Proceedings of the Standing Senate Committee on
Agriculture and Forestry
Issue 27 - Evidence - Meeting of December 6, 2012
OTTAWA, Thursday, December 6, 2012
The Standing Senate Committee on Agriculture and Forestry met this day at 9:02 a.m. to examine and report on research and innovation efforts in the agricultural sector (topic: coordination between federal and provincial governments and the private sector to fund research and innovation in the agriculture and agri-food sector).
Senator Percy Mockler (Chair) in the chair.
[English]
The Chair: I declare the meeting in session. I want to take this opportunity to thank the witnesses for appearing this morning before the Standing Senate Committee on Agriculture and Forestry. I am Percy Mockler, a senator for New Brunswick, and I would like to ask all senators to introduce themselves. Then we will ask the witnesses to make their presentations.
Senator Mercer: I am Senator Terry Mercer from Nova Scotia.
Senator Merchant: Pana Merchant from Regina, Saskatchewan.
[Translation]
Senator Robichaud: Fernand Robichaud, Saint-Louis-de-Kent, New Brunswick.
[English]
Senator Callbeck: Catherine Callbeck from Prince Edward Island.
Senator Mahovlich: I am Frank Mahovlich from Ontario.
Senator Plett: Don Plett and I am from Manitoba.
Senator Buth: JoAnne Buth from Manitoba.
Senator Eaton: Nicky Eaton, Ontario.
[Translation]
Senator Maltais: Ghislain Maltais, from the province of Quebec.
Senator Rivard: Michel Rivard, the Laurentides, Quebec.
[English]
The Chair: Thank you. The committee is continuing its study on research and innovation, and efforts in the agricultural sector from the producers' perspective.
Today we have Mr. Roman Szumski, Vice-President, Life Sciences (National Bioproducts Program), National Research Council Canada; and Dr. Jerzy Komorowski, General Manager, Aerospace, Engineering, National Research Council Canada.
Thank you for accepting our invitation to share with us your comments, vision and recommendations. Please proceed with your presentation, Dr. Szumski.
Dr. Roman Szumski, Vice-President, Life Sciences (National Bioproducts Program), National Research Council Canada: Thank you, Mr. Chair. It is an honour and pleasure to have an opportunity to contribute to your examination of research and innovation in the agricultural sector.
I am Dr. Roman Szumski, the Vice-President of the Life Sciences division at the National Research Council Canada. I am a medical doctor by training and I have had experience as a life sciences industry executive before coming to the NRC in 2005. I am joined here today by my colleague, Jerzy Komorowski, the General Manager of the Aerospace sector.
Given that the theme today is collaboration in innovation, we have an example of extreme collaboration that we will give you. Believe it or not, you will have reason to want to speak to an aerospace engineer, despite being the Agriculture Committee.
As mandated by the National Research Council Canada Act and as part of the Government of Canada, NRC undertakes, assists and promotes scientific and industrial research in different fields of importance, ranging from agriculture to human health to aerospace and construction. In keeping with the Government of Canada's priorities, NRC is currently refocusing to become more industry-driven, with a sharper focus on supporting commercialization for Canadian innovations. With your permission, I would like to provide some examples of NRC's engagement in agriculture-related activity, particularly our role in fostering research and innovation projects with public- and private- sector partners.
One such partnership includes a remarkable seed-to-sky achievement for Canada. The committee may be aware that NRC's Falcon 20 jet recently became the first civil aircraft in the world to fly powered by 100 per cent biojet fuel not blended with petroleum. This is aviation history and it happened here at the Ottawa airport.
Agrisoma Biosciences, a Canadian biotechnology firm that has been incubating at the NRC in Saskatoon for a decade, developed a plant trademarked as Resonance, a new strain of mustard seed, the scientific name for which is brassica carinata. It is the basis for this fuel.
Complementing Agrisoma's research capabilities, the NRC's expertise in plant genetics contributed to the development of the source plant, which produces a higher-yield oil with the right chemistry and a plant that thrives in semi-arid areas as well as marginal soil. Therefore, Canadian farmers can grow a biofuel crop on land that might otherwise lie fallow, without displacing food crops, unlike the majority of plants that are considered for biofuels today.
This year, Agrisoma contracted with more than 40 commercial growers in Western Canada to grow 6,000 acres of this oilseed crop to prepare for the flight. The farmers gain a new source of income, plus the plant provides a more sustainable source of energy for domestic and international markets, with added potential for significantly reducing aviation-related emissions. NRC Aerospace experts tested emissions and evaluated the biofuel for engine performance during the test flight.
