Agriculture Committee on Nov. 2nd, 2022

[The Chair, Liberal, Kody Blois]

I call this meeting to order.

Welcome to meeting no. 35 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 via 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.

I'd like to remind the participants that screenshots or taking photos of your screen is not permitted.

Colleagues, welcome back. I hope that you had a great week in my absence and that Mr. Barlow was able to chair this committee in a great fashion, which I know he does.

We are continuing our study on global food security, but I want to just make a couple of announcements. We have some substitutions today.

Welcome to Ms. Lambropoulos, who is going to be here on behalf of Mr. Turnbull. We have Ms. Bradford on behalf of Ms. Valdez. Welcome to both of the folks on the Liberal side.

On behalf of Mr. Steinley right now is Mr. Patzer, making his way over, at least for the first hour perhaps, and Mr. Shields for Mr. Barlow.

Welcome, everyone, to the committee.

Pursuant to Standing Order 108(2) and the motion adopted by the committee on Monday, May 30, 2022, the committee is resuming its study of global food insecurity.

In accordance with the committee's routine motion concerning connection tests for witnesses, I am informing the committee that Mr. Raymond Orb has unfortunately not completed the tests required prior to the meeting.

However, we have worked on the connection and it looks like it's going to work, and the translators are satisfied enough to move forward with his testimony. I just wanted to make sure that all participants knew that, according to our routine standing order.

Today we have three different witnesses who are going to be appearing. From the Canadian Agri-Food Policy Institute, we have Tyler McCann, managing director, joining us by video conference. Mr. McCann, welcome. From the Saskatchewan Association of Rural Municipalities, we have Mr. Orb, as was mentioned. Welcome to our committee, Mr. Orb, joining us virtually from Regina, it sounded like. From the Western Canadian Wheat Growers Association, we have Gunter Jochum, president.

Welcome to the committee. We look forward to hearing your testimony.

Colleagues, of course, as is customary, we're going to have a five-minute opening remark from each of the witnesses before we proceed to questions.

Mr. McCann, you're first on my list. You have up to five minutes. We'll go over to you, my friend.

[Tyler McCann, Managing Director, Canadian Agri-Food Policy Institute]

Thank you very much, Mr. Chair and committee members. Thank you for giving me the opportunity to appear on this important topic.

The world faces an incredible challenge: How do we produce enough food sustainably, affordably and profitably to reduce food insecurity around the world? According to the FAO, rates of undernourishment were actually falling up until 2014, and until 2019 they actually stayed pretty constant. Unfortunately, the number of food-insecure people began to climb after that. The World Food Programme now says that almost 830 million people go to bed hungry every night, with 210 million more people facing acute food insecurity in 2021 than did in 2019.

Canada, too, is seeing an increase in food insecurity. The most recent report by the University of Toronto shows that food insecurity rose from one in eight Canadians to one in six in 2021.

The World Food Programme cites four causes for the global hunger crisis we are facing: conflict, climate shocks, the consequences of COVID-19, and costs.

Today I'll talk about all four of these unique but very connected causes and about how Canada can offer solutions to each.

I'll spend less time on the first, but it is important to acknowledge that Canada should do more in Ukraine and around the world to mitigate conflict and its impact on food security. The world can produce endless amounts of food, but without safety and security, that food will not get to where it is needed. Conflict drives food insecurity, but food insecurity also drives conflict. There can be a devastating vicious cycle between the two.

COVID-19 impacted the global food system, but in Canada and around the world, the food system proved to be pretty resilient. You might not have been able to buy a new vehicle, but you could pretty well always find food on store shelves. Some of the consequences of COVID-19 are also finally beginning to ease. For example, while it's not back to prepandemic levels, the cost of ocean freight has fallen to 30% of what it was at its peak in September 2021.

The final two causes are very closely connected.

Canadian farmers understand the impact of climate shocks. A drought on the Prairies and a disastrous flood in B.C. are two recent examples. These shocks are happening around the world. This year we have been concerned about heat waves in India; droughts in China, Europe and the U.S. Midwest; and floods in Pakistan.

Climate shocks in China and India could be particularly devastating. These two countries alone make up more than 30% of world wheat production, but almost all of it is consumed domestically. While China has stocks that are a buffer for climate shocks, India and most other countries do not. A climate shock disrupting production in India, where a 30% loss would be equivalent to Canada's entire wheat production in a good year, would have a devastating impact on global food insecurity.

