Evidence of meeting #30 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 study.
A recording is available from Parliament.
President, Sollio Cooperative Group
Could I ask you to answer, Mr. Kaastra?
Chief Executive Officer, Sollio Cooperative Group
I can answer that question by saying that this 100% increase occurred the year before. The fertilizer market is a free market, just like any other commodity. As Mr. Thompson mentioned, the demands had already increased. In addition, the COVID‑19 pandemic caused a decrease in capacity. China stopped exporting fertilizer for a long period of time.
So several factors have contributed to the price increases, in a free market, before the war in Ukraine and before the sanctions and the 35% tariff.
Liberal
Francis Drouin Liberal Glengarry—Prescott—Russell, ON
You also mentioned that you are actively working to change suppliers so that they are no longer from Russia.
Have you had the chance to talk to Canadian international trade specialists or specialists from the Netherlands and Germany or Morocco who produce nitrogen, or the United States, to see if they can increase their production?
Have you had any discussions with them? Have you interacted with international trade organizations or the government?
Canada has representatives all over the world.
President, Sollio Cooperative Group
As I mentioned earlier, Mr. Kaastra and I were in France last week. Right now, on the European continent, whether in France or other European countries, many plants have shut down due to shortages and the cost of energy. This makes it very difficult to obtain supplies from other sources for the coming year.
I don't know if Mr. Kaastra wants to round out my answer.
Chief Executive Officer, Sollio Cooperative Group
Yes, that is indeed the case. There's an impact caused by the decrease in nitrogen production capacity. This represents at least 15 million metric tonnes of nitrogen from European countries. As Mr. Gervais mentioned, these countries are becoming importers rather than exporters of nitrogen. That's one of the factors—
Liberal
Francis Drouin Liberal Glengarry—Prescott—Russell, ON
My apologies for interrupting, but I have about 30 seconds left.
Are you having discussions with any nitrogen-producing African countries?
Chief Executive Officer, Sollio Cooperative Group
Yes, we do business with several African countries, including Algeria and Egypt. I should point out that Russia didn't meet 100% of our needs in the past. We do business with several countries around the world, as usual.
Bloc
Yves Perron Bloc Berthier—Maskinongé, QC
Thank you, Mr. Chair.
I'd like to thank the witnesses for being with us today.
My question is for Mr. Gervais or Mr. Kaastra.
To conclude this discussion, what problems might the global decline in fertilizer production have over the next year? What supply issues do you foresee? If I understood your answer to Mr. Drouin's last question correctly, supply negotiations are going on outside of Russia, particularly in Africa.
Can we expect regular supplies and access to fertilizer for producers?
Chief Executive Officer, Sollio Cooperative Group
Some types of nitrogen are available in greater quantities than others. For example, a lot of urea is manufactured globally. This means that there is a lot more availability and options to purchase urea from other sources. However, nitrate-based types of nitrogen are less available, especially liquid nitrogen. In those cases, other products such as urea are chosen. This is an effect we are seeing in the current situation.
Bloc
Yves Perron Bloc Berthier—Maskinongé, QC
I'd like to summarize the previous discussions.
Mr. Gervais, you expect support for fertilizer purchases by producers, but you don't have a specific proposal.
Did I understand correctly?
President, Sollio Cooperative Group
I said we wanted the tariffs we had to pay last spring to access fertilizer, which was purchased and ordered in October and November 2021, to be eliminated.
We have had to do a lot of legwork to secure the supply of fertilizer for our producers. As a farmer-owned cooperative, we didn't want to have to tell our producers that we didn't have fertilizer for them this spring. We jumped through a lot of hoops and paid the tariffs to be able to buy fertilizer, but the producers are footing the bill. Unfortunately, it's the producers in eastern Canada who are bearing the cost. That's why we're asking for a refund of this spring's tariffs.
Bloc
Bloc
Yves Perron Bloc Berthier—Maskinongé, QC
All right, that's clear. Thank you very much.
I'll now turn to Mr. Affleck or Mr. Prouse from CropLife Canada.
I'd like to talk about food security. You say that regulations must be modernized based on science, that there must be adequate monitoring and that the public must be well informed.
You talk about promoting sustainability and the environment. You say we need to have science-based rules. That amounts to pretty much the same thing.
One of the major problems in the food industry is waste. Much of the production doesn't make it to the consumer when it could be used to feed people in need.
What are your organization's policies for preventing food waste?
Ian Affleck Vice-President, Biotechnology, CropLife Canada
Thank you for that question.
When speaking about crop inputs we talked about fertilizer, but when you look at seed varieties that are more hardy and resistant to deteriorating in the field and crop protection products that avoid damage to those crops so that they store well—we don't see them either rotting in storage or in the field before they even have a chance to arrive to the plate—that's where these technologies are so important if we're going to avoid food waste.
To that point, I think the regulations you speak of are incredibly important. Canada is a science-based regulatory role model for the world. What we do here reverberates around the world and can either support or hinder food security.
With that in mind, when there are public questions or concerns especially with pesticides, GMOs or gene editing, it's important that we continue the government's work on this and not pause the work. We have to double down on engagement with the public and explain science-based regulation rather than pausing it. I will give two very quick examples of this where I think we've done well and maybe not so well as a government.
Last week Health Canada published an excellent response in The Hill Times to misinformation around their recent policies on gene editing. It was an excellent defence of a science-based regulatory system. It demonstrated what the truth behind that science was and why they chose that direction.