Other research or funding partners for this project included Applied Research Associates, the Government of Canada's Clean Transportation Initiatives, the Green Aviation Research and Development Network, Honeywell, Chevron Lummus Global, and the U.S. Air Force.
With this crop, the growers will save on input costs with respect to water and fertilizer. When crops like this are suited to higher temperatures, more frequent droughts and less fertile soil, the environment benefits, too.
From a theme of collaboration, we have in this particular project farmers working together with biotechnologists — both private and government — aerospace engineers, and test pilots. It is a collaboration that gives me great confidence that Canada can be first. I am sure you can sense from the way I am describing this that we have a great sense of pride for having accomplished this for Canada — us and all of our collaborators.
Similar issues face food crops. Developing new and higher-yielding crops is critical for Canadian agriculture to seize opportunities presented by the growing global demand for food. In addition to traditional foods, consumer-related demand has resulted in new markets for higher-end foods and natural health products. This presents opportunities for Canadian biotechnology companies and the agricultural sector supplying raw materials for their products.
Sevita International Corporation, for example, is an Ontario-based company focused on marketing non-genetically modified soybeans selected for superior health benefits and destined for exporting to international speciality food and beverage markets. Beyond providing Sevita with access to research expertise and incubation space in our facilities, NRC is assisting Sevita in identifying the phytochemicals in their plant for potential health and feed benefits in the soybean varieties.
Also, one of Sevita's predecessor companies achieved commercial success through help from the NRC Industrial Research Assistance Program, IRAP, to support research and provide technical and business advice.
Another collaborative project, this one involving the NRC, the University of Prince Edward Island, Agriculture and Agri-Food Canada, and financial support from ACOA, identified bioactive compounds in rosehips, ideally suited to the Maritimes. A number of private sector Canadian partners are evaluating the commercialization opportunities for rosehips' health-benefiting compounds.
Canada's BioPotato Network is a program led by Agriculture and Agri-Food Canada and involves the NRC. They have studied a variety of potato crops, and the researchers have found coloured potato varieties that have rich antioxidants rivalling those of blueberries, but with the added benefit that potatoes can be grown on a much larger scale at lower cost, maintain elevated antioxidant levels throughout food processing, and are a source of gluten-free starch.
Aside from federal R & D teams, partners included six universities from four provinces, Prince Edward Island's Bio| Food|Tech centre and the culinary research chefs at Holland College. One of our jobs is that we are expected to sample output from the college and I love this job; it is a lot of fun.
Through research, NRC contributes to scientific evidence that companies need to meet regulatory requirements, and ultimately to the safety and security of agriculture-based natural health products. We also help clients assess the quality of their raw ingredients and conduct pre-clinical trials to determine if products are safe enough to proceed with investment in human clinical trials.
I trust these examples provide the committee with a sense of NRC's pivotal role in supporting innovation and opportunity in Canada's agriculture sector. To develop and demonstrate their innovations' commercial value, partners count on cost-effective access to NRC's highly specialized technical and scientific expertise and our research facilities — the personnel and physical infrastructure companies require, but which small- and medium-sized companies rarely have the resources to invest in on their own.
Research and innovation can strengthen Canada's competitiveness of agriculture and agri-products at export markets, while the production and profits remain in Canada.
Thank you for your time and I welcome any questions for myself or my colleague.
Senator Plett: Thank you for appearing here this morning. My first question is purely out of curiosity. How long and how far did the test flight go on the biofuel?
Jerzy P. Komorowski, General Manager, Aerospace, Engineering, National Research Council Canada: The important thing, of course, is that we did not have much of the fuel; we had a total of about 40 gallons. The uniqueness of the Falcon is that it has separate tanks and so we were able to switch between regular fuel and the biojet fuel during the flight.
We had a total of about a half an hour, but the key thing was that we were able to do it at an altitude of 10,000 metres. This is typical cruising altitude for passenger jet aircraft. We have been measuring emissions using our T33s specially equipped at altitude, which is really valuable for us from a research point of view. While the event was fairly mediatic, it was really a research event and we are still analyzing the data.
Before we had spent some fuel on the ground, we had the same engine in our gas turbines laboratory. We also attempted relight using this fuel, so we wanted to know what would happen if the engine stops and the properties of the fuel if one needs to restart the engine at altitude. Everything went fine and the emissions seemed to be lower.
Senator Plett: Did you take off using the fuel?
Mr. Komorowski: No.
Senator Plett: You talked about the global demand for fuel, and before 2050 we will have 9 billion people to feed on this earth. One of my concerns is that I have spoken to farmers in the livestock industry who say that one reason for their feed costs going up is that more and more of our crops — corn especially and others — are being taken to use in ethanol plants. Of course, across the line there are many subsidies being given and they believe that is one reason for our high feed costs.
