Thank you very much, Mr. Chair. Good morning, committee members. Thank you for inviting us.
My name is Garth Whyte, and I'm president and CEO for Fertilizer Canada. Fertilizer Canada is an industry association whose members not only sell fertilizer to farmers and homeowners but also manufacture and mine nitrogen, phosphate, potash, and sulphur. You have a handout, our annual report. It is translated and it explains who we are and what we do.
Fertilizer is one of the world's most precious natural resources. It helps soils become more productive, accounting for 50% of food production. To feed a projected world population of over nine billion by 2050, food production must increase by 70%. Canada's fertilizer industry stands ready to meet this challenge.
Andrew talked about finding a needle in a haystack. In our area, we're the haystack, and we have to mine it and pull it out. Saskatchewan is the world's largest supplier of potash, a mined product accounting for 46% of global trade. Alberta holds the largest concentration of nitrogen fertilizer production facilities in Canada, which add value to the province's natural gas resource. Additionally, Canada is home to the world's largest fertilizer company and the world's largest agri-retailer. These and all our members' contributions are vital to increasing crop production sustainably.
As the committee considers measures to enable economic opportunities in Canada's natural resources sector, I want to highlight three recommendations to aid growth, protect the environment, and help farmers feed the world: first, help industries to promote and implement innovative programs that protect Canada's air and water, such as our program, the 4R nutrient stewardship, which is the right source of fertilizer at the right rate, right time, and right place; second, ensure greenhouse gas reduction policies are science-based and recognize industry competitiveness; and third, enable trade through the development of transportation infrastructure.
As mentioned, more crops need to be produced on less land to feed the world's growing population. Climate change makes this challenge all the more significant, as it requires adaptation in farming systems and innovative ways to protect the environment. Our 4R nutrient stewardship is a science-based approach to fertilizer application.
At last year's United Nations conference on climate change, COP21, we shared how the fertilizer industry can help achieve greenhouse gas reductions from agricultural sources by using 4R nutrient stewardship. Research demonstrates that 4R practices can reduce nitrous oxide emissions released during fertilizer application by up to 25%. Annually, that's a one-to-two megatonne reduction of nitrous oxide emissions in western Canada alone.
One of Fertilizer Canada's strategic goals is to have 20 million acres under 4R nutrient stewardship in Canada by 2020. Fertilizer Canada has worked with governments to promote this innovative process to farmers and homeowners through memorandums of understanding with farm groups, environmental stakeholders, and provincial governments. While the federal government has endorsed 4R nutrient stewardship through the agricultural greenhouse gases program and Growing Forward 2, there are additional opportunities for partnerships resulting in tangible reductions in greenhouse gas emissions.
To that end, our industry has also developed the nitrous oxide emissions reduction protocol. We're using our mined product to develop these programs, which are then used, of course, in agribusiness. The nitrous oxide emission reduction protocol, or NERP, develops saleable carbon credits for farmers who reduce on-farm greenhouse gas emissions using 4R nutrient stewardship practices. Currently used in Alberta's system, the NERP could be used to offset large final emitters in any greenhouse gas reduction regime developed by governments.
We recognize and encourage the government to support sustainable phosphorus management, in a similar way to nitrogen management, to preserve another of our country's precious natural resources: water. Fertilizer Canada is committing to work with stakeholders in Canada and the United States to reduce losses to Lake Erie and other vulnerable water bodies. Protection of these water systems is a subject of our 4R nutrient stewardship agreements with the Government of Ontario and the Government of Manitoba, an approach endorsed by the International Joint Commission.
At production, sustainability is a pillar. Nitrogen fertilizer manufacturing processes are highly efficient, nearing the theoretical minimum for combustion emissions, and use natural gas as a primary input. Extensive government and third-party benchmarking shows that Canadian facilities perform in the top quartile for energy efficiency and greenhouse gas emissions. Likewise, potash producers employ the best available technology in their mining practices.
Environmentally or scientifically, unattainable greenhouse gas reduction targets negatively impact our industry's competitiveness. A recent report by the Ecofiscal Commission shows that the nitrogen fertilizer manufacturing sector in Alberta, where the vast majority of this product is manufactured in Canada, is one of the most energy-intensive, trade-exposed industries, and thereby is most vulnerable to costly policies. Any target set by the federal government should be achievable and sector-specific, balancing environmental goals with the economic realities of our industry.
Further, the government should recognize those efforts taken by our sector to produce real emission reductions through 4R nutrient stewardship, which if implemented on farms across Canada would offset the emissions of nitrogen manufacturing facilities.
Finally, the government can aid miners and manufacturers of fertilizer products by enabling trade through the development of transportation infrastructure.
Most fertilizer products in Canada are produced in landlocked provinces, necessitating long hauls. The large volume of shipments and special handling requirements of some fertilizer products make fertilizers the third-largest commodity shipped by Canada's class 1 railways, CN and CP.
Fertilizer produced in Canada is exported to 80 countries around the world. As the government seeks to enable trade, they must ensure that investments are made in transportation infrastructure to ensure that the capacity exists to meet the needs of all shippers. There are opportunities for the federal government and the private sector to facilitate these investments, exemplified by the recent Pacific gateway initiative.
Several recommendations were made by the Canada Transportation Act review panel to incent private and public sector investment in transportation corridors. We encourage the Government of Canada to consider and implement these recommendations quickly to aid trade-focused industries such as fertilizer.
To conclude, Mr. Chairman, I want to thank the members of the committee for this opportunity to present our views.
In summary, our recommendations are to help industries promote and implement innovative programs that protect Canada's air and water, such as 4R nutrient stewardship—the right fertilizer source at the right rate, right time, and right place; to ensure that greenhouse gas reduction policies are science-based and recognize industry competitiveness; and to enable trade through the development of transportation infrastructure.
We welcome the opportunity to continue this dialogue. I am pleased to answer any questions after the presentations.
Thanks very much.