Industry Committee on April 27th, 2021

[John Barlow, Conservative, Foothills, AB]

Thank you, Madam Chair. I appreciate the welcome and look forward to the discussion.

Mr. Carey, it's good to see you again. I appreciate your insights. I also want to first congratulate you on co-chairing the newly formed Agriculture Carbon Alliance. I think that is an excellent initiative and certainly well-timed, as I think it's an opportunity for us to highlight the incredible work that agriculture has done in sustainability and in protecting our environment over the last few decades. I am hopeful that we'll see some great work come out of that alliance.

In your presentation, Mr. Carey, you were talking about the importance of competitiveness. I couldn't agree with you more. As we try to dig ourselves out of a very deep financial hole as the result of COVID, I see agriculture as one of the critical industries that will provide some economic development opportunities.

How important, when it comes to that competitive factor for agriculture post-COVID, are the government policies that may have hurt that competitiveness—including some reciprocal issues with canola to China, for example? There is now a carbon tax of $170 coming in the next few years. What impact do some of these policies have on the canola industry, and what are some of the things that you see need to be addressed to ensure that competitiveness?

[Dave Carey]

Canola and agriculture have a really positive story to tell when it comes to environmental policy and the intersection of agricultural and environmental policy. It's really important, going forward, that there be an understanding, when environmental policy is being crafted, of how agriculture works, so that the policy can be implemented on-farm.

China's closure to the two largest grain handlers has certainly been a huge hit on the industry. We had really strong commodity prices in 2020, which has helped buoy it. Domestic demand for canola for biofuels has certainly helped with this.

When it comes to competitiveness, I think it's important to note that carbon pricing is typically designed to disincentivize certain behaviours. When it comes to primary agriculture in western Canada, there has been a lot of talk about electrification, but there simply is not the infrastructure in western Canada to run a grain dryer, for example. You can't reach the BTUs in Alberta using electricity; you have to use propane and natural gas. If farmers could use more electricity, they would, because it's cheaper than propane and natural gas.

I think it's just understanding the realities on-farm and that we've relied on farmers throughout the pandemic, both from a food security perspective and an export perspective.

Going forward, to address the second part of your question, canola has specific targets, but in agriculture we don't want to break more land; we don't want to put more land into production. What we're trying to do is intensification to get more production per acre—higher yield, less disease, less damage from weather. The way we're going to do that is through new plant breeding innovations, such as gene editing.

The concern we have now is that we're going to achieve those new yields through using technology such as gene editing, but Canada's regulatory environment is one that's not incentivizing small, medium-sized or even global players to invest in plant breeding here.

There have been two examples of Canadian innovations developed in Canada, tested and trialed in Canada and commercialized in the United States because there is a clear path to market.

[John Barlow, Conservative, Foothills, AB]

That's a a great point, and I couldn't agree with you more on some of those new technologies and innovations, which are so important for agriculture.

One of them would be the pest management tools that you talked about. We've seen some issues with the PMRA, for example, in the way they're assessing some of the very important pest management tools that we ensure are protecting the soil and being able to grow more on less.

How important is it for PMRA to ensure that they're using up-to-date data and strong, rigorous investigation, but also using economic impact as one of the criteria in their analysis of important tools such as neonicotinoids, for example?

[Dave Carey]

I think PMRA is a world-class institution. Besides Canada, the U.S. and Australia, there are very few pest management agencies that really uphold the high-level science, using risk as opposed to hazard.

The concern we have is that in the absence of data, as PMRA doesn't currently have a requirement under the Pest Control Products Act to actually do monitoring—water monitoring, for example, for us—they make very conservative assumptions that aren't based on real-world conditions. If that continues to happen, farmers don't have access to tools that actually.... They don't have to plough their land; they can allow cover crops and they can be more sustainable.

It also means that we will not get the next generation of chemistries registered in Canada, because we're taking away technologies, based on science that isn't complete. We need to make sure that PMRA has the data to do their work.

[John Barlow, Conservative, Foothills, AB]

Thank you very much, Mr. Carey. I appreciate your time.

Thank you, Madam Chair.

[The Chair, Liberal, Sherry Romanado]

Thank you very much, MP Barlow.

We'll now go to MP Jaczek for five minutes.