You suggested that a lot of the land you will be planting your crops in would be lying fallow otherwise. One witness here said that they had done a large contract. You just say Western Canada here, but he was a little more specific. He said that my province of Manitoba was front and centre in having done some contracts. I know most of the land there would not be lying fallow, so they are using land that would otherwise be used for food.
Would you talk a bit about that? Although I support the research and innovation, I am concerned that we are using our food to put into fuel.
Mr. Komorowski: The food-fuel debate is very important to the NRC, so we decided a number of years ago that we would not pursue research in, for example, the ethanol from corn. We are focusing on what we refer to as third- generation biofuel. We would be looking at crops — like the example I gave — which have the opportunity of growing in marginal lands and in spaces that are not competiting with food. We are also looking at other ways of making fuel from algae, for example, which would not be displacing farmland.
My understanding is — and I am not an oilseed industry expert — the oilseed industry believes that there is a capacity of up to 10 per cent of the crop land in canola, for example, that can go towards industrial oils and that would not materially impact food costs. However, beyond that, you would start to run into the challenge.
As a research organization, we focus on third-generation biofuels that take that into account present opportunities to the market to use crop land that is not applied to food, and alternate technologies that do not even go close to the crop land, like the algae example.
Senator Plett: I certainly support that. Perhaps my colleague will talk about oilseeds and canola, because she is an expert on that. I will wait to for her to ask questions.
Senator Mercer: Thank you for being here. I am a big fan of the National Research Council. I think Canadians do not really understand the gem we have in the National Research Council, the work that you do, and the history of the product development research that has gone on there.
Do you think it will be commercially viable to get into the business of making fuel from mustard seed, and particularly for aircraft? The test worked. I am glad to hear that, but what does the commercialization of it look like?
Dr. Szumski: I mentioned quite a number of substantial companies that are involved in the collaboration. These companies have done their due diligence to understand whether or not they believe it is worth making investments in this technology at this stage. The response from them — and we take the cues for commercialization from industry — is that industry is interested in this. They are making investments in this space.
Senator Mercer: One of your partners is the United States Air Force — not an insignificant group of people. Do the partners have a proprietary call on the technology? Would the partners own a piece of the technology if it goes to commercialization?
Dr. Szumski: There are multiple technologies in a technology like this. Some are owned by that Canadian biotech company; actually the key ones are, including the plant itself. Some of the conversion technologies are owned by the other companies that were mentioned, such as Honeywell and ARA. The U.S. Air Force would be a partner that is involved in terms of the application and understanding the results. The air force tends to be interested in alternate fuels as well.
Senator Mercer: You talked about 40 commercial growers in Western Canada who have grown about 6,000 acres of this oilseed crop. Is it viable to be grown in other parts of Canada? We do not have a lot of arable land in Nova Scotia. We have a lot of rock.
Dr. Szumski: I do not think it will grow on rock.
Senator Mercer: No, I do not think so either, but have you looked at other regions of the country where it might be viable for farmers to grow it? If it is on land that they are not currently using, it is a bonus.
Dr. Szumski: Yes. I am not an agronomist. I do not have the level of expertise to answer that. My understanding is that the nature of the crop is suited towards the western provinces at present.
Senator Mercer: Good for them. Finally, my last question is a simple one: What are rosehips?
Dr. Szumski: It is a flowering plant.
Senator Eaton: No, it is the seed left over from rugosa roses or old fashioned roses. When you see them at the end of the season, in August and September, it looks like a pinkie-red seed ball.
Senator Mercer: I am on this committee to learn these things.
Senator Eaton: They grow along the side of the road and in gardens. They are old-fashioned roses.
Senator Mercer: Thank you, witnesses, and thank you, Senator Eaton.
Dr. Szumski: That is very helpful. I have experts around the table to help us.
The natural health products field is quite a substantial industry in Canada. It has about $4.7 billion in sales a year. It is mostly export and mostly very profitable to the producer because they are high value products. It is an interesting space.
Senator Mercer: Thank you.
Senator Eaton: Thank you, gentlemen. My first question is to do with fuel. Have you done any experiments with animal fat or with forest products the way that they are now making cellulose with forestry products? Has any of that been tried to make jet fuel?
Dr. Szumski: We have not done that work, no.
Senator Eaton: I think they are making biofuels for cars with animal renderings.
Dr. Szumski: Yes.
Senator Eaton: Nothing else has been tried?
Dr. Szumski: For us, as I indicated, the interest is in the non-food crops and things that do not displace food. As for the theme of developing fuel from waste, which would include things like animal renderings or even municipal waste, the algae example that I mentioned is one where the organism can grow on municipal waste. That would be a method of converting municipal waste into fuel. The animal rendering is simply not an area in which the NRC has done work.
