Environment Committee on Oct. 27th, 2025

[Colin Hornby]

Yes. I mean, I guess the reward for the producer is that they're going to spend less on inputs and they're going to know that they're doing the right thing. The 4R protocols can reduce up to 35% of your emissions.

[David Bexte, Conservative, Bow River, AB]

As you mentioned, there was overwhelming support among farmers for Bill C-234 to exempt farm fuel use from the carbon tax, yet the government fought hard to stall and water it down. What message did this send to farmers? How seriously is the Liberal government taking their concerns?

You have 30 seconds.

[Colin Hornby]

Thank you. I'll try to be quick.

I think Bill C-234, as mentioned, was a prime example of where industry rallied together. We saw multiple parties. I met with members from multiple parties. There was support across Parliament and support across industry. It was just a disappointment and a frustration that farmers were being punished for doing core components of their operation for which there was no alternative.

If you want to dry grain, you have to use fossil fuel. If you want to heat your livestock.... Here's the thing: We're in a cold climate in Manitoba. When it's -35°C and you—

[The Chair, Liberal, Angelo Iacono]

Thank you. I'm sorry.

Ms. Miedema, you have the floor for five minutes.

[Shannon Miedema, Liberal, Halifax, NS]

Thank you very much to all the witnesses today.

We know that the current state of play with our emissions in Canada, in terms of sectors, is that the emissions are increasing in the oil and gas sector and also in the agricultural sector. I've actually been thinking about this and trying to better understand the collaboration with the agricultural sector, because we definitely need to work together on some solutions.

Mr. Rainville, can you tell us about Clean Prosperity's net-zero pathways for Canada project and how Clean Prosperity advocates for Canada's net-zero goals? If you have anything to contribute from an agricultural perspective, I would appreciate that as well.

Thank you.

[Etienne Rainville]

Thank you very much for the question.

With our net-zero pathways project we looked at different pathways for achieving net zero. One thing you have to do whenever you're talking about decarbonization is to look at it sector by sector to figure out which technologies to use and when to apply them. It's very different for every industry and for different sectors in Canada. Everything is also hyperlocal. There are different opportunities to decarbonize in Alberta electrically than there are in Ontario. There are different options for carbon capture in Alberta than there are in Ontario or Quebec or Nova Scotia. It was a broad report that looked at opportunities across the country.

In terms of the agricultural sector, that's one we've had our eye on. There is a natural opportunity, as I think one of the other members of the committee was getting at, to involve agriculture in carbon markets. It's really just a question of how. With agriculture having biogenic sources of carbon, it can make it very difficult to audit and monitor in standards that are sought out and looked at in terms of industrial carbon markets.

There are opportunities there to create what we call “offset protocols” in order to recognize emissions reductions when you're reducing methane from cattle and things like that and having those rewarded by creating offset credits. There are just technical challenges in terms of the verifiability of the sources of emissions reductions that aren't there when you're talking about a carbon capture and storage project, for instance, where you have a flue stack coming out of a facility. It's much easier to recognize the difference between emissions at one end of the pipe versus the other end.

[Shannon Miedema, Liberal, Halifax, NS]

Thank you very much.

I'll note that the federal government recently announced $370 million to provide a per-litre production incentive to Canadian biofuel producers. This is really to help improve the competitiveness of Canadian renewable diesel and biodiesel production, of which canola oil is a key feedstock. The details are still coming on that, but that is one way to think about supporting the agricultural sector in climate action.

I'll switch to you, Ms. McKenzie. I know that the Pembina Institute has investigated the cost of clean electricity grids in Atlantic Canada. One of the major challenges for the federal government is getting provinces to collaborate on the shared infrastructure needs associated with such a project. What role do you see for the federal government in supporting Atlantic provinces in moving towards this initiative?

[Janetta McKenzie]

There's certainly a coordination role that the federal government can play along with providing policy signals for the cleanliness and the low-emitting nature of the grid over time. Electrification, running as much as possible on low-cost, abundantly available electricity, can really be the backbone of Canada's economy, in Atlantic Canada in particular. To achieve that, we need a lot more electricity supply than we have today. We need that supply to be as low cost as possible. That means wind, solar and battery storage, some of the cheapest forms of power available. It also means bolstering them with grid modernization measures, such as better interties between provincial grids to increase their resiliency and efficiency measures to make the most of the electricity that we do have.

[Shannon Miedema, Liberal, Halifax, NS]

Thank you.

Just quickly, to go back to you, Mr. Rainville, you have the 2023 “Pillars of Decarbonization” report showing how our electricity demand in Canada is going to go up to about 40% in 2050. Can you comment on the need to invest in a clean electricity grid now to accommodate this growing demand and on why it's important?

[Etienne Rainville]

Yes. I recently did a panel on nuclear energy and data centres, which I think is emblematic of the questions we have around energy growth or electricity demand in this country.

We have new sources of demand, such as the data centres that are coming online. There's obviously a lot of interest in them, but there are also other things like electric vehicles and heat pumps. All of these different pieces collectively mean that we're going to need a lot more electricity in the very near term—

[The Chair, Liberal, Angelo Iacono]

I'm sorry about that, Mr. Rainville.

Mr. Bonin, you have the floor for two and a half minutes.

[Patrick Bonin, Bloc, Repentigny, QC]

Thank you, Mr. Chair.

Ms. McKenzie, I would like to come back to the tax credit for the production of renewable energy. We hear that municipalities that are involved in renewable energy projects would not currently be entitled to the credit. Do you think the eligibility for this credit should be extended to municipalities, indigenous people and other institutions?

