Agriculture Committee on Oct. 3rd, 2022

[Alistair MacGregor, NDP, Cowichan—Malahat—Langford, BC]

Thank you.

[The Chair, Liberal, Kody Blois]

Thank you, Mr. MacGregor, and thank you, Mr. Wright.

We'll now go to the second round of questions, colleagues.

Mr. Epp from the Conservatives, you have up to five minutes.

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

Thank you, Mr. Chair.

I'd like to thank the witnesses for their testimony today.

I want to begin with the statement from Mr. Boisseau-Bouvier that what's contemplated under Bill C-234 would become a de facto subsidy for the oil and gas sector. I must admit that I fail to see how the addition of a tax, and then the potential removal of that tax, becomes a subsidy. That's logic beyond my head. I just want that on the record. From what we're hearing from farmers, grain farmers in particular, they're getting cents back on the dollar that they're spending on this carbon tax on grain drying and barn heating. I wanted to start by putting that on the record.

I'd like to direct my first question to you, Mr. Wright, please.

With the greenhouse pollution pricing act of 2018, the government did grant the on-farm fuel exemption. With respect to barn heating and grain-drying fuels, do you think that was an intentional policy decision or an oversight?

[Glenn Wright]

Boy, that's a good question. I don't know that I can read the minds of the government, but it strikes me that it would probably have been an oversight more than an intentional policy decision. I mean, I'm really just guessing at this point.

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

It makes sense.

I'm trying to understand the NFU position, then. With the harvest from hell from 2019, if I understood your testimony correctly, the NFU wrote to the government asking for a full exemption because it was an extraordinary year. Is that correct?

[Glenn Wright]

Yes. That was the context that promoted that resolution. That's correct.

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

Okay. Would the NFU position be consistent if we had a similar extraordinary year?

[Glenn Wright]

I think the science and the information continue to evolve and change, and rapidly change. There wasn't as much of a sense of urgency to respond to the climate crisis in 2019 as there is now.

You might recall that there was a lot of court action surrounding the Greenhouse Gas Pollution Pricing Act. We had the premiers of many provinces, Conservative premiers primarily, asking the question, “Is this constitutional?” I actually need to thank those premiers, because they managed to do something that 40 years of environmentalism couldn't do. In a matter of a year, they got environmental degradation declared as an “existential threat” to humanity by the Supreme Court. We owe them a debt of gratitude there, I think.

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

Going back to the NFU position, what would your message be to the eastern Canadian corn farmers who are in a similar situation of requiring grain drying every year for their crop? What would you define as an extraordinary year similar to the NFU position in 2019, or do you think they should just suck it up?

[Glenn Wright]

I think extraordinary years are when we have widespread conditions. It's no secret that I think Bill C-8's revisions are meant to refund pollution prices paid in aggregate back to producers. There will be some winners and losers each year as local conditions.... You might have a wetter harvest in one place than you have in another. The extreme conditions you referred to would be a widespread situation, much like the drought we experienced in western Canada last year, which dropped yields by 35% to 40%.

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

You just touched on the amount that's contemplated as rebates. From 2019, the initial cost averages per farm on the pollution pricing for grain drying was estimated at 0.05% to 0.38% of an average Canadian farm's net operating cost, representing $210 to $774. Can you comment on whether you feel those numbers would be accurate relative to grain farming, particularly from your members across Canada? Would those costs be a representative average from them?

[Glenn Wright]

I would think they're fairly close, yes. We have thousands of members across Canada. You're likely going to see higher costs on much larger farms, because in those situations time is not on your side. You have to push to get through all of the acres and get the harvest into the bin, so often that doesn't give you the luxury of waiting for weather conditions to dry the grain in the field somewhat. I would say that smaller farms are more likely to have some flexibility to not run the combine every day, but I do think that on an aggregate basis, yes, those numbers are probably close.

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

The feedback that we were getting is that they're not close, but that's probably influenced more by commercial farm sizes versus the smaller farm sizes that are supplanted with off-farm income.

You mentioned that there are commercial options available. How fast do you think the electrical grid across Canada could be put in place to support that kind of infrastructure?

[Glenn Wright]

I think it really depends on our ambition. If you're really focused on cost and trying to amortize the investment we already have in much of our infrastructure, then it may take time. I note that the clean electricity standard is suggesting that the grid should be decarbonized by 2035, so we're talking about a 12-year time horizon. Certainly to me, fuel switching from natural gas or propane to electricity only makes sense when you have a decarbonized grid, because if you're just moving the smoke stack emissions from your farm to a natural gas or coal-fired power plant, that's different.

