Madam Chair and members of the committee, thank you for the opportunity to appear before you today.
My name is Daniel Gleeson, and I'm the CEO of Canadian Phosphate, the company advancing two sedimentary rock phosphate projects in British Columbia, in the Fernie and Wapiti regions. Our objective is straightforward: to build Canada's only domestic phosphate fertilizer production facility. We're advancing the pathway that would allow us to supply Canadian farmers with phosphate fertilizer domestically and reliably from Canadian natural resources.
Sedimentary rock phosphate is the raw material from which 90% of the world's fertilizer is produced, and it has no viable substitute at scale. Canada, one of the most agriculturally productive nations on earth, currently imports virtually all of the phosphate fertilizer it requires to grow its food. Our farmers from the southern prairies all the way to Quebec depend entirely on a supply chain that originates thousands of kilometres from their fields in foreign jurisdictions under policy conditions they cannot influence or control. This is a structural gap in our industrial base, and it's one Canada has the resources and the capacity to close.
Parliament and this very committee have already recognized the strategic importance of phosphate for Canada, but the Income Tax Act does not reflect that reality, creating a gap that makes every domestic sedimentary phosphate project inadmissible for the financing tools the government created to support their growth. That gap must be corrected urgently.
The case for acting now is not abstract. It is in the headlines every day. Geopolitical conflict in the Middle East and export restrictions by China have fractured the global fertilizer supply chains and made prices skyrocket. Canadian farmers are absorbing these costs now and likely will into the long term, with diminishing breathing room. That pressure is transmitted directly to the grocery bills of every single Canadian family, from coast to coast.
Governor Tiff Macklem of the Bank of Canada testified recently before this committee that with higher energy and fertilizer prices now compounding existing food inflation, which has been running near 4% for several months, it is difficult to say that food price inflation is going to come down any time soon. This is a crisis affecting the daily lives of Canadian families already under enormous financial strain, and the factors at fault originate in markets and conflicts Canada does not govern. The only reasonable answer is to build the supply we can control, and that starts with supporting Canadian farmers.
Canadian Phosphate is well positioned to meet the moment. Our Wapiti project in northeastern British Columbia sits at the doorstep of the Peace River agricultural heartland. Our Fernie project connects through existing corridors to southern prairie markets. Together, they would bring lasting economic activity to western Canada while supplying all of Canada with domestically produced phosphate fertilizer, reducing the entire agricultural sector's exposure to the kind of foreign price shock we're all witnessing right now.
That brings us to why we're here before this committee today. As MP Leitão noted a few months back, phosphate is already eligible for flow-through share financing. In principle, that is correct, but the Income Tax Act ties industrial mineral eligibility to non-bedded deposits, namely igneous. Sedimentary phosphate, the source for approximately 90% of global phosphate fertilizer production, is a bedded deposit by definition and therefore does not qualify. That provision makes flow-through share financing and the critical mineral exploration tax credit inaccessible to any project aiming to develop a strong domestic supply chain of phosphate fertilizer from sedimentary deposits.
One amendment—adding sedimentary phosphate explicitly to the definition of “mineral resource”— would correct that.
An independent economic analysis found that our combined mine and fertilizer plant would generate approximately $34 million annually in total GDP, supporting close to 200 high-paying jobs. Once in operation, the project is expected to return approximately $7.4 million annually in federal revenues, while the total cost of the change we are requesting is only $5 million. Sedimentary phosphate is the foundation for nearly all phosphate fertilizer supply, and correcting this oversight is how tens of millions of dollars in private capital can be deployed in Canada and how Canada can become, as Prime Minister Carney has said, its “own best customer”, building the industrial base that feeds our own people from our own land.
Madam Chair and members, thank you for your time.
I look forward to your questions.