Agriculture Committee on Feb. 15th, 2024

[Alistair MacGregor, NDP, Cowichan—Malahat—Langford, BC]

Thank you very much for that.

Mr. Lemaire, I'd like to turn to you.

You and I have had conversations about plastics. I think it's very important in this conversation to also put in the perspective of the coastal communities. I live on Vancouver Island and, of course, we deal with the very real problem of microplastics, the bioaccumulation in the food chain. It's pretty sure knowledge that every time I go fishing off the coast of Vancouver Island, I'm probably ingesting salmon that has some component of microplastics because of that bioaccumulation.

I understand very well and I'm very sympathetic to the plight that you find yourself in with these new regulations, but I really want to delve a little bit further into your exchange with Mr. MacDonald.

You were just about to start on the circular economy. Can you offer this committee any suggestions on how the federal government can maybe partner a little bit more with industry to start realizing that circular economy?

The problem I hear from constituents and even from people who are involved in the waste chain is that when it comes to sorting plastics, if there's too much confusion, most of it will just go into the garbage stream. What can be done to ensure that those plastics are in fact being reused and are not ending up in the waste stream?

[Ron Lemaire]

Thank you, Mr. MacGregor.

This is the complexity of the issue. We need a strategic approach federally that brings together the provinces, harmonizes our EPR systems, and educates Canadians. That's the simple answer.

When we look at the proposed regulatory approach and the P2 notice, we see that it is actually removing the ability to handle compostables and biodegradable plastic materials. We have members who have invested in new technologies that have a totally biodegradable material that do not leave any microplastics in the environment. It's quite costly, but the industry is invested.

This is where we look at a combination. There's no silver bullet. We need to look at how we build the infrastructure and then federally enable and support provinces and municipalities. The Federation of Canadian Municipalities needs to be engaged effectively to ensure municipalities that are very fragmented are enabled and supported and that the right funding mechanisms are put in place to bring the system together.

We also need to create an economic engine. We need to enable the value of these materials in the system.

[Alistair MacGregor, NDP, Cowichan—Malahat—Langford, BC]

Thank you.

I'll leave it there, Mr. Chair.

[The Chair, Liberal, Kody Blois]

Thank you very much, Mr. MacGregor.

We'll now turn to Mr. Barlow for up to five minutes.

[John Barlow, Conservative, Foothills, AB]

Thanks, Mr. Chair.

Before I go to some of our other witnesses, I want to go back to Mr. Lemaire.

I think it's important that we really highlight this number. I want to make sure I have this right. You said that if the current government goes ahead with the P2 plastics ban, the increase in food costs will be 34%. Is that right?

[Ron Lemaire]

That's correct.

[John Barlow, Conservative, Foothills, AB]

We will also see an increase of 50% in food waste.

Are that 34% number and the food waste number things you came up with, or are they specifically from that Deloitte report?

[Ron Lemaire]

They're from the Deloitte report. There are a series of reports that are publicly available on our website. I'm happy to have our staff forward them all. I think they have been provided to the committee, but I'm happy to have them sent to the committee again.

[John Barlow, Conservative, Foothills, AB]

Can you make sure that the Deloitte report is tabled with this committee as part of that?

[Ron Lemaire]

I can.

[John Barlow, Conservative, Foothills, AB]

Thank you.

Obviously, we're also debating Bill C-234 in the House of Commons. There is a Senate amendment as part of that bill that removes the heating and cooling of barns from the exemption, as well as greenhouses.

What impact will that amendment on Bill C-234 have on the fruit and vegetable industry when you're talking about 44% of your members selling at a loss?

[Ron Lemaire]

This is a dramatic shift. We need to look at the targeted and time-limited carbon tax exemption for the agriculture industry.

For greenhouses specifically, right now the sector estimates that the carbon tax costs about $22 million annually. If we move forward, that's going to rise to between $82 million and $100 million by 2030. When we talk about food costs, this tax is putting them through the roof.

In many ways, when you look at all of the carbon sequestration that happens, also in the greenhouse, and some of the new technologies that are being pushed through, there's an amazing push to work toward carbon neutrality. However, we're not there yet, and we need time, which is the key to a limited carbon tax exemption that will enable us to be functional.

[John Barlow, Conservative, Foothills, AB]

Thanks, Mr. Lemaire.

Mr. Spurr, you said you need help now to get through what could be another tough season. We're feeling the same in western Canada, with not much of a snowpack and with water always being an issue.

Bill C-234 would exempt the carbon tax from farms on natural gas and propane, specifically greenhouses, and for you in produce, exempt heating and drying of product in barns. It would immediately remove the carbon tax for you.

Would it be a benefit to you in your production, and to your colleagues in Nova Scotia, to remove that carbon tax from your bills?

[William Spurr]

Yes. Anything that gets put on us that we have to add extra cost to is just going to add to our bottom line. Being exempt from it would be beneficial, but it's one thing.... There's a lot more that's accumulating, like the pesticides, the fertilizer and the labour. It just adds to it.

[John Barlow, Conservative, Foothills, AB]

Right.

[William Spurr]

The carbon tax is.... It would be nice if we didn't have to pay that, or not get exempt.... If we had to pay it, and then we could take that money and invest it into being sustainable....

[John Barlow, Conservative, Foothills, AB]

Right.

Just to be clear, that carbon tax is not only on your natural gas and propane, but when you're buying fertilizer, it's on that fertilizer, and when you're paying for your diesel and transportation, it's also on that diesel. Removing that cost would provide you assistance and financial relief right now, which could happen.

