Environment Committee on June 14th, 2016

[Jim Eglinski, Conservative, Yellowhead, AB]

Thank you, Madam Chair, and thank you to all the witnesses for coming.

Listening to Mr. Jessop, and then KPD, I was quite interested that you both mentioned the difficulty of getting some of the changes recognized here in Canada. Mr. Bush, you summarized something very interesting to me—or maybe it was Mr. Doyle. I'm sorry. Your firm had to go outside of Canada to develop your technology and prove it.

I am running into the same thing in my riding of Yellowhead, where there is a group of companies that have formed technology in reclamation of soil and cannot get any interest in Canada, provincially or federally. They have the technology, and it is proven technology, but they had to take it to the United States. The equipment is sitting there in the United States, yet in Canada it is very difficult.

I will probably ask Mr. Jessop if he would give us the perspective from his side, but Mr. Doyle first, can you tell me where you see the problem here in Canada? Why with technology that is going to make things greener do we have to take it outside of the country? What can we do as a committee, or make recommendations on, to make it simpler for Canadian firms and scientists to develop this technology and make it more beneficial to the country?

[Kerry Doyle]

KPD is a for-profit company. To generate profit, we have to go to clients who have an economic driver to implement our technology. The reality is—and I am going to direct this to the dairy industry in Canada with supply management—it is a very unlevel playing field for producers, if you compare them to the United States in terms of what they get paid for their milk. They have to look at other opportunities or resources that come from their biodigester, which is a cow. It takes a feed input and creates all kinds of resources. Most of it goes through the animal unutilized and comes out in the form of manure. They look at that underutilized resource and say, “How can we make value of that?”

They also have a much more stringent regulation process. They are required to have and implement nutrient management plans to be able to operate a dairy. They have to collect data that relates to implementing and operating those plans. They have to fall within specific guidelines, and they have a huge regulatory body that watches them on a daily basis. That is not so for the Canadian dairy industry.

[Jim Eglinski, Conservative, Yellowhead, AB]

Go ahead, Mr. Bush.

[Chris Bush]

There's an interesting point in our journey with the digester. In British Columbia, we have rules that are the same for everyone, but the typical farm doesn't really face any scrutiny. With us putting in an anaerobic digester, we had the light shining on every bit. We had to account for everything that came in and everything that went out. No farm wanted to be a part of that, because suddenly any discrepancies, any challenges, anything at all that might be going on would be exposed. That was a tremendous challenge also, where everyone is exposed equally there. Everyone here has enjoyed quite a lot of autonomy or privacy, I guess, in what they are doing.

[Jim Eglinski, Conservative, Yellowhead, AB]

You are dealing with the two countries—and then I will go to Mr. Jessop quickly—how do you find the difference in the regulatory controls in the process?

[Kerry Doyle]

The regulatory controls are much more significant in the United States than they are in Canada, absolutely. A spill in Canada will maybe get a slap on the wrist. A spill in the United States will put the producer in jail.

[Jim Eglinski, Conservative, Yellowhead, AB]

Mr. Jessop, can you give me a little concept of what the difficulties are that you're seeing, sir?

[Dr. Philip Jessop]

Yes. As a professor and also as an owner of a couple of start-up companies, I've found the same problem, that it's often actually easier to go to the U.S. than to stay in Canada to get further development. There are a number of reasons for that. There are more investors in the U.S. Sometimes there are relevant companies that could license the.... For instance, I have a new paint. There are more paint companies in the U.S. There are very few paint companies in Canada and they are not major players.

What can we do to fix that? In order to encourage the R and D and further piloting and all that to happen in Canada, there are things you can do, such as SR and ED credits or matching for development funds in Canada to try and encourage that to happen. There's also the soft stick approach that was taken in Ontario that could be spread across Canada, where you tell companies that you don't have to phase out toxic chemicals; you can just make a plan about how they could, in theory, be phased out. That encourages a lot of companies to actually do the phasing out, even though they weren't required to do so by legislation. That kind of prodding actually helps companies to meet more green-style challenges in Canada.

[Jim Eglinski, Conservative, Yellowhead, AB]

How am I doing for time?

[The Chair, Liberal, Deb Schulte]

You have 20 seconds.

