Finance Committee on Oct. 10th, 2023

[Steve Ogden]

I'm of two minds on that. We don't mind having funding linked to results. There's nothing wrong with that. However, it has to be within the control of the municipality. If it's linked to results and we have full control over those results, I agree wholeheartedly, but if there are other aspects to it—for example, the president of the Construction Association spoke about the difficulty in getting labour, materials and those sorts of things because of the supply chain. We have no control over that. However, if you were to link our results, based on the funding we received, to things that we control, then I'd be happy with that, but I don't think that's the case.

[The Chair, Liberal, Peter Fonseca]

That's the time, MP Blaikie, but maybe you can expand with one of the other members. We have two left.

We have MP Duncan.

[Eric Duncan, Conservative, Stormont—Dundas—South Glengarry, ON]

Thank you, Mr. Chair. It's always flattering to be mentioned in committee.

Mr. Mayor, I appreciate your comments about performance targets on that. I always appreciate any chance to talk about Mr. Poilievre's private member's bill on linking infrastructure funding for large cities to the actual results of houses built, doors open and families and individuals living in them.

One of the things that I particularly like and gives me a chance to speak again about my municipal experience in a rural municipality is that there are different factors in terms of infrastructure. Sadly, if interest rates keep as high as they are, based on the current economic environment between the Liberals and the NDP, it makes it very difficult for a young family to build a home at $600,000, $700,000 or $800,000 in my part of Ontario, as an example, and, at that, to afford a mortgage.

It's certainly about understanding a local context, but I think the big thing and the opportunity for a community like Stratford is to reward and bonus those that go out and not only meet the target but exceed that. There are actually building bonuses, and to the point of where you're talking about removing barriers and trying to get things built, those who not only deliver on the targets but exceed them in rural communities will benefit from that.

Mr. Killorn, in your time here with the federation of agriculture, I just want to give you an opportunity to talk about input costs and some of the costs pertaining to the carbon tax. You've alluded to and spoke well about climate mitigation and measures that farmers could take, but particularly, perhaps, speak about the transport costs of being here in P.E.I. and using either the ferry or the bridge to get potatoes in the province over there. Do you have any numbers through the federation of agriculture about the impact on the cost of business for farmers pertaining to the carbon tax here on the island?

Where I would go with that is to say that perhaps those are dollars that are being taken away from other mitigation measures. I'm just wanting to see what the impact would be, in your estimation, particularly with the transportation of agriculture on the island.

[Donald Killorn]

Thank you. I appreciate the question.

It's difficult to estimate the impact thus far. We still hope to work with the provincial government to develop a provincial.... We're still working on that. We became subject to the federal backstop only this past July, so we're still coming to terms with what that's doing to the cost of inputs.

With regard to transportation, we produce about 2.5 billion pounds of potatoes. That's about 40,000 truckloads to get over the Confederation Bridge. It's a substantial cost. We do see subsidies for other bridge infrastructure in Canada: $200 million for the Champlain bridge to keep that toll-free. Any investment in reducing tolls will allow us to be more competitive in a regulatory regime where carbon has a price on it.

The cost of inputs has increased dramatically, and certainly this year with the cost of diesel fuel. We did see a spike in the cost of fertilizers. In the east coast, our fertilizers come from overseas. Historically, it's been easier for us to access them from Europe and Asia rather than accessing Canadian fertilizer, because of the issues with logistics. We've seen a significant spike. The cost of production for an acre of potatoes is probably up by close to 40%, and it's had a dramatic impact on the bottom line.

In the meantime, we've experienced significant regulatory impact from the Canadian Food Inspection Agency. We have been under a ministerial order keeping not just seed potatoes but other crops from leaving Prince Edward Island. Taken with the impact of the carbon price, which.... We are seeing continued exemptions, but those are stalled in the Senate. We want to see those get pushed through, but all of that—the cost of transport, the impact of CFIA and the impact of the carbon price—lead to a significant increase in the cost of production.

[Eric Duncan, Conservative, Stormont—Dundas—South Glengarry, ON]

It's a negativity type thing even in terms of competitiveness as well. We talk about a global market that way too. I think where you can.... On the bridge, for example, the carbon tax is going to be increasing, significantly, the costs over the coming years. It's an “in one way and out the other” type of thing in terms of the costs and expenses being added to it.

