Proceedings of the Standing Senate Committee on
Agriculture and Forestry
Issue 7 - Evidence
OTTAWA, Tuesday, May 8, 2001
The Standing Senate Committee on Agriculture and Forestry met this day at 5:32 p.m. to examine international trade in agricultural and agri-food products, and short-term and long-term measures for the health of the agricultural and the agri-food industry in all regions of Canada.
[English]
Mr. Daniel Charbonneau, Clerk of the Committee: Honourable senators, I have to inform you of the absence of the chair and the deputy chair this evening. We have a quorum and we will proceed to elect an acting chair for this meeting.
Senator Fairbairn: I move that Senator Chalifoux be our acting chair for this meeting.
Mr. Charbonneau: Is it the pleasure of the committee to adopt the motion?
Hon. Senators: Agreed.
Mr. Charbonneau: Carried.
I invite Senator Chalifoux to take the chair.
Hon. Thelma J. Chalifoux (Acting Chairman) in the Chair.
The Acting Chairman: Thank you for your indulgence in that small bit of housekeeping.
I would like to welcome you all here to this important meeting. Ducks Unlimited is one of the most exciting things in this country, in my view. As a member of the Fish and Game Association in Morinville, Alberta, I am very involved in watching the nesting grounds and the wetlands.
Please proceed.
Dr. Brian Gray, Director, Conservation Programs, Ducks Unlimited Canada: Honourable senators, I have been with Ducks Unlimited for five years. Currently I am in charge of all the conservation programs corporately. That includes our research division, our traditional programs, with which you are most familiar in the Prairies, as well as our government relations and policy program.
Ducks Unlimited opened house in Ottawa 18 months ago. When we opened our shop here we announced that we were here to help develop solutions to vexing problems that we face in conservation. It is in that spirit that we are here tonight.
Mr. J. Barry Turner, Director of Government Relations, Ducks Unlimited Canada: Senator Fairbairn and I and some of you may have also participated a few moments ago on Parliament Hill in a wonderful ceremony recognizing former Prime Minister John Turner as his portrait was unveiled.
I wear two hats in this wonderful city. I am a former member of Parliament, but I am also chairman of the Canadian Association of Former Parliamentarians. I was there today at the unveiling to represent former members - of both Houses of Parliament, I should say.
The Acting Chairman: Some of us had to stay to keep quorum so Senator Fairbairn could go.
Mr. Turner: When you all reach that magical age of senatorial retirement, you will be eligible to join our association.
Dr. Gray and I will present to you what we think is a rather timely and a rather innovative set of recommendations, suggestions and food for thought on how we might manage agricultural landscapes differently in this country.
We were invited to do this at the invitation of your chairperson who, I understand, is seeding his farm this week. Perhaps on another date we will have a chance to share this with Senator Gustafson and some of your colleagues who are not here.
Dr. Gray will take us through a PowerPoint presentation which will take about 22 or 23 minutes and then we will have lots of time for questions and discussion.
Dr. Gray: As all of you are aware, agriculture is a very important component of life in Canada representing greater than 12 per cent of the work force and 8 per cent of GDP.
The current trends over the past 10 years or so include an intensification of land use, declining rural community populations and the amalgamation of farms. We have fewer but larger farms. We have also seen quite a bit of environmental degradation.
These patterns are related in part, but not totally, to the current grain and oilseed price issue in the prairies and we are seeing degradation right across the country. Originally much of our information was generated in the prairies but this is very much a national issue that we are trying to address.
It is not all doom and gloom. In fact, if you listen to the staff at Agriculture and Agri-food Canada, there is talk about developing a new revolution in agriculture. There is talk about the life science revolution. The vision is to have the life science revolution operating in 10 years on the family farm in Canada. That is 10 years away. How do we get there?
There is an overlap between our topics and the goals of Agriculture and Agri-food Canada in the area of environmental stewardship. Nothing that we will present here is at odds, in my opinion, with the direction chosen by Agriculture and Agri-Food Canada.
Why are we here? What are the issues? Essentially, over the past 50 years, technological advances and declining profit margins have resulted in agricultural activities that have negatively impacted the landscape. The key practices that we are talking about specifically include tillage of marginal and highly erodible soils. These are soils that are Canadian Land Inventory, CLI, soils in Class IV and higher. According to most soil scientists, those soils should not be tilled.
We are also talking about wetland drainage, overgrazing and native pasture in riparian areas. Riparian areas are those green shelter belts that are adjacent to rivers, streams and lakes. We also see removal of vegetation in buffer zones along waterways and in field margins and an over-reliance on fertilizer and pesticide use.
We will look at the five key issues. Marginal soil cultivation is not economically nor ecologically sustainable. If it is not ecologically sustainable, it certainly is not sustainable as an agrarian practice. It results in increased sediment and nutrient loads within associated water courses and, in saline areas, increased salinization in the associated uplands.
The second key issue is the loss of wetlands. When wetlands are drained or filled we lose the flood protection values of these wetlands, the potential for groundwater recharge, the water filtration and purification functions and the associated fish, wildlife and human benefits.
The third key issue is the loss of riparian buffer zones. Agricultural activities that reduce or impact this buffer zone along streams, lakes and rivers affect the fish and wildlife habitat directly. That is obvious. The nutrient sediment loading of the adjacent water course and especially the rates of surface runoff are affected. We often think of wetlands as being sponges to help mitigate flood events but so are riparian zones.
All these functions, in turn, affect the water quality and quantity. In the past year we have become keenly aware of the importance of water quality in this country.
The fourth key issue is the loss of biodiversity. Without native plant communities recurring in field margin buffer zones and wetlands, we lose biodiversity and we increase the number of species at risk within agricultural landscapes.
The fifth key issue is Canada's greenhouse gas budget. Converting native prairie into cultivated croplands, excessively tilling marginal lands and draining wetlands impacts not only on our climate but also on our environment through the greenhouse effect.