Mr. Larrass, you mentioned that 44% of your members are selling at a loss. How important is that carbon tax exemption on greenhouses specifically, for fruit and vegetable producers?

[Stefan Larrass]

Thank you for that question.

It would be tremendously important to have the exemption that was originally in place be reinstated before the modifications to the bill are made. A full exemption on inputs like natural gas for heating purposes would be the equivalent of tens of millions in financial relief. It would be tremendously impactful. It is urgently needed.

I just want to reiterate the point that from a consumer's perspective, ideally, the greenhouse operations would take on that cost themselves, but can we really expect growers to volunteer to take on that cost? Some of that cost is going to be passed on, so if we're talking about tens of millions in the financial equivalent of that carbon tax on greenhouse operations, tens of millions will make their way into the food price that Canadians are paying.

It's impactful not just to our members but ultimately to consumers as well. If the carbon tax could be removed from the operation costs for greenhouses, growers and consumers would benefit significantly.

[The Chair, Liberal, Kody Blois]

We're at time, Mr. Barlow. Thank you, Mr. Larrass.

We'll turn to Mr. Louis. I think you and Ms. Taylor Roy are going to split your five minutes.

Go ahead. It's over to you.

[Tim Louis, Liberal, Kitchener—Conestoga, ON]

Thank you, Chair. Yes, I'll be splitting my time with Ms. Taylor Roy.

Thank you to everyone for being here.

I would start with Mr. Lemaire from the Canadian Produce Marketing Association.

You mentioned off the top that fresh produce consumption is declining and that we should be having fruits and vegetables on half of our plates. You also mentioned a national school food program and how that can help if the federal government's working in partnership with provinces and territories.

You mentioned it a bit, but can you expand on how that would improve children's health, lower families' grocery bills and also support our local farmers, like Mr. Spurr mentioned?

[Ron Lemaire]

I think the integrated approach is key here. The challenges are the federal-provincial jurisdictional issues that were noted by the chair, but we can surpass those challenges.

I think the federal government can take a lead here. There has been a lot of good work, and modelling has already been proposed for a school food program that works with key NGOs across the country and effective delivery systems. OFVGA and Stefan's team already run a program in northern Ontario that is very effective and very targeted.

How do we support existing programs in the market and expand those so they are sustainable and delivering to those Canadians who need support? It means some dollars. It needs federal coordination and enablement of the province and municipal framework from the school breakfast programs in B.C. to the programs in Nova Scotia, Ontario and even in the far north.

[Tim Louis, Liberal, Kitchener—Conestoga, ON]

Thank you, I appreciate that. I believe that is absolutely going to help our farmers locally, help the children and keep costs of groceries down.

With that, I'm about halfway through.

Go ahead, Ms. Taylor Roy.

[Leah Taylor Roy, Liberal, Aurora—Oak Ridges—Richmond Hill, ON]

Thank you very much. Thanks for sharing your time.

Thank you to all the witnesses for being here.

It's an incredibly important conversation, because I think confronting the challenges of climate change and pollution while supporting our farmers is what's needed. I was very encouraged by the conversation Mr. MacGregor had about how we can provide solutions. Leaving things the way they are is not a solution.

One thing I like to say is that often, when some of the members talk about the costs of these programs, they don't talk about the cost of doing nothing.

You were talking, Mr. Spurr, about the increasing climate events you and many farmers are facing. We know that with plastic production, not only are these microplastics getting into our environment, but they affect groundwater, food chains and supply chains, and they are having a huge impact on human health. We never look at the costs that are incurred from that; we only see the one side of it.

You said that the quality and the environmental standards are very important to you.

I spoke with two members from your organization yesterday, Dave and Aaron. We were talking about the greenhouses in particular. One thing they were talking about was how the carbon is captured in the greenhouses to be used for growing the plants. I thought that was really encouraging.

Is that one thing we can look at in terms of continuing to have a price on pollution to help us reduce greenhouse gases, but at the same time rewarding farmers for what they are doing to help with environmental goals?

Mr. Larrass, I'd ask you that first.

[Stefan Larrass]

Thank you for the question.

I understand the goal of creating incentives to stop, as you mentioned. The cost of doing nothing is that bad behaviour could continue if the incentives aren't there. As a parent, I will say I believe in incentives.

I think the main message I want to leave you with is about a true partnership. In the European model, there is significantly higher support. If you look at it on a dollar-for-dollar basis, you see that it's.... I said it's twice, but it's actually more than twice for our sector, which is not supply managed. It's significantly higher. It's a true partnership, rather than the idea that “you need to do better”. We know we can do better, but where's that partnership? I think that's where I welcome the dialogue.

As for greenhouses and the recirculation of carbon, it's a great example of how innovation and technology can help solve the problem. Rather than just exhausting that furnace exhaust outward, we bring it back in to the plants. We're getting much closer to carbon neutrality through that kind of technology. Technology can get us a long way.

I don't know if that answers your question.

[Leah Taylor Roy, Liberal, Aurora—Oak Ridges—Richmond Hill, ON]

It does. I think it's one really good example.

I think the other thing is that often these estimates are based on people not reacting to the price signals. It's kind of the status quo, and let's look at what would happen if the price was put on, and people don't....

As you say, there are a lot of innovative, creative solutions that we can come up with by co-operating. Perhaps compensating farmers for the contributions they're making to offset or to sequester carbon is one of those ways. I appreciate that.

I think I'm at time. I was going to ask Mr. Spurr for his comments on it, but that's okay.