[Helena Jaczek, Liberal, Markham—Stouffville, ON]

Thank you very much, Madam Chair, and thank you to all the witnesses. Certainly your testimony has been extremely interesting today and it's covering a wide range of subjects.

My first question is for Ms. Lloyd.

I am aware of some of the good work that Green Economy Canada has been doing, specifically in my riding of Markham—Stouffville. You wanted to emphasize your work with small and medium-sized business. It sounds from your description that you assist them in terms of navigation, opportunities and possible government assistance.

Could you describe that a little bit more? Perhaps you can also allude to where some of Budget 2021 might come in to potentially help some of these small and medium-sized businesses.

[Priyanka Lloyd]

Thank you for the question.

Our local green economy hubs, like the ClimateWise Business Network in York region, are membership-based and any business can sign up. Some 85% of the businesses in our network are small and medium-sized enterprises. In signing up, they get support to measure their carbon footprint, because you can't manage what you don't measure. They get support to develop reduction plans aligned with where their biggest sources of emissions come from and to set long-term GHG reduction targets, so that they can make progress towards emissions reductions over the long term and align their business strategies.

What we know for small and medium-sized businesses in particular—although it's true for all businesses—is that they often lack the time, knowledge and resources to do this kind of work on their own. We're doing one project right now that's specifically focused on what it will take to get SME manufacturers to a net-zero emissions future. One of the interesting preliminary findings coming out of that is that, yes, financial pieces are important, but really what's coming out to be just as important is the knowledge of what to do. They keep saying they're ready and interested and they want us to tell them what the next step is to doing this because they don't have the in-house expertise.

At the local level, the hubs bridge that gap and help those businesses understand the pathway for what they need to do in a way that makes good business sense. It connects those businesses to one another, so they can learn, share best practices and then amplify that to share the success stories, so that other businesses can see that there is a financial, social and environmental benefit to doing this work.

In terms of what was there in budget 2021, I think there are lots of good social supports for small businesses, like wage subsidies and support for digitization and all of that. Truthfully, we did see a gap there in budget 2021. It's a gap that has been there not just this time, but historically, in really looking at how to help small businesses incorporate some of these green practices into their operations.

Things like retrofit funding specifically geared toward small businesses would have been extremely helpful. Typically, the way these programs have been designed in the past has favoured larger organizations. The project threshold and the application processes have been really difficult for small businesses to access. We know that things like energy efficiency are quick wins for businesses because they also often come with financial savings.

Hopefully there are more investments to come and this is something that can be looked at more seriously. Investments in heavy industry and clean tech are really important. It's a critical part of us getting to where we need to be, but it feels like, in general, the small business perspective and the value that's placed on small businesses doing their part have not yet been recognized or invested in.

[Helena Jaczek, Liberal, Markham—Stouffville, ON]

One solution, potentially, would be to lower thresholds for applications for some of these financial opportunities.

Are there other specific things that you could recommend?

[Priyanka Lloyd]

Absolutely. There are a couple of categories. In terms of retrofit projects and project design, making smaller projects eligible and providing more upfront capital is going to help those businesses actually take on those projects and access those things. Streamlining the application process would also be really useful.

Outside of those financial incentives for capital projects, support to help businesses to build their internal capacity is really important. Things like the NRCan energy manager program—being able to bring an energy manager into an organization—are really useful.

We talk about job skills training, but there's also a whole workforce of businesses that haven't been designed with green in mind. How we start to train everyday people internally to understand what a transition to a green economy means will be really important. To be able to scale up networks like ours that provide that support and connection at the local level so that businesses can undertake this work is going to be really important, too.

[The Chair, Liberal, Sherry Romanado]

Thank you very much.

Mr. Lemire, you may go ahead. You have two and a half minutes.

[Sébastien Lemire, Bloc, Abitibi—Témiscamingue, QC]

Thank you, Madam Chair.

Mr. Breton, you mentioned in your opening statement that building a zero-emission vehicle supply chain was necessary for industry-wide electric mobility.

What elements are needed to build that supply chain?