Cost is the fourth and final driver cited by the World Food Programme. Much has been made of the impact of the Russian invasion, but prices were climbing before Putin invaded. Shortages, supply disruptions, increasing input costs and market volatility started driving world food prices higher in 2020.

The solutions to climate shocks and costs are similar. They require a more productive, more resilient food production system that wastes less; more reliable and efficient infrastructure; and an effective global trading system.

I want to take a minute to focus on productivity, because it allows us to address food insecurity by producing more with less. This year, the OECD said that to meet the zero-hunger sustainable development goal and for agriculture to make its contributions to mitigating climate change, the sector must deliver productivity growth of 28% over the next decade. That is three times greater than that of the previous decade.

In Canada, we're heading in the wrong direction. Between 1990 and 2000, average annual agricultural productivity growth was 2.4% a year, but in the last decade, it has fallen to 1.8% per year. We need to turn this trend around. Boosting Canadian agricultural productivity will be good for farmers, good for the global food system, good for the environment and good for fighting food insecurity.

Food insecurity is a global challenge. Canada can be a leader with local solutions, but effective solutions require a whole-of-government approach.

Global Affairs should be using the upcoming Indo-Pacific strategy to make agriculture and food core to our strategy in the region and around the world. It should also make agriculture and food a core component of our overseas development assistance approach.

Regulators, including ECCC, Health Canada and CFIA, need to enable and facilitate access to the tools needed to boost productivity, including gene editing, and they need to focus on harmonizing our approaches with those of our major trading partners. Agriculture Canada and other funders need to increase and better target investments in R and D and in adding value to deliver that much-needed growth. The entire Canadian government should take steps to work in a more coherent manner to help Canada become an agriculture and food leader at home and around the world.

A final thing that we need to do is to have a more explicit conversation about the trade-offs and unintended consequences of trying to use the food system to meet several objectives, including food security and environmental and economic goals. We are not heading in the right direction to be able to do it all, and we need a more fulsome dialogue on what that means.

Thank you.

[The Chair, Liberal, Kody Blois]

Thank you, Mr. McCann.

We're now going to turn to Mr. Orb, for up to five minutes.

It's over to you, my friend.

[Raymond Orb, President, Saskatchewan Association of Rural Municipalities]

Thank you.

My name is Ray Orb and I'm president of the Saskatchewan Association of Rural Municipalities, known as SARM. I was born, raised and live in the small community of Cupar, northeast of Regina, Saskatchewan.

I'd like to thank the Standing Committee on Agriculture and Agri-Food for the opportunity to share our association's thoughts as it studies global food insecurity.

Our membership is made up of Saskatchewan's rural municipal governments. We also represent and serve the interests of Saskatchewan agricultural producers. SARM has been the voice of rural Saskatchewan for over a hundred years. I look forward to sharing our perspective on this critical issue with you today.

We are in a perfect storm for higher food prices, given the skyrocketing costs for fuel and fertilizer and other input costs, combined with the ongoing conflict in Ukraine. We see this negatively impacting the global market supplies for food, fuel and fertilizer. These commodities' prices are rising steeply.

Prior to the war, Russia and Ukraine were growing exporters of grains and oilseeds. Canada was losing its market share. Canadian producers can expand to fill that gap, but must do so with competitive prices and sustainably produced products. Now is the time for the trusted, reliable agriculture sector in Canada to step up and fill these gaps in the world market to help stabilize world food insecurity. We can't afford to waste this opportunity to fully support an industry that already contributes over $110 billion annually to Canada's GDP.

Before I suggest what might be done to capitalize on this opportunity, I need to paint a picture of the realities facing our agriculture sector.

Most farmers carry a lot of debt. They buy seed, fertilizer and equipment every year, and then hope for a bumper crop and high returns many months later. Farm debt has risen every year since 1993. According to Stats Canada, at the end of 2021 Canadian farm debt totalled $129 billion. That's up about $8.6 billion from a year earlier, which outpaced the $5.34-billion increase recorded the year before. The rising interest rates call into question the sustainability of some farms, which could directly affect consumers, as well as the one in nine Canadian jobs involved in this country's agriculture and agri-food sector.

