Evidence of meeting #29 for Environment and Sustainable Development in the 44th Parliament, 1st session. (The original version is on Parliament’s site, as are the minutes.) The winning word was technology.
A recording is available from Parliament.
Liberal
The Chair Liberal Francis Scarpaleggia
Unfortunately, we have only about 50 minutes, so I'll have to adjust the time that each questioner has. I'll do the math while we hear from our witnesses, for three minutes each.
We have Dr. Donald Smith, who is a distinguished James McGill professor. I think we met last spring. It's nice to see you.
Please start, Dr. Smith, for three minutes.
Dr. Donald L. Smith Distinguished James McGill Professor, McGill University, As an Individual
First, I'd like to thank the committee for inviting me here. It does seem like a very interesting process.
In terms of general background from where I am, agriculture can help manage some large environmental challenges, such as greenhouse gas levels and associated climate change, because it covers quite a slice of the earth's total terrestrial surface area.
Atmospheric CO2 can be incorporated into food crop residual biomass—stems, leaves, roots and things like that—or biomass crops, where it all goes into the soil. The point is that these things can be added into the soils. They improve soil quality and subsequent crop productivity. There's a bit of a feed-forward there in terms of removing CO2 from the atmosphere.
The biomass can also be used for biofuel production—I'm guessing that a lot of you know this. The nice thing about this, from my perspective, is that when you burn biofuel material, it releases CO2 into the atmosphere that came out of the atmosphere only a year or two before, whereas when you burn fossil fuels, the CO2 that's released came out of the atmosphere millions of years to hundreds of millions of years before, and the system is equilibrated to its absence.
In terms of broader efforts, in research, Dr. Xiaomin Zhou and I, both from McGill University's faculty of agricultural and environmental sciences, administer the biomass cluster, the BMC as we call it, which is funded through AAFC. BMC conducts work on recycling crops and other waste biomass as heat sources to make crop production more sustainable, including at high latitudes.
There's also a production of things like high-value bioproducts. There's a novel bioadhesive, which has now been patented and is being scaled up for production. There's research on biochar. The really nice thing about biochar is that when you add standard biomass to soils, the material is in there, on average, from years to decades, but when you add biochar, the carbon you've added to the soil is there from centuries to millennia, so the carbon is out of the atmosphere for a long time.
Finally, there's work on making plant biomass supply chains maximally efficient.
In terms of my own research, my lab works on microbial technologies that enhance crop yield and resilience to stressful conditions such as those associated with climate change. This is through the effects of, at least in some cases, signal compounds that are produced. We actually discovered a number of these. They regulate plant metabolism and even gene expression at very low concentrations, so they're kind of like hormones.
Several of these have been commercialized. One of them has been with Novozymes and Bayer for a few years and has been earning over half of the royalties from all the technologies at McGill University, indicating, I would argue, that it's being widely distributed and is having an impact.
That's it from me. Thank you very much.
Liberal
The Chair Liberal Francis Scarpaleggia
Thank you very much, Dr. Smith.
We'll now go to Ian Thomson from Advanced Biofuels Canada, for three minutes, please.
Ian Thomson President, Advanced Biofuels Canada
Thank you very much.
Good afternoon, ladies and gentlemen.
Thank you for the opportunity to speak to the committee today.
My name is Ian Thomson. I'm the president of Advanced Biofuels Canada.
I would like to begin by acknowledging that I'm speaking with you today from the traditional and unceded territory of the Squamish Nation.
Our trade association members include global biofuel producers and technology developers, with over 23 billion litres of global advanced biofuel capacity.
Time is brief, so I'll speak directly to the status of clean energy investments in Canada.
You've heard this from previous witnesses this morning, but on August 16, the U.S. administration signed into law the Inflation Reduction Act, or IRA. With its $369 billion U.S. in clean energy provisions, the U.S. has clearly thrown down the gauntlet in the race to capture economic advantage in the global manufacture of clean fuels. The IRA's tax credits and funding programs create material challenges to the competitiveness of clean fuel capital investments and the production and use of clean fuels in Canada.
The IRA has cross-cutting implications for future clean energy production. It will drive clean energy investments in low-carbon electricity, hydrogen, and clean fuels to the U.S. Without immediate and focused efforts to create balanced investment conditions in Canada, our clean energy projects are imperiled.
Our recommendations, which we'll submit in a more detailed document to the committee, focus on new measures necessary to mirror U.S. actions.
