Environment Committee on Dec. 4th, 2018

[Brian Innes]

I'll build on what Ron said with respect to research.

Research in agriculture has been an investment of the federal government for more than 100 years, since the country was founded. The reason we invest public money in agricultural research is that once we produce a result, it's really hard for any particular entity to capture the benefit of that. The benefits are spread to farmers all across the country, and indeed, farmers all around the world if they're farming in similar conditions.

Public investment in agricultural research around agronomic practices, things you can't capture the benefit from as a private enterprise, are really fundamental for helping our sector move forward to adopt best management practices, to understand what those best practices are in a changing world and in an environment where we're trying to reduce greenhouse gas emissions.

From our sector's point of view, I outlined some of the research we're funding. Our members contribute voluntarily. The canola growers contribute voluntarily to fund research. Some of that is matched by federal government funds. We haven't seen an increase in funding for the types of agricultural research that I'm referencing where we can see real benefits spread across the sector that can have real impacts on mitigating climate change and reducing emissions.

We are very fortunate to be able to have funding that encourages growers and industry to invest, but we're not seeing those funds increase over time at the same time as we're growing our economic footprint and really conscious that agriculture has a lot of land across Canada and can have a real impact to mitigate emissions from Canada.

[William Amos, Liberal, Pontiac, QC]

Thank you.

Mr. White.

[Rick White]

On the capital cost allowance, yes, that will spur innovation and investment in innovation. I can only speak from the farm level. That would be very helpful to get farmers in a place where they can afford this innovation, which turns over pretty quickly.

Our success to date has relied on innovation in biology, innovation in chemistry such as chemical protection products, engineering, machinery and information technology such as computers, robotics, big data, mapping, drones, satellites and high-speed Internet everywhere in the rural areas.

In terms of those tools, if we can continue to innovate and encourage and make it affordable for farmers to implement, we will continue seeing these results.

[William Amos, Liberal, Pontiac, QC]

Mr. White, I appreciate those comments. I'll address each of your comments and invite your further thoughts.

At around page 57 of the fall economic statement, it goes specifically to data collection systems, computers, and buildings. The tax writeoffs that will be available in year one across the board for a number of those items that you've just mentioned, including fibre optic cable, will represent significant savings for our farmers.

I represent a very rural region in western Quebec. I have some canola farmers, not many but some. I truly believe what we're doing is enabling those who want to be the leaders, who want to innovate, so I'm really keen to hear more about what the most climate-forward, innovative canola farmers will be looking to invest in to take advantage of these measures. I leave that question open to you.

On research, I couldn't agree more. Our government, if anything, has been playing catch-up, effectively, in terms of investing, after 10 years of cutbacks in climate research. There are a lot of aspects of climate research that require investment. I agree that more partnerships are needed, although there are significant partnerships already enabled through the pan-Canadian framework.

Chair, I see you and I'll finish with this: It would be helpful to our committee if we went back to the Government of Canada and sought information specifically on the agriculture and climate research investments that have been made and how those compare to the decade prior.

[The Chair]

Great. Thank you.

Now we'll go to Mr. Warawa for six minutes.

[Mark Warawa]

Thank you.

I appreciate the witnesses being here.

Mr. Bonnett, you touched briefly on preserving farmland, wetlands and forest stands. There would be some type of incentive per acre, annual payments from a governing body to encourage that.

When the land is left and there are trees growing, the land is protected. It stays healthier and more diverse. I'm thinking of our boreal forest. I think you're recommending the same thing, the same principle, for Canada's boreal forest, which is the largest carbon sink in the world, that as part of international agreements there should be some type of credit for Canada's boreal forest. Would you agree?

[Ron Bonnett]

Yes, we'd agree that there should be some kind of a credit for that. What you could take a look at on the agricultural side, I think, is that wetlands and significant set-aside areas should be part of that as well. More and more, I think there's a recognition that it's that combination. It's interesting to see that you made that link between forestry and agriculture. I think sometimes we miss that link.

[Mark Warawa]

Yes.

