Agriculture Committee on Oct. 3rd, 2024

[Richard Cannings, NDP, South Okanagan—West Kootenay, BC]

Thank you.

I'm going to start with Mr. McCann.

I think we're talking here about a hypothetical situation. Sometime in the future there might be carbon border adjustments on the agriculture sector. We've been hearing it's going to be very complicated and it's certainly not likely to happen in the very near future, as the EU is moving in other sectors.

One of the themes of your opening statement was harmonization and that in many ways the best way we can prepare for this is to try to harmonize our practices with our major trading partners, in particular the United States.

You mentioned Bill C-359. I don't want to take the chair's thunder away from him, as he might want to ask you about this directly, but could you mention some of the key ways we could harmonize our agriculture practices, our subsidies and anything we do to support agriculture with those in the United States as a start in preparing for a future that may include a carbon border adjustment?

[Tyler McCann]

I'd like to start by making the point that it's good to be paying attention to these issues that are going to happen in the future, but we have issues today, such as what to do about the EU deforestation regulation, that I'm not sure are getting the full attention, support and service they need.

One of the points I want to make is that we need to make sure we're adequately addressing the issues in front of us today before we get too worried about the issues that are in store for the future.

If you look at this need to reinvigorate multilateral approaches and collaboration across countries, we've seen the U.S. show leadership around a sustainable productivity growth coalition that's aiming to try to increase dialogue and collaboration between countries around the tools we will need to implement sustainable productivity growth and what practices can be used. That's an example of an effort there.

We've been holding an event yesterday and today. Yesterday morning, we had the deputy director general of the Inter-American Institute for Cooperation on Agriculture come and speak, and he talked about the need to better align approaches across the Americas. There's a huge amount that Canada could do to show leadership, to help support capacity building and investments and to ensure more coordination and consistency across policies there. There is, unfortunately, a bit of a tendency to look away from the good work that groups like IICA are doing that we could be supporting more and that would proactively and positively encourage a more consistent and level playing field.

Again, we could be using some carrots internationally, rather than relying on sticks.

[Richard Cannings, NDP, South Okanagan—West Kootenay, BC]

Thank you.

We've also heard several witnesses mention—I'm sure you've heard the conversations—the importance of better data in all of this. When you have a complicated system that is being proposed, it's one thing to calculate the carbon intensity of steel production, but it's another to calculate it for beef production when you have cattle out on the range, cattle in feedlots and cattle being shipped back and forth.

I heard somebody else mention, when vegetables are being taken from various farms and places and put in the same bag, how important data is—in general in this world, but certainly in a case like this—and how the government could support that for the agriculture sector across the country in all sorts of ways, whether it's through StatsCan or whatever.

[Tyler McCann]

There's a huge opportunity for the government to facilitate and enable more work around measurement and reporting and to do it in ways that reduce the potential burden.

In Europe, we see that one of the reasons the European Commission is not that aggressive on an emissions trading scheme on agriculture is that it's so complex to really get a good, accurate and reliable measure.

It's not just a measure. One of the things that has a huge impact on the agriculture sector's emissions footprint every year is whether it's dry or wet on the Prairies. Even if you can actually measure the carbon footprint, what do you do with your border carbon adjustment when all of a sudden we've had a really wet year and the carbon footprint of our western Canadian crops goes up?

These systems don't lend themselves to the same types of measures and approaches that a steel plant does. They are fundamentally different systems. That organic system that exists in agriculture is so wildly different that, again, it's not just a matter of measurement. Even once you have the data, what do you do with it and how can you use it in a way that achieves these outcomes? That's really tough.

[Richard Cannings, NDP, South Okanagan—West Kootenay, BC]

Thank you for mentioning rain. I was just thinking intuitively that if you had a wet year on the Prairies, the carbon footprint would go down because there would be more carbon sequestration, but that shows you how much I know.

Mr. White, would you like to comment on any of that in terms of harmonization with our major trading partners?

[The Chair, Liberal, Kody Blois]

Could that be in about 30 seconds, Mr. White? I know you're capable.

[Rick White]

Thanks—message received.

You have to have harmonization. You have to know what you're measuring. You have to know what you're adjusting for.

My conceptual gap here is this. What is the problem that we're trying to fix here? I am not clear on what exactly it is we're trying to fix or curb. Is it philosophical? Is it protection of certain aspects of our industry? If we had clarity on the purpose and the objective, we can figure out the measurements and the tools that are needed to fix that problem.

I'm not exactly clear if this is an academic exercise or not, but I agree 100% with Tyler: We need the data. We don't have the data, and neither do other countries, to do this properly.

Thank you.