There are solutions. We want to generate thought and ideas. We do not have a tight financial argument yet but we are developing one. We are recommending government-led programs that financially reward producers who provide environmental goods and services for the Canadian public. Instead of having subsidy or bail-out programs that reward people for the wrong things, we suggest that producers be rewarded for doing the right things. There are no such incentives through government programs at the moment.
Specifically, we are talking about planting and idling vegetation and vegetative cover, protecting and restoring native pastures, riparian field margins, buffer zones, wetlands and estuaries. These programs will have substantial implications not only for the ecological integrity of agricultural landscapes but for the long-term viability of agriculture and the health of Canadians.
Specific program benefits would include reduced soil loss, reduced chemical inputs and associated losses to runoff and reduced flooding, both in terms of the frequency and magnitude of flooding and improvement of water quality and human health. It would mitigate climate change and also provide fish and wildlife benefits.
I would now like to refer to a couple of appropriate quotations that we have seen in this calendar year. The first is from Stuart Smith, who is the chair of the National Round Table on the Environment and the Economy. When speaking at the round table meeting of the nature protection planning program, he stated that protection also must occur on private lands, largely through incentive-based programs for landowners.
In the Speech from the Throne, it was stated:
The government will help Canada's agricultural sector move beyond crisis management - leading to more genuine diversification and value-added growth, new investments and employment, better land use, and high standards of environmental stewardship and food safety.
What we are talking about in our proposal is not at odds with these two quotations. In fact, it overlaps 100 per cent.
Some of the jurisdictional issues that we uncovered while considering this relate to Canadian "farmscapes." People in urban areas look at Canada and see a country of which 93 per cent is largely intact. They say, "Since agriculture only affects 7 per cent of the country, why should we care?" My argument is that96 per cent of the population of Canada is within a kilometre of, or totally encapsulated in, these agricultural lands. Therefore, as human beings in Canada, we should be concerned about what happens on our agriculture lands.
As we all know, private lands fall under the regulatory jurisdiction of provincial and municipal governments. However, under the Constitution, agriculture has federal and provincial involvement and mandates.
Federal-provincial responsibilities and initiatives currently encompass stewardship of water quality, air quality, fish and wildlife habitat, soil conservation and carbon sequestration. In considering the international-scale implications of this proposal, certainly under the Kyoto protocol, we are talking about reducing the amount of fossil fuel use by having fewer fields cultivated. As well, on the sink side, we are talking about sequestering a significant amount of carbon.
Under the North American Waterfowl Management Plan signed by the United States, Canada and Mexico in 1986, Ducks Unlimited Canada receives a substantial amount of its operating budget every year from the U.S. federal government, which is part of a transfer under the North American act. Our current budget this year is $80 million. Eighty-five per cent of this is directed to our conservation programs. While the North American Waterfowl Management Plan has been successful in Canada, I would also argue that all our good work has probably enabled us to tread water, at best, with habitats within agricultural landscapes. While we are protecting and restoring, we are also losing at the other end.
Finally, I should like to talk about the international convention on biodiversity. Our program supports the ideals of that convention.
We are not talking about reinventing the wheel here. There are excellent case histories provided to us by the United States. The Conservation Reserve Program, or CRP, was developed in the 1985 farm bill and has withstood three subsequent farm bills. It is alive and well in the 2002 bill which is under construction at present.
Currently, some 33.5 million acres of previously cultivated land in the United States have been either idled or restored to grasslands, forest lands or shrub lands and are in an idle state. This is done on an annual lease basis with an investment of $1.7 billion per year. The Wetland Reserve Program, which is a fairly small program compared with the CRP, has restored1 million acres of wetlands in the United States.
We have had the opportunity and the pleasure of talking with Mr. Robert Stephenson, who is in charge of the Conservation Reserve Program in the United States. They have learned much from that program. It started out being a commodity reduction program, mostly focussed on sustaining highly erodible soils. It has evolved into a true conservation program. Enrolment in the program is very competitive. One must meet environmental criteria. In fact, they have about 1.5 to 1.6 times as many people sign up for this program as there are spaces available. It is a hugely successful program. The USDA has no intention of getting rid of it. However, it is now providing mostly environmental goods and service.
In Canadian acts and policies, the Fisheries Act protects fisheries habitat. We have a policy on wetland conservation, but it is simply a policy.
There are many provincial acts and policies but most focus on Crown lands. They are not focussed on privately owned lands. Several actually promote wetland drainage or tillage. In this regard, Ontario's Drainage Act, the Federal-Provincial Crop Insurance Program, as well as Saskatchewan's large scale drainage activities are examples where policies are at odds with wetland or upland conservation.
What you are looking at now concerns the Churchbridge, Saskatchewan area. What is depicted is the upper Assiniboine River basin. The Assiniboine River flows into Portage la Prairie, Manitoba and on to Winnipeg where it hits the Red River. This is what the landscape looked like in 1956. It is a very high density area of wetland, or potholes as we call them. There are up to100 potholes per square mile. It is intermixed with parkland habitat and parkland tree setting. These are marginal lands under most Canada Land Inventory, CLI, definitions. If we compare how it was in 1956 with how it was in 1997, we will see that this landscape is providing very few off-farm environmental goods and services. I suggest that is also exacerbating the flood problem we have with the Assiniboine River. Every year, the Government of Manitoba must invest in the Portage Diversion that diverts flood flows from the Assiniboine River and send that out into Lake Manitoba. We seem to be working at cross purposes here, as two governments.
We feel the main actors in what we are proposing will definitely be the producers and the landowners. However, at present, there are few incentives for land stewardship. We are talking about providing incentives. High costs and low profits make self-financed activities unfeasible. Last summer Ducks Unlimited, DU, sponsored a poll conducted by Environics.
