Thank you, Mr. Chair. On behalf of our members, I appreciate the opportunity to be here.
I'll start by saying that I echo a lot of what both John and Ray have said here this morning.
CSTA is a not-for-profit association made up of more than 130 company members engaged in all aspects of seed from research and development to production, processing and domestic and international sales. The seed industry contributes $6 billion a year to the Canadian economy and employs more than 60,000 Canadians, with exports of more than $600 million. Our members also do approximately $171 million in domestic research and development annually.
Our members range from small family-owned companies to large multinational firms operating in over 50 different crop kinds. By developing high-quality seeds, our members supply Canada and the world with the material used to produce food, feed, fuel and fibre. This is why seed is so important. Seed is the start of it all, the first link in the agri-food value chain. It's the microchip that powers the now close to $111 billion annual agricultural industry. It is where the innovation is delivered.
However, innovation requires investment, and to secure investment, Canada needs to be an attractive place to do business. Cumbersome regulations can curb or discourage investment in innovation, especially for smaller enterprises, and the majority of our members would be considered SMEs, small and medium-sized enterprises. That said, we applaud the committee for undertaking this important study.
In much the same vein as John, I'd break our members' major barriers to innovation into three categories: an intellectual property system that encourages investment, which we call value creation; a clear path to market for the commercialization of new plant varieties, which we call plant breeding innovation; and continued access to crop protection products, essentially protecting the seed once it is planted in the ground.
On average, it takes seven to 10 years and millions of dollars to develop just one cereal variety. We're pleased to see the ongoing Agriculture and Agri-food Canada and Canadian Food Inspection Agency consultation on the plant breeders' rights regulations. Proposed amendments would ensure the long-term sustainability of both public and private breeding. This is value creation with a robust intellectual property system.
The current regulatory system for plant-breeding innovation, known as the plants with novel traits system, lacks clarity and service standards and is excessively expensive for smaller and medium-sized companies. There are multiple stages for the pre-market assessment of new plant varieties, and these are managed by two different departments within CFIA and another within Health Canada. The complexity and length of the pre-market submission process increase the cost and administrative burden on small organizations. Plant breeders need a clear regulatory path to market to bring their innovations forward.
Canada's globally unique PNT, plants with novel traits, system has served us well for the past 25 years, but in future, it will curtail crop innovation if enhancements are not made. The case-by-case approach used to determine which new varieties are subject to pre-market assessments causes great uncertainty for the plant-breeding community. They cannot be sure if their products require approvals, and if they do, how much it will cost, what data they will need and how much additional time it will take to do field research and obtain the necessary approvals.
A recent study of Canadian plant breeders done by the University of Saskatchewan indicates that nearly half change or scale back the research and development activities in Canada to avoid falling under the Canadian PNT regulations. Moreover, 20% of varieties regulated in Canada are not regulated anywhere else in the world.
The advent of new breeding methods, such as gene editing, will amplify this problem. There are examples of products being commercialized in the U.S. or elsewhere where regulatory regimes for plant-breeding innovation are clear. We are pleased to see that Minister MacAulay has tasked an industry-government technical working group to discuss how the PNT system is delivered and how it can be improved. CSTA does have a seat on that committee.
Given Canada's reputation for high-quality agricultural products, we should be championing and encouraging the adoption of the newest tools that will drive innovation in seed and grains. Tools like gene editing can bring new varieties to the market faster and at lower costs than ever before. Providing a clear regulatory market will allow us to continue to invest in new plant varieties. This will also encourage smaller enterprises to engage in plant breeding. This in turn will enhance competition in the marketplace and ultimately increase the choices available to farmers to produce for the world.
Last, once the seed is in the ground, farmers need access to the best chemistry to ensure that every seed planted results in a successful harvest. On this subject, we echo the comments of our partners, the Canadian Canola Growers Association, who stated that, while the health of Canadians and the environment must remain paramount, evaluations of pesticides should consider the economic impacts they will have on farmers and small businesses. Changes to the Pest Management Regulatory Agency of Health Canada are needed, and we are pleased to see that consultations on the subject are also under way.
Thank you for the opportunity, and I welcome any questions.