[The Chair, Liberal, Kody Blois]

I'm going to pass it over to Ms. Rood for up to five minutes.

I'd also like to recognize that Mr. Epp from Chatham-Kent—Leamington is here on the committee. It is a great agricultural riding, and he is a good advocate.

We'll go over to you, Ms. Rood.

[Lianne Rood, Conservative, Lambton—Kent—Middlesex, ON]

Thank you, Chair.

Thank you, witnesses, for being here.

Mr. White, I appreciated your comments earlier to my colleague Mr. Barlow, when you were saying that farmers do everything they can to minimize their costs. We see that our costs are up year over year for farmers, and the carbon tax plays a big part in that, especially, I would think, on the Prairies, when we're hauling lots of grains, and canola in particular, from the fields back to the farm gate. Those transport trucks, of course, have to use fuel. The diesel fuel used in those trucks is not tax-exempt, contrary to some of the beliefs that we hear from other parties.

We've seen on the carbon tax data that has come out, even from the Liberals' own government data, that since that tax has been imposed, we haven't actually seen a reduction in emissions. We're talking now about putting on another layer with these carbon border adjustments.

What concerns me is that we haven't actually talked about the food security aspect of these new measures. We know that we have seen huge increases in food bank usage numbers over the past several years.

To either Mr. McCann or Mr. White, I'm just curious as to what you see as the core food areas that are most likely to be adversely impacted, and will these inflationary pressures create a ripple effect through to food markets elsewhere, leading potentially to more food insecurity?

[Rick White]

It's a great question.

I hadn't really thought of it as food security, because we're awash in food. From a canola perspective, we grow way more than we consume domestically, so if food security is domestic, we're good. If food security is more global, maybe it's not so good, because our product does feed a lot of people globally.

On the carbon tax part of your question, that is one area that the government needs to reconsider, especially for farmers. Bill C-234—speaking of sticks from Tyler's earlier comments—would alleviate the stick on farmers.

My suggestion here is that this is coming up again in the House on October 26. Bill C-234, in its original form, is our preferred approach. However, the reality of the situation—and without much faith in the Senate—is that we would encourage the amended Bill C-234 to go through immediately. It won't help as many farmers, but it will help farmers in need right now, and we need an early harvest for those farmers to get some tax relief.

The emissions are not going down because farmers do not have any alternative, and it becomes a straight-up tax. This stick is just acting on farmers as a club, and they can't do anything about it except take it on the chin and reduce their bottom line.

Please get Bill C-234passed and get some relief to those farmers. Lots of those farmers are feeling the brunt of China right now, and they're going to feel a lot more of it in the next six months.

[Lianne Rood, Conservative, Lambton—Kent—Middlesex, ON]

Thank you.

I'll turn it over to Mr. McCann.

[Tyler McCann]

I appreciate the opportunity to comment on this, because I think the last time I was in front of the committee, some of the members took some creative licence with some of the things I said about data and the carbon tax.

The basic premise of a carbon tax is to make things more expensive. If the carbon tax hasn't made food more expensive, it's because it's failed its policy objectives. I think you have to call a spade a spade when it comes to what the premise of that objective is.

I think the reality is that it's not having an impact. There are much better solutions. If we really do care about emissions in agriculture, there are better approaches that will have a better impact at the end of the day.

[Lianne Rood, Conservative, Lambton—Kent—Middlesex, ON]

I cede my last minute to Mr. Epp.

[The Chair, Liberal, Kody Blois]

You have about 40 seconds, Mr. Epp.

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

Thank you.

We talked a lot today about the impact primarily on primary products off the farm going through perhaps a minimal step, and then facing the international markets.

For those of you who have ever picked up a bag of a medley of frozen vegetables produced in southern Ontario, cauliflower is often produced in Mexico: Sometimes it's floretted in the U.S., frozen, shipped to Canada and blended in with carrots grown from Ontario. The little sweet corn that you get usually comes from Thailand, actually. Carrots are domestic. Broccoli can be from either Canada or the U.S. It's all mixed in southern Ontario and frozen. It is mainly put into the domestic market but often exported, sometimes back to the U.S. Just think about that for a second as you contemplate a border carbon adjustment.

Second, Red Gold, one of the largest privately owned tomato processors in Illinois and Indiana, is actually the largest importer of California tomato paste within the U.S. Tomatoes are grown in two totally different production systems. One is an arid desert in California, and they're blended with Midwest tomatoes, which are grown quite similarly to our tomatoes. They sell to a little company called Walmart, which is probably ubiquitous. Is that not right?

