Agriculture Committee on June 16th, 2022

[The Vice-Chair, Conservative, John Barlow]

I call the meeting to order.

Thanks very much, colleagues.

We have Mr. Lobb with us this afternoon, and we will be going over Bill C-234. Most people know the instructions for how committee works, so I won't go into them too much. I just have a few reminders.

Today's meeting is taking place in a hybrid format, pursuant to the House order of November 25, 2001. The proceedings will be made available through the House of Commons website. Please be aware that the webcast will always show the person speaking, rather than the entirety of the committee. Taking screenshots or photos of your screen is not permitted. For members participating in person, keep in mind the Board of Internal Economy's guidelines for mask use and health protocols.

I don't think I need to go through all of the steps for Mr. Lobb. I know he is quite well aware of them, and we want to make sure that we use the best of his time today.

Pursuant to Standing Order 108(2) and the motion adopted by the committee on Monday, May 30, 2022, the committee is commencing its study of Bill C-234.

I would now like to welcome our witness for the first panel, Mr. Lobb, member of Parliament for Huron—Bruce. I know everyone is very familiar with our colleague.

Mr. Lobb, you'll have five minutes for your opening remarks, and then we'll proceed with the rounds of questions. I'll try to give you a signal when you have one minute left. Please proceed with your five-minute introduction.

[Ben Lobb, Conservative, Huron—Bruce, ON]

Thanks, Mr. Chair.

I do have some prepared comments. Normally I would wing it, but seeing how it's five minutes and I didn't want to go over the time and miss a point, I made some prepared comments today.

Good afternoon. Bill C-234 is a bill that amends the Greenhouse Gas Pollution Pricing Act. Bill C-234 is a bill that will help farmers by eliminating the carbon tax for the purposes of growing food, and cutting the carbon tax on propane and natural gas used to heat barns and to dry corn, beans, grains—i.e., food.

Agriculture provides many benefits to society. Firstly, it provides food to our nation and other nations that are unable to.... Secondly, agriculture is the number one economic driver in Ontario and one of the top economic drivers in our country. It provides a rural way of life, passed down through generations, and provides jobs throughout the value chain—in processing, trucking and shipping, to name just a few.

Agriculture also provides numerous benefits to our environment. Firstly, crops, grasslands and woodlands are natural carbon sequesters. Farmers practise ethical crop rotation, plant fall cover crops and are concerned about the quality and overall health of their soil. Farmers are involved with on-farm environmental plans, which also have manure management plans built into them. Nothing is wasted on your farm. From the tools passed down through generations, to lumber, scrap steel behind the shed, or even a corn kernel that didn't find its way to the bin, there's always a way. Farmer are environmentalists, recyclers and stewards of the land.

A friend of mine, who has a sizable hog farm in the region, sent me a heating bill for the period of November 30 to December 31, 2021. His bill from Enbridge was as follows: customer charge, delivery, vendor admin fee, transportation to Enbridge and gas supply charge, for one month, $8,473, before the carbon tax. The carbon tax was an astonishing $2,918, and one penny, in memory of Jim Flaherty. Now, if you factor in what that is on the original $8,400 bill, that's astonishing, and also factor in the HST charged on top of the carbon tax.

Some may say, “Well, Ben, we have that covered now with the carbon rebate that was delivered in Bill C-8 in the fall economic update as relief for farmers.” Well, in my opinion, and in the opinion of many, the carbon rebate falls short, maybe almost 100% short—88%, likely. For the last year, it was $1.47 per $1,000, and in this economic year, it's $1.73 per $1,000. On $10,000 of eligible expenses, your rebate is $14.70.

Now, remember that heating bill I told you about of the hog farmer in Huron County? It was $8,473.60, and his carbon tax bill was $2,918. It's not really fair: $12.50. Where I'm from, that's about four king cans, which is not much.

With Bill C-8, this carbon program once again asks the farmer to be the government's line of credit. The farmer is currently the government's line of credit for business risk management programs like AgriStability, as well as HST and your rebate. Now we're asking farmers to once again be the government's line of credit for the carbon tax rebate. With rising inputs—seed, fertilizer—the farmer's line of credit is maxed out, folks.

To summarize, farmers are price-takers, they are not price-makers. They do not make the market. They are within the whims of the weather. The market is in Chicago; the crops in the Midwest, Brazil and other places; and there are trade deals, whether they work effectively or they are not enforced; rail lines; ports that may or may not be functioning properly; the lack of container capacity in this country; and geopolitical tensions that we've seen in Europe this year, all have an impact.