The challenges that have arisen since the beginning of our COVID-19 pandemic problems have shone a spotlight on the reliability of our supply chains. Rail strikes, delays at port and tightening of border restrictions have slowed the movement of goods and people, resulting in direct supply chain disruptions. Farms looking to increase productivity or capitalize on new marketing opportunities struggle with finding and retaining good labour to support their plans for their farms.

Most importantly, Canadian agriculture producers need government support to help them compete internationally. Nearly 40% of farm income in the United States is estimated to come from government supports, with 38% in the European Union. Canadian producers need equal support now, more than ever, when facing the implications of inflation and rising fuel costs, to grasp the existing opportunity to fill world market gaps in grains and oilseeds.

Now, let's talk about opportunities.

We need to urgently increase the supply of skilled and unskilled labour, and to improve the knowledge and skills of existing workers. Farmers need access to agricultural labour to be successful and maximize their ability to expand. We need federal funding for grants to address the class 1A driver shortage in agriculture. Currently, farm operations are not eligible to apply for this funding. We also need government-funded employee incentive and retention programs that focus on agriculture. We need more training opportunities to be offered at times when farm labour is needed in the field during harvest and seeding.

We also see a huge opportunity to embrace those immigrating to Canada from Ukraine. SARM calls on the federal government to evaluate its process and the requirements for newcomers to get proper permits to enter the Canadian workforce. The government should focus on efficiency and reduce barriers so that we can welcome these Ukrainian immigrants into our province and into the workforce in a timely manner.

We also need the federal government to remedy the following issue. In March, the federal government placed a 35% tariff on fertilizer imported from Russia and Belarus amid the ongoing invasion of Ukraine. The tariff was intended to act as a sanction on Russia, as fertilizer is one of that country's biggest exports to Canada. However, suppliers are passing that cost on directly to farmers. We understand the need for sanctions, but a better solution would be a partnership with the Canadian government to get inputs arriving on time and providing tariff relief for farmers.

Agriculture has—

[The Chair, Liberal, Kody Blois]

Mr. Orb, I apologize. I gave you an extra 25 seconds or so. I don't mean to cut you off, but I also want to make sure we have time to get back around to questions. I'm sure you can elaborate on some of the points you were making, and my colleagues will be interested in engaging on them.

We're going to go to Mr. Jochum for up to five minutes, and then we'll go to questions.

[Gunter Jochum, President, Western Canadian Wheat Growers Association]

Thank you, Mr. Chair and committee members. I am grateful for the opportunity to appear before this committee.

My name is Gunter Jochum. I farm about 20 minutes west of Winnipeg, with my wife and daughter. I'm also president of the Western Canadian Wheat Growers Association.

We are a volunteer-based farm advocacy organization dedicated to developing ag policy solutions that strengthen the profitability and sustainability of farming and the ag industry. Our members grow grain, which ultimately will be turned into food. In times of supply chain disruption, war and economic instability, our goal of maximizing grain production for food is in the national interest and the international interest.

The COVID years were the biggest business challenge that I and farmers of my generation have ever faced, and the effects are lingering. Policies around COVID cost us workers and disrupted transportation. They have created food cost inflation the likes of which we have not seen in 40 years. That inflation is hurting low-income Canadians. The effects on low-income people globally will be disastrous.

However, we are farmers. We are used to challenges. In fact, we worry about and plan for worst-case scenarios every single year. Our goal is simple: produce more grain year after year in the most efficient way we can. The more grain we produce, the more grain gets turned into food and the lower the cost to consumers. It's very simple arithmetic.

The federal government's stated goal is to increase Canadian food exports by $75 billion a year by the year 2025. The Barton report also called for less regulation in the ag sector, and we support that.

Instead, the government has implemented policy actions, such as the carbon tax, that make our inputs more expensive. At the current rate, the tax is costing my farm about $40,000. However, the government wants to increase the tax, which would cost my farm a whopping $136,000 per year by 2030. This will jeopardize the viability and sustainability of my farm.

There is a proposed policy that would reduce greenhouse gas emissions from fertilizer by 30% by the year 2030—an ambitious goal indeed. The government has stated that it's a voluntary goal. However, they have also said that not meeting this target is not an option. Various scientists have stated that achieving this goal utilizing efficiency methods currently available to farmers will not be possible. At best, a 14% to 15% reduction may be possible. The other 15% to 16% will have to come from reduced fertilizer use.