Third-generation biofuel is obviously an emerging area. It is like the VHS-Beta scenario; you do not know which one will emerge as the key supplier in the end. Which one does will depend on things like the logistics of collection and transport, and the way that the whole supply chain works out. We also anticipate that, when the airline industry starts to be supplied with greater and greater amounts of biofuel, it will likely come from multiple sources. There is no one source that could possibly provide for all of the aerospace needs.
Senator Eaton: Is there anyone in the U.S. who is trying to do what you are doing in development, and is there cross- fertilization of ideas, so to speak?
Dr. Szumski: There is strong collaboration. In the biofuels space, we work with the U.S. Department of Energy and we have multiple collaborations with them.
Senator Eaton: And also with universities?
Dr. Szumski: At the NRC, we tend to work in the U.S with the big government labs.
Senator Eaton: And in Canada?
Dr. Szumski: In Canada, there are a number of university researchers that we reach back to and that help us with some of this work. There is a variety across the country.
Senator Eaton: You are not siloed, in other words?
Dr. Szumski: No, the NRC is anti-silo. We are moving in quite the opposite direction.
Senator Eaton: In our studies, both in forestry and in agriculture, sometimes we find that one end of the country is doing the same kind of research as the other end of the country, and no one is talking to one another.
I wanted to take you to Sevita International. The company is focused on marketing non-genetically modified soybeans. Because there seems to have been such an uproar in Europe over genetically modified seeds, which is probably for all kinds of trade reasons and not scientifically based, is this the way of the future? Do you see this going into canola and wheat? Is this kind of research something that will be spread throughout food crops?
Dr. Szumski: That is an example of a company that is selling a specialty crop that can command a much higher value because there is a consumer interest in the output of that. As this committee would know, the vast majority of canola in Canada is genetically modified. Do I see that going the other way? For niche and specialty markets, you can picture it emerging as an interest, but, in order to meet the productivity requirements that producers have, the current canola varieties have a tremendous output. I do not see it going the other way, no. The productivity would be too low to go back to the old crops.
Senator Eaton: Thank you.
Senator Mahovlich: You mentioned a potato taking the place of blueberries. I am a great fan of blueberries; I have them in my cereal every morning. What colour skin would the potato have?
Dr. Szumski: Those are the purple or blue potatoes.
Senator Mahovlich: This year the popular thing is sweet potato fries. Everyone is asking for sweet potato fries. If we get a blueberry potato, I think that will really hit the jackpot. For blueberries themselves, I am paying $28 for a little basket these days. It is getting quite expensive because the value of blueberries is so high. They are good for your health.
Dr. Szumski: There is good work to support that.
Senator Mahovlich: Was this mustard plant in high demand? I think I have driven by a field, and people would say, ``Oh, that is mustard seed.'' Is there a great demand for mustard these days?
Dr. Szumski: Again, I apologize. You are getting into areas that I am not an expert in, but Canada supplies a significant percentage of the world's mustard seed — 80 per cent. Most of the mustard that you buy from France is Canadian.
Senator Mahovlich: Dijon mustard must come from France. There fields are filled.
Dr. Szumski: They make it there, but they get the mustard seed from us, or often they do.
Senator Mahovlich: That is interesting.
Dr. Szumski: Eighty per cent of the world's mustard seed is provided by Canada. It is a very important crop.
Senator Mahovlich: I think we have a lot of fields of it in Ontario.
Dr. Szumski: Yes.
Senator Mahovlich: There will be more demand now for mustard seed.
Dr. Szumski: This is a very specific one that is made for biofuel. It is derived from the mustard seed.
Senator Mahovlich: It is a specific mustard seed?
Dr. Szumski: That is correct.
Senator Mahovlich: I see. It might not be able to be a popular one in Ontario. We have some rugged country up north.
Dr. Szumski: Yes.
Senator Mahovlich: We will have to see, I guess.
Dr. Szumski: We will have to see.
Senator Buth: Thank you very much for being here. My first question is about all of the different agencies and funding organizations and research in agriculture and how you fit into that. Can you talk a bit about NRC versus Agriculture and Agri-Food Canada and describe the differences, and also about NSERC, the National Science and Engineering Research Council?
Dr. Szumski: Yes, I would be glad to. With respect to the granting council, the granting council provides funding to universities to do research. They are a small group of people with a large pot of money, and they provide the funding. The NRC is more like Agriculture and Agri-Food Canada.
We are a ``doing'' organization. We have our own facilities, equipment and professional staff who undertake the research. We do not provide funding; we do the work.