We sampled over 600 producers in Ontario and another 1,000 across the nation. The producers told us, loud and clear, that they would like to be stewards of the land. They want to protect the natural resources. They cannot do it right now for financial reasons.
They believe in and take great pride in being stewards of their own land but simply, the financial capabilities are not there. However, there is a willingness there. It is not something they would not consider.
Who, from the federal government, should be involved? Agriculture and Agri-Food Canada should be involved, obviously, from "adaptation," although it is not using that word so much - now it is "transition" into multi-functional farming operations. Natural Resources Canada should be interested in this program in relation to carbon sequestration and our commitment to Kyoto. Environment Canada should be interested for not only stewardship of biodiversity but also stewardship of endangered species and species at risk.
Bill C-5 deals with stewardship and private land stewardship. Department of Fisheries and Oceans is very much interested in this from the perspective of a fisheries habitat and fish resource opportunity. Health Canada is also interested.
In the past year we have been able to speak with four of these five departments. We presented more or less the same discussion to them. As a non-government organization we are a bit frustrated in that these organizations, these pillars of government, do not speak to one another too often. They might each think this is a good idea independently, but it is difficult to get them together.
Arguably, I could approach Natural Resources Canada and it could make an economic argument that, based on its mandate, it could probably justify $5 an acre. I could approach DFO and make the same argument to its financial people. Soon there would be a big pot of money, but it would be all divided up. They will never come together to help implement this program.
That is where we come in. This must be a federal-provincial partnership. I will show you a slide in a few minutes that bears this out.
As I mentioned, we have talked to four of the five pillars. These are what are called the five NRs - the five natural resource related organizations - within the federal government. Mr. Turner and I have talked to the senior staff on several occasions. Again, it is very difficult for them to communicate with one another. They are very receptive but, at the end of the day, budgets are sacrosanct. It is very difficult to talk about moving a large chunk of money from one part of the budget to another.
Our argument is that they all have interest but we need to bring this together. This is an issue for the Government of Canada. That is why we are taking it to this level. Arguably, all of these organizations, all of these institutions believe that they are environmental goods and services. We are saying that collectively, this is something with which the Government of Canada should deal. The obvious delivery arm is Agriculture and Agri-Food Canada, as it is already positioned to do that. However, I am careful to say I do not expect this to come out of its budget alone. This is something in which all sectors of natural resources have an interest.
Who are the main NGO actors? Ducks Unlimited is one. We have floated this proposal by the Green Budget Coalition, a group of 14 NGOs. It is very supportive because of the broad reach of what this program proposes to do and who it will affect.
Looking at ecological fiscal reform, as I mentioned earlier, the life science revolution that Agriculture and Agri-food Canada is after is all about environmental stewardship. Agriculture and Agri-food Canada is actually a critical component of developing this life science revolution.
However, we must also consider overseas markets. Agriculture may have to certify the ecological integrity of its programs to compete in these markets.
You may be aware that the Swedish Seal of Quality program is not a government program. It is a group of 500 producers. I would encourage you to look at its Web site, www.swedishseal.com. It is a group of 500 producers that have come together and has its own criteria for environmental stewardship. In so doing these producers have created a premium for their grains, oil seeds and other products. They sell their products in the European market at a premium because of the way they do it. It is essentially like the certification process we see in North America for hardwood. There is quite a market for their product.
I would suggest that agriculture will go the way of timber products. If we do not get on board soon, it is not a train we will have time to jump on. Before long, we will be run over by that train.
Competitively, in the global market, Canada's opportunity will be in branding itself as having environmentally responsible farming. I would suggest that most senior employees of Agriculture and Agri-Food Canada share that vision.
Looking at a preliminary analysis that we have had done by the Centre for Studies in Agriculture, Law and the Environment at the University of Saskatchewan, the cost of government payments to producers for providing these environmental services would be far less than the current costs associated with the status quo of simply supporting farm incomes. That was our hypothesis when we began. We hired the centre to use a thumbnail sketch and examine whether we are on track. They just considered the province of Saskatchewan. The centre's preliminary conclusion was that planting and idling vegetation in marginal soils could result in a net benefit of $66 million per year in Saskatchewan alone. That told us we were onto something.
On February 12 and 13, Mr. Turner and I brought this to the round table, which is examining ecological fiscal reform. We brought this proposal forward to an expert advisory group, which chose this proposal as one of the initiatives it would like to formally explore through ecological fiscal reform. It established the working group entitled "Ecological Fiscal Reform and Agricultural Landscapes Working Group."
This does not constitute the majority of what the working group is examining. It is considering all ecological and economic activities on the agricultural landscape. The proposal we are presenting is a component of that but it is not the entirety. The goal of this working group is to develop a preliminary report. We will have that report in October of this year.
Preliminary discussions that Ducks Unlimited has had with agricultural and natural resource ministers and senior staff from some of the provinces indicate that there is support for this concept within the public policy agenda. We have sent the same four-page briefing document that you have received to those six governments. We have support, in concept, from the ministers of agriculture in Prince Edward Island, New Brunswick, Nova Scotia and Saskatchewan. Our staff is meeting with the Minister of Agriculture in Manitoba this week. We are trying to set up a meeting in Ontario.
I also know that staff of Alberta Environment, who are looking at change mechanisms, are very supportive so far but we have not met with the agricultural people. We will try to do so this summer.
Overwhelmingly, there is very much support for the concept that we are proposing from the six we have talked to.
In conclusion, we believe that the use of taxpayer-funded environmental stewardship payments to producers will benefit all Canadians, ensure the long-term future of agriculture and save taxpayers money, versus the status quo.
With that, we would be happy to answer any questions.
The Acting Chairman: Thank you very much. It was very interesting and enlightening.
