Agriculture Committee on Oct. 24th, 2022

[Brian Masse, NDP, Windsor West, ON]

Yes, your ratio is nowhere to be compared in that.

I want to move to our guest, Ms. Brekveld.

With regard to some of the innovation that can be done, one thing I asked a previous panel was about the increased cost of borrowing right now.

How do you think that's going to affect farmers, with not only inflation, but also increased borrowing rates, which the Bank of Canada is talking about doing?

I think one witness appropriately mentioned that if there is a 10-year window, maybe have a review so you can give a heads-up. For the SR and ED tax credits and writeoffs, for a long time.... There is finally a system in place to give a heads-up for these things.

How important is it to have low-cost borrowing and amortization over a number of years? Is it a concern now, with the rates going up and the cost of inflation, to make investments that are going to make it cleaner and greener now?

[Peggy Brekveld]

Borrowing costs are very significant to agriculture. In fact, many farmers have borrowed to their limit. There are several options in borrowing. With some of them, I'm not always sure they are the best plan, because sometimes farmers go too deep.

I have significant concerns about the interest rate and the continuing renewal of loans. As a federal government, with Farm Credit Canada being a part of your package, I think this is something you need to keep your eyes on.

I'll also say that farmers can't do it without profitability. Whatever we do, including trying to find ways to be innovative and reduce costs, we're always looking at.... Yes, we love the land and we love to farm, but at the end of the day, we still have to make a profit. We can't do it for free.

Earlier, Ms. Taylor Roy—

[The Vice-Chair, Conservative, John Barlow]

Thanks, Ms. Brekveld, and thanks, Mr. Masse.

I'll turn it back over to Conservatives and Mr. Steinley for five minutes, please.

[Warren Steinley, Conservative, Regina—Lewvan, SK]

Thank you, Mr. Chair.

I'll be splitting my time with Mr. Lehoux. We'll do two and a half minutes each.

I would really like to let Mr. Kielstra finish what he was going to say. He wanted to correct the record on something, so I'll give him some of my time to make sure he has the appropriate information that he wanted to get out there on the record.

[Hessel Kielstra]

When I was asked the question about the cost and the ratio, I gave a figure of $10 million, but that's more of a fully operational thing. I'd have to take the question under advisement to give a proper answer, because that one is the wrong answer.

[Warren Steinley, Conservative, Regina—Lewvan, SK]

Thank you very much.

I'll continue with a couple more questions, Mr. Kielstra.

You were asked earlier how many of your barns you had upgraded with insulation and everything. The cost was probably significant. Was it more or less than $106,000 a barn to upgrade with insulation? I don't know if you had better windows, too.

What amount of money did those upgrades cost? Would the carbon tax that you paid cover those costs?

[Hessel Kielstra]

They would have largely covered the costs, because it would be barn by barn. There are about 15 barns. Two years ago, we had a barn burn down, and we went with a whole different style of barn, with tilt-up concrete. That is a lot more energy-efficient than the older barns.

It's a moving target. We have thought about the money that's available under the federal government's program, whatever it's called, where there's money available because of the rate agreements. We've thought about trying to enter into some of that to probably replace a few of the barns.

[Warren Steinley, Conservative, Regina—Lewvan, SK]

Thank you very much, Mr. Kielstra. I will just end with one comment, which is that you can see that producers, farmers, do reinvest in their barns when they can. When they have money, they reinvest it to make them more environmentally friendly, and it doesn't take a government program to do it. Producers do it because it's the right thing to do for the health of the herd and for the environment. Sometimes, if you just put the money back into the producers' pockets, they're going to do the right thing with it.

Thank you.

[The Vice-Chair, Conservative, John Barlow]

Mr. Lehoux.

[Richard Lehoux, Conservative, Beauce, QC]

Thank you, Mr. Chair.

I'd like to thank my colleague Mr. Steinley for sharing his time with me.

Mr. Bekkering, in your opening remarks, you talked about steam flaking, which has a significant impact on food processing in your feed lots. Are you able to estimate the costs that this steam flaking can cause, in addition to the carbon tax that's being added and will increase?

[James Bekkering]

Currently, for every tonne of grain we process, the carbon tax alone is 75¢. When we increase it going forward, it will be $2.50 per tonne. Right now we gain efficiencies by doing the steam flaking. It is still cost-effective for us to do this process because of the high commodity prices we are currently seeing. If commodity prices go down again and these costs increase, the percentage of the cost of that commodity increases as well, so then it may stop being cost-effective for us to do that.

[Richard Lehoux, Conservative, Beauce, QC]

Thank you.

Ms. Brekveld, from the Ontario Federation of Agriculture, we talked earlier about carbon sequestration with other witnesses. If we recognized carbon sequestration for all the agricultural products served by your federation, would that have a significant impact?