Mr. Morrissey, we were indirectly having a debate in the previous witness panel about the input costs added to agriculture. I appreciate the mentioning of the Senate bill across the country. If that bill does not pass, it's going to add a billion dollars—I think it's $970 million—in carbon taxes to agriculture across the country between now and 2030, none of which receives any sort of assistance, coverage or rebate of any sort. The individual family ones don't even cover it at this point.

Again, when we talk about that and trying to do other measures to keep up with other production challenges, I think the argument is between.... You've raised as well the CFIA. Between the federal carbon tax and some of the other factors, are these things from the federal government hurting or helping? It seems like more often than not they're hurting and going in the wrong direction.

[The Chair, Liberal, Peter Fonseca]

Do you want a quick answer to that? Then we will have to move to our last questioner.

Thank you, MP Duncan.

[Donald Killorn]

The impact of the Canadian Food Inspection Agency is profound here on Prince Edward Island. It's a significant risk to the sustainability of agriculture on Prince Edward Island and across the country. It's something we share with our partners in other provinces. If there's anything I challenge this committee to try to address with budget 2024, it is the significant risk to our food production posed by the regulatory regime of the Canadian Food Inspection Agency.

[The Chair, Liberal, Peter Fonseca]

Thank you, Mr. Killorn and MP Duncan.

Now we go to MP Morrissey, who will be our last questioner for this panel and for this session.

[Bobby Morrissey, Liberal, Egmont, PE]

Thank you.

Just following up on that, Mr. Killorn, has the federation done an impact analysis on costs directly attributed to climate change in terms of lost crops and damage from various storms?

[Donald Killorn]

Do you mean past storms?

[Bobby Morrissey, Liberal, Egmont, PE]

Yes.

[Donald Killorn]

We're in the midst of developing a sector-specific adaptation plan that will involve the collection of that data. We haven't done our own data collection on that.

[Bobby Morrissey, Liberal, Egmont, PE]

Would you say they were significant in P.E.I.?

[Donald Killorn]

I would say they have been significant and thus far the response has been underfunded.

[Bobby Morrissey, Liberal, Egmont, PE]

Who is the first in line to cover those costs from natural disasters like climate change? Is it the farmer?

[Donald Killorn]

Yes, our farmers have been forced—

[Bobby Morrissey, Liberal, Egmont, PE]

In terms of taking mitigative action to slow climate change—all we're doing at this stage is slowing it and not stopping it—is that extremely important for the future of agriculture in P.E.I.?

[Donald Killorn]

If you're talking about sequestering greenhouse gases in our soils and reducing our emissions from agriculture, I think those are tremendous opportunities to lessen the impact of climate change.

If you're talking about investments in adaptation, I do think that a dollar spent effectively today with good ROI can provide significant benefits in the long term. What that ROI is exactly I don't know yet. I hope soon to fully understand what we can save by making smart investments today.

[Bobby Morrissey, Liberal, Egmont, PE]

Thank you.

Farmers on Prince Edward Island are on the leading edge of innovative farming practices. Here on Prince Edward Island, farmers have done a tremendous job of reducing fertilizer inputs. Am I correct?

[Donald Killorn]

That's right, yes.

[Bobby Morrissey, Liberal, Egmont, PE]

That's correct.

That has come from programs that were funded by the Government of Canada through your industry.

[Donald Killorn]

That's right. It's been primarily through the living labs program.

[Bobby Morrissey, Liberal, Egmont, PE]

That's right, and it has reduced the financial burden on those farmers who participated in that program.

Continuing along that track, is effectively reducing high-cost inputs a good investment for the government?

[Donald Killorn]

Yes. The great thing about our opportunity in agriculture to address climate change is that the best management practices we need to promote also have direct economic benefits. Whether it's reducing nitrogen fertilizer or planting cover crops, from all of those we can point to a direct economic benefit outside of the socio-economic benefits we're providing to the nation as a whole.

[Bobby Morrissey, Liberal, Egmont, PE]

In the time I have left, you articulated in your opening statement—and you are correct—that we've diversified the economy of P.E.I. significantly, but agriculture and the directly related processing are still the biggest parts of Prince Edward Island's economy. Am I correct in that?