Senator Fairbairn: This is not only a fascinating subject but it is also very germane to where many of us come from. I am aware of the anxiety among a number of people in my area of Southwestern Alberta.
When I was a child I knew all about wetlands. Indeed, that whole area was a place where people from all around the world came during the duck hunting season because it was one of the most prolific and finest places. That is no longer the case. There is hardly anything left.
When you talk about the history of our country, kids growing up now would have no concept at all of what we are talking about because they just do not see it. You may count me as positive in terms of not only protection but trying reclamation and projects.
When I followed your project and went through the document, a couple of questions came to mind. Your document indicates that it was prepared this year, in consultation with Environment Canada. That sounds encouraging.
You talked about government departments having a great deal of difficulty building bridges between and among themselves. That is unfortunately a part of life. In your efforts, including these most recent ones, do you have a sense of new kinds of partnerships with the Government of Canada, through the Department of the Environment and others, or is this very much still in the paper stage?
Dr. Gray: It is still in the paper stage but there is keen interest. Minister Anderson was at our office in Winnipeg last week. Our headquarters is located on a marsh. He wanted to see the Oak Hammock Marsh Interpretive Centre because he had never been there before. We had a chance to talk and the minister is certainly aware of this and he is very supportive. We will be testifying next week on Bill C-5 and we are attaching this document as an appendix.
It is premature to say whether there will be any money available from any department. No one is stepping forward to say they will fund this thing but they all support the concept. I mentioned the budget of Ducks Unlimited being $80 million. We are prepared to partner, not only in terms of our 450 staff across the country, but also with money. The rate and intensity of our partnering with the government on this will be in direct proportion to its value to our mission. I am director of our conservation programs. We are talking about millions of dollars. We are prepared to bring in and match, to some extent, provincial and federal governments.
Prairie Farm Rehabilitation Administration, PFRA, is an excellent delivery mechanism in the Prairies. It is already in place. It could implement this program. Again, I am speaking as someone who has a hunch. I do not have perfect knowledge but, as an outsider who knows a bit about PFRA, I would say it is capable of delivering this. The issue is what do you do in the rest of the country where there is no PFRA-like mechanism. We have offices in every province and we have already talked about the fact that we are willing to help develop and implement this in the areas where the federal government needs supplemental help. In addition to having the staff and the know-how, we also could provide funds if that is necessary.
Mr. Turner: Senator Fairbairn, you are right about what we have lost in the last decades. You can remember the landscape around Lethbridge from your childhood. In the last century, half of the world's wetlands have been lost. In this country, for example, 75 per cent of the wetlands in Southern Ontario are gone. People wonder why their wells are going dry. People wonder why there are water problems, flooding, soil erosion and degradation of our environment. We refer to the wetlands as the kidneys of the earth. If the forests are the lungs of the earth, wetlands are the kidneys.
As a company that had been around since 1938,Ducks Unlimited is now the most successful conservation company in the world.
Dr. Gray did not mention the fact that we had a wonderful meeting about five weeks ago with the Department of Finance. At the end of the day, if this initiative is adopted as a national initiative, as Dr. Gray has explained, the five NR departments will be involved in talking and working together, sharing with Ducks Unlimited, with the provinces and with stewards of the land such as the farming community. We presented this to the Department of Finance in a private meeting with staff from Minister Martin's office, Minister Peterson and staff from his office. They were overwhelmed. They were impressed and said that this is a vision. They saw the vision.
It is important that other departments, the Senate and the House of Commons, when it reaches that point, can see this vision and that the departments co-operate with the Department of Finance's understanding. We thought it was important to approach it early so it would be aware of what is evolving. In this town, as we all know, there are rumours, misunderstandings, misinformation and things get lost in the shuffle. However, the Department of Finance understands our objectives. They see the long-term benefit, not only at the farm gate in terms of income, but for the environment and the overall health of the country.
When Senator Fairbairn says she remembers those wetlands in Lethbridge she is right, they are no longer there.
Senator Fairbairn: In terms of the quantity of money required to bring about the program you describe and the notion of rewarding rather than penalizing, do you have a ballpark figure in mind? What share would you be seeking from the federal government? Would you also go beyond governments to the private sector to build this initiative?
Dr. Gray: That is an excellent question. We are building an economic case now. Essentially we must determine how much is there, how much it will cost and how much it will save. We do not have the answers yet. The ballpark estimate of how much land is involved is somewhere in the neighbourhood of 4 million to 8 million acres.
There are exciting opportunities to bring in the industrial or private sector. In regard to carbon trading, if carbon sinks are ever allowed under Kyoto or if our government shows leadership and says we will do it anyway because it is the right thing to do, there are industries that can buy into sinks. Therefore, industry could help fund part of this.
There is opportunity in the upper Assiniboine River basin for tradable permits. If the City of Winnipeg, the City of Portage la Prairie and the Province of Manitoba ever really looked at the hydrology of that system and understood what was happening, it is obvious that they should bankroll the required funds. They should be protecting the upper Assiniboine watershed. When they drain all the wetlands, which they are doing at an alarming rate, the water runs right off and comes down to destroy our cities. There is opportunity for private sector funding or public sector funding.
Senator Fairbairn: One of the reasons I asked that question was that as you were talking I was envisioning the work that has been done in Northern Alberta by Syncrude. Many years ago, going up there was like visiting a desolate place. That company has been in the reclamation business over the years. Senator Chalifoux will know the degree to which it has reclaimed and replanted. It even has a herd of buffalo up there. It has done a remarkable job. I was thinking of what was done there and of the prospects of doing that elsewhere in Canada to try to recover some of the things that have been lost.
Dr. Gray: It depends on how much financial incentive is necessary. It depends on the area, the type of farming, whether it is a riparian system in Ontario or a prairie system in Southern Saskatchewan. There will not be a "one-size-fits-all," solution so it is important to engage the provincial and municipal governments.
