Agriculture Committee on Oct. 3rd, 2022

[The Chair, Liberal, Kody Blois]

Welcome to meeting number 29 of the Standing Committee on Agriculture and Agri-Food.

I will start with a few reminders. Today's meeting is taking place in a hybrid format. The proceedings will be made available on the House of Commons website. Just so you are aware, the webcast will always show the person speaking, rather than the entirety of the committee. Of course, screenshots or taking photos of the screen is not permitted. Finally, I ask that members who are participating in the meeting in person follow the Board of Internal Economy's health recommendations.

Today, the committee is continuing its consideration of Bill C‑234.

We have three different witnesses here for our first panel.

Joining us by video conference as an individual is Mr. Jean Caron, professor, Laval University. Welcome, Mr. Caron.

From Équiterre, Émile Boisseau-Bouvier, climate policy analyst, is also joining us by video conference.

From the National Farmers Union, we have Glenn Wright, farmer and professional engineer, joining us by video conference.

Each of our witnesses is going to have five minutes. Obviously, we have the ability for English and French. You will see the toggle at the bottom of your screen.

I'm going to allow Mr. Caron to start. You will have up to five minutes, and then we'll go to questions.

Mr. Caron, it's over to you for up to five minutes.

[Dr. Jean Caron, Professor, Université Laval, As an Individual]

Thank you very much to the members of the committee for inviting me to testify today. It is a pleasure for me to be with you.

I have provided two documents to the committee. The first is a letter written to Senator Robert Black this spring regarding land degradation and the need for monitoring. The second document is a PowerPoint presentation in which we provide our latest research findings.

I am speaking to you today as a researcher from Université Laval who works in the field.

There is one thing that I want to highlight in relation to the bill. In our document, we announced that agricultural soil compaction levels were reaching very high levels. Our study concerns Quebec, but we suspect that the same is true for eastern Canada, Ontario and, in some cases, for heavy soils in the Peace River and Fraser Valley areas. At the time of the study, we estimated soil compaction levels to be in the 30% to 90% range; we did not know the exact figures. However, our latest surveys in the major grain corn growing region of southwestern Quebec indicate compaction levels of about 80%.

Figure 5 in the PowerPoint presentation I sent to you indicates that, given the thresholds reached, denitrification could result in a loss of 10% to 60% of the nitrogen in the nitrogen fertilizers that are applied.

Through my testimony, I want to emphasize that it would be very relevant to encourage monitoring with respect to soil quality and compaction levels if we want to effectively combat denitrification, which is a major source of greenhouse gas emissions. In this case, taxation should instead be based, through concerted efforts, on improving soil quality.

That is the essence of the point I wanted to make today.

[The Chair, Liberal, Kody Blois]

Thank you, Mr. Caron.

I now give the floor to Mr. Boisseau‑Bouvier.

[Émile Boisseau-Bouvier, Climate Policy Analyst, Équiterre]

Mr. Chair, members of the Standing Committee on Agriculture and Agri-Food, good afternoon. My name is Émile Boisseau-Bouvier and I am a climate policy analyst at Équiterre.

Thank you for the opportunity to discuss Bill C‑234 with you, as I was able to do alongside my colleague on Bill C‑206.

I will first say a few words about Équiterre. We are an environmental NGO that founded the Family Farmers Network in Quebec. In addition, we currently have a technology showcase project on health, soil conservation and regenerative practices. We have participated in the consultations for the next agricultural policy framework. Finally, we are working with producers, institutional buyers and policy-makers to implement solutions to build an agriculture that is more resilient and sustainable.

Of course, we also have expertise in climate issues. In recent years, we have defended federal jurisdiction over a carbon pricing system in the Supreme Court because we believe that a price signal is needed to guide individual and collective decisions.

We are also working on the issue of fossil fuel subsidies. If we are to meet our climate goals, Canada cannot continue to be the largest provider of subsidies and public support for fossil fuels in the G20.

Let's now get to the heart of the matter.

Bill C‑234 essentially replicates former Bill C‑206 with some clarifications regarding the use of fossil fuels to heat or cool a building that houses animals, or to dry grain. However, much has changed since Bill C-206 was originally introduced in February 2020.