[Jim Eglinski, Conservative, Yellowhead, AB]

Oh well.

[The Chair, Liberal, Deb Schulte]

We'll use that for something else.

I should introduce two other MPs who are with us today, Vance Badawey and Michel Picard. Thanks for joining us today.

Mr. Amos.

[William Amos, Liberal, Pontiac, QC]

Thank you. My first line of questioning goes to Mr. Burt.

Dow doesn't take issue with the precautionary principle as a foundation of CEPA 1999 does it? It's accepted, and would you agree it's appropriate?

[Michael Burt]

In certain circumstances, yes.

[William Amos, Liberal, Pontiac, QC]

Okay. There are individuals who would bring into question the credibility of Dow to articulate a public interest perspective on chemicals management in Canada, on the basis of past actions that Dow has taken. I'll cite one example, a NAFTA chapter 11 arbitration that was brought by Dow AgroSciences against the Government of Quebec which sought, back in the day—this was about eight years ago—to ensure that cosmetic pesticides couldn't be used and distributed in the province. I happened to be counsel for intervenors in that matter. It ultimately settled and Dow backed off. That's a specific substantiation of a chemicals management issue where quite clearly it was running against what the government of day in Quebec thought was in the public interest.

How do you think Dow's credibility is affected by actions taken, such as those, by one of its affiliated entities?

[Michael Burt]

Well, I don't believe our credibility is affected. As a large multinational we continually have fronts with other competitors, with other governments in other jurisdictions as to what we believe is a good product, a good science. I think the process we have going forward works fairly well. If we have an issue, we'll bring it up. It will go to a tribunal. A decision will be made and we will honour the decision.

[William Amos, Liberal, Pontiac, QC]

Do you think the average Canadian would appreciate a large chemical company challenging the public interest measure that is designed to protect the most vulnerable in our society? Clearly, we're having a discussion here with the reform of CEPA. We're having a discussion around vulnerable populations and how CEPA can be improved to ensure the protection of those vulnerable populations.

[Michael Burt]

It comes back to some of the comments I made earlier about Dow as an entity that has shareholders. Our shareholders are the public. Lots of times they want us to challenge some of the preconceptions about products that are coming to the market. We always have to take regulations with a grain of salt. Have they been developed in consultation with the scientific community? Are their assumptions correct? Our job as a chemical company is to make sure that our point is heard, and we will let the public and any tribunal or trial that comes make the final decisions.

[William Amos, Liberal, Pontiac, QC]

Okay. You would agree then that the primary public, whose interest Dow would seek to promote, would be the shareholding public.

[Michael Burt]

Dow employees are shareholders. The people who work in our company and the people who know us are all part of the public, as am I. So I have an opinion which may be no different from my neighbour's next to me.

[William Amos, Liberal, Pontiac, QC]

On a different tack, it's a widely accepted academic theory that has been borne out in regulatory practice across many western jurisdictions that enhanced regulation, call it increased regulation, can actually bring about many new, innovative approaches that then drive the economy.

Would you agree with that statement?

[Michael Burt]

I would to a certain extent. The problem that you run into with regulations is timing. Individuals spoke earlier about the need to harmonize some of the regulations between Canada and the U.S. Right now Canada has a very onerous environmental regulatory regime. Lots of products and innovation can be stifled when things take so long to come to market, and people will move to other jurisdictions.

In that sense it is stifling innovation. It's a double-edged sword where, yes, forcing companies to look at other alternatives can be beneficial, but at the same time we have to be careful that it's not so onerous that they just move to another jurisdiction, and innovation has stopped.

[William Amos, Liberal, Pontiac, QC]

I will pause and I will think further on that notion that Canada has an onerous environmental regulatory regime. I think you'd find that there are many witnesses who have come before us who would disagree entirely.

I'd like to pose the question to Mr. Bush and Mr. Doyle around that issue of regulation with a view to enhancing innovation. One of the things our government is very keen on—

[The Chair, Liberal, Deb Schulte]

You have less than a minute.

[William Amos, Liberal, Pontiac, QC]

—is enhancing our economy's capabilities to innovate, produce new products, and generate new economic opportunities in our communities. How do you think new regulations or enhanced regulations can help achieve that?