Good afternoon, Mr. Chair and honourable members. Thank you for the invitation to appear today on Bill C-234.
My name is Branden Leslie, and I am the manager of policy and government relations for the Grain Growers of Canada. The Grain Growers of Canada represents 65,000 grain, pulse and oilseed farmers through our 14 provincial, regional and national member organizations across Canada.
Canadian farmers have a long reputation as environmental stewards, adopting the best environmental practices whenever possible.
Canada's grain sector is proud of our hard-earned reputation as one of the world's largest suppliers of safe, sustainable and high-quality grains, of which the exports of cereals, oilseed and pulses add over $30 billion to the Canadian economy every year.
Our sector is also proud of our record of sustainably intensifying our production when the world demands more food and cleaner fuels, while simultaneously working to reduce emissions and increase carbon sequestration. That sustainable intensification of production is enabled by farmers reinvesting profits back into their operations in the form of new machinery, technologies and the adoption of beneficial management practices, all of which reduce emissions and increase operational efficiencies.
This is why Bill C-234 is a critical piece of legislation, which our members strongly support.
As a result of climate change, we are seeing an increased need for grain drying. With the steadily rising price on pollution applied to propane and natural gas used to dry grain, farmers also now face incredible cost increases without an alternative fuel source available. While there are emerging potential alternative fuel sources for grain drying, the reality is that they are not commercially viable at this time. Further, it will take years to scale them up and implement necessary infrastructure upgrades as required.
Given the significant operating costs of using propane or natural gas, there currently exists a price signal to be judicious with the use of these fuels, as there is no benefit of drying grains beyond what is necessary for sale or storage. As such, most farmers have also already made significant investments to upgrade their dryers to make them as efficient as possible, leaving little room for improvement in that area.
It's fair to say that no farmer wants to be spending money on drying their grain but does so out of necessity and, certainly, hope that a more cost-efficient and lower-emission option becomes available in the not-too-distant future. However, until that happens, farmers have no choice but to use propane or natural gas to dry their grain, making the price on pollution a punitive tax and not a market-driven signal to change fuel sources. Right now, this simply means that farmers have money taken out of their pocket to undertake a necessary process to ensure their product does not spoil during storage.
The federal government has tacitly admitted the flawed nature of the price on pollution put on propane and natural gas used on farms through the rebate program offered under Bill C‑8. While we appreciate the government acknowledging that farmers currently have no choice but to use these fuels, the reality is that the rebate is a blunt tool that does not fairly reimburse farmers for the fuel they actually use. This means that depending on the crops they grow, they may receive only a small percentage of the carbon price paid through their operation.
That is why the exemption offered through Bill C-234 is superior to the rebate system. With an exemption in place, Canadian farmers will remain competitive and have additional working capital to reinvest in their operations, leading to more tangible environmental outcomes and emission reductions.
Grain drying is necessary to maintain the grains' quality. Taxing this practice will not result in emissions reductions and instead will hinder farmers' ability to invest in sustainable innovations.
A reinvestment into updated machinery or technologies has proven to make real progress in emission reductions. Canadian farmers need policy and the incentivization of innovation of best management practices and other adoption tools that put working capital back into farmers' pockets. Farmers are simultaneously facing rising input costs, rising interest rates and increased debt loads required to finance equipment and farmland. So for many, every dollar counts.
It is also important to note that the passage of this legislation would not alleviate all the carbon pricing costs and associated signals that are built into the prices of transportation and other inputs the farmers use, which are passed on to farmers. As price-takers, they are unable to pass those costs on any further.
Ultimately, the savings that would be found for farmers should Bill C-234 pass would make up just a small percentage of their overall operational costs, but would absolutely make a difference to their bottom line.
By passing Bill C-234, Parliament would acknowledge the important sustainability efforts farmers have undertaken and will continue to undertake, and empower them to reinvest in their operations, further reduce emissions and improve on-farm environmental indicators. We urge all parties to support the swift passage of this legislation.
Thank you. I look forward to your questions.