Thank you. My name is Pat Pitka and I'm the CFO at Ag-West Bio Inc. I'm accompanied by Boni Dorish, director of finance, administration and human resources. The comments we are making today are on behalf of Ag-West Bio Inc.
Ag-West Bio is a member-based, not-for-profit organization with over 100 members, including multinationals such as Bayer CropScience, Cargill, and PotashCorp; various government agencies and departments such as AAFC; and small and medium-sized organizations such as Bioriginal Food, Prairie Berries, and Prairie Plant Systems.
Ag-West Bio's strategies are to promote the development and adoption of emerging technologies, create connections and partnerships to build community, enable and accelerate commercialization, advocate for science and build trust, and build national and international awareness of the cluster. The agrifood sector presents great opportunities for the province and for the Prairies.
The prairie provinces contain about 85% of the arable land in Canada. The Prairies used to be known for wheat, oats, and barley production, which was grown, harvested, and shipped overseas. This has all changed, thanks to the innovation of our researchers and the technologies used by our farmers. Today, canola is a $27-billion crop, 50% of which is processed in the Prairies. Pulses, also known as legumes, are another example. These include crops like lentils, peas, and chickpeas. Lentils alone are a $2-billion crop, and 99% of the lentils produced in Canada are grown here in Saskatchewan and processed and exported to countries like Turkey and India. Continued research is leading to further improvements.
Our farmers are leading in the use of technology. An example is zero tillage, which preserves moisture, reduces soil erosion, and acts as a carbon sink. Thanks to zero till, Saskatchewan farmers are responsible for over 11 million tonnes of carbon sequestration a year, significantly reducing the impact of farming on the environment. New digital technologies are also having an impact. For example, drones are used to help farmers assess fertilizer and chemical requirements, thereby eliminating overuse of these products. Dot Technology Corporation, a company near Regina, is developing a new driverless tractor using GPS to guide the process. It is currently at the prototype stage, and field demonstrations have taken place. This will help farmers control labour costs.
New technologies keep our farmers competitive on the international market without government subsidies, which is a great achievement. Continued public investment in research is critical.
We support the federal innovation superclusters initiative. Key priorities in the agrifood sector should include: more value-added processing and commercialization to develop food and feed ingredients for our global customers; stimulate the creation, growth, and attraction of companies; support for emerging technologies, including artificial intelligence, big data, and robotic applications; and improved crop varieties for ever more discerning global markets. We are searching for the next canola. Investment in research and development is critical for the future of agriculture in the Prairies and in all of Canada.
An impact study completed by MNP of Vancouver found that for every dollar invested in R and D in the Prairies, there is a $6 return on that investment. This is something for governments to consider.
Regarding challenges for the future, preservation of the family farm is critical. The current environment and success in the Prairies has been achieved without large public corporations owning or operating the farms. We need tax changes that support the intergenerational transfer of the family farm without penalties. Right now, it is more advantageous for a farmer to sell to an outsider than to transfer the farm to his or her children. This must change if we are to preserve the family farm.
There is another issue the government should consider. We're talking about a new phrase called “freedom 85”. In an article published in the September 2017 issue of CPA Magazine, life expectancy has increased at the rate of one year in every five years. At this rate, half the children born in Canada in 2007 can expect to live to 104. This is good news and bad news. Collectively, we need to find ways to financially support a long life. The retirement age of 65 was set almost 50 years ago when life expectancy was 72. Unless you have a defined benefit plan from a government or major company, you'll have to invest a lot of money into your RRSP for your retirement years.
The government could consider some options, such as deferring the payment of old age security until a later year, maybe age 70. The second option would be to allow small business owners, including farmers, to make an extraordinary contribution to their RRSPs in years with unusual events, such as exceptional profit or the sale of their business.
Thank you for your consideration.