In this committee, you have the opportunity to help a neighbour, maybe a hard-working rural family you've never met before. You can help a farmer.

Thank you.

[The Vice-Chair, Conservative, John Barlow]

Thank you very much, Mr. Lobb. I appreciate you being right on time—perfectly done.

Now we'll go to the Conservatives for six minutes.

Mr. Epp, your time starts now.

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

Thank you, Mr. Chair.

Thank you, Mr. Lobb, for joining us today. On behalf of Canadian agriculture, thank you for supporting this private member's bill.

Canadian ag—grain production and animal production—is very much integrated into a North American scene, particularly with our neighbours to the south in the U.S. You mentioned the Chicago Board of Trade, which sets the benchmark pricing for a lot of the trade that occurs.

What is the U.S. carbon pricing plan for their ag industry?

[Ben Lobb, Conservative, Huron—Bruce, ON]

First of all, Mr. Epp, I'd say that we're competing on the world stage—you know that and you've been around the world on agriculture—and this is a competition. With the carbon tax that's being applied to farmers today, we're tying one arm behind our back in the ability to compete on the world stage, not to mention the unfair tariffs on fertilizer that have been applied to the March 2 and prior purchases. This has cost millions of dollars for a sector and an industry with very low margins to begin with.

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

What I hear you saying is that there is no charge being applied to American farmers, so basically Canadian farmers are eating that from a competitive basis when they go up against American farmers.

We are told that the measures in the budget, in Bill C-8, were left there to send a price signal to the ag community to turn away from their fossil fuel ways, yet the proposed rebates were to partially compensate their costs. What should a farmer in rural Canada do if they're on a concession road, like I am, and they only have single-phase hydro for their grain-growing operations? Is that why you're proposing a blanket exemption? Are there alternatives?

[Ben Lobb, Conservative, Huron—Bruce, ON]

That's right. To put it simply, there's just not enough electricity. Even if you wanted to go to electricity in Ontario, it basically would be hydro and nuclear fuelling those. There's just not the grid capacity up and down the concession roads to do it, and there would be a huge cost to convert.

In addition to that, many years ago—I'm thinking over 10 years ago—there was a change to the NOx and SOx for diesel emissions, and all the new tractors that came out had those in there to help with emissions. Maybe in the desert in Arizona or in California you can use the sun to dry, like they do salt, but it's not practical at this time to do that here. We have to compete today.

I will remind everybody that we're not making widgets. We are making food that feeds this country and feeds the world. If we've learned anything in the last six to eight months, it's that the nations that can make things and feed people are the nations that will be ahead and can take care of their own people.

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

Thank you.

Farmers—at least in my community, and I'm sure across Canada—have been innovative and have adopted many measures on their own. To my knowledge, it's on their own: crop rotation, rotational grazing, 4R nutrient management and cover cropping. Are you aware of any tax incentives that were put in place to incentivize those production systems?

[Ben Lobb, Conservative, Huron—Bruce, ON]

Well, through the years, there would be the environmental farm plan. That would be a plan that many people would be aware of and that farmers who are listening would be aware of.

If your local crop and soil group were managing programs, there might have been a grant for fencing, a grant for no-till drilling or a grant for putting in your fall cover crops. Those programs I think are effective, but again, what you're doing with this pricing on carbon is that you're creating a whole level of bureaucracy again and trying to figure out who's going to win and who's going to lose.

Just recognize that we're making food and that this is helping the sovereignty of our nation.

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

In my riding, there is the largest concentration of greenhouses in North America and second-largest in the world. It is my understanding that in the previous pricing regime in the Greenhouse Gas Pollution Pricing Act greenhouses received an 80% exemption.

Under your proposal, I believe they would go to 100%. Do you have any comment on what $1.47 for last year to $1.73 now would do to the greenhouse industry given the fact, obviously, that they're heating their greenhouses through the wintertime?

[Ben Lobb, Conservative, Huron—Bruce, ON]

Yes, and if you also figure out the increase, the inflationary pressures they're facing with transportation and with labour, and the issue with immigration and getting workers to come and to be able to actually work in these greenhouses, they have a lot to manage as well. Now they're facing margin pressure with the carbon tax on their natural gas or propane bill. It's very difficult.

I'm not trying to be an alarmist here with this, but if you look at what has happened since I read my bill into the House of Commons or since Philip Lawrence introduced his bill a couple of years ago, look at how the world has changed, and in many different ways.

This, in my opinion, is for the survival of Canadian agriculture and the ability for it to thrive in the future.