Mr. Turner: One of the good things the government did in the last year was reduce the capital gains tax on the donation of ecologically sensitive properties. It was at 75 per cent in February of 2000. It became 33.3 per cent and, in the October financial statement last fall, was reduced to 25 per cent. That is a wonderful incentive for Canadians who have sensitive lands to donate.
There is a backlog of many thousands of acres waiting for approval by the government under the new initiative. That was a good step.
Dr. Gray: It does not apply much to agricultural practitioners now. They already have a half million dollar exemption. To gain from this tax credit, you need revenues. You need profit against which to write that off. Most farmers these days do not have a profit so this tax credit is not doing them any good. It might be an opportunity in estate planning, and we are looking at that, but even if there were no capital gain, I think it would not help most landowners that are current practitioners.
Senator Banks: I am not a farmer but I have family members who are so I know that what you just said is true. I have a hard time getting around the fact that you said that it would be more effective in ecological terms and cheaper or more efficient to assist farmers by instituting a program of leases or whatever than it would be to use agricultural subsidies. In other words, we are talking about taking the land out of production.
Dr. Gray: Yes.
Senator Banks: I have a multi-faceted question. If farmers now say it costs more to seed, till and harvest this crop than they can get for it, that is not a healthy benchmark from which to work.
I have a hard time understanding how, on any medium or long-term basis, you could convince me, if I were a farmer, that I could do better from any kind of subsidization program that I could conceive of and that the country could afford. Would these programs be payments, buying back the land or lease payments? We are talking about 8 million acres. I do not know what the average cost of agricultural land is, but that is a whack of money. You must have thought about this so would you explain to me what the mechanics are, in your best vision?
Before you do that, would you tell me how much money you get from the Canadian government? I think you told us that you get $30 million from the Americans.
Dr. Gray: We have a very favourable transfer now with the exchange rate. This past year we got U.S.$15 million from the U.S. federal government which is matched by Ducks Unlimited. The North American wetland conservation act that George Bush signed in 1989 made moneys available to Canada if the moneys were matched by a non-federal organizatiton, which could be a state or an NGO like DU. The ceiling was $15 million. That was matched by Ducks Unlimited and came across the border as U.S.$30 million, which, converted to Canadian dollars, was$45 million.
While it depends on the year, I am guessing that the direct partnership money that we get, apart from the millennium stewardship fund money we received, from the Canadian government and through our partners in the Canadian Wildlife Service, would probably be in the neighbourhood of $1 million to $3 million a year in total.
Senator Banks: Thank you for that. How would this work?
Dr. Gray: There are two ways of looking at it. If you look at the current farm aid program of this year, of last year, the year before, basically, of those we have had since we got away from perennial subsidies, it is acreage-based payment in the Prairies. It would behove a land owner to have as much land as possible in cultivation to get the payout. The only number I know is that of my source from Alberta Environment, an economist, who says that farmers received $14 an acre of farm aid from the 1999 planting season. For 1,000 acres the payment was $14,000. It was based on the amount of land tilled. A lot of land in that scenario would probably never be good producing land. If it is CLI IV, V, or VI, it should not be in grains and oilseeds anyway. The system is still rewarding the individual for having economically or environmentally marginal lands in production.
If the average payment was $14 and land that was declared good land, probably the owner made money on it but then if there was other land that was marginal that could be taken of production. Arguably that could be costing the government $30 an acre to subsidize per year.
Those are the types of examples we were looking at - getting it out, paying them to get it out, and it still costs less money. That is just looking at the economics of farming.
Senator Banks: Why is $30 an acre less than $14 an acre? You said just a second ago, as I recall, that it might cost $30 an acre to take that land out of production. We are now subsidizing it at $14 an acre and you said just a moment ago that it is less expensive that way.
Dr. Gray: If the average payment for all the tilled land in Alberta was $14 per acre and some of that is good land and some is bad, it is the bad land that is actually making the farmers lose more money per unit area. No one has the numbers. If it is $14 an acre on average, the marginal lands are probably losing $60 an acre or $40 an acre and some good lands are making money. If you get these bad lands out of production, then you could be saving the government in the neighbourhood of $60 an acre or $40 an acre. We are trying to get those numbers. That is just with the subsidy issue.
Senator Stratton: I would smell the potential for a wonderful boondoggle here if I were a farmer. If the money is allocated and I have a farm that is not doing very well, why would I not give you guys the whole thing and just take the money? How do you decide what is marginal and what is productive? Does the farmer come forward and say, "Here, you can have this"? Who decides?
Dr. Gray: It would be decided by Agriculture and Agri-food Canada. It has good soil mapping of the soil capabilities across Canada. At a macro level, it already has a good idea.
I referenced the U.S. farm bill and the Conservation Reserve Program, CPR. The details and the mechanics of the CRP in the U.S. are that it limits the amount of any given municipality or county that can be in CRP. The cap is 25 per cent of the active farmland in a rural municipality or county or parish.
The preference there, in a perfect world, would be to limit the percentage that any given producer could have and in the current enrolment for 2002 there are very clear environmental indices. Not just anybody is eligible. You have to have riparian zones. You have to have marginal soils. The government will not allow you to enrol productive soils in it. In your example, the mechanics would be such that it would not be allowable.
Senator Stratton: The farmland around Brandon, section upon section, is all good farmland. The land in the Interlake, north of Winnipeg around Selkirk, is very marginal. Folks there are still farming. In the spring much of it is under water. There could be a municipality with marginal lands that amounted to 60 to70 per cent of the total municipality. I am guessing roughly here. Others would maybe have 10 per cent. Would it not be better to return the marginal land in the Interlake region, which used to be a wonderful area for exactly what you are talking about, to what it was, rather than limiting the amount to an arbitrary number like 25 per cent? You would actually like to grow more marshland, I think, in certain areas that were once that way.