Between the NRC and Agriculture and Agri-Food Canada, Agriculture and Agri-Food Canada has people focused on the agronomy and on plant breeding. They actually have breeders in the large fields and they will try out the new varieties. The NRC has expertise in understanding the biology of the plant. We do things such as gene sequencing, and understanding the chemistry and the hormone profile of plants.
We are working together — and there are a number of significant collaborations with Agriculture and Agri-Food Canada and ourselves — to help accelerate the breeding process. We provide the Ag Canada scientists with critical information related to the genetic sequencing of a plant or its hormone profiling, and they use that information to accelerate their breeding process so they have a good understanding of this plant versus that plant, and which traits they want to put together.
There is a spectrum of activity that needs to take place to develop a new crop variety, and we are in different segments of that.
Senator Buth: That is interesting. You talk about some of the basic science that you are doing, but the projects that you reported here are much beyond that. What is the balance between the basic science and some of the projects that you have mentioned here today?
Dr. Szumski: This seed-to-sky one is so exciting because it put together the whole spectrum, from doing the kind of genetic work that helped to create the plant to actually having it in an aircraft and becoming a fuel within several years.
The basic science is not just knowledge for knowledge's sake. The way we look it, some of it is valuable from a prosperity perspective in terms of converting it into commercially valuable products. This fuel example is a good example of that.
Senator Buth: One of our witnesses at one point, and I think it was the universities, reported that they were talking about funding for agriculture research and NSERC no longer has agriculture as a priority area. Do you have any comments on that?
Dr. Szumski: About NSERC? No. I do not have a comment about NSERC.
From the NRC's perspective, with the increasing focus that we are having on industry-relevant research, we actually look at agriculture as an important place, because it has the characteristic of sticking to Canada when you invest in that space. You will not pick up and move the land anywhere. Using the latest technologies that we have to bring value to agriculture has a strong business case for us. We see our investment continuing in this space.
Senator Buth: Are you the organization looking at specific flagship programs?
Dr. Szumski: Yes, we are looking at a number of programs that will be looking to have a large impact, yes.
Senator Buth: In agriculture, what would those flagship programs be?
Dr. Szumski: I do not know that we can really use the term ``flagship'' at this point in time, but we are seriously looking with collaborators, the ones that you expect at Health Canada and the like, to develop improved varieties of wheat.
Senator Buth: I find this food versus fuel and the utilization of carinata resonants an interesting pitch, saying that it will not be grown in areas where food would be grown. We need to be careful in terms of how we actually present that. You did make the comment that 10 per cent of the canola cropland could be dedicated toward fuel. That is a food crop. There are also comments that growers can save on input costs like water. Typically, growers do not irrigate in western Canada. I do not think that the argument that it is completely separate from food is a very solid one. Could you comment on some of that?
Dr. Szumski: My comment would be that we agree this is a very important topic. The examples that I gave were that there are a number of areas of research that we are not pursuing because we do not want to pursue lines of research where there is a direct conflict with food and fuel. For example, ethanol from corn is an area that we are simply staying away from. As a research organization, we are focusing our efforts on areas where you have the option of doing your work in an area that will not compete with food. That is one of the themes and one of the filters that we use for picking areas on which we are putting our emphasis.
At the end of the day, how this all works out becomes issues that require debate and oversight, and I agree that we have to be careful.
Mr. Komorowski: We also looked at where the biofuels could be important. Aerospace is a place where replacement of fuels is not on the horizon. It is limited quantities. Aerospace contributes only 2 per cent to greenhouse gas emissions, but aerospace needs high energy density fuels. Airplanes are typically replaced every 30 years. The typical lifecycle of an aircraft is 30 years. Essentially, everything we see flying today will pretty much still be flying in 20 years. Cars are much more easily replaced. They are replaced in roughly 10 or 15 years. We could be all driving electric vehicles in 10 or 15 years.
From NRC's point of view, looking into the future, to invest in automotive fuel would be short-sighted, whereas aerospace is very different.
Senator Buth: I understand. I am just saying that I think you need to look carefully at the rationale that you are using that this will not compete with food crops in terms of acres.
Mr. Komorowski: At the beginning, when we were discussing with Agrisoma the potential to direct their work toward biojet fuels, we met with the mustard seed representatives, and they told us that what the farmers need is crop rotation. As an option of a crop to include in the mix that they need, they cannot grow wheat year after year. This is very far from my expertise, but I am passing the knowledge that I acquired. They need something. The fact that the world can only consume so much mustard was what attracted them to this crop. Apparently, the package to grow canola is exactly the same that they use, so there was very little change that the farmers need to do in order to grow Brassica carinatta, this plant.
Senator Buth: I understand, but I am saying to be careful in terms of how you present the argument that it will not take up food space.