First, since the passage of Bill C‑8, the government has been returning proceeds from the price on pollution directly to farmers in provinces that are subject to the federal safety net.

However, most importantly, Agriculture and Agri-Food Canada launched the agricultural clean technology program in 2021, which provides $50 million to help farmers purchase more efficient grain dryers and replace hydrocarbons. The program also focuses on research and innovation, particularly in the areas of green energy and energy efficiency. Ultimately, these are investments that will accelerate and facilitate producers' transition away from fossil fuels.

You will agree that Bill C-8, passed last June, addresses the very real problem raised by Bill C-234 without weakening the principle of carbon pricing. This is an approach we encourage you to pursue and enhance, rather than the one presented to us today.

We agree with providing assistance to farmers, but we cannot agree with systematizing the erosion of carbon pricing mechanisms. The transition must begin quickly.

I want to take a moment to say that we understand the farmers who are experiencing increased stress owing to increasing extreme weather events and the current economic context. We suggest that they be helped financially by promoting sustainable alternatives. This is a potential solution that, again, already exists.

I would now like to remind you of Canada's commitments on fossil fuel subsidies.

Canada made a commitment in 2009 to phase out inefficient fossil fuel subsidies. It has since consistently reiterated that commitment in various international forums. Last year, the government moved the deadline for its commitment closer to 2023 instead of 2025. The year 2023 is just around the corner.

Bill C-234, which is being considered today, proposes to exempt new fossil fuels and new activities from carbon pricing. If passed, the bill would artificially reduce the price of fossil fuels and increase their competitive advantage. In short, it would be another subsidy for fossil fuels, even as we have committed to eliminating them by next year.

In conclusion, while this bill is presented as a plan to help farmers, it instead creates conditions that are conducive to maintaining the dependence of agricultural activities on fossil fuels.

It is also a bill that, from my reading of it, would conflict with Canada's national and international commitments on fossil fuel subsidies.

Given the many advancements since 2020, it would be in the best interest of the agricultural sector, its operators and workers for this committee to quickly consider how to promote alternatives to fossil fuel grain drying and building heating. We have an opportunity to help transition the sector away from fossil fuels; this opportunity should not be missed.

Thank you for your time. I will be happy to answer your questions.

[The Chair, Liberal, Kody Blois]

Thank you, Mr. Boisseau-Bouvier.

I will now turn the floor over to Mr. Wright for up to five minutes.

[Glenn Wright, Farmer and Professional Engineer, National Farmers Union]

Thank you for inviting the National Farmers Union to provide submissions to committee here today.

My name is Glenn Wright, and I have been an active member of the National Farmers Union, or NFU, since 2017. I supported my farm with off-farm income by working first as a professional engineer for 15 years, and now as a lawyer. My wife and I operate our grain farm near Vanscoy, Saskatchewan.

NFU policy positions are developed through a democratic process of discussion and debate by members at regional and national conventions.

The harvest of 2019 on the Prairies was referred to as the “harvest from hell” because nearly all the grain taken from the fields was either tough or damp. There was significant grain spoilage for many producers, including my farm, and grain drying required far more energy than expected that fall.

As a result, at the 50th annual convention of the NFU in November 2019, NFU members passed a policy resolution that requested that the federal government provide a rebate of the carbon levy on farm fuel used for grain drying. NFU members could not understand why grain dryer fuel was not treated the same as tractor fuel in the Greenhouse Gas Pollution Pricing Act, which hereafter I will refer to as simply the pollution pricing act.

Since the passing of that NFU resolution, recent changes made by Bill C-8 introduced a tax credit to return fuel charge proceeds to farming businesses where the pollution pricing act federal backstop applies: Alberta, Saskatchewan, Manitoba and Ontario. The NFU believes that the amendments introduced by Bill C-8 were a step in the right direction, and the NFU urges the committee to be cautious with respect to further changes proposed with Bill C-234.

The NFU worries that Bill C-234 proposes to create a complete exemption for farm heating fuels, which would entirely remove the pollution pricing signal currently provided by the pollution pricing act. Pollution pricing signals are important because they encourage producers to find and implement lower-emissions practices to heat our barns and dry our grain. The current system, as modified by Bill C-8, is now striking a better balance as it retains the pollution pricing signal without threatening food production.