Fertilizer, whether it's in manure or synthetic form, is the single biggest contributor to yield. Without it, or with less of it, Canadian farmers will end up growing less, exacerbating the sustainability of farms and reducing grain for food production, thus directly increasing food insecurity in Canada and around the world, most notably among people who can least afford it.

Canadian farmers are very efficient farmers. Fertilizer is one of our most expensive crop inputs. We don't use it carelessly; it's quite the opposite. We soil-test and work with agronomists to develop crop rotations, crop plans and maps to help us precisely place fertilizer to maximize yield per nutrients used.

Will the proposed emission cut reduce greenhouse gases? Maybe in Canada, but internationally, it will only work out to approximately 0.0028% of total greenhouse gases. Is this even worth it?

If we grow less, then other countries will try to make up our shortfall. Other countries, where farmers aren't burdened with carbon taxes or greenhouse gas emission targets, will use more fertilizer to increase their yield, because Canadian farmers won't be able to compete. In turn, those countries will produce more greenhouse gases.

You are here today to discuss supply chain issues, and those are very important. We know that. Our message is that the surest way to create supply chain issues is to hobble producers and the whole ag industry with bad policy.

Our message is simple: Let us do what we do best: grow safe, sustainable, high-quality grain that feeds people. Feed people with some of the most responsibly grown food in the world. If we flood the supply chain with abundant grain, inflation slows, and the poor will benefit most. Our message to you is to let us grow our grain as well as we can.

Thank you.

[The Chair, Liberal, Kody Blois]

Thank you, Mr. Jochum.

We're going to turn to questions. I believe it's Mr. Patzer who will lead for the Conservatives, for up to six minutes.

[Jeremy Patzer, Conservative, Cypress Hills—Grasslands, SK]

Thank you very much, Mr. Chair.

Thank you to all of the witnesses for coming today. It's certainly great to hear your thoughts; each of you provides a unique perspective.

I'm going to start with a basic question on the issue of rail transportation, and all three of you can answer it—or if one of you wants to answer it, it doesn't really matter.

Maybe, Mr. Jochum, you can start with it. As we're coming into winter, what concerns does your industry have with rail in this country?

[Gunter Jochum]

Our concerns are that rail transportation is at its limit. Both CN and CP have stated that in the past month they have transported as much grain as they have ever before, which is good to hear, but we saw what happened last year with any kind of weather disruption or strike action; as soon as this happens, we will be in a lot of trouble. Last year, the only reason we managed to get through the tough times was that we had a very poor crop. This year, we have an average or possibly above-average crop, and we cannot afford to have any kind of disruption. The government needs to work with railways to ensure that there's no work stoppage and that goods flow as smoothly as possible.

[Jeremy Patzer, Conservative, Cypress Hills—Grasslands, SK]

Mr. Orb, do you have anything you want to add to that?

[Raymond Orb]

Yes, thanks, Mr. Patzer.

I would also like to add that last week SARM was in Ottawa, and we met with the Minister of Transport, Mr. Alghabra, and relayed our concerns. We met very recently with both CP and CN rail and they showed us their plans for winter movement and for the rest of the crop year. We're always concerned about issues. Some of the things we've already talked about, but one thing we brought to the minister's concern was that we're asking the federal government to make rail service, particularly in the grain and oilseed industry, an essential service, because we feel that farmers shouldn't carry the burden when there are labour strikes and things like that, poor weather, all those things. Rail needs to be given a higher priority.

One more concern we have is that we know there is an issue with loading ships in the port of Vancouver when it rains, and everyone knows it rains quite often at the port of Vancouver. They need to have covers at the loading facilities to be able to load the ships 24-7, seven days a week. That's one of our major problems, that the grain is not moving through that port as well as it should be.

[Jeremy Patzer, Conservative, Cypress Hills—Grasslands, SK]

Thank you very much.

When we talk about the issues for farmers, we were talking about the tariff relief, for example. That's a cost that gets passed down to the producer. It's the same with the carbon tax; it's a cost that gets passed down to the producer.

I'm wondering, Mr. Orb, if you want to finish your statement on the tariff relief on fertilizer. Fertilizer is a very important aspect of farming, so if you want, you can spend 30 seconds to a minute finishing that statement quickly.