Dr. Gray: That is a good point. As a point of clarification, this is a total landscape issue, rather than simply wetlands. We are about entire landscapes. We used to be simply a wetland company but we have evolved into landscapes.
I would stress that DU is bringing this initiative forward. We must engage producer groups, provincial, municipal and federal governments and the 5 NR to come up with the mechanics of this. We have an excellent case history happening south of here with three separate farm bills.
Another good example of what not to do: The first two U.S. farm bills set up the conservation reserve program to protect highly erodible soils. However, they forgot about putting in protective clauses. The caveat was that the land had to be in production for the past three years. Many producers in North Dakota and South Dakota tried to break the native prairie. They tried to farm that land for three years, knowing that they would not make anything, but knowing they could get into a 10-year or 15-year contract following that, which actually exacerbated the problem. That was fixed but there are many of those examples that we could learn from.
Senator Stratton: I heard about that one. That is why I raised this subject, because you can smell a boondoggle here. Farmers, out of necessity, can get very creative.
Senator Tunney: Only farmers?
Senator Stratton: In this particular instance, yes. You could not blame them, if the door was open, to take advantage here.
The last question I have is if much of a farmer's land is marginal, that is, it should be taken out of production, what is he supposed to do? He is trying to make a living on that farm. If he turns much of it over to you folks, he may as well turn over the whole thing.
In cases where you want a long time subsistence farmer to suddenly convert his marginal lands to another use, he may respond that if you take that land, you may as well take the whole thing. Have you thought about that aspect?
Dr. Gray: There are a couple of ways to address that subject. Again, there is no silver bullet solution right now, at least not floating around in my brain.
We presented this to finance and their reaction, looking at the U.S. model, was to question why we would want to lease the land because after 10 years it would have paid for and after 20 years it would have been paid for twice. They asked, for really economically marginal land from a production standpoint but which really is ecologically important, why we would not just protect it in perpetuity with a one-time payment? In surprise, Mr. Turner and I responded, "We would, but we did not think you would go for that."
There are many security issues - the need to protect the farm and all of that - but we are not considering giant acreages across large areas, we are talking about bits and pieces of land, a mosaic of the landscape. There will be areas that, unless farming changes dramatically as it could with genetically modified organisms, GMOs, where the best and highest use would be to provide environmental goods and service. However, there are other aspects. There are areas that Agriculture and Agri-food Canada is considering taking out of crop production and putting into forage, either to try to restore it to a grazing system or to put it into hay. Those are viable agricultural activities and, at the moment, the beef industry is doing quite well in Western Canada.
We are not saying the whole thing will be walled off in wilderness but we have a component that will get the numbers and find out exactly how much it is, what it will cost and what it will save.
[Translation]
Senator Gill: I see in the documentation that Ducks Unlimited as an organization has been in existence for several decades. Personally, I took part in a fundraiser that was held in my area, an isolated corner of Quebec.
We don't hear much about Ducks Unlimited nowadays, except when we receive letters asking for a financial contribution.
I understand that you have approached six governments in Canada and that you have not yet done so in Quebec. I also understand that your mandate is habitat conservation, fundraising, research and education. Has your mission always been the same ever since the creation of Ducks Unlimited?
You are doing some exceptional work in terms of habitat conservation in this country and I believe that the objectives you are seeking to attain are also shared by others.
My other question is about affiliation. I would like to know whether you have a partnership with farmers groups, with native groups or any other governmental organization.
[English]
Dr. Gray: We are in the fundraising business. That is part of what we do. We raise money and spend money on conservation. We have a fairly good partnership with the Quebec environmental department's wildlife branch. One of our staff has been seconded to the provincial government where his task has been to look for the existing agricultural and environmental policies related to conservation, wetland and upland conservation.
We have a small presence there. Our operating budget in Quebec is probably about $4 million to $5 million a year. We have a new project just down the road from Montebello. If you were to drive from Ottawa to Montreal, you would pass it. Along the Ottawa River and the St. Lawrence River between here and Montreal we probably have five or six projects that are visible from the road.
With regard to the First Nations, I tried three years ago to develop a memorandum of understanding with the Assembly of First Nations. They do not do memoranda of understanding. They said, "If you want to develop a national relationship with us, develop a resolution that we could take before our annual general assembly." We have worked with numerous First Nations across the country over our 60-year history and spent about $18 million on First Nation lands, working with stewardship programs, rotational grazing programs, helping them to convert marginal cultivated land that they had recently acquired through land deals or purchases and helping them to restore it to grass for grazing systems.
It would be useful, at a national level, to develop a working relationship with the assembly because they own a significant amount of land and are acquiring more. I thought they could use non-traditional scientific support to enhance or work with their traditional knowledge. The two work very well together. They do not have many traditional scientists working with them. For the most part, they do not trust government. In my vision, we could be a non-government organization that they could trust.
Unfortunately, we never got the resolution to the floor through two annual general assemblies. Our movers either did not show up or decided not to move the motion. I am not sure what this would have done at the national level. We continue to work with individual First Nations where we overlap in our program. In fact, in our boreal forest initiative we are working with several First Nations in Manitoba, Saskatchewan and Alberta.
[Translation]
Mr. Turner: Last year, we launched a major project in Montebello, on the North shore of the Ottawa River. An amount of 2.2 million dollars, shared between the Government of Quebec and Ducks Unlimited, was invested in that project. It was a great project for us in Quebec. We invite you to come and familiarize yourself with it.
I have a question for Senator Gill. Did you buy something at dinner?
Senator Gill: It was fairly expensive, too.
[English]
The Acting Chairman: I know that if you deal with theMétis Nation in Alberta you will get lots of support. In the great wisdom of the provincial government of Alberta of those days, the Métis were given marginal lands. It would be very advantageous for you to contact the Métis General Council and the Métis Nation of Alberta.
