Evidence of meeting #42 for Agriculture and Agri-Food in the 45th Parliament, 1st session. (The original version is on Parliament’s site, as are the minutes.) The winning word was fertilizer.
A video is available from Parliament.
Liberal
Giovanna Mingarelli Liberal Prescott—Russell—Cumberland, ON
It's no problem at all. Thank you for your answers.
Your work emphasizes distribution. What vulnerabilities exist in regional food distribution networks like in eastern Ontario?
Director and Professor, Dalhousie University, Agri-Food Analytics Lab
If the question is posed to me, I would say distances. The reason that I thought that the investment in food hubs was critical was exactly to that point.
The Ontario Food Terminal is a good case study. We've actually studied the Ontario Food Terminal in terms of its capacity to bring food into this urban region supported by rural areas.
In rural areas—and frankly, this is the reality that we're facing in Atlantic Canada—it's very tough for farmers to do business and connect with cities without a functional architecture based on hubs. We don't have that, necessarily. We have some hubs in the Maritimes, but they're not as efficient as they should be. When you do that, you increase wealth in regions supporting farmers even more.
Liberal
Giovanna Mingarelli Liberal Prescott—Russell—Cumberland, ON
Thank you so much.
This is the last question for both of you.
Does your research suggest that communities like ours are overly dependent on external supply chains, despite being surrounded by agriculture production?
Director and Professor, Dalhousie University, Agri-Food Analytics Lab
Supply management is very much a big part of the economy in your own riding, which I know a little about. Obviously, supply management has built an ecosystem that makes the agri-food sector in your riding less vulnerable to external factors than other ridings are, for example.
Liberal
Giovanna Mingarelli Liberal Prescott—Russell—Cumberland, ON
Thank you so much.
I'm now going to direct my questions to you, Mr. Harrison.
Eastern Ontario has a mix of smaller family farms and productive grain-land. Do policies designed at a national level sometimes miss the realities of the eastern Ontario region?
Chair of the Board, Grain Farmers of Ontario
It's not only eastern Ontario. Eastern Canada is unique. We work very collaboratively with our farmers across the country, but eastern Canada has unique differences. We service similar markets. We source our inputs from similar regions. We grow similar crops. Of course, we all work in a very densely populated part of the country. All those challenges contribute to a farmer's viability.
In eastern Ontario specifically, you'll hear us talking about fertilizer. We don't just service value-added processing sectors. We are also looked upon to feed the world. We do a lot of good work in supplying nations that need our farmers, through export facilities.
Particular to your question, a good agriculture policy is important to our farmers in eastern Canada and eastern Ontario.
Liberal
Giovanna Mingarelli Liberal Prescott—Russell—Cumberland, ON
Are there unique soil, drainage or climate conditions in eastern Canada that should be reflected in federal agriculture programs but that we don't know about yet?
Chair of the Board, Grain Farmers of Ontario
It's important to recognize that eastern Ontario, certainly, has an abundance of water. Of course, the infrastructure has been put in over generations, whether it's highway, rail, pipeline or municipal infrastructure. All those things have affected farm drainage and soil topography.
You spoke about farm drainage, but I would use the term “improving farmland”. We've been improving our farmland as a nation since we got here. It has allowed us to achieve not only economies of scale but also efficiencies. It's also important to remember to be more environmentally conscious of the efficient use of our inputs. Improving farmland in eastern Ontario has been a practice we've been doing for a while, and we need it to continue.
Liberal
Bloc
Sébastien Lemire Bloc Abitibi—Témiscamingue, QC
Thank you, Mr. Chair.
Mr. Harrison, we met last week in my office. I very much enjoyed the meeting. You raised an interesting point about the inputs required for your production. Right now, given the global geopolitical situation, it's difficult to obtain the fertilizers you need. You mentioned that 35% to 40% of the increase in grain prices is due to rising nitrogen fertilizer prices.
Not to mention that part of your production is also devoted to food production—what do you think the solution would be?
I'd also like to ask you a follow-up question: Do the recent agreements give you hope that the prices of your inputs will stabilize somewhat?
Chair of the Board, Grain Farmers of Ontario
Thank you for your questions. I'll address the first question.
