Thank you, Mr. Chair, for inviting Sustainable Development Technology Canada, SDTC, to appear before this committee.
My name is Maria Aubrey. I'm the senior vice-president of operations at Sustainable Development Technology Canada. Accompanying me is Keith Watson, who is SDTC's screening and evaluation manager focusing on technology solutions for soil and water, including aquaculture.
As you are aware, SDTC is an arm's-length foundation, a not-for-profit foundation created and funded by the federal government. Our mandate is to develop and demonstrate clean technologies that have the potential to provide environmental benefits in clean air, water, land, and/or climate change for Canada.
SDTC's portfolio is currently comprised of over 220 projects. These projects are from all across Canada and have a total portfolio project value of $2 billion. This is comprised of $548 million from the Government of Canada through SDTC, with the balance coming primarily from the private sector.
The selection process we follow is a two-stage, decision-gated process that maximizes the use of public funds for the development of Canadian technologies while minimizing development and demonstration risk. Our selection is based on rigorous due diligence and a merit-based assessment process. This process integrates the reviews and recommendations from SDTC staff, experts--both technical and business--and an independent investment committee and the final decision by the SDTC board.
These reviews take into account a number of key criteria, including technical innovation and market and environmental potential. In addition, of course, the evaluation includes the capacity of the team to deliver on the scope of the project. All projects must be done on a consortium-based approach. This is to ensure validation by the key players in the supply chain.
The projects are structured in a milestone-deliverable base, with a go/no-go decision-based approach that allows adjustments to the technology as actual data and findings become available, thus maximizing the chances of success while mitigating the risk of failure and protecting public investment. A typical project takes about three to five years.
At the stage of technology development when SDTC invests, venture capital and other sources of traditional funding are typically not available. During the project execution, potential technology adopters, future investors, and regulatory bodies are able to follow the results and be better informed while the de-risking is done in a mitigated fashion and It's made ready for market entry, also raising private expansion capital.
SDTC prioritizes its funding based on the needs of industry, in consultation and alignment with government priorities. One of the sectors that industry identified a technology gap in is aquaculture. Salmon farming is an important industry for Canada, with a strong domestic and foreign demand for Canadian product. However, the industry has been engaged in a debate around the ecosystem and environmental implications, such as risks of disease outbreaks, discharge of waste and pollutants into the water supply, escapes of non-indigenous species, and transfer of disease from farmed salmon to wild salmon.
Closed containment has the potential for major environmental benefits in salmon farming by reducing the risk of spread of disease, improving feed conversion rates, and reducing environmental discharges such as solids, nitrogen, and phosphorous, but these technologies are not yet proven at a commercial scale in a real-world application. That's why SDTC has chosen to invest in this area. If successful, closed containment provides the aquaculture industry with alternative means to address this economic potential in an environmentally sustainable fashion.
SDTC has received seven aquaculture salmon-rearing-related applications through the course of the last six years and we have committed funding to two of those: the Middle Bay Sustainable Aquaculture Institute floating closed containment technology in 2007, and the 'Namgis First Nation land-based recirculating system, RAS, in 2011.
Total SDTC committed funding for these two projects is $8.2 million. About another $15 million in investment is being contributed by other sources. The SDTC funding has leveraged industry funding as well as contributions from the Gordon and Betty Moore Foundation, Tides Canada, the Department of Fisheries and Oceans, and Western Economic Diversification.
I'll keep my remarks about each of these projects brief, given that both proponents have presented or will be presenting to the committee. My colleague, Keith Watson, can answer project-specific questions.
The Middle Bay floating solid-wall technology is a significant technical innovation with a novel design. It is a floating solid-wall tank, 25 metres in diameter, that contains 3,000 cubic metres of water. Think of it as a massive fish aquarium floating in water.
This technology is intended to increase isolation of the salmon-rearing process from the aquatic environment beyond what is possible with the commonly used open net-pen salmon grow-out technology. The technology minimizes the potential for disease spread. The waste associated with rearing the salmon is collected. The conditions in the tanks can also be controlled to increase the growth rate of the fish and to reduce the mortality rate, thereby increasing production efficiency.
The proposed technology is a variation on the land-based tank technology, redesigned to float in the ocean. The project started with construction of an initial tank. It was followed by a subsequent tank once the operation of the initial tank was confirmed. The materials used in the construction of the tanks have evolved to meet the aggressive nature of the open ocean sites along the Canadian coast.
The project remains in its early stages, with one tank deployed and a second under construction. The tank was installed in Campbell River and was stocked with smolts in January 2011. The smolts have grown significantly, from 35 grams in January to over 800 grams by the end of September 2011, which has exceeded expectations.
The project partners have also secured an MOU with an industry distributor for purchase of the salmon, which completes the supply chain.
The project of the 'Namgis First Nation, from whom you recently heard, has been approved for funding by SDTC. They will develop and demonstrate a commercial-scale recirculating aquaculture system salmon-rearing module near Port McNeill, on Vancouver Island.
The 'Namgis will build on their expertise operating DFO's Gwa'ni hatchery. The RAS system and technology has been used in raising other fish species, such as tilapia and catfish, and is now, through this project, adapting to the larger, more sensitive salmon. The technology aims to improve isolation during the rearing process by establishing land-based rearing tanks that replace 20% of the water per day.
The environment can be controlled to provide optimum growing conditions for the fish. The benefits of the technology include the elimination of discharge into the aquatic environment and soil benefits from the production of compost. The development of the technology is supported by the Freshwater Institute in West Virginia. Our contracting of this project is currently under way, and pre-project design has commenced.
Both of these projects show great potential for new, innovative salmon-farming techniques.
In conclusion, industry has identified the challenges of current salmon-farming methods and has brought forward closed containment as a potential solution to address this need. While these technologies offer promising environmental and economic returns, this can only be proven through demonstrations in real-life settings.
The reality is that industry and private investors consider these types of early stage investments to be too risky, with uncertain economic returns; however, if the economic viability of these technologies is demonstrated, they are quite willing to invest in the deployment of these technologies. Public funding through SDTC, in partnership with industry, helps to fill this gap and gives Canada a leadership position in closed containment.
Thank you.