Mr. White, you touched on how dramatically we have improved farming, particularly canola farming. You said that no-till was used for 7% of western Canada's farmland in 1991, and that has increased to 65% as of 2016. You now sequester 11 million tonnes of greenhouse gases.

On the Paris Agreement, which unfortunately we're not going to meet—the government has admitted that the 2020 and 2030 targets won't be met—hasn't your industry, the canola industry, had a reduction of over 20% or 30% from 2005 targets? I think the answer is yes, but have you calculated what kind of reduction you've had in GHGs since the 2005 level?

[Rick White]

I don't have those numbers from 2005 at hand, but the numbers I gave earlier about our historical success were measured between 1981 and 2011. Those numbers are that, during that time, the energy used to produce canola dropped by 43% and the land use efficiency improved by 25%.

We're going to 40% going forward, but as of 2011 we had increased land efficiencies by 25%. During that same time, we saw a 71% decrease in greenhouse gas emissions in growing the crop.

I don't have the numbers lined up for that particular benchmark that you're talking about, but those are from the time period of 1981 to 2011.

[Mark Warawa]

You've had dramatic increases.

I was talking to the airline industry two weeks ago. They said that they are at a 50% reduction, I think, compared to 2005. Their argument is why are they paying the carbon tax when they've already reached that target and then some. They would like to be exempt.

In your presentation, Mr. White, you touched on taxes. You said, “Farmers would rather be incentivized to help the government achieve its climate change goals rather than be taxed.” Which tax are you referring to?

[Rick White]

I'm referring to the carbon tax. My point is that we've done all this without intervention, incentives or being taxed by government to do the behaviour. This is the economics of growing crops. There's no money in emitting carbon. There's a natural economics at play there to drive our cropping in this direction.

I'm just speaking quite frankly from farmers.... There are two ways of getting at incenting behaviour. Right now, our track record is good. Our future looks bright. You can use a tax or you can use incentives. You can use either the carrot which are incentives, or the stick which is the tax.

At the end of the day, we're looking at what behaviour needs to be changed here. With regard to the carbon tax, what we're saying is that it can work, but if it's implemented, what we really have to watch for is to make sure that our farmers are not rendered uncompetitive in the international market.

Can it be done? Probably by smarter people than me, but at the same time, we need to make sure that our growers are not taxed, because there are no other carbon taxes in the world in which we compete. Our first and foremost ask is to make sure that whatever happens going forward on climate change farmers are not rendered uncompetitive in the global market, because 90% of what we grow is exported.

[Mark Warawa]

I have how long, Chair?

[The Chair]

You have about 30 seconds.

[Mark Warawa]

I'm sorry that the government is hitting you with the stick when you've already achieved the goal.

Mr. Innes, you've said that you don't want to move elsewhere. Industry is moving elsewhere. What would be the cause for farmers to be considering moving out of Canada?

[Brian Innes]

In my remarks, I was referring to our processing plants. In the canola industry, we have 14 processing plants across the country. For those processing plants to continue to be in Canada, they need to be competitive. Otherwise, the processing plants to turn canola seed into oil and meal will be built elsewhere, in places such as China, India, Pakistan or the United Arab Emirates.

When we think about encouraging value-added processing in Canada, what I was referring to is that our processing facilities need to have a competitive environment. If I could, Mr. Chair, I'll just briefly come back to the comment about the capital cost allowance. That is a major positive thing for our sector to encourage investment in that value-added processing that makes us competitive with the U.S., which has been a problem. When we think about measures to help our sector be competitive, the capital cost allowance is one that is very helpful for value-added processing.

[The Chair]

Thank you.

Now we're going to Mr. Fisher.

[Darren Fisher, Liberal, Dartmouth—Cole Harbour, NS]

Thank you, Mr. Chair.

Thank you very much, gentlemen, for being here and for your expertise.

I want to congratulate the canola industry on its successes.

We often think about the climate as our generation's biggest concern, but too often we forget about the fact that it's potentially our biggest opportunity. You're seeing that, and that's great. Your goal is to decrease GHGs, use less fuel and increase production. You've shown that you've cut GHGs, increased your yield and increased your profits. It's astounding. I just saw on the Internet that there were 15 million tonnes for 2013 and there will be 26 million tonnes by 2026. I think I saw that on the Internet, or perhaps, Brian, you said it.