[Peggy Brekveld]

I believe it will make a significant difference. I think it is a part of the conversation on ecological goods and services. There's opportunity to balance the fact that we are growing food and that we sequester carbon at the same time, as we need some energy to make it happen. I really think there's a big part to play in agriculture by continuing to sequester and being a part of that conversation.

[Richard Lehoux, Conservative, Beauce, QC]

Thank you, Mr. Chair.

[The Vice-Chair, Conservative, John Barlow]

That's time. Good job.

Could I ask everybody to mute your microphones if you're in the room or online, when you're not speaking? It's causing a bit of feedback for our interpreters, so could you, if you don't mind, keep an eye on that? Thank you.

Now we go to Mr. Drouin for five minutes please.

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

Thank you, Mr. Chair.

I want to thank all the witnesses who are here blessing us with their presence in this room, and those who are in virtual mode. My first question will go to Ms. Brekveld.

Thanks for coming here. One of the questions this committee has been debating is with regard to barn heating. Of course, we've heard some of the issues with mushroom farmers and some with poultry farmers. Are there any other sectors that are being impacted by this, where technology may not yet be available and where carbon tax would represent a significant cost to their operations?

[Peggy Brekveld]

I will give you an example from a phone call I got this weekend from aquaculture—indoor fish farming. They talked about the fact that they are using some wonderful technologies to reuse the energy they're producing and using the heat once again, but they are still paying the carbon tax on top of that. It is pushing out some of the warm-water fish production from here in Canada. It has real consequences.

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

As this committee is considering Bill C-234, I would love to get in touch with them and find out a little more in terms of the impact this is having on cost.

I won't ask you about grain drying. I think we've had enough testimony to discuss this.

My next question is for the mushroom growers' association. Mr. Medeiros, thanks so much for appearing before our committee. Ryan, it's great to see you virtually. I appreciate your being in front of this committee.

I think mushrooms are a testament to the innovation that can happen in a sector. I know I was at Whitecrest Mushrooms' operations down in Putnam. Robotics are playing a huge role in helping solve the labour challenges that are happening in ag in general. I know they're working on amazing stuff to reduce their energy emissions.

Are there any other types of projects where your sector is working, particularly on trying to reduce energy within their buildings? I know everybody talks about the carbon tax going up to $170, but are you working actively with suppliers to say, “Okay, we have this price signal coming up in 2030. How are you helping me reduce my energy costs?”

From my own perspective, I have met some companies that are actually doing that in the marketplace right now. I am just wondering if you guys from the mushroom growers' association are actively working with these types of companies out there.

[Mike Medeiros]

Earlier, when I said we had reduced our deliveries.... I worked with my retailers for that, to allow deliveries four days a week, so we were able to save about 100,000 kilometres a year doing that.

The next project that our facility is looking at doing is a new indoor compost facility that's looking at using more electricity than fossil fuels. We're also recapturing any exhaust heat to use for heating.

The interesting thing is that my partners and I are looking to do this new facility, and there is no funding for it to help out. This is all on our dime because it's a new company, so there is nothing out there that helps new businesses to be energy-efficient. For anything out there, they want you to have been in business for three years, so if you decide to start a new business or company to be more energy-efficient, there is nothing out there that you can tap into to help out. Basically, we're taking a big chance on doing this, but it's the right thing to do. We believe in that, so we're trying our best.

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

Yes. I'm happy to have this chat in terms of a new company. I know that normally you need at least two years of taxable income in order to qualify for either a bank loan or most government programs, but I am happy to have a chat, especially if Carleton Mushrooms is behind that, backing them.

I have a question for the National Cattle Feeders' Association.

Obviously, part of this conversation is that methane is a huge GHG emission. We've had a lot of chats at this committee with regard to 3-NOP. How do you see the sector implementing this widely, and would you see your sector benefiting from programs? Some members have mentioned the agri-tech program here, to help feeders reduce their methane output. Is that something you see as a positive?

[James Bekkering]

Yes, as you alluded to, I think some of these newer technologies, such as 3-NOP, would be widely adopted by the feedlot industry, because we can implement that fairly quickly compared to the larger cow-calf sector.

[The Vice-Chair, Conservative, John Barlow]

Thank you very much.

Now, we will go to Madame Larouche for two and a half minutes, please.

[Andréanne Larouche, Bloc, Shefford, QC]

Thank you very much, Mr. Chair.

I'd like to thank the witnesses for joining us.

Mr. Kielstra, you talked, particularly with regard to the chicken industry, about how animals are treated and their welfare, including the importance of heat. I have chicken farmers in my riding who have really raised my awareness about these issues.

I'd like to come back to the question I asked other witnesses. What could help you? Efforts are being made to reward good practices. How could we start a transition and encourage a greener way of feeding ourselves, one that generates less greenhouse gas?

[Peggy Brekveld]

Is the question for me or Mr. Kielstra?

[Andréanne Larouche, Bloc, Shefford, QC]

It's for Mr. Kielstra, but you can answer it, too. I didn't ask you any questions, so I'll give you an opportunity to comment on those good practices.