[Raymond Orb]

Yes, absolutely, it was to ask the federal government not only to reconsider the tariff itself, but also to help with supply chain issues. A lot of our fertilizer—especially nitrogen—is manufactured in this country, but a lot of it does come in from offshore, so we need perhaps more funding or more interest paid by the federal government. We need to realize that natural gas is a natural resource that we have here and we don't need carbon taxes on top of those products we have available in our country.

The last point I wanted to make was that rail is an essential service.

[Jeremy Patzer, Conservative, Cypress Hills—Grasslands, SK]

Mr. Jochum, would it be fair to say that your carbon tax rebate does not match how much you pay in carbon taxes?

[Gunter Jochum]

Absolutely. This year, the carbon tax alone will add about $40,000 to my farm. My farm is a very viable family farm. There's no off-farm income to supplement us, and this will really hurt. As it increases up to the year 2030, it will put my farm's sustainability in question. The carbon tax is an unfair tax, and I would say a tax on basic food production is wrong on every level.

[Jeremy Patzer, Conservative, Cypress Hills—Grasslands, SK]

Thank you.

I have only about 30 seconds left here.

I was on a previous study on biofuels. We were told that they could increase yield production, so they could get more tonnage without adding more land usage. However, now, as we're hearing about the potential for fertilizer usage being reduced, is that even possible to do?

[Gunter Jochum]

I doubt it. Farmers are very efficient as it is.

This year, we had a tremendous year. The biggest contributor to yield is, of course, rain and fertilizer.

[The Chair, Liberal, Kody Blois]

I'm sorry, Mr. Jochum. We're going to have to leave it at that, but Mr. Drouin is going to pick up a line of questioning. I know we'll have another opportunity.

Mr. Drouin, go ahead.

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

Thank you, Mr. Chair.

I want to thank all the witnesses who are here before us virtually.

My questioning will start with Mr. Jochum.

I disagree with a couple of statements, but you've made them and I respect them.

With regard to fertilizer, are you aware that the 4R research network has done a study saying that if western Canada adopted 4R everywhere across Canada, we could get to between 50% and 75% of our goal without impeding yields?

[Gunter Jochum]

I have not heard of that study.

However, others have studied it. I forget if it was Mario Tenuta out of U of M who said that with just the 4R fertilizer efficiency, we cannot gain the 30% emission reduction.

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

Scientists have been there. The study I'm quoting is just about implementing 4R in western Canada, not even including Ontario or the rest of Canada. We could get anywhere between 50%.... Fertilizer Canada has reconfirmed that just a few months ago. They said that's a conservative figure because 4R research has come up with anywhere between 50% to 75%, which would bring us to 22.5% at the top, or 50%.

I'm just trying to lay some facts on the ground. I know there's been a lot of misinformation with regard to what's been happening in Holland, which is not what we're trying to do. Neither the minister, nor I have ever said we would implement that 30% emissions reduction through regulations. We said we would do that through incentives.

You've said that we would do that through regulations. I'm just curious to find out where you have been hearing that. That's the first time I've heard that.

[Gunter Jochum]

All I heard was that, yes, the minister has said that it is a voluntary goal. At the same time, I have also heard the minister say that not achieving a 30% reduction in emissions is not an option.

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

Can you provide this committee with that quote you heard from the minister, please? It's just that I have never heard the minister say that. I'm really close with her. I've been working with that office for seven years. Whether it was the previous minister or the new minister, I have never heard the minister say that before. I'm curious to find out where you've heard this and who's telling you this because I think that's misinformation to this committee.

If you've heard the minister say this, I would correct you and say the minister has said publicly and consistently that this is a voluntary goal. Our intention is to provide incentives and not to provide any regulations on that matter.

I am happy to have this debate, but it has to happen on facts.

[Gunter Jochum]

Agreed.

I have heard it from a third party. I have not heard the minister herself say that. I have heard it from a journalist who asked the government what happens if we cannot reach 30% reduction. The minister or her office apparently had replied that it's not an option.

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

I'm just here to say that farmers have been doing a great job. Some of them are way ahead of the technology. They are way ahead and they are doing a great job.

We've also provided $17.5 million to the Canola Council of Canada to help more farmers implement some of those practices that a lot of farmers are already doing. We're just trying to get this widespread use through incentives. That's the way we're trying to get this done.

I'm not here to fight with you. I agree that farmers are doing an extremely great job. Whoever is doing the amazing job that they are already doing, we're trying to get those practices to be adopted on a wider spread.

Am I on time?