One is to establish a refundable low-carbon fuel production tax credit in the Income Tax Act to mirror the IRA clean fuel production credit, which comes into force on January 1, 2025.
Two is to amend the Greenhouse Gas Pollution Pricing Act to fully exempt low-carbon-intensity fuels from the fuel charge. The exemption should require registration and compliance under the clean fuel regulations.
Three is to revise the proposed federal carbon capture, utilization, and storage tax credit by converting the credit design to a production tax credit that mirrors the new IRA 45Q scope and credit rates.
Four is to amend the newly established zero-emission technology manufacturing federal income tax rate cut to apply to all low-carbon-intensity fuel manufacturing registered under the CFR.
In closing, I would simply say that the U.S. has taken action, putting Canada at a real crossroads with respect to its clean energy future. Generational clean energy capital investments are being drawn to the U.S. market under the IRA framework. Without immediate action to restore balance in north-south clean energy trade, Canada will forgo most of the economic benefits of the low-carbon economy, and our reliance on imported clean energy products, such as clean liquid fuels and low-carbon hydrogen, will be increased.
Thank you for the opportunity to appear before you today. I look forward to your questions.
Liberal
The Chair Liberal Francis Scarpaleggia
Thank you, Mr. Thomson.
We'll go to Mr. Robert Saik, founder and chief executive officer of AGvisorPRO Inc., for three minutes, please.
Robert Saik Founder and Chief Executive Officer, AGvisorPRO Inc.
Ladies and gentlemen, distinguished guests, I'm a professional agrologist and a certified agriculture consultant. In 2006, I was recognized by Alberta as a distinguished agrologist, in 2014 as Canadian agri-marketer of the year, and in 2021 as one of Canada's top 50 most influential agriculture leaders.
Currently, I'm CEO of AGvisorPRO, a connectivity platform for agriculture. In 2007, I founded arguably one of the first carbon credit trading companies in Canada. To date, we've traded over $50 million of offsets in agriculture.
In 2019, on January 23, I presented this to all of the federal and deputy ministers of agriculture in Canada. These numbers come from the NIR and the IPCC, and according to these numbers, all the greenhouse gases emitted from agriculture are about 60 million tonnes, the smallest being fertilizer. From that, it is acknowledged that 11 million tonnes of carbon dioxide is sequestered or pulled out of the atmosphere into the soil. What is not accounted for is the full balance assessment of the 79 million tonnes of carbon dioxide being stored in the grain from the 95 million tonnes of produce that farmers grow.
Farmers capture 132% of their total CO2e emitted, and when you take soil into account, that's 150%. This grain is being shipped internationally, meaning that Canada's crop farmers are 30 million tonnes of CO2e to the positive. We take into account cow burps in the national inventory. It's recognized that carbon is stored in soils, and we recognize the carbon stored in forestry, so we should be thinking about the carbon that's stored in grain. When we do that, we come up positive.
However, today the focus is on fertilizer.
It's recognized that Canada produces about 1.6% of the global emissions. Agriculture is about 10% of Canada's emissions, and fertilizer is 17% of agriculture's emissions or 1.75% of Canada's greenhouse gas emissions. So, if we reduced our emissions by 30% in Canada from all fertilizer sources, it would amount to 0.0028%.
That's really what we're talking about here, and I'm here to talk to you about agriculture technology, precision ag, slow-release fertilizers, etc.
Thanks for inviting me.
Liberal
The Chair Liberal Francis Scarpaleggia
Thank you.
We now go to Ms. Emmanuelle Rancourt, from Vision Biomasse Québec. You have three minutes.
Emmanuelle Rancourt Coordinator and Co-spokesperson, Vision Biomasse Québec
Thank you, Mr. Chair.
I thank the members of the committee for inviting our organization and giving us an opportunity to speak on the important issue of clean technologies in Canada.
Vision Biomasse Québec is a group of around 20 organizations from the co-operative, municipal, business, environmental and rural development sectors. These organizations have chosen to unite with a common objective, that of promoting an exemplary and efficient sector of forest biomass heating in Quebec. We participate in the acquisition and dissemination of knowledge in regards to the use of forest biomass for heat production through communication and awareness-raising activities. We also contribute to structuring the sector by taking part in political representation activities.
Some time ago, these organizations drew up for the renewable energy sector a vision full of promises that showcase its strong potential. They've identified a potential for heating conversion of buildings in Quebec, outside large urban centres, which could make it possible to replace 400 million litres of fossil fuels annually; recover one million metric tons of residual forest biomass annually; avoid the emission of one million metric tonnes of CO2 equivalent per year; produce 4,000 gigawatt hours of renewable energy annually; improve Quebec's trade balance to the tune of $225 million; and create 12,500 jobs in the construction phase and 3,600 permanent jobs subsequently.