Dr. Szumski: We are sensitive to the issue, yes.
Senator Buth: Thank you.
Senator Callbeck: Thank you for coming this morning. I am delighted with your comments because you talked about research on Prince Edward Island not once, but twice. We have some tremendous facilities that we have built up there over the years and very distinguished researchers.
The first project that you mentioned is the rosehips. You say that some commercial or private sector people are looking at this. I would like you to comment on the overall project and when we might hear news as to whether the private sector will pick this up.
Dr. Szumski: It is hard to predict the timeline of commercial uptake of things like this. In the natural health products space, typically the development cycle is approximately eight years from an idea to uptake by a commercial player.
Senator Callbeck: When the private sector does pick it up — in this case I think the university has been involved, with the National Research Council, Agriculture and Agri-Food Canada and funding from ACOA — do any of these bodies get any financial resources back from the private sector?
Dr. Szumski: Yes, typically we do. For example, when the NRC develops a new technology, the intellectual property is owned by the Crown. That gives us an opportunity to negotiate a licensing agreement for the intellectual property, so there is a return, ultimately, to the NRC for any technology that does get commercialized, yes.
Senator Callbeck: In terms of dollars, is it a large per cent of expenditures for that private sector?
Dr. Szumski: Intellectual property typically has industry standard licensing fees, royalty rates and/or milestone payments that are negotiated with the companies. Is it a large percentage? If you develop something really big like, let us say, a blockbuster drug in health care, you are typically looking at somewhere between a 1 per cent and 3 per cent return.
Senator Callbeck: Did you say 1 to 3 per cent?
Dr. Szumski: Yes, somewhere in that range, if you have the core technology for that.
Senator Callbeck: You mentioned that the rosehips are ideally suited to the Maritimes. What do you mean by that?
Dr. Szumski: The plants that we are working with come from that area, so they grow naturally in that area.
Senator Callbeck: Is that the only area they grow naturally?
Dr. Szumski: Where we are working with this group, that is where we are working.
Senator Mahovlich: They are a wild plant.
Dr. Szumski: They are wild plants, yes.
Senator Callbeck: You talked about the coloured potato varieties and that you get gluten-free starch. Certainly grocery stores in the last 10 years have expanded their gluten-free sections, so there should be potential here for a market. Where does this project sit right now? Has the private sector expressed an interest in it, or is it that far along?
Dr. Szumski: This is one where we would still be looking for the private sector partner, but that would be coming along shortly.
Senator Callbeck: You are not at the place yet where private sector has expressed an interest?
Dr. Szumski: That is correct. I gave a range of examples here that go from the private sector's strong engagement to things that are being prepared and ready to transfer to private sector.
Senator Callbeck: What is the time frame, roughly, on that before you might be ready to transfer to private sector?
Dr. Szumski: On this, the discussions would be taking place currently.
Senator Callbeck: All right. Do you know if there are private sector companies interested?
Dr. Szumski: We know that they are interested, but it is not considered a success until one actually takes it.
Senator Callbeck: All right. Thank you.
[Translation]
Senator Maltais: You are conducting research and we have seen the results with biodiesel, the biofuel used to keep a plane in the air for 30 minutes. How long do you think it will take to commercialize this technology?
[English]
Dr. Szumski: The airline industry interest is very strong, so there is a strong industry pull. The international airline associations have given themselves some tight time frames to reduce their greenhouse gas emissions as a business imperative, so they are active in looking at alternative ways of reducing their greenhouse gas emissions, whether it is light weighting their aircraft or looking for alternate fuels.
Right now we are at the stage of doing the demonstrations, the tests. How long until there is actual commercial use of biofuel in planes? In my professional judgment, I will guess that we will start to see that in approximately a 10-year time frame.
[Translation]
Senator Maltais: Do you have a relationship with automakers?
[English]
Dr. Szumski: Yes, we do. We have automotive programming and we do extensive work with the automotive sector at the NRC, yes.
[Translation]
Senator Maltais: For all the material you mentioned, from mustard to rosebuds, setting aside algae because it can be found outside western Canada, how are you seen by your competitors, the oil extractors in the west? Do you work hand in hand? Do you go for lunch together from time to time?
[English]
Dr. Szumski: It is interesting being at the NRC because the answer is yes. We work with the oil industry; we work with farmers; we work with all the different sectors of the Canadian economy. How do they view these technologies? As you know, there are requirements for biofuel introduction often introduced into the mix, so, yes, the oil companies do have interest in these types of technologies ultimately.
Do we sometimes find ourselves creating technologies that are working with different competitors? Yes, we do that, too. That is part of the game.