The problem with Bill C-234 is that a complete exemption does nothing to encourage clean technology and low-emission alternatives. The exemption proposed by Bill C-234 may have been more sensible when the pollution pricing act was first drafted, but it becomes less appropriate as clean alternatives are available.

The growing body of climate science information regarding dangerous climate change requires an urgent policy response. In the context of Canadian agriculture and Bill C-234, the following points must be considered.

Number one is that greenhouse gas pollution must be reduced as fast as possible. There are no easy, cost-free ways to accomplish this task. In our capitalist market-based economy, pollution price signals are important for all players, including farmers.

Number two is that adequate supplies of food must be maintained. The pollution pricing act reflected this and exempted most farm-used fuel from pollution pricing.

As for number three, the NFU was disappointed that farm-used grain-drying fuel was not included as farm-used fuel in the pollution pricing act. Bill C-8 has improved the situation regarding fuel used for grain drying while still providing some pricing signal to reflect the cost of ongoing pollution.

The NFU recommends that the government continue to assist farmers to transition to better practices by providing incentives for farmers to purchase more efficient grain dryers and improve livestock facilities, and that it continue using the pollution pricing act to provide price signals for farmers regarding the costs of pollution where possible.

Specifically with respect to Bill C-234, the NFU recommends that this committee amend Bill C-234 to include a sunset clause for the exemption that would treat grain-drying and barn-heating fuel as farm-used fuel. The sunset period would provide time for clean grain drying technologies to mature and provide time for farmers to retrofit farm building insulation and heating systems to decrease greenhouse gas emissions from their farms.

Subject to any questions, those are our submissions from the NFU today.

Thank you.

[The Chair, Liberal, Kody Blois]

Thank you, Mr. Wright.

Colleagues, that concludes the opening remarks from our panellists. We're going to now move to questions. We do have the ability to extend for a few minutes, so I intend to use the full hour for the first panel and a full hour for the second.

I give the floor to Mr. Lehoux for six minutes.

[Richard Lehoux, Conservative, Beauce, QC]

Thank you, Mr. Chair.

I thank the witnesses for being here this afternoon.

My question is for Mr. Caron.

I understand that soil compaction has many implications. You mention the need to monitor soil conditions across eastern Canada. I assume budget cuts have been made, as some studies were still done in the past.

Is there a significant lack of support for soil compaction research?

[Dr. Jean Caron]

That is a fact.

The point of my remarks today was, in a way, to say that it is laudable to try to tax nitrogen, for example, so as to attempt to reduce its use, but it is also important to understand that the more compact the soils are, the more fertilization, and in particular nitrogen fertilization, is required to sustain production. This is due to the phenomenon of nitrogen loss from a lack of oxygen in the soil owing to compaction.

To answer your question more specifically, I would say that research efforts have not been sustained in the past. There was a lot of effort in the 1980s and into the mid-1990s. After that, the teams were virtually all disbanded.

[Richard Lehoux, Conservative, Beauce, QC]

With that in mind, Mr. Caron, are there other methods that could be used? Is it enough to make budgets available and carry out studies quickly? The timelines are still very tight, and no immediate alternatives are really being provided. Yes, it will result in fewer tractor passes over the fields, which will have an impact, but there is still the whole issue of grain drying, which is a major factor and one for which we don't have many alternatives available right now.

I would like to hear your thoughts on this. It is indeed important that soils be analyzed, but what concrete solutions could be applied in the short term?

[Dr. Jean Caron]

Grain drying is really not my area of expertise, so I'm not the right person to speak to that.

However, in terms of efforts to improve soils, indeed, research is a good thing, but there are solutions out there, like soil rotation. Soil rotation is no longer encouraged, and production patterns have changed to less and less versatile farms, which has increased the risk of soil compaction. We need to turn back the clock and restore better long-term rotation practices.

[Richard Lehoux, Conservative, Beauce, QC]

I understand that there is work to be done upstream, Mr. Caron, but the difficulty that we have right now is on the harvest side. Particularly in Quebec, there is an important link to make with the issue of grain drying. Bill C-234 adds certain fuels used for grain drying to the list of products exempt from the fuel charge. This is very much the focus of the bill.

