farmers consistently mention this as a key to success. It's important to remember that the average age of a farmer is in my ballpark, around 56 years old, where these things are not necessarily familiar to us. Having the support of a community-based program and the technical advice is really important to bring us into this fold.

Fifth, a marketplace for ecosystem services is emerging before our eyes, and ALUS is a leader developing this space through its new acre project. Corporations will look to this marketplace for solutions for their ESG reporting and other objectives. It is essential we leverage these private dollars with public initiative for maximum effect.

Sixth, the biggest point I want to make here is that farmers need flexibility to fully engage in conservation programming, so flexible approaches towards carbon sequestration are essential. We need to develop and approve carbon offset quantification and credit issuance protocols that are very different from what we have seen to date and reflect the wishes of the farming community and the realities of farming. Putting farmers in the lead to provide environmental solutions is not only a proven analysis but highly effective.

I thank you for your time today and stand ready for your questions.

[The Chair, Liberal, Pat Finnigan]

Thank you, Mr. Gilvesy.

Now we have Farmers Edge. You have up to seven and a half minutes between the two of you.

Go ahead.

[Wade Barnes, Chief Executive Officer, Farmers Edge Inc.]

Good afternoon. Thank you very much for having me here today.

My name is Wade Barnes. I'm the CEO and co-founder of Farmers Edge. Farmers Edge is a technology company that operates in a majority of the key exporting nations in agriculture. We were founded here in Manitoba. Just in Canada alone, we operate on nine million acres. We go out and we connect farms. We help those farms move through digitalization. We provide analytics and help them make key decisions on their farms. Some of the by-product of that is carbon offsets and sustainability.

The other part of what I do is that I'm a farmer, born and raised on the family farm in Manitoba, right along the Saskatchewan border, on the right side of the border to cheer for the right and winning football team, mind you—no offence to any of the folks from Saskatchewan on the line. I'm also a trained agronomist. I've worked in the industry for close to 20 years. We have a unique perspective on how agriculture and sustainability will play out.

There are really four key initiatives we want to drive home.

The first one is collaboration. There does not need to be a difference between economic development and the environment. As most farmers know, it is good business to be environmentally sustainable. I think the majority of farms we operate within Canada—and we operate in Ontario and western Canada, not yet Quebec, but hopefully in the future—are doing the right things to essentially create sustainability. They have a natural attachment to this land, but they have a real focus around productivity.

One thing we hear from an agronomic standpoint that concerns us is the view around a reduction in nitrogen. I can tell you that a lot of the things that Farmers Edge does from a company's perspective is to enhance farmers' use of crop inputs, specifically around nitrogen. Our view is that, if government goes in and reduces the amount of nitrogen that is used on the farm, you'll essentially reduce productivity. If I use my own example as a farmer on my own farm, if we reduce nitrogen by 30%, we'll reduce my productivity by 25%, which will really end up costing me, on the canola that I grow, somewhere around $225 an acre. If you multiply that across 20 million acres of canola, it's a huge amount of revenue that will be pulled out of the farming community.

From my agronomic side, my concern is that a reduction of nitrogen may not give the reduction in nitrous oxide that people may be looking for, and that's the real concern. I think we have significant opportunity to enhance and help farmers move towards sustainable practices like the 4R program. What this really enables is not a give on productivity. You can have your cake and eat it to. You can have maximum productivity with, essentially, the most environmentally sound applications of crop input out there in the marketplace.

One way we can move toward this, from a Farmers Edge perspective, is that Canada has a unique opportunity—and you have to remember that I've worked in many markets around the world—to be a powerhouse in digital agriculture. There would be an opportunity to connect farms and utilize technology to be a world leader. That will enable farms to utilize technology, to go out and implement tools like the 4R program and to create much more sustainability on those farms, which will create significant opportunities beyond just producing grains, and have that ability to connect with that end consumer, which is, I think, really important and could be a unique opportunity.

With that, if we think about it, if we can enhance farms and motivate them to move towards adoption of technology, there's a huge opportunity around the creation of offsets. Today Farmers Edge, on the nine million acres we work with, will create over $3 million to $4 million in offsets, whether it be through nitrogen management, no tillage or cover crops, and we'll be utilizing those offsets and selling them on the voluntary market.