[Translation]
Senator Maltais: If the oil companies decide to expand into Eastern Canada, I do not think mustard will go over very well in that part of the country. They are investing billions of dollars, in the east, in the west towards the Rockies and towards the United States for their overall project, even if it has yet to be put in place. How will you stay competitive once biofuel is ready to go?
[English]
Dr. Szumski: The way I anticipate the industry unfolding is there will be a demand. As I indicated, the airline industry is seeking biofuel to put into the mix of the fuel that they use. We have seen a number of examples where you have Virgin Airlines and other high profile companies that have put some biofuel into their fuel mix. Regardless of what the world oil markets look like, there will be demand for a certain amount of biofuel. There is opportunity there, even if there is not expansion of availability of gas and the like.
Senator Merchant: I have a further question about the new mustard seed that you talked about. When we were on our trip to Saskatoon recently, I think we went to Bayer CropScience. They showed us some different plants there, and I am not sure if they are involved in this project. You mentioned a different company.
Dr. Szumski: No, they are not.
Senator Merchant: I appreciate that you are seized with a food-to-fuel debate, and I am pleased about that. However, with the canola biofuel, many people will argue that the emissions created in the whole production chain really do not present much of an advantage over the standard fuel, if you factor all that in.
With these new biofuels that you are now working with, these third-generation biofuels, how do you view the emissions vis-à-vis the environment? When you look at the whole equation, are these biofuels a plus? Maybe these seeds grow in arid land, but what about fertilization and those kinds of things, which also produce many emissions?
Dr. Szumski: That is called the total LFA — life cycle analysis — that needs to be done on these fuels.
Getting back to the filters or the themes that we use at the NRC to determine what areas we will do research in, we are sensitive to the food/fuel issue. That is why we are looking at third-generation biofuel.
We are also sensitive to the life cycle analysis. We undertake to understand whether the environmental footprint will be larger or smaller than the alternative. If the environmental footprint is larger, as it is, for example, with ethanol from corn, then we will not go there. If we believe that it is or can be smaller with technological enhancement, then we will undertake the research in that space.
Senator Merchant: In this instance, then, you have done that kind of analysis with Resonance?
Dr. Szumski: That type of work has been done, and the belief is that it has the potential of having an improved environmental footprint.
The other thing with biofuel is that, when you have the biojet fuel, it has slightly higher energy density than normal jet fuel; that is just under 1 per cent enhanced energy density. That also adds some efficiencies. They are minor, but they add to the equation.
Things like that come into the whole life cycle analysis. It is a very important point and is one that must play a role in what is ultimately adopted in order to have the social or the environmental benefit.
Senator Merchant: Good. Thank you so much.
[Translation]
Senator Rivard: Thank you Mr. Chair. Thank you again for your presentation. I believe that technical questions have been asked and you gave us good answers.
My question is not related to your presentation but is an important one regarding the future of your research centre. As we know, there are efforts to balance the budget by 2014-15. All government departments and agencies have been encouraged to suggest reductions to their budgets. Have you been affected by this program? Has the Treasury Board or the Department of Finance informed you that your funding and your resources may be reduced? What do you see happening in the short term?
[English]
Dr. Szumski: Yes, like every government department, the NRC is part of the budget and can be impacted one way or another. In the budget this year, the NRC did contribute to the strategic and operating review, so there was an impact there. Also, the NRC had the IRAP budget doubled, so there was an investment in the NRC, as well.
The concept of focusing is important to the NRC. The areas that I talked about today are not impacted by these changes.
[Translation]
Senator Rivard: I am very pleased to hear that because I know your mission plays an extremely important role. It would be wonderful if you could obtain contributions from businesses to help you achieve the funding you need, that would be excellent.
Senator Robichaud: I have two last questions. First, could you tell me about algae? Also, I would like to talk about GMOs used to produce biofuels.
[English]
Dr. Szumski: Algae has great potential to be a source of fuel and protein for feed.
The type of algae we are talking about is not algae that you would harvest from the ocean, but rather algae you would grow in a tank, very much like brewing beer. You have a large tank, you put light inside it and you take the carbon dioxide from an industrial process and bubble it through the tank. The algae grow with the light, and convert the carbon dioxide into oil.
It is a very efficient process: It does not have roots, it can be a continuous process, and you do not have to harvest it once a year — you can harvest it every week and have a continuous process of converting CO2 into products of value. It is an area of active research at the NRC, and it is an area in which we are engaging with private-sector partners to develop the technologies that go into it. The large final emitters will be the ultimate beneficiaries of that technology.
We are very excited by that one. It is not yet at the level where it can produce enough fuel to fly a jet, but we hope that will be the case in a number of years.