How do you implement the—

[The Chair, Liberal, Kody Blois]

Mr. Epp, thank you. Don't make me get out my gavel. Your point was made.

Go ahead, Ms. Murray, for up to five minutes.

[Joyce Murray, Liberal, Vancouver Quadra, BC]

Thank you very much. I appreciate that. What an interesting conversation.

Thank you to the witnesses for being here for this. I'm going to just ask a few questions to try, as an urban Canadian, to understand the perspectives you're bringing.

Mr. White, you asked the question about pricing on carbon and “What are we are trying to fix?” I would say, generically, that we want to limit our impact on climate change, and that is the critical thing underpinning the conversations here today.

Mr. McCann, you said there are better approaches, at the end of the day, than putting a price on carbon for reducing greenhouse gas emissions from farming and agriculture, so what are you proposing?

[Tyler McCann]

I'm always hesitant to go before Rick because I gather that I take up a lot of the time from him. Maybe I can say, just quickly, that there's pretty good literature about practices around the world on how to support and encourage, for example, value chain solutions to the sustainability problem, recognizing that if you're a beef farmer, what you need to do to reduce your emissions footprint is wildly different from what a canola farmer needs to do.

What we need to do, first and foremost, is build systems that recognize those differences and give the value chains, the farmers, the processors and others the tools they need to encourage action.

[Rick White]

I'll just elaborate a bit on that. Thank you.

When it comes to the farmers, they have no way to pass along the costs of these things. They don't have any alternative energy they can move to. A tax, theoretically, would work if you had alternatives and were trying to change their behaviour. They just don't have available to them the technology to switch from the more fossil fuel-based system they have right now. Without an alternative for their energy needs, they just have to pay the tax, and emissions are not, respectfully, going to move, because they're going to continue to do what they need to do to farm the crops and grow their crops.

They are sustainable. They have cut their emissions and softened their environmental footprint a lot, especially in canola production, which has gone to zero-till and high-tech—everything that they can do—but if they have to dry their grain—

[Joyce Murray, Liberal, Vancouver Quadra, BC]

Excuse me, but I have a few more questions.

That sounds to me like a great answer, which is that it has driven them to be innovative and move toward no-till agriculture. That sounds like it is a positive from putting a price on carbon in some way, even if not as directly.

I think I heard that the European trading system doesn't cover agriculture carbon, and so the border carbon adjustment is not likely to cover climate...issues, either. I didn't understand that, and I would like clarification as to how a pricing system, an international one, could be put in place that would help to drive productivity and reduce emissions. Are there any thoughts about that?

[Tyler McCann]

One of the reasons they've done it on steel, for example, is that there is a price on carbon in Europe if you're a steel producer. However, there is no price on carbon in Europe if you're an agriculture producer, so you cannot use a border carbon adjustment to level a playing field if there's no price that's being paid on one side.

Again, the European approach on agriculture tends to be many, many carrots. If you look at what they're trying to do on soil carbon, for example, you'll see that it's about how to encourage soil carbon farming and how to do it in a positive way.

Again, they tend to do it with a lot of burden. There are a lot of issues from European farmers. However, the premise is different in that they are not looking at it as a tax; they are looking at how they can do a better job building very generous incentives to encourage the transition.

[Joyce Murray, Liberal, Vancouver Quadra, BC]

Okay, so that is—

[Rick White]

Could I make a correction to your comment, Madam?

The innovation that farmers implemented with the zero till and by substantially softening their environmental footprint happened 20 years ago. It had nothing to do with the carbon tax at all. Farmers innovate and innovate well, even in the absence of that.

[The Chair, Liberal, Kody Blois]

Unfortunately, we're out of time. I think a good question in all of this is how we account for that success in the international market.

Mr. Perron, you have the floor for two and a half minutes.

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

Thank you, Mr. Chair.

Mr. White, I'm going to continue with you.

You just asked that we pass Bill C-234. The way to pass it quickly is to pass it in the form in which it came back from the Senate, to avoid it being sent back there, because we know it could spend a lot of time there, going by Bill C-282, which has been there for over a year. The Bloc Québécois supports the adoption of Bill C‑234 as is. I therefore call on my colleagues to pass it next week and bring it into force immediately.

Furthermore, how do we go about establishing regulations to improve performance? You talked about doing it through the World Trade Organization, and that makes a lot of sense.

That said, my concern is to take into account what has already been done. Let's take the example of a producer who uses no-till or already does crop rotation, compared to another producer who doesn't do that and uses more pesticides and herbicides. We know that some amount is necessary, but efforts can be made. How can we recognize what has already been done in Canada and Quebec in relation to foreign countries with which we do business? It's not an easy thing to do.