These numbers could certainly be increased if we applied this vision to all of Canada and even more if we added industrial sectors that might consider conversions, for example cement and steel plants.
Vision Biomasse Québec fervently believes that forest biomass as an energy source is a winning clean technology for Canada. The use of post-cutting, post-processing and post-consumption forest residues for direct heating uses is the most efficient mode of energy conversion compared to cogeneration and the production of biofuel or hydrogen. The yield being higher, the carbon debt is reduced and the GHG balance is further improved. Its use in the bioenergy sector would only serve, in this case, to cannibalize a more efficient use of the basic resource.
Being abundant in Canada, forest biomass is a local resource and its increased use as a replacement for fossil fuels will improve the trade balance of several provinces by reducing the value of imports, while allowing energy security and independence.
The direct heating from forest biomass sector remains little known in Canada, however. Most of the market is outside the country. It is essential to develop the domestic market, because millions of tonnes of forest biomass could be sold locally to create renewable energy and thus contribute to the country's energy transition.
A promising avenue for the domestic development of the sector can be found in remote communities. Some of the communities in the northern regions of many provinces and territories have already converted to using local forest biomass for heating.
However, government funding programs are essential for these projects to ensure they are successful and can act as a showcase and thus support the healthy development of the sector. The federal programs currently in place to support these conversions should therefore be maintained and could be expanded and enhanced to accelerate conversions and the country's energy transition.
A number of potential projects fall through because the Treasury Board doesn't consider that biomass reduces GHG emissions, and so funding possibilities are limited. It would be useful if the various departments consulted each other in order to standardize the status of the renewable energy that is biomass.
Liberal
The Chair Liberal Francis Scarpaleggia
Unfortunately, we'll have to stop there to move on to questions.
In order to finish the meeting on time, I've had to cut a third of the committee members' speaking time. Consequently, members will have four minutes in this first round.
Let's start with Mr. Dreeshen.
Conservative
Earl Dreeshen Conservative Red Deer—Mountain View, AB
Thank you very much, Mr. Chair, and thanks to all the witnesses. This is amazing testimony here this afternoon.
Of course, Canadian farmers and ranchers are the most environmentally conscious in the world, and all they ask is that progress be recognized when they are measured against global competitors. I believe, Mr. Saik, you've pretty well hit the nail on the head on what we actually do, yet nobody wishes to talk about that particular fact. I know that Alberta has always been a leader in carbon management, whether it be in agriculture or in other industries.
I'm wondering, Mr. Saik, if you could discuss your experience in the carbon offset space, since your company is one of the leaders in this. Could you talk about why we're not getting credit for that 132% of carbon sequestration that we have with the grains that we sell around the world? We don't get credit for the water that we put into it and sell, and the transfer of water around the world.
Could you talk to us about that, please?
Founder and Chief Executive Officer, AGvisorPRO Inc.
Yes, I'll quickly do some cowboy math. For every 1% increase in organic matter in soils, farmers pull out of the air approximately 20 tonnes of carbon dioxide. I'll repeat that: For every 1% increase in soil organic matter, 20 tonnes of carbon dioxide go into the soil. In western Canada alone, 70 million acres, a 1% increase would be 1.4 billion tonnes of carbon dioxide out of the atmosphere, if that were recognized by the government.
Farmers are doing a lot. Yesterday I went out to a farm and spent some time on the on-farm climate action fund, OFCAF. Did you know that the farmer I was dealing with would not qualify for any support? Do you know why? He is already doing soil testing, already doing split nitrogen application, already using nitrogen inhibitors and doing crop rotation. The work that the federal government wants us to do is already being done by farmers, but it's not being recognized.
It's far better for us to be given incentives, carrots rather than sticks, than to be told to reduce our nitrous oxide by 30% when we're already among the most highly efficient nitrogen farmers in the world.
Conservative
Earl Dreeshen Conservative Red Deer—Mountain View, AB
Can you expand on that as far as the cattle feed industry is concerned, because they have also done amazing things and, again, it's another sector that is not getting its due?
Founder and Chief Executive Officer, AGvisorPRO Inc.