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

I think in the views of many, natural gas and propane for barn heating kind of fell through the cracks at the last go-round, and they're now being included in this go-round.

[Ben Lobb, Conservative, Huron—Bruce, ON]

Yes.

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

Another industry whose president was a constituent of mine was the head of the Canadian mushroom growers and Highline Mushrooms. I know there are mushroom facilities across Canada. Considering that mushrooms are food—despite the fact that my wife won't eat them—it's my understanding that your proposal in Bill C-234 would also cover them. Is that correct?

[Ben Lobb, Conservative, Huron—Bruce, ON]

If you take a look at the actual act and what was excluded, the heating of buildings for the purpose of livestock/food certainly would be a consideration under this one, for sure. Again, it's not to make widgets. It's not to make high-end anything. We're just talking about the ability for a farmer to grow food and make a reasonable margin, which is not a big margin. They're not operating at 40% gross margins.

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

Thank you.

[The Vice-Chair, Conservative, John Barlow]

Thank you very much, Mr. Epp and Mr. Lobb.

We will turn it over to the Liberals and Mr. Drouin for six minutes.

[Francis Drouin, Liberal, Glengarry—Prescott—Russell, ON]

Thank you, Mr. Chair.

Welcome to the agriculture committee, Mr. Lobb. I know you have the opportunity to represent the second-best riding in Ontario. I don't want to make anyone jealous, but I do have the opportunity to visit your riding often, with my in-laws living there.

Mr. Epp touched a little bit on a key difference between Bill C-206 and Bill C-234. Mr. Lawrence's previous bill touched on qualifying fuels. You're focusing on property used for the purpose of providing heating or cooling.

Why does your bill differ from Mr. Lawrence's bill?

[Ben Lobb, Conservative, Huron—Bruce, ON]

Well, I think the most important thing on there is the way the act is described. One of the exclusions in there was “property used for the purpose of providing heating or cooling to a building or similar structure”. In the pricing act, it is excluded. It was easier to just make it include livestock, etc., so that it was very clear, if you catch my drift.

We didn't want to have ambiguity and have people thinking that this was going to be heating their homes or something like this. You're heating a building, and that building would be for livestock as an example of food production. I thought that was a good idea.

[Francis Drouin, Liberal, Glengarry—Prescott—Russell, ON]

Okay.

Just to be clear, this bill would not be applied to provinces where there is a carbon pricing model in place. For most of the provinces, for instance, there wouldn't be an impact with your bill in place, right?

[Ben Lobb, Conservative, Huron—Bruce, ON]

It's just the backstop provinces, Alberta to Ontario.

[Francis Drouin, Liberal, Glengarry—Prescott—Russell, ON]

Okay.

This was also a point of discussion with Bill C-206. Would you be open to some amendments to your bill? For instance, we know that some technology is catching up. There are biomass grain dryers right now. I'll be forthright with you that they're not completely or all available to the market, but there are technologies in southwestern Ontario, where I know some farmers.... We've helped fund that particular technology. He's testing it with corn right now. He's paying zero carbon tax because he's adopted a biomass technology for grain dryers.

The point is that we are trying to decarbonize inputs, and that's what the carbon levy does, but I do recognize that right now technology is scarce for grain dryers. It's there, but it's not completely there yet.

Would you be open to having an amendment to put a timeline on that particular exemption?

[Ben Lobb, Conservative, Huron—Bruce, ON]

Yes. I think we're open to looking at anything to see if we can work forward. If we can look at stuff like that and get support from a person such as yourself, I would definitely do that, for sure. If you look at how technology's progressed in 10 years, who knows where we might be at that time?

[Francis Drouin, Liberal, Glengarry—Prescott—Russell, ON]

Okay.

With regard to your comment on the 12% rebate program, I did some calculations with local farmers and their accountants. We came up with one-third. I'd love to have a discussion off-site about how you came up with 12% and I came up with one-third, but I think it's important for—

[Ben Lobb, Conservative, Huron—Bruce, ON]

Well, I wasn't an A-plus math student in high school, so that could be part of it.

We got that number from the Ontario grain farmers. I'm sure they'd be happy to go through their math. I'd be happy to sit down and do that.

Whether it's 12% or 33% or whatever, it's still a long way from being neutral, let's say. Again, there's no recognition of the sequestration that takes place with your corn crop, your soybean crop, your wheat, grasslands, or even what you do in the woodlots. I know that you've been around here in the county through the years. You can go anywhere in the world, in my opinion, and you'll see some of the most ethically managed woodlots here in Bruce County, for sure.