Senator Robichaud: This is contained, is it not? You are not looking at the aquaculture side of it, let us say.
Dr. Szumski: No, it would be contained. In Canada, if you built a pond, it would be frozen for four months of the year, so that would not work. We are looking at it as contained systems, yes.
To give you a bit of a technical appreciation of how it works, if you have industrial processes that have waste heat — heat that is otherwise given off in the atmosphere — you can use that to heat up the organisms in the tank. Also, you can use municipal waste to provide the feed for the organism. You have a pretty nice picture that comes together, ultimately, in terms of using waste and turning CO2 into something of value. It is an exciting area.
Senator Robichaud: That is close to the farm we visited in New Brunswick where they use waste to produce gas and then generate electricity. That was interesting.
Was the Resonance mustard genetically modified?
Dr. Szumski: It is a genetically modified oilseed, yes.
Senator Buth: Resonance is not genetically modified; it was developed through traditional breeding. It is a close relative to canola.
Senator Robichaud: Is there not a lot more potential for genetically modified organisms to produce fuel, rather than use it in the agri-food sector? Whenever you move to agri-food, you provoke quite a debate as to how it should be used and how good it is for human consumption.
Dr. Szumski: You can. Today, you actually have technologies called marker-assisted breeding, whereby knowing the genetics of the organism you can identify the traits and rapidly breed them into the organism using traditional methods. You have a variety of approaches that you can take.
That is a technology that is being used more and more. In fact, the NRC is doing a lot of that with Agriculture and Agri-Food Canada, the University of Saskatchewan, and others. We are providing that information so that they can do a more rapid traditional breeding methodology.
Senator Robichaud: Yet that is biologically modified, is it not?
Dr. Szumski: No, it is traditional breeding.
Senator Robichaud: It is not genetically modified?
Dr. Szumski: It is not genetically modified, no.
Senator Robichaud: Is there a lot of potential in genetically modified organisms? That is my last question.
Dr. Szumski: Yes, we have seen the story with soy and canola, where being genetically modified resulted in tremendous productivity gains for some plants. The potential is always there.
The real question is around market acceptability. There are some areas where it looks like it is difficult to go down the GMO path.
Senator Robichaud: On the food side.
Dr. Szumski: On the industrial biotech side, is there potential for genetically modified? I would say yes, there is, and it is very possible. However, you can use both methods.
Senator Robichaud: Thank you.
The Chair: Before we adjourn, honourable senators, I wish to thank the witnesses for sharing their thoughts; it was very informative. You can stay before we adjourn, because you will be part of making history.
Honourable senators, one of our team players — I say the best when he is on his skates — will be departing. In fact, this is his last meeting. As we know, our friend is a friend to all Canadians. I have to say that we are sorry to see Senator Mahovlich leave.
Senator Plett: Indeed, I echo what the chair has said. It has been a pleasure to serve for three and a half years with Frank Mahovlich, in particular at committee. We will miss Frank's wit around the table when talking about his blueberries that he eats for breakfast. I eat raspberries for breakfast, instead of blueberries.
It has been a pleasure, Senator Mahovlich, to travel with you. When I was appointed to the Senate, I felt somewhat that I had achieved something and that people would be happy to see us when we traveled. However, when we walked in ahead of Senator Mahovlich on many of the trips we made, people were looking over our shoulders to see where the Big M was. Maybe after you are gone from this place, Senator Mahovlich, some of us will get some recognition on our trips; but I am not sure.
I wish you well in whatever you do, for I know you will not retire. I want to say what a thrill and honour it has been for me to serve with you here. Certainly, I cheered for you during all the years you were in Toronto, but did not cheer when you were in Montreal. You were one of my heroes then, and you are one of my heroes now.
[Translation]
Senator Robichaud: I must say that the fact that Senator Frank Mahovlich was with us certainly added another dimension to the committee. When the committee arrived in a village or a town, it attracted a lot of attention. The members of the committee were overshadowed, but we never held that against Frank.
Senator Mahovlich worked hard and worked with others on the committee. He did what he had come to do and commanded a lot of respect from the people who appeared before the committee or whom we went to meet.
Honourable senators, even if I were wearing skates, I could never, ever command the respect that Senator Mahovlich does today.
[English]
Frank, we will miss you. If you have time, come back to visit us.
[Translation]
Senator Maltais: Senator Mahovlich, it has been a privilege for me to work with you over the last 10 months. It is quite a rare opportunity to work with a Canadian hero like you. As you were on the ice, you have been a perfect gentleman. Over your 20-plus-year career in hockey, and your career in the Senate, you have gained the respect of Canadians by conviction and you always dedicated yourself entirely to what you undertook to do. This is a lesson