[The Chair, Liberal, Kody Blois]

Thank you, Mr. Wright. Thank you, Mr. Epp.

Now we have Ms. Taylor Roy for five minutes.

[Leah Taylor Roy, Liberal, Aurora—Oak Ridges—Richmond Hill, ON]

Thank you very much, Mr. Chair, and thank you to the witnesses for being here today.

I found the discussion very interesting. Thank you, Mr. Wright, for your viewpoint as a farmer.

I think this bill was initially introduced.... Obviously we're concerned about the economic welfare of our farmers and their ability to manage with all the increasing costs. Mr. Epp has spoken about extraordinary years when there are real challenges. Do you feel these kinds of exemptions or rebates should be tied to hardship?

I notice that in 2021, Statistics Canada reported that farms had very healthy incomes; in fact, their revenues increased despite the increasing prices of inputs. I'm wondering, given that fact, whether you feel this should somehow be tied to need as opposed to a blanket exemption.

[Glenn Wright]

That's a good question.

It's a lot like business risk management programs. When you make a policy that applies to everyone in aggregate, usually there ends up being some winners and some losers, because it doesn't work when you paint everyone with the same brush. The suggestion that you're putting forward, then, to address individuals or individual farm businesses on the basis of need is certainly another alternative that the government could look at implementing.

[Leah Taylor Roy, Liberal, Aurora—Oak Ridges—Richmond Hill, ON]

Thank you very much.

I'm also wondering about the barn heating, not the grain drying. It seems that with the grain drying, we need perhaps more time. What would you suggest in terms of barn heating for livestock agricultural purposes? Do you feel the alternatives are there now and that we we don't need to include that in this bill, that just further assistance from the government in making the transitions would be sufficient, or do you believe that we still need some time to make that transition?

[Glenn Wright]

I believe we need some time.

The problem is twofold. You have the issue of new construction and the issue of existing buildings. With respect to the new construction, what we need more than ever is to modify the building code. The building code is woefully inadequate for our climate and not focused on energy efficiency as much as it could be. The technology is ready.

With respect to existing buildings and infrastructure, farmers need help to do that work. It's a large undertaking to retrofit a barn to be much more airtight and insulated and to have heat recovery ventilation. There are probably going to be unique heat recovery ventilation issues that arise with the dust and contaminants that are in livestock facilities that aren't seen in a shopping mall, for instance.

I'm not suggesting there's a silver bullet ready here, but we know how to do it. The engineering principles are sound, but farmers need assistance to do it.

[Leah Taylor Roy, Liberal, Aurora—Oak Ridges—Richmond Hill, ON]

Thank you.

For Mr. Boisseau-Bouvier, I was wondering about your thoughts on the pricing signals. You're obviously in favour of them.

What impact do you think legislation like this—which, once we have the signals in place then reverses or takes them away for a while—has on the kind of farm clean-tech development that's so needed in the grain drying field, for instance?

[Émile Boisseau-Bouvier]

Thank you for the question.

I want to confirm that this is indeed a fossil fuel subsidy; I want to make that clear. Removing the carbon tax as proposed in Bill C-234 will slow the arrival and implementation of sustainable alternatives because they won't be cost competitive. Consumers and farmers can have the best of intentions, but if it's just not a profitable business for them, they're not going to go with the sustainable alternatives.

Therefore, the price on carbon and the price index must be maintained to encourage consumers to make decisions that move in the right direction.

[Leah Taylor Roy, Liberal, Aurora—Oak Ridges—Richmond Hill, ON]

Thank you very much.

[The Chair, Liberal, Kody Blois]

Thank you very much Ms. Taylor Roy and Mr. Boisseau‑Bouvier.

I'd now like to welcome Mr. Lemire, who is joining our committee to replace Mr. Perron.

Mr. Lemire, you have two and a half minutes.

[Sébastien Lemire, Bloc, Abitibi—Témiscamingue, QC]

Thank you, Mr. Chair. Don't get too attached to me; don't worry, Mr. Perron will come back to the committee.

I'd like to talk to Mr. Boisseau‑Bouvier about alternatives.

Right now, propane is considered perhaps the most efficient, but I think it's also possible to dry grain with electricity.

Do you know if Quebec has any agreements on this, particularly with respect to preferential tariffs? Has Hydro‑Québec ever explored this? What about drying using electricity?

[Émile Boisseau-Bouvier]

These are good questions, Mr. Lemire.

I don't know if Hydro‑Québec has special rates for grain drying. I know there are agreements with large industrial consumers and that there are also special rates for greenhouses. I don't have the information on the specific issue of grain drying with me today, though.