I am trying to detect in your comments what may be a solution in the short term. I agree with you that land rotation could provide medium and longer-term improvements, but what are the short term solutions?

If this requested exemption is not provided soon, the fuel charge will quickly become a burden on farmers. I'm thinking of grain drying, among other things, but there's also building heating, which is far from negligible in Quebec.

[Dr. Jean Caron]

I'm really caught off guard here. My testimony was not focused on that aspect.

[Richard Lehoux, Conservative, Beauce, QC]

You mentioned available clean technologies. Can you give us some examples?

[Dr. Jean Caron]

I don't know what document you are referring to, but what I sent to the Senate did not mention such technologies. In fact, there are tracking technologies, among others. If you want to increase production efficiency and reduce the risk of soil compaction, obviously, you're going to have to go with lighter machinery, diversification of the production model, and more rotations.

To go back to your question, I can say that it is clear that because of the climate change that we are seeing now in production settings, there are more and more extremes. We can see that on the ground. This has more significant consequences, especially on drying. You want us to address that. Because there will be delays in seeding and crops will be ready less quickly, producers will end up with higher drying costs.

[Richard Lehoux, Conservative, Beauce, QC]

Indeed, Mr. Caron, it's—

[Dr. Jean Caron]

It's heading in that direction. It's to be expected. However, production models need to be diversified, as Mr. Boisseau‑Bouvier mentioned earlier, to make agriculture more resilient and reduce its sensitivity to climate‑related hazards. Obviously, this doesn't happen with a snap of the fingers. Changes in soil quality will take place over 10 to 15 years. So there are short‑term solutions that need to be put in place to support the transition.

[Richard Lehoux, Conservative, Beauce, QC]

Do I have any time left, Mr. Chair?

[The Chair, Liberal, Kody Blois]

You have only 20 seconds left, so thank you very much, Mr. Lehoux.

Thank you, Mr. Caron.

I'll now give the floor to Mr. Turnbull for six minutes.

[Ryan Turnbull, Liberal, Whitby, ON]

Thanks, Chair.

Thanks to all the witnesses for being here today. I'll start with Émile Boisseau-Bouvier.

In your opening remarks, you expressed some concern about removing the price signal from the price on pollution within the agricultural industry, certainly for these on-farm fuels for grain drying and for heating and cooling.

Is your concern that if we remove that price signal, we'll essentially be removing the incentive to make the change to renewable energy on the farm?

[Émile Boisseau-Bouvier]

Yes, absolutely.

If I may, I'll speak in French, just to make sure I get all the nuances.

If we remove this price indicator, it will be a way to favour fossil fuels. As I said in my speech, it will be a form of subsidy for fossil fuels that will make them more competitive with alternatives that are favourable to us all, that are sustainable and that will achieve Canada's climate and environmental objectives. We need to maintain a strong price signal, otherwise we will never be able to accelerate this transition.

[Ryan Turnbull, Liberal, Whitby, ON]

Thank you. I appreciate that.

Is it possible to heat and cool a barn or greenhouse or fuel a grain dryer with renewable energy?

Émile, I'll start with you and then I'd like to ask Mr. Wright the same question.

[Émile Boisseau-Bouvier]

One of the differences in Bill C-234, compared to Bill C-206, is the inclusion of animal housing areas. In this regard, there are solutions that already exist to get away from fossil fuels. There is an opportunity for the government to encourage those alternatives, whether it's improving the insulation and ventilation of those buildings or installing heat pumps that will make the energy system more efficient, for example. Electrical input changes can also be made. We know that our farmers often live at the end of a road, so these changes can be costly. The government can provide grants for this. These are all tools that are in the hands of the government and that make it possible to promote solutions that are sustainable and that make it possible to heat a building, for example, using renewable energy.

[Ryan Turnbull, Liberal, Whitby, ON]

If I hear you correctly, there are alternatives, but the government should be or could be further helping to realize.... The government should be helping to finance some of those on-farm renewable energy solutions.

Would you say that's true?

[Émile Boisseau-Bouvier]

Yes, that’s exactly it. Our farmers have environmental values. We need to make it easier for them to make that their first choice so that they don't even have to ask. So we need to favour renewable energy, not fossil fuels, as Bill C-234 is proposing right now.