Agriculture Committee on Oct. 17th, 2022

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

Okay. Thanks, Brendan. I appreciate it.

I have a question for Mr. Leslie. It's good to see you before committee. I would be remiss if I didn't say we had worked the land prior to this committee appearance, you and I.

It's the same sort of question: Would you be in support of a potential sunset clause? Normally my colleague Mr. MacGregor would do that work, but he's not here, so I'll be asking those questions, not necessarily on his behalf. Do you think if we put a 2030 timeline, that would give enough time to create the innovation that's needed in the sector?

[Branden Leslie]

Thank you for the question, Mr. Drouin.

It's tough to predict where innovation might go. I'd love to say that in eight years we're going to have over half of Canadian dryers converted to some other fuel source. That would probably be a bit of a stretch. Maybe it would have taken that long 10 years ago, in 2006, but now that we're in 2022 on Bill C-234, I think 10 years would be a reasonable thing.

I understand that we still want the price signal. The government's intention on the price of pollution is there for a reason. I think we understand that. The struggle with this particular nuance on the use of propane and natural gas is that it's just not applicable when there's no nudge effect. There's nothing to nudge towards.

I think it's reasonable to want to maintain that. However, I wouldn't want to go through this process again in 2032. I think it would be important to have an order in council or some sort of mechanism in place whereby the government of the day could say, okay, we were hoping to have over 50% adoption of a new fuel use for grain drying or the heating and cooling of barns, but that hasn't happened yet.

Maybe I'll bring in your second question on clean tech here. I think there is an absolute necessity to maintain that. If we want to have the sunset clause, I think it's important to make sure that we have the funding to have these new technologies embraced and enabled on-farm. I think the two-stream approach will continue to be necessary.

I think it's reasonable to have a sunset clause, as long as the government is able to not have the exemption just drop off at some point so that all of a sudden farmers are forced to have a $170 per tonne carbon tax thrown back on them. That would be a real crunch to their operating expenditures at that time.

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

I know it's not the farmers who are creating these technologies, although some of them do. Are you working with industry to say, okay, we have these potential costs going up, so are you guys investing in research and innovation so our members can benefit from this?

[Branden Leslie]

As an organization, we don't have the finances to pick and choose project proponents like that. However, as you say, farmers are innovators by nature and are regularly tinkering on their own, because this is their money that they're spending on these costs. If they see an advantage with a different fuel source, they will try to enable it. They are certainly the consumers, and just as we are consumers of normal products that we're seeing a price signal on, they are too. They are looking for when these become available.

It is difficult as a sector or as an industry to have products like these commercialized. We talk about how many farmers there are. We're talking tens of thousands or hundreds of thousands. In the big picture, that's not a huge number of consumers, so I think we need to be realistic about how quickly those innovations can come online.

I think if farmers can see an opportunity to save money and lower their own environmental footprint for consumer reasons, commercial reasons, they'll take it. We certainly see a lot of those talents—

[The Vice-Chair, Conservative, John Barlow]

Thanks, Mr. Leslie.

Time is up, Mr. Drouin. Thank you very much.

Go ahead, Mr. Perron. You have six minutes.

[Yves Perron, Bloc, Berthier—Maskinongé, QC]

Thank you, Mr. Chair.

I'd like to thank the witnesses for being with us today.

I want to welcome our friends back to the committee.

I'm going to start with Mr. Orb.

You said that your association is the voice of rural areas. I just want to make sure I've understood what you were saying earlier about the carbon tax rebate. Producers receive an average refund equal to 13% of what they paid. Is that correct?

[Raymond Orb]

I'm sorry, but I lost the translation for some reason.

[Yves Perron, Bloc, Berthier—Maskinongé, QC]

In response to an earlier question, you mentioned that since Bill C‑8 was passed, producers have been receiving an average rebate of 13% of what they paid. Is that correct?

[Raymond Orb]

I'm sorry, but I lost the translation.

[The Vice-Chair, Conservative, John Barlow]

Maybe we'll work—

[Brendan Byrne]

That would have been me.

[The Vice-Chair, Conservative, John Barlow]

That would have been Mr. Byrne on that, Monsieur Perron. Maybe you want to redirect while we figure out Mr. Orb's technology here.

[Yves Perron, Bloc, Berthier—Maskinongé, QC]

Yes, I can do that, but if the witnesses did the sound tests beforehand, I don't understand why it isn't working.

I'll let you answer the question, Mr. Byrne.

[Brendan Byrne]

Yes, I was the one who made that comment, and those are the numbers. We had worked out that under 15% of actual dollars spent on carbon were being refunded by the rebate.

[Yves Perron, Bloc, Berthier—Maskinongé, QC]

I don't know if Mr. Orb can hear the question. If not, I'll ask someone else to answer.

With respect to Bill C‑206, which we studied in the last Parliament, an exemption for farm buildings was added to the bill. Is it as essential to have an exemption for farm buildings as it is for grain drying?

[Raymond Orb]

[Technical difficulty—Editor]

[Yves Perron, Bloc, Berthier—Maskinongé, QC]

Obviously, communication with Mr. Orb isn't working. So I'll address the people who are here.

Mr. Leslie, did you hear my question? Do you have a response for me?

[Branden Leslie]

On the second part there, I do, sure.

We represent the grain growers. We do have, obviously, mixed farm operations involved as well, but I don't want to speak too much for the livestock sector.

When you look at the consumer world, my home is heated by natural gas. To see a transition away from these fuels on large-scale operations where you need a lot of heat—think of a chicken barn or any livestock barn—it's going to take a while.

[Yves Perron, Bloc, Berthier—Maskinongé, QC]

Okay, thank you.

We talked earlier about a 13% carbon tax rebate since the passage of Bill C‑8. Do you get the same percentage rebate?

[Branden Leslie]

As it relates to the 13%, this is a challenge because there's no uniform application of how much of a rebate you will get. It is based on your expenses and not the amount of fuel you use.

[Yves Perron, Bloc, Berthier—Maskinongé, QC]

Can you give us an average?

[Branden Leslie]

Again, it's problematic.

Corn is a good example. There's a necessity to dry corn. It is coming off at too high of a moisture level, and you have to dry it to store it. You might bring off a cereal crop at the correct moisture of 13%, 14% or 15%. You can take it off via air drying, and you don't need to use a fossil fuel to heat it. When you get into a wet year—2019 is a good example and, in some places, this year—you need to drop four or five points.

It's inconsistent in how it's applied. Why this is problematic and why I would say the exemption is preferable is that, if you bring off all of your cereals dry and you really don't need to use your dryer that year at all, then you could still be eligible for a rebate under Bill C-8 based on your overall expenses, despite not using any of the fuels that we're trying to solve this year.

I think that's why the more flatlined option would be to exempt those who are using the fuels for that purpose rather than an unequal reimbursement based on whether or not you use the fuel at the end of the day.

[Yves Perron, Bloc, Berthier—Maskinongé, QC]

I understand your point of view.

The sunset clause was mentioned earlier. You're talking about 10 years.

I'm thinking here of innovation needs. In your case, it will be difficult to answer the question, because you can't talk about buildings. In any event, I think there are more alternatives for buildings than for grain drying. Correct me if I'm wrong.

Therefore, do you think the same amount of time is needed in both cases for the carbon exemption?

[Branden Leslie]

I couldn't speak to the advancements and innovations in building heating and cooling.

[Yves Perron, Bloc, Berthier—Maskinongé, QC]

Great. Thank you.

Mr. Byrne, I'll ask you the same question.