Our view is that there's a huge opportunity here to create value beyond just growing grains as a commodity by utilizing the tools we have to create offsets and allow Canada to be a powerhouse in sustainability.

With that, as farmers implement technology, the ability to create carbon offsets on the farms creates significant opportunities downstream when you think about how the majority of food companies are now looking at their own zero-emissions goals. Many of them are looking to source low-carbon grain. Again, the Canadian farmer can be a world leader in that. We have the opportunity to capture that value and capture it now.

The other thing I wanted to touch on is that, when we utilize carbon offsets to create value for the growers so that they invest in technology, it creates a much broader ecosystem. When you think about government's role in risk management and how the government funds risk management and how it helps support lending programs, and you think about how implementing technology can allow farmers to go out and create opportunities whereby they can get better insurance products, better risk management and better lending opportunities, that starts to take some of the risk off government and puts it towards private industry. Private industry can go out and utilize the data that farmers are creating and essentially provide those better management practices.

Right now, we see in Canada, but specifically in western Canada where most of our customers are, that there's a lot of concern around government coming in with environmental restrictions. We see that as an opportunity. Again, if they do it in the right way, farmers can create significant value out of these offsets. Utilizing technology and digitalizing agriculture can then allow for better risk management, crop insurance and lending.

I want to leave you with the idea that Canada has a tremendous opportunity here if things are done in the right way, using a collaborative approach that includes industry, farmers and the government.

I'm excited to answer any questions. Thank you.

[The Chair, Liberal, Pat Finnigan]

Thank you very much, Mr. Barnes.

Before we go to the question round, Mr. Gilvesy, there was an issue with your sound. The interpreters were able to translate because they had your notes, but it has been suggested that perhaps you could turn off your camera. It's not that we don't want to see you, but if you turn off your camera, all the energy will go to.... Hopefully that will improve the poor sound quality. We'll try that and hopefully it will work.

With that, we'll go to our first question round. We have six minutes and we'll start with Mr. Epp.

Go ahead, Mr. Epp, for six minutes.

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

Thank you, Mr. Chair.

Thank you, witnesses, for your excellent testimony.

Also, thank you, Mr. Chair and my colleague Richard. There are no brooms in your background right now that I can see, so I will extend congratulations for your cheering. With that we will carry on.

Let me start with you, Mr. Gilvesy, even though I can't see you. It is good to see you again. I believe I saw you just at the end of my tenure at the Agricorp board. Agricorp was the adjudication body as ALUS got off the ground. It's good to see you again.

I lifted one quote from the materials you forwarded to us. It was “Conservation will ultimately boil down to rewarding the private landowner who conserves the public interest.” That's by Aldo Leopold.

Can you comment further? Many changes have been made at the farm level. You've outlined some there. I'm familiar with many. Can you talk about how agriculture has not necessarily been credited with those? What do you mean exactly by that statement?

[Bryan Gilvesy]

Aldo Leopold was a great figure to follow because he recognized the stewardship role.

The idea for our program came from Ian Wishart, who was a potato farmer in Manitoba at the time and who now sits as the environment minister of Manitoba.

His notion was that the farm can be a multi-functional place and that the farm can produce more than just food and fibre. It doesn't need to be at the exclusion of the food and fibre, but ecosystem services that are valuable to all Canadians, including those involving biodiversity and at-risk species and wetlands, are worth rewarding. If we don't look to the agricultural community and reward it for this, we will miss the biggest opportunity in Canada.

All of southern Canada where we live, work and play is managed and maintained by farmers. If we want to maximize the quality of our life and what we get from those farms, we need to look at them differently and consider rewarding them for the extra things that they produce over and above the food and fibre. I think that's where that comment comes from.

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

Thank you very much.

I'm going to ask Farmers Edge to weigh in on the same thing. I'll lift one quote from your materials, “Net gains in sequestered carbon have gone unrecognized for 20 years. It represents an untapped opportunity for millions” and so on. Can you make comments along a similar vein?

[Wade Barnes]

Yes. I mean, look, of those nine million acres we operate on, the majority of those farms are either using no-till technology today, variable application of fertilizer or specifically placing fertilizer in the right spots. They are making a huge contribution right now.