Number one, it's important to remember that grain farmers in eastern Canada and across this country are expected to be globally competitive. The prices we receive for our crops are derived in a global marketplace, so we need to be able to be competitive. In the same way, our inputs need to be sourced in a free and open marketplace. It's important to remember that the prices our commodities are sold for do not care what it costs a farmer to produce. That is the essence of it for non-supply managed farmers, who are required to be globally competitive.
On the fertilizer question, we need to be able to source fertilizer in a free and open marketplace. Supply at all costs is not a solution for our farmers. We have a competitive issue here in eastern Canada. We don't have enough competitors to do business with, as farmers. We need a competitive environment. We need to be able to source it from all regions of the world, which need to supply good-quality fertilizer. Remember, fertilizer from the Belarus-Russia region comes from a similar climate. When fertilizer sourced from other regions around the world with much warmer, more temperate climates is transitioned, that product comes into Canada and there's a significant difference. It leads to the degradation of the product, which also leads to a poor application process. It's important.
We don't need supply at all costs. We need affordable access to the supply. We need it in a timely manner so farmers can have confidence in the system. We need good-quality products so we can do what we do.
Bloc
Sébastien Lemire Bloc Abitibi—Témiscamingue, QC
One of the key factors to consider for all types of production—whether in forestry, mining, agriculture or other sectors—is to produce and process here locally in order to meet producers' needs. Would it be possible to produce some of the fertilizers you need for your operations right here?
As for potash, you import it from Morocco or elsewhere rather than elsewhere in Canada. Why isn't it possible to use Canadian fertilizers?
Chair of the Board, Grain Farmers of Ontario
I won't make the claim that we're a net exporter of fertilizer as a nation, because I think the truth is that we're pretty neck and neck either way, but the reality is that we are a global leader as far as potash production, potash mining and product exportation are concerned. Other nations look to Canada as a key producer of potash.
In eastern Canada, we have very little nitrogen production. It's a system that has depended, through our seaway, on other nations to import nitrogen.
To look at projects where we could produce our own nitrogen, that would be great, and it would be welcomed by farmers. However, the reality is that nitrogen production around the world is sourced from regions where natural gas is virtually free, almost as if it was a by-product. For us to be competitive in our regulatory environment, it would be a significant challenge and, for farmers, if we're expected to be a global competitor, we cannot pay a premium on that product. If we are to go down that route, it will make BRM programs and BRM funding and mechanics to help farmers manage risk all the more important.
Bloc
Sébastien Lemire Bloc Abitibi—Témiscamingue, QC
In my region and in many of the regions you cover, it's the same story: Transportation costs are a major obstacle. A shipment of grain can cost around $3,500 in my region, whereas it costs around $700 in a region closer to major urban centres.
How can we help reduce these transportation costs in order to support producers in remote areas? Do you think the government can lend a hand to reduce transportation costs?
Chair of the Board, Grain Farmers of Ontario
I don't have a solution to that, but I have heard the claim that potash can be moved out to the port of Vancouver on a Panama vessel around the Panama Canal and service the European Union for less money than putting it on a railcar and bringing it to eastern Canada.
I asked that question at the H2O conference in December, and that statement was reaffirmed. It is really sad when nations around the world look to Canada as a potash supplier and eastern Canada is paying a premium for that product because of transportation costs.
I'm sorry; I do not have a solution to that, but that is definitely a problem we need to address to help our eastern Canadian producers.
Bloc
Sébastien Lemire Bloc Abitibi—Témiscamingue, QC
I have one last question.
You briefly mentioned in your opening remarks the importance of giving the provinces flexibility to adapt their risk management programs to their jurisdictions. What positive impact could this have on grain producers in your region?
Chair of the Board, Grain Farmers of Ontario
AgriStability has been a program that has been promoted by the government for farmers to utilize as a risk management tool. The reality is that it works for some sectors, and it doesn't work for others. If anyone wants to question the value of that program, one only needs to look at the dismal rate of participation.
That being said, there are differences in provinces across this nation, geographic needs that business risk management has to address. In order for all provinces to get on board with this, we need to have a program that will address those differences.