Senator Tunney: Greetings. I am a working farmer. When I am home, I keep up with the farm work. My home is only a three-hour drive from here, along Lake Ontario.
You have an office in Kingston, do you not?
Dr. Gray: Yes, we do.
Senator Tunney: I have dealt with that office a few times. You mentioned a pothole. Is that what I refer to as a slough?
Dr. Gray: A pothole is a geologic formation.
Senator Tunney: Is it a little pond on the prairie?
Dr. Gray: Yes. There are some in the limestone plain of Ontario. We just developed a project in the Alfred Bog area. Between the bog and the river there is a limestone plain. We just purchased 1,000 acres of that.
Senator Tunney: Is Ducks Unlimited a company?
Dr. Gray: Yes. We have been a company for 63 years.
Senator Tunney: I never understood that it was a commercial operation. Do you consider it a commercial operation?
Dr. Gray: We are a registered, not-for-profit organization.
Senator Tunney: That answers my question.
Dr. Gray: However, we behave like a for-profit enterprise. We are very businesslike and take every dollar we have very seriously. We consider our members shareholders.
Senator Tunney: I am surprised at the number of newspaper clippings in your material that recommend the abolition of subsidies. If you are making a pitch to farmers, you can understand what their reaction will be if they think you are also promoting the abolition of subsidies. For many farmers these days, the grant allowance is more than all of their net profit and some of their net loss as well. I just do not understand this.
Dr. Gray: As a point of clarification, we did not intend to have those newspaper clippings as part of that folder. That folder is an information package on who Ducks Unlimited is. Separate from that - or they were supposed to be - are the clippings that are relevant to what we are talking about today. They are just related newspaper articles and this is the only group with whom we have shared that as it was put together only today. That is just some lateral thinking from the press on the plight of subsidies.
I should like to say, on the record, that Ducks Unlimited believes in farming and the family farm. We are all about continuing farming. We have wonderful partnerships with landowners. Other than the federal government, we probably have more experience working with landowners than anyone in the country.
We have approximately 100 staff members in Saskatchewan and probably 70 of them are active farmers or at least help family members out on the farm on the weekends. We are very much in support of the family farm and farming. It is part of our culture in Canada.
Our approach is, rather than to subsidize for the wrong behaviour, to develop a mechanism to reward people for doing the right things. We are serious concerning branding Canadian agricultural as environmentally responsible. People from abroad think of Canada in much the way they think of Sweden with regard to how we treat the environment. There is an opportunity for branding and that is an opportunity for export.
With regard to exports to the United States, we are growing duck-friendly grain in Saskatchewan and there are probably a lot of people in the United States who would buy bread made from Saskatchewan grain.
Senator Tunney: I have quite a large wetland on my farm. Your Kingston office made some very good recommendations with regard to it and wanted to do a project there involving quite a few thousand dollars. I was not interested in that. I did the work that they recommended, but not with your money.
If I tile-drained the elevation on the far side of the wetland, fertilized the land with nitrogen and drained it into that water, that would kill the fish and frogs in the water. That is my concern. I never allowed that to happen, but that is something that I am sure you must have to deal with a lot.
Dr. Gray: Tile drainage is a unique and challenging matter. However, for overland drainage or runoff, grass buffer strips, just 50 feet wide, adjacent to riparian areas will, in some areas, capture 99 per cent of any fertilizer or pesticide runoff. Without that buffer strip, it goes right into the creek or river and eventually into our drinking water.
I know tile very well because I am in the bed of Glacial Lake Aggassiz in the Red River area. It is very flat and it is all tiled. Those tiles go directly into drainage ditches that eventually feed into the Assiniboine River and the Red River. There are very high nutrient loadings in these rivers. They do not kill all fish. That particular river system is probably not that bad, just a very nutrient-rich environment. For a trout stream or a cold water fishery this is very detrimental, but it is a warm water fishery so it is less of an issue.
Senator Tkachuk: I want to congratulate you on a very good presentation.
I looked at the subsidy articles. The trouble with subsidies is that the entity that gives them often wants a certain behaviour that they never see in the end.
Will there not be farmers who are not disturbing the land that you have identified for particular conservation reasons? In other words, if you drive through the Prairies you will see farmers who drain and those who leave the potholes and seed around them. How would this work? Would you be concerned with the natural habitat that has been conserved or would you try to reclaim projects?
Dr. Gray: Both. We want to create a system that rewards people who have already done the right thing. The worst thing that could be done would be to develop a system that only rewards the people who need to restore. Those who have been good stewards for a number of years would feel cheated.
Most people would not just plow it under. The system must reward practitioners who are already doing the right thing.
Senator Tkachuk: You talked about economic products, but you did not expand on that. All of these conservation efforts have value. Conservation has economic value.
We have problems with water because it is free. People abuse what is free. With these last couple of problems that we have unfortunately had in Ontario, we have learned that nothing is free.
The water itself in the wet lands has economic value. The value is that the wildlife, ducks, hunting, the enterprises that would arise and the natural beauty are for the good of the communities.
Would you expand a little further on that with a follow up document? It is just as important that while one buys land to do something, there is an economic value that will also go to the community and the country as a whole.
Dr. Gray: A couple of newspaper articles that I provided to the standing committee included discussions of the environment and the environmental goods and services related to tourism or recreation. In the Prairies we already have bed and breakfast operations sprouting up as part of the family farm. Some would argue that there is quite an opportunity for more of that. I think that there is. There are 20 million people in California. In 50 years there will be 60 million people. Where will they go to get away?
There are lots of opportunity in that. There is the direct recreational value of fisheries or of hunting. Half the hunters and fisherman who arrive in Saskatchewan in the fall are from the United States, and they stay on.