A lot of this is due to the fact that it's good business to implement these types of technologies. It saves the soil, and it saves moisture to place nitrogen in the right spots. You don't want to waste money, so you essentially create a higher productivity. There doesn't have to be a win-lose when it comes to the farm and the environment.

I think what needs to go forward is how farmers are rewarded for this and also to entice them to invest more in this, to actually go further and see what other things they can do to find more efficiencies when it comes to potentially drying grain or better efficiencies with farm equipment.

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

Thank you.

We recently heard testimony here at committee from the National Farmers Union that really warned us in the farming community—I still lump myself in there because I'm part of a farm at home—to be careful of how embedded we become with multinationals and how embedded we become with data. It would be an oversimplification to say that they were advocating a return to a simpler form of agriculture, but they were very wary of digitizing and becoming wedded to large multinationals.

Can you comment, please?

[Wade Barnes]

Is that directed towards me, sir?

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

Yes, please.

[Wade Barnes]

Look, I'm a farmer. I'm also the CEO now of a publicly traded company. The way that we look at data and information is similar to the way my grandfather would have looked at oil. If the oil stays in the ground, you can't create value out of it. Data's no different on the farm. We want to utilize data in an effective manner so that farmers can make decisions on it. We've been able to prove that when farmers have the right information, the use of crop inputs will go down.

I would say that being afraid of digitalization would be a giant step backwards in the farming community.

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

Thank you.

Canada's track record, as testified to us by AAFC officials, is that greenhouse gas emissions from agriculture have remained steady since 2005 despite production increases.

If carbon taxes were further exempted, as proposed under Bill C-206, for grain drying and things like that, would you expect greenhouse gas emissions to increase all of a sudden? What would you expect to happen over time, given the adaptation of the 4Rs and things like that?

Again, this is to Farmers Edge, please.

[Wade Barnes]

Look, my view on greenhouse gases, based on farmers that are utilizing the 4R approach, would be that I don't think they'll go up. I think that the more efficiency you can create, the less you'll see an increase in greenhouse gases.

I think technology will only enhance this in other aspects of the farm, rather than just focusing on nitrogen application or fuel use.

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

Thank you.

I'd like to get one more question in if I can to Mr. Gilvesy. What would be ALUS's position on cross-compliance between BRM programming and environmental initiatives?

[Bryan Gilvesy]

One of the things that farmers have told us in the design of our program is that we need to be voluntary. That means that we operate in a space that is neither a regulatory one nor a legal one. Our farmers' actions are operating in an additional nature. In other words, they're providing environmental services over and above what any regulation or compliance might require.

[The Chair, Liberal, Pat Finnigan]

Thank you, Mr. Gilvesy. We have to move on to the next questioner.

Thank you, Mr. Epp.

Now it's Mr. Blois for six minutes. Go ahead.

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

Thank you, Mr. Chair.

Thank you to our witnesses for their testimony here today.

The big take-away, from what I've heard as a member of this committee, is that there's huge power in looking at the natural solutions that are offered and the work that farmers can continue in this space and, of course, augment within their existing practices.

My first question is for Farmers Edge and Mr. Barnes.

I had the opportunity to visit your website—very well indeed. One of the titles is “Enrich Soil and Your Bank Account”, and you spoke to this in some of your testimony. I assume that you're working directly with farmers to create programming to enable them to verify some of their results such that they can take advantage of some of the corporate opportunities that are out there and, of course, the offset by ECCC in the days ahead. Is that fair?

[Wade Barnes]

Yes, absolutely. Our focus right now is the voluntary market. There is a significant number of corporate clients on both sides of the border that are focused on their zero emissions. Agricultural offsets are the most sought-after offsets, but they're also the most concerning because of the lack of transparency. When a farm is digitalized and they have an electronic record, suddenly companies feel much more secure in acquiring those offsets so that it's not “greenwashing”, if I can say that. With that, they're willing to pay a premium for those offsets. Regardless of whether they come from Alberta, Ontario or Quebec, I think there's a huge opportunity.

The second part to that is, beyond just the sale of the offset, what can be created around premiums for low-carbon grain and products that are coming off that farm, because that is the next wave.