[Daniel Breton]

Taking into account the whole ecosystem is key, from mining, R and D and university involvement to assembly, infrastructure and recycling. Recycling is an important piece we haven't talked a lot about. The diesel or gas used to power traditional vehicles is not recyclable, whereas up to 95% of the components in electric vehicle batteries can be recycled. That is a priority focus for companies like Lithion, in Quebec. Lithion developed an exciting new technology and just signed an agreement with Hyundai Canada to recycle batteries.

We can't build a complete supply chain by sending raw materials out of the country for processing to be returned as finished products. A secondary and tertiary processing industry would create added value. Unfortunately, that has not been the habit of Quebec or Canada in the past. As a former environment minister, I saw the approach that was taken when it came to our lumber and iron industries. Back then, they used to say, “10¢ per tonne”.

[Sébastien Lemire, Bloc, Abitibi—Témiscamingue, QC]

It was a penny per tonne.

[Daniel Breton]

Yes, that's right.

All that to say, I think we can take a much better approach. We have a once-in-a-lifetime opportunity to create good quality jobs in the electric mobility sector in Quebec and Canada, an opportunity that won't come again. Things are really starting to ramp up all over the world, whether in China, Europe or the United States. If Canada does not adopt a plan to develop its own electric mobility industry, it will be left with scraps, both job- and vehicle-wise.

[Sébastien Lemire, Bloc, Abitibi—Témiscamingue, QC]

As a member who represents a mining area, I can certainly attest to the importance of what you're saying.

Last week, the Minister of Finance delivered the budget, and it was passed yesterday. Could you comment on the measures in the budget to support electric mobility? The government recognized the importance of investing in the sector, so that is an important first step. Nonetheless, it could have provided more funding.

What are your thoughts?

[Daniel Breton]

The finance minister's budget investments were actually more general. Some of the measures seem promising, but the details are lacking. We are eager to find out more to get a better sense of how electric mobility will take shape the weeks and months ahead.

[Sébastien Lemire, Bloc, Abitibi—Témiscamingue, QC]

I see. I am counting on you to stay on top of the situation.

Thank you very much.

[The Chair, Liberal, Sherry Romanado]

Thank you.

We will now go to MP Masse.

You have the floor for two and a half minutes.

[Brian Masse, NDP, Windsor West, ON]

Thank you, Madam Chair.

Mr. Breton, I can remember back in 2003 when I showed the film Who Killed the Electric Car? It was based on the EV that General Motors had done. Now we've come full circle to embracing it quite differently.

One of the interesting side effects we have now is something that you noted, which I don't think gets a lot of recognition. I also worked on a bill called, in short, the right to repair, dealing with the automotive aftermarket. It was about getting the information, technology, equipment and servicing for people, other than dealerships, who are fixing vehicles. In the United States that was provided because of the Environmental Protection Agency and other work.

Tesla now refuses to sign the voluntary agreement. To make a long story short, my bill passed second reading in the House of Commons but eventually became a voluntary agreement. Tesla hasn't signed on to that. I'm just curious about what we should do about that and whether perhaps we need to maybe look at a non-voluntary agreement at some point. If we're going to have more electric vehicle suppliers come into Canada, they should all be living up to the same rules.

[Daniel Breton]

I think so. I agree.

By the way, I used to assemble Chevrolets myself in Sainte-Thérèse when I was a student. So I know about vehicle assembly.

I think this is a very important issue. We have to look into that. I mean, not everybody, but qualified technicians can fix your vehicle, whatever the brand.

[Brian Masse, NDP, Windsor West, ON]

You mentioned a training program. I think that's where this budget could actually do some work, because there are some aftermarket progressive people—Bento from Bento's automotive in Toronto and others—who are actually doing some training, but there's no real electric training out there for many vehicles.

It's interesting; my friend has an electric vehicle, and Ford still tried to sell him oil changes.

[Voices]

Oh, oh!

[Brian Masse, NDP, Windsor West, ON]

They weren't trying to do anything improper. They just didn't have the skill set down into even their sales department. It's changed.

Do you have any thoughts on how to roll out a program to accredit people in the aftermarket to provide that?

[Daniel Breton]

Actually, EMC's members are working on putting together programs, whether they're at the high school level, the university level or the college level, because we will need to have more and more training and retraining. That's something that EMC works on.

I can tell you that we've had discussions with different colleges in Canada, so it's on its way. Quebec is leading the way with B.C., but there's a big future for colleges, universities and high schools in that.