Yes, our economists are examining those numbers. Those are more tangible than discovering how much somebody would pay to go bird watching. Those numbers are more speculative.
Senator Tkachuk: You mentioned something about the Kyoto agreement. I am not a big fan of what was done in Kyoto. Nonetheless, we are a signatory to the protocol.
You mentioned something about an agreement on the reduction of land use for cultivation to meet standards set somewhere. I had not heard of that. Would you please speak to it?
Dr. Gray: It was not been signed off in Kyoto process but there was a discussion of carbon sinks and the concept of offsets. Kyoto concerns with reducing the amount of stuff we put in the air. Concurrent to that, there is a group of scientists, environmental people and industry that agreed this was important. However, that group noted that you could also sequester. You can take carbon from the air and bind it in roots or biomass of living or dead plants. The idea was that you would go into a crop land situation that is a net producer of carbon or methane. You would put those by-products into grass or trees that each year would be the sequestering tons and tons of carbon per hectare of land or per acre of land.
If I were running a large coal-fired operation, whether I were a manufacturer or producing electricity, and I had just gone through capital improvements five years ago, I would be frightened by the Kyoto Accord. I would be wondering what I would tell my shareholders because now my capital depreciation is put off by20 years.
Sinks would be one of the bridging mechanisms. You could then figure that emissions could not be cleaned up perfectly in the next 10 years without going bankrupt. However, you could provide offsets by purchasing or leasing land to sequester carbon out of the atmosphere. The net differential would be about the same.
Senator Tkachuk: Some scientists are saying that the more trees you plant the hotter it will to become. You just never know, do you?.
Dr. Gray: I am not an expert on climate change. Forty-nine of the top 50 models on climate modelling are all pointing in roughly the same direction. It has gone past the point of debate. In fact, Harvard Business Review suggested that all corporate CEOs in the U.S. should stop talking about it. It is a reality. The science is there. Let's move on and do the right thing.
Senator Tkachuk: I did not say I was in favour of global warming. I said that am not a big fan of Kyoto.
Dr. Gray: Wetlands do sequester carbon. They are a net sink, especially concerning the riparian system around the trees and shrubbery at the edge of the wetlands.
Senator Hubley: I come from Prince Edward Island. As I have been watching your presentation I have been trying to relate what is a very large and expansive farm environment to a smaller ecosystem.
In the case of Prince Edward Island, how would you identify more productive land as opposed to marginal or less productive land - in Prince Edward Island or other smaller areas?
Dr. Gray: We have quite a bit of experience in Prince Edward Island. We have been working with the Honourable Minister Mitch Murphy on this issue.
I vaguely commented about estuaries and shellfish in my presentation. We were thinking specifically of the Maritime provinces. Two years ago when we had a massive downpour, there was a lot of silt runoff. The soils, bearing many nutrients, killed a lot of shellfish, sea trout et cetera. That is a big industry in P.E.I. We have been working with that. This would manifest itself in P.E.I. by providing a buffer strip along creeks and channels. There is also an elevation at a point around seven degrees or nine degrees of slope on the land where rain becomes problematic and causes loss of topsoil, which runs off into the creeks.
We have been working with people in the ministry to examine developing a cover program there. They already have farm conservation plans. It is one of the provinces that has shown a great deal of leadership on that. This would come in not only at the edges of the fields to buffer that runoff but also in steep areas where there might be a whole field. If it were a 12-degree slope, many people would say that that land should be retired. It may not be a decision to retire every time. It may be a choice of rotation, to, once in five years, plant potatoes and the rest of the time, have some sort of perennial cover.
Senator Banks: I would like you to muse for a second. You made an eloquent statement about believing in the family farm. We all accept that from time to time farming requires public subsidy.
There are two points of view on subsidizing farming. I would like to know which viewpoint your organization would deem to be the wisest. One approach is to subsidize the family farm as an industrial sector - as an industry that we need to subsidize. The other approach is to consider it as a way of life. Those two approaches are not mutually exclusive. If we set out to subsidize family farms, should we subsidize them as a way of life that we want to keep or as an industry that we want to keep?
Dr. Gray: Corporately, we have never mused publicly on that question. I feel uncomfortable speaking on behalf of the company in this instance.
I can speak on behalf of me, if you will indulge me. The latter approach is the one that I favour. If "subsidize" has negative connotations, I understand that. However, if we subsidize, my argument is that subsidizing a way of life will be the context that stands up. It extends beyond food and fibre. It is part of our culture and our heritage and it is part of the landscape.
We produce. What proportion of our farm sales are exported?
It seems to me that there is a cultural aspect, especially for people from any of the small rural communities. If farming is gone, then the rural communities are lost. There are small communities that are trying to invest in the younger generation. They are basically giving university scholarships with the agreement that young people will return to the community.
Again waving the DU flag, we employ quite a few people from some of these smaller areas - North Battleford, Melford, Brandon, Killarney, Camrose, East St. Paul, Amherst and a small community outside Lethbridge, et cetera. We are a part of the community. These communities exist because of farming.
Senator Banks: In consideration of what the Government of Canada and the provinces do together with respect to investing in the family farm, thinking of them as a way of life is more compatible with your way of thinking and with what you want for family farms, is it not?
Dr. Gray: Yes, that is my opinion.
The Acting Chairman: I thank you for attending today. Be assured that the proceedings of the meeting have been recorded and the chair and the deputy chair will receive the transcripts. The information that you provided is invaluable.
I would suggest that you speak with the Métis. They may be a little more receptive. The majority of people that live in the mid-Canada corridor, where the wetlands are, are Métis. They live in isolated settlements and communities and it would be wise to speak with them.
As well, Ducks Unlimited should go to Prince Edward Island to speak with Senator Hubley. Our environment is so important.
Dr. Gray: I will call Minister Murphy tomorrow on a related matter.
The committee adjourned.