[Janetta McKenzie]

Yes. Having the ability to spur investment in renewable power in municipalities, and on indigenous land as well, is going to be a really key part of ensuring that low-cost and abundant electricity is available for Canadians all across the country.

In particular, ways to ensure there's predictable policy through things like the clean electricity regulations are really key to work with investment tax credits in order to provide the certainty for that kind of investment.

[Patrick Bonin, Bloc, Repentigny, QC]

Are you in favour of carbon border adjustments, as the Europeans are doing? Is that something that Canada should be putting forward?

[Janetta McKenzie]

Things like carbon border adjustment mechanisms or pricing carbon at the border can be really key ways to make sure that heavy-emitting industries, or industries just generally across the board, are not overly exposed to trade or competitiveness pressures globally.

With a strong industrial pricing system, Canada can also prepare for other countries or other jurisdictions like the European Union putting in their own carbon border adjustment mechanisms, ensuring that we don't pay a fee to places like the European Union for our emissions and that we keep that revenue in Canada to reinvest in emissions reductions. A carbon border adjustment mechanism that Canada develops can work well in concert with things like domestic industrial pricing to prompt investment in decarbonization both at home and abroad.

[Patrick Bonin, Bloc, Repentigny, QC]

In your opinion, would a new pipeline carrying oil from the oil sands be compatible with climate competitiveness in Canada or with the Paris Agreement and Canadian commitments?

[Janetta McKenzie]

Given the emissions that would come online from a new, large oil pipeline, whether it's to the west coast or somewhere else, and that those would be significant emissions, we would need reductions elsewhere in the economy to make up for the emissions that brings on. We would also need to really carefully and robustly account for upstream oil and gas emissions, the production of which would go into that pipeline.

[The Chair, Liberal, Angelo Iacono]

Thank you very much.

For five minutes, Mrs. Anstey, the floor is yours.

[Carol Anstey, Conservative, Long Range Mountains, NL]

Thank you to the witnesses.

Thank you, Mr. Hornby, for the work you do for our rural communities. I represent a very rural riding in Newfoundland and Labrador. Eighty per cent of the goods and services in Newfoundland are brought into the island portion. One of the things we've heard a lot of conversation around for close to a decade is how we can really promote this industry and, as a province, become more food secure.

I'm just curious. Is the current Liberal government setting up this industry...? Particularly as it relates to expanding a new industry in Newfoundland and Labrador, is the current regulatory environment setting them up for success?

[Colin Hornby]

Thanks for the question.

We do our work in Manitoba. I can't necessarily speak to the specifics of Newfoundland. However, I would say that there are certainly challenges with the current regulatory environment. We look at things like innovation and how the PMRA, the Pest Management Regulatory Agency, is working to promote Canada being on the cutting edge. We have thorough regulatory oversight in this country; however, we do have instances where Canadian regulations don't necessarily align so well with other jurisdictions, and that does cause challenges for competitiveness for producers.

Your question, I guess, is on the expansion of industry and investment as well. There's agricultural policy, but there's also tax policy. There are all of these different components as well. We did see proposed changes to the capital gains tax treatment recently, which would have been devastating for farm transitions. However, that has been rescinded, which was positive.

I would say that there have been some examples in the past few years where there have been some definite concerns with how that's being dealt with.

[Carol Anstey, Conservative, Long Range Mountains, NL]

You said in your opening comments that when the government introduced the net-zero advisory board, it failed to include a representative from the agriculture sector. Do you think it may have contributed to or be an example of the growing frustration and erosion of trust among farmers?

[Colin Hornby]

The general feeling, more broadly, from farmers is that they want to be in at the ground floor. They want to be there because they have a perspective and knowledge that others don't. When it comes to agriculture, it's been passed on for generations. In most cases, it's from their parents. A parent has passed it on to their child. They've learned and seen throughout the years what has and hasn't worked through trial and error and the loss of lots of dollars. They've seen successes as well. That's the thing.

There have been some efforts to include producers in consultations. I won't dispute that. I've been at many of those consultation sessions. However, when you're consulting with farmers, having them in at the ground floor and having them shape the discussion is key.

[Carol Anstey, Conservative, Long Range Mountains, NL]

I want to give you an opportunity to expand on something you mentioned in your opening statement. You said farmers “understood that cutting emissions by 30% without cutting fertilizer use was simply not realistic, especially with today's crop yields and soil conditions.”

I'm curious. What have you heard from farmers and producers about the impacts they have had to face because of caps like the fertilizer emissions cap, the oil and gas emissions cap and the carbon tax? Are these regulations practical in a real-life sense?

[Colin Hornby]

The fertilizer emissions and the 30% reduction that was discussed—I can't recall, but it was maybe three years ago—created a lot of fear among the producers. That was not a regulatory approach. That was more of a “we're going to set this target” situation, and it was not communicated well. We've seen in the past that governments have brought forward ideas without consulting the industry fully and without providing all of the details. There was a sentiment of “they're going to cut our fertilizer use by 30%”, because the only way you can reduce emissions by that much is through fertilizer use.

There's a bit of a duality as well, where agriculture is being asked to produce more food, fuel and fibre for various inputs on the one hand, while on the other hand, there's a push to reduce emissions. We need to say we can't have both all the time. We have to really make sure that we're—

[The Chair, Liberal, Angelo Iacono]

Thank you.