When you think about the forest—and my esteemed colleague talked about biochar and the utilization of biomass—you burn wood, and somehow that is a cycle that everybody recognizes. The half-life of methane is 10 years. The half-life of carbon dioxide is 1,000 years. Carbon dioxide goes into plants. Cows eat those plants and they burp out methane. In 10 years, that methane starts converting back into carbon dioxide.
How did cows make more greenhouse gases? They don't. The only way cattle can make more greenhouse gas is if there are more cows, but the peak of the cattle herd was in 1971. If you take cattle away, or demonize the cattle industry, you've taken away one of the key ingredients that we use in agriculture to harvest cellulose and hemicellulose, and you put at risk one of the most fragile ecosystems in the world, which is the grasslands and the foothills of the province of Alberta, where you need a keystone species to keep the rosebushes and the poplars at bay.
A lot of people don't think about cattle, but it's a biogenetic cycle, the same as biochar, the same as biomass.
Liberal
The Chair Liberal Francis Scarpaleggia
Thank you.
We'll have to go to Mr. Longfield now, for four minutes.
Liberal
Lloyd Longfield Liberal Guelph, ON
Thank you, Mr. Chair.
I was listening with great interest to Mr. Saik and thinking of a conversation I had at the University of Guelph, where they're looking at measuring carbon using satellite technology to be able to give credit to the farmers for the carbon levels they are maintaining in the soil.
Is that anything you're familiar with?
Founder and Chief Executive Officer, AGvisorPRO Inc.
Yes. There are a number of measurement devices that are being experimented with right now. If I was asked categorically if there was one that you would depend upon, I would say no. They're still trying to do regression analysis to find out if these measurement devices.... Satellite imagery to ascertain carbon in soils is still a long way off.
In western Canada, a lot of the carbon is sequestered in the top zero to six inches of the soil, but in eastern Canada you have more tillage and more rainfall, so consequently the carbon sequestration is deeper in the plow layer. I think it's pretty hard to ascertain all of that coming from satellite remote-sensing imagery.
Liberal
Lloyd Longfield Liberal Guelph, ON
Six inches, or whatever the baseline ends up being.... Thank you for your testimony. That is very good for our study.
I'd like to switch over to Dr. Smith.
I understand that you got your Ph.D. in Guelph, which is always a good connection.
Distinguished James McGill Professor, McGill University, As an Individual
That's true.
Liberal
Lloyd Longfield Liberal Guelph, ON
It's great that you're continuing to work on research. I've seen your research grant is up to $65 million, which also includes some spinoff businesses, one of them being Bios Agriculture Inc., commercializing technology on the farm.
Could you maybe expand on the clean technology opportunities for business spinoffs from the work you're doing?
Distinguished James McGill Professor, McGill University, As an Individual
Sure. We are conducting work right now on developing technologies, and I guess ultimately products, out of plant-microbe interactions. I mentioned this in my introduction. These seem to be producing signal compounds. The microbes plus the plant are now considered the holobiont, and I've started calling these “hormones” of the holobiont, because they work at hormonal levels.
They have some profound effects on the plants. They increase their growth rates, and they also make them substantially more resistant to the kinds of stresses that are associated with climate change. There's a lot of interest and there are a lot of interesting things that can be done with that.
The original company, Bios Agriculture, had an interesting history. It actually went through the corporate food chain. It was taken up by a larger Canadian company and wound up with Bayer.
Right now, I'm working with two companies in my lab that are both start-ups based on technologies from my lab. There's a lot of interest in these technologies. We're producing more as time goes by. I'm hoping to get some funding focused just on that.
Liberal
Lloyd Longfield Liberal Guelph, ON
Thank you.
To add to the NSERC funding, maybe we can get some other innovation funding. We can talk about it offline, if I can help in any way.
Mr. Chair, I know I'm coming up to the four-minute mark. I have about half a minute left.
Ms. Rancourt, I'm very interested in the forest biomass that you talked about. One of the studies I read a few years ago had to do with wood chips and making some sawmills more viable by selling wood chips to the market. Is this the sort of thing that you'd be involved with?
Coordinator and Co-spokesperson, Vision Biomasse Québec
Could your clarify the question?
Liberal
Lloyd Longfield Liberal Guelph, ON
I'm sorry. I'm thinking of the biomass products coming from wood chips from sawmills, to make use of the biomass that would normally be a waste product in sawmills.
Coordinator and Co-spokesperson, Vision Biomasse Québec
We're talking about wood waste from processing. It's one of the most frequent sources of residual forest biomass. Many lumber mills will be able to use their own wood waste to heat their facilities and even their drying kilns. It's a kind of circular economy.
Liberal