Conservative
Dave Epp Conservative Chatham-Kent—Leamington, ON
Thank you, Mr. Chair.
I'm going to stay on the theme of fertilizer and its importance. The following is a quote:
While many of the most pressing and daunting Black Swan events of the last few years have subsided and helped fertilizer values to correct, there remain substantial issues that continue to threaten global fertilizer supplies today. It is not out of line to forecast a future where fertilizer production/inventories are impacted severely enough that global food supplies are threatened.
That quote is from a StoneX report, which the Grain Farmers of Ontario commissioned, and it is more than timely. It was done in August 2024, before the Strait of Hormuz, and here we are today.
My question for you, Mr. Harrison, is this. What has been announced since 2024, as you mentioned in your previous responses to my colleague from the Bloc, to secure Canada's fertilizer supplies? We have an abundance of potash, but we can't get it to eastern Canada economically. From a nitrogen perspective, how many dollars have been put into nitrogen production in eastern Canada? We have the natural gas. Can you respond to that?
Let me go to phosphorus for a second, and I'll give you the rest of the time.
Norway has found abundant supplies of phosphorus. It's a northern country where we can source phosphorus. What has been done with our relationship with Norway to have that become a more reliable supplier than even perhaps Florida or the other areas that you have outlined?
Go ahead, Mr. Harrison, please.
Chair of the Board, Grain Farmers of Ontario
I know of no dollars that have been attributed to projects to develop or increase nitrogen production. I know there have been ideas lofted and thoughts of the good thing that could go forward in that direction, but I know of no dollars that have been attributed to that.
As far as phosphorus is concerned, yes, it is an important product—you know as well as I do—for the starter fertilizers that we use for growing the soft red winter wheat that we grow here in Ontario so abundantly and in such top quality that other nations look upon us to supply it. Phosphorus, though, really comes from only a few places in the world, and it has been on an upward trajectory for many years.
With phosphorus in particular, we saw the perfect example of how tariffs are just a bad idea that penalizes our farmers, because the United States put some protectionist policy tariffs in place to protect some of their own producers in the United States. In turn, we were paying a tariff on a tariff when we brought phosphorus in.
I can't speak enough about how retaliatory tariffs hurt our farmers, penalize our farmers and, ultimately, jeopardize our family farms.
Liberal
The Chair Liberal Michael Coteau
Thank you.
Next, we'll go to Mr. MacDonald for two and a half minutes.
Liberal
Kent MacDonald Liberal Cardigan, PE
You've taken half my time.
Thank you, Mr. Chair.
I'll ask a question first of Mr. Harrison about fertilizer. I'm not rebutting what's been said. I'm just telling you I'm from Atlantic Canada, and I think in Canada, we have to develop a strategy and a plan going forward to be more self-reliant on fertilizer supply.
The federal government is involved in Saskatchewan in urea production. There will be some interesting things coming out of those talks. Canadian Phosphate is mining in British Columbia. Obviously, for Ontario, Quebec and eastern Canada, that's not going to align for us. However, the development of the Churchill port could help us with the potash issue. Obviously, all fertilizer companies bring in their supplies and store them in the early fall. It would give us stability in some prices.
I don't want to get into the sensitivity around the embargo on Russian fertilizer. I think the federal government has been quite clear that we're not supporting anything Russian while the war is going on in Ukraine.
I'll get your comments on the port development in Churchill that would bring potash east.
Chair of the Board, Grain Farmers of Ontario
I'll address the first question. I want to make it perfectly clear that we, at the Grain Farmers of Ontario—and I think I can speak for eastern Canadian farmers—once again, aren't looking to promote business with Russia. What we are asking is for this government and all decision-makers to support Canadian family farms. We're all trying to work together to address food affordability, food sovereignty and food security, and family farms are part of that answer.
That being said, we welcome any ideas. We want to work constructively with the government and all decision-makers to solve this problem. We're not looking to politicize this issue. We want solutions for farmers, agriculture and, ultimately, our citizens. We would welcome sitting down and talking about any ideas to move fertilizer more efficiently from parts of this nation into eastern Canada to solve this problem or to bring in fertilizer from other parts of the world so that our farmers can be productive and competitive.