You were presented with a problem. You're providing the solution and you're reaping the economic benefits as far as your industry goes. I think that's fantastic.

I want to talk a bit about innovation. We talked about the fall economic statement and the government's funding of innovation. You've talked about some cool things like the no-till and the precision agriculture. What else is out there?

You've suggested, Brian, that with the fall economic statement, the capital cost allowance, you can innovate even more. Tell me more about some of the things you can do.

You could chime in as well, if you like, Rick.

[Brian Innes]

You're right. It's a really exciting world when it comes to what we can do with plants to make them be more productive and use nutrients more efficiently.

I'll give you an example. We've talked about using fertilizer most effectively. When we grow plants, we use nitrogen, which helps plants grow all of the green leaf and architecture required to make seeds that make oil and protein. When we look at nitrogen, traditionally we get that from nitrogen fertilizer. Some of the research is really exciting and would have a major impact on the amount of energy required to grow a crop. For example, instead of using that nitrogen, which is made in a factory, we would be using the bacteria around the root, the root microbiome, in order to take nitrogen from the air—which is about 78% of the air—and turn that into a form of nitrogen that the plant can use.

When we think about innovation, the plants and the technologies that we have in plant breeding and our ability to understand bacteria and how they can turn nitrogen from the air into nitrogen the plant can use, it's a really exciting time for plant agriculture. That's just one example.

[Rick White]

Yes, and maybe I can give you something completely different, because it excites me a little as a farmer as well. I'm very intrigued about the future of robotics and autonomous machinery, which are already out there to some degree.

For example, for a sprayer—yes, we do need to use chemical control of weeds—I see the day when these robotics will be so precise that there will be a dose for each and every single weed across that field. It will get the exact product needed on that exact plant, instead of this kind of broadcasting approach that we take today.

We're moving in that direction of being much more precise. That could cut down on even more of the pesticides and herbicides we use, which are expensive. Farmers only use them as they need them. I can see the day when the sprayer goes over, takes a picture of the weed, identifies it and sprays it with exactly what it needs and nothing more.

[Darren Fisher, Liberal, Dartmouth—Cole Harbour, NS]

Canola is a Canadian success story. Ninety per cent of the world's supply comes from Canada. You've gone from 15 million in 2013 and you're going to go to 26 million in 2026. How high can you go? How much more canola can we produce for the world market out of Canada? Does this become one of the biggest industries in Canada?

[Brian Innes]

I'll start, and Rick, if you want to, you can add to it.

When we set our targets, we're looking at how much we can grow with the technology we have and with the land that we have in Canada. Our targets to 2025 take into account that it's not feasible for us to put more land into canola production. We have to increase productivity on every acre. The target we've set is 52 bushels. How high can we go? Right now, we know that we could produce 100 bushels per acre, not just 52 which is our target, but 100 bushels per acre under the right conditions.

I referenced the research we're sponsoring right now that shows how we can quadruple the number of seeds that are produced by a plant by just changing a starch-branching enzyme. We don't think that we're going to grow canola on more acres—

[A voice]

More per acre.

[Brian Innes]

—but as for the limit to how much we can grow, I think we're still discovering it. We really believe that we can achieve 52 bushels per acre by 2025, and in canola we're already Canada's number one source of income on the farm and a major source of export. We think there's a lot of room to grow through more innovation and moving that innovation from the science lab to the farmer's field.

[Darren Fisher, Liberal, Dartmouth—Cole Harbour, NS]

How prolific is canola in cosmetics, toothpastes, sunscreens and industrial lubricants? Is that just a small segment of the usage? Is that something in which you could see growth in the future?

[Brian Innes]

I'll speak briefly, and maybe you will want to add something, Rick.

Canola is one of the healthiest oils. We've been sending all of our canola oil either to the food market or to biodiesel. We haven't explored opportunities like that, primarily because it's a relatively new crop and we can sell everything we produce, either to food or biofuel. It's a very versatile and healthy oil for those markets, and as a consequence, we haven't had to explore other markets for it.