In contrast to that, last summer the government paused the activities on pesticide maximum residue limit adjustment and review in the face of public questions and considerations. It's completely understandable that people have questions, but pausing internationally aligned science-based work in order to figure out how to respond to the public just jeopardizes the science-based system. It confuses our trading partners by which these MRLs create an ability for us to move our Canadian produce into areas of food insecurity.
We have a great example in The Hill Times of defending the science-based process and moving forward, and an unfortunate pause on MRLs on the other side, which creates a confusing message. We really think it's important that public engagement, communication and risk understanding is critical versus a pause in activity.
Bloc
Yves Perron Bloc Berthier—Maskinongé, QC
I'm sorry to have to stop you there, Mr. Affleck, but I don't have much time left.
We understand the idea. What's important for me is transparency to the public. In fact, I think that's the take-home message from recent events.
Mr. Thompson, you were talking about encouraging exports. What can the government do to help you further?
One of the things I'm thinking about is reciprocity of standards. Are we importing products that don't meet the same standards as ours?
You don't have much time left to respond.
Executive Vice-President, Chief Strategy and Sustainability Officer, Nutrien Ltd.
Thank you to the member.
I would say that agriculture is a globally competitive and globally traded market. For fertilizers like nitrogen, which has been talked about, North America is a net import market. Therefore, supplies find their way where they're needed in the world based on the lowest cost of production. Canada is a competitive producer today and serves domestic needs, but it also serves international market needs where it makes sense to do so based on market factors.
Liberal
The Chair Liberal Kody Blois
Thank you, Mr. Thompson and Mr. Perron.
Mr. MacGregor, you have six minutes.
NDP
Alistair MacGregor NDP Cowichan—Malahat—Langford, BC
Thank you very much, Mr. Chair.
Thank you to all of our witnesses for joining us today and helping us with our study.
I'd like to start with CropLife. We are seeing some pretty crazy weather patterns happening over these years. We know that climate change is going to drive that further and further. My own riding of Cowichan—Malahat—Langford is going through a drought right now, and drought is not synonymous with Vancouver Island in October. In British Columbia last year, we went from wildfires to catastrophic floods in a matter of months. We know that in the Prairies they have had their own experiences.
It's just getting harder and harder for farmers to predict what is going to come their way, and they're already dealing with a lot. We're putting so much pressure on farmers. We're setting these export goals. We know that they are leaders in innovation. They have taken gigantic strides in producing more food with less land, which I think you very clearly outlined. At the same time, they are fighting this rearguard action against climate change, and it's coming up unexpectedly.
You can't separate food security from climate change and the effect it's having on our land and our ability to produce food. Can technological advances keep pace with the change that is coming our way—for example, developments in hardier crops and their ability to withstand these crazy weather patterns? Do you have anything you can add to our discussion in that specific area?
Vice-President, Biotechnology, CropLife Canada
There's absolutely an opportunity for that to occur. Again, with Canada being a regulatory role model, its recent policies on plant breeding innovation to clarify how conventional crops are bred, and gene editing and GMOs, all provide opportunities for hardier varieties that can withstand droughts or be more water-efficient and more pest-resistant. That shortens the time by which it takes to get a new variety to market. It used to take 10 years in traditional breeding. If you can introduce gene editing, maybe you can get that down to six or five. That changes your ability to respond to weather patterns. If we can get those varieties out to farmers for them to select what works best on their farm, they have a better chance of weathering the storm that could come their way.
I'm from Prince Edward Island. We don't have a drought. We had a very different situation, but whether it's my cousins who had barns blown down or the amount of rain that fell on the crops they were trying to harvest, it's the same issue. There is a great opportunity for technology to address those issues, but I would come back to the regulatory piece and to being a science-based regulatory leader as much as we're able as a government to allow innovation to thrive.
We want safety first, but then it's how to ensure safety with the least amount of impact on the speed of innovation. It's always safety first, but then it's looking for the quickest route to get that innovation to market in the safest way possible.
Vice-President, Government Affairs, CropLife Canada
I would just add this very quickly: How do we make Canada an innovation hub? How do we attract that investment and have it happen in Canada?
To your point, climate change is going to drive a great deal of research and development in agriculture. We think it should be taking place in Canada. We have the advantages and we have the ability to do it, but it won't happen on its own.
NDP
Alistair MacGregor NDP Cowichan—Malahat—Langford, BC
Yes, those are very good points. It's not only Canadian agricultural products but also Canadian know-how and expertise in this field.
That's a great segue to my next question. So many countries in the Horn of Africa are going through famine-like conditions right now. So many countries depended on Ukrainian grain. That stop in Ukrainian exports really affected many countries in a horrible way. It truly is a breadbasket for the region. While exports are resuming, it shows the vulnerability of supply chains to geopolitical incidents and conflict.
We've had witnesses say that Canada could also be doing more to try to establish better resiliency in those countries and better know-how, so that those farmers have the ability to withstand the ravages of supply chain interruptions and climate change, which we know is having a big effect in the Horn of Africa as well.
Do you have any comments on how, from your perspective, Canadian know-how and expertise could be exported to those countries to help build that resiliency there?
Vice-President, Government Affairs, CropLife Canada
Perhaps Ian has some thoughts, but one of the things we talked about in our opening remarks was Canada and promoting our resilient agriculture and taking that technology out there. We are a sustainable supplier.
I believe that, in Canada, about 8% of our greenhouse gases are generated by agriculture and agri-food. Globally that number is 23%, so we do have efficient systems and we can do a great deal to export that. We would very much like to see that and, of course, have those countries growing crops that are culturally and locally appropriate. I think we can play a role in doing that.