Evidence of meeting #119 for Agriculture and Agri-Food in the 44th Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was fertilizer.
A recording is available from Parliament.
Director, Governmental and institutional affairs, Sollio Cooperative Group
Okay.
Basically, you have to look at it differently. We're talking about products. Producers need inputs, and they need to have them at the same price as their competitors. Otherwise, their profit margin is squeezed out. A producer cannot pass on the extra cost of producing their product to the end consumer. However, they are struggling with their profit margin, which is shrinking, as I explained.
That's where the real issue is. It's this kind of unfair competition that eastern producers are currently experiencing.
Chief Executive Officer, Sollio Cooperative Group
I don't have anything to add.
Bloc
The Vice-Chair Bloc Yves Perron
Thank you.
You talked about special permits and Russian aluminum. Do you think there is a double standard? Do you think that agriculture is somewhat taken for granted, that is to say that farmers will figure it out? That is often the impression we get.
You have 45 seconds to answer.
Chief Executive Officer, Sollio Cooperative Group
I'll focus my response on the situation that occurred in 2022 with the arrival of the tariffs. I think there was a general lack of understanding of the impact that this would have. If that had been clearly understood at that time, we believe there would have been different decisions taken at that moment in time.
I think that in that case, it is safe to say that we'd been taken for granted.
I don't know if Mr. Poisson wants to add anything.
Director, Governmental and institutional affairs, Sollio Cooperative Group
I would like to clarify something. In what we defended, we had Global Affairs Canada help us with the four special permits, but I want to make it clear that Agriculture and Agri-Food Canada understood these issues. The problems with understanding the supply chain had to be elsewhere, because we had excellent support from that department. Thanks to them, we avoided a shortage.
Bloc
The Vice-Chair Bloc Yves Perron
Thank you very much.
We'll now go to Mr. Cannings for two and a half minutes.
NDP
Richard Cannings NDP South Okanagan—West Kootenay, BC
Thank you.
I will just follow up on that. The removal of most favoured nation status was, I imagine, an attempt to put some pressure on Russia as part of a suite of things Canada and other countries were doing regarding their invasion of Ukraine. The whole aim of it, I assume, would be to eliminate or significantly reduce Russia's ability to sell their products around the world.
Can you tell me how successful that has been? Is Russia now not able to sell those products? I haven't heard any statistics on how much that has been reduced in Canada and North America. How successful has this been? The whole point of these tariffs is not to punish Canadian farmers but to punish Russia and stop their imports.
Chief Executive Officer, Sollio Cooperative Group
It is a very relevant question. For sure, little to no Russian fertilizer has been imported into Canada since the imposition of the tariffs in 2022. That has had an impact on Canada in the sense that we no longer have access to Russian fertilizer products.
For their part, it's true that Russia has no access to Canada, but they have no problem finding sources or individuals or countries that would be willing to take their product, including the U.S., which is fully free and able to import from Russia. The same could be said for many countries around the world that continue to import from Russia. The impact to them has been negligible, if anything at all.
NDP
Richard Cannings NDP South Okanagan—West Kootenay, BC
As you say, the American agriculture industry continues to import Russian fertilizer. There's been no diminution there.
Chief Executive Officer, Sollio Cooperative Group
There's been no reduction. In the document that you'll receive afterwards, you'll see statistics on their imports of Russian fertilizer products. They've actually increased very significantly since the invasion of Ukraine.
Bloc
The Vice-Chair Bloc Yves Perron
Thank you very much, Mr. Cannings.
Thank you, Mr. Kaastra.
We have five minutes left, which we're going to split between the Conservatives and the Liberals.
Mr. Epp, you have the floor for two and a half minutes.
Conservative
Dave Epp Conservative Chatham-Kent—Leamington, ON
Thank you, Mr. Chair.
I like to start any discussion on fertilizer by reminding everyone that four billion people—one in two in this world—owe their lives and their ability to eat to fertilizer, in particular the synthetic production of nitrogen. That needs to be kept in mind.
Let me add one other quick fact. The three main macro elements for plant life are nitrogen, phosphate and potassium. Canada, from a food security perspective, is blessed to have abundant resources, or the ability to make resources, on two of those three, yet here we are—it's the ultimate irony for me—talking about shooting ourselves in the foot in two of those.
Let's take them one at a time, starting with potassium, because of the 35% tariff. Could you talk about the cost of rail for transporting potash from Saskatchewan, the world's leading exporter, into eastern Canada? Is it competitive now with the 35% tariff? What's the market there?
Chief Executive Officer, Sollio Cooperative Group
We've seen no reduction in competitiveness in potash products or in availability. We have historically always supplied the eastern Canadian region from domestic production. Historically, it's actually in Nova Scotia, but more predominantly, it's now from western Canada, so there's been no change in that at all.
Conservative
Dave Epp Conservative Chatham-Kent—Leamington, ON
In my past life in farming, I've used more Belarusian and Russian potassium than Saskatchewan potassium on my farm, unfortunately, because of cost reasons. In order to look at that in the longer term, would freeing up rails—because potash doesn't flow down a pipeline that well—add to the competitiveness of using Canadian potash in eastern Canada?
Chief Executive Officer, Sollio Cooperative Group
Sure. Rail is key and critical in terms of being able to supply our market reliably. For us, rail is an essential service for supplying other products, yes.
Conservative
Dave Epp Conservative Chatham-Kent—Leamington, ON
As for nitrogen, we lack the ability to make it. We certainly don't lack the feedstuffs. How do we make more nitrogen in the eastern seaboard where we need it?
Chief Executive Officer, Sollio Cooperative Group
There would be a commitment required to invest in domestic nitrogen manufacturing. I think there are companies that would be interested in pursuing that with the newest available technologies, but that would require the will and support of the various government agencies to help get that off the ground.
Conservative
Dave Epp Conservative Chatham-Kent—Leamington, ON
I'd love to support it.
Before I go any further, I want to touch on phosphorus. That's the one we are short of. Are there any discussions ahead? I know Jordanian phosphorus contains cadmium. That's still okay in Canada, but not in the EU, so we're dependent on Florida. What's the outlook?
Chief Executive Officer, Sollio Cooperative Group
For sure, there continue to be significant phosphate reserves globally. We'll see continued development of those. Without getting into the number of countries that have phosphate reserves, Canada does itself have phosphate reserves. There are ongoing efforts to develop mines in some regions, and northern Quebec is an example, but there wouldn't be enough domestic production, so we will need to rely on imports.
Bloc
The Vice-Chair Bloc Yves Perron
Thank you very much, Mr. Kaastra.
Mr. Drouin, you have the floor for two and a half minutes.
Liberal
Francis Drouin Liberal Glengarry—Prescott—Russell, ON
Thank you so much.
Obviously, the world is changing. A lot of things are happening. For fertilizer prices, we've seen the peak, obviously. I think all of us heard it in October 2022, when everybody was starting to call us because prices were going through the roof. Since then, I think there's still been a steady decline, generally, of fertilizer prices in the market, in the world. Am I correct to assume that?
Chief Executive Officer, Sollio Cooperative Group
That would be fair to say. It's in line with many other similar commodities. That's correct, yes.
Liberal
Francis Drouin Liberal Glengarry—Prescott—Russell, ON
Okay.
I'm just going to make one ask of you, gentlemen. Keep me posted, please, on the developments with CBSA. I do want to make sure that there's a conclusion, whatever way it goes, and then you can do whatever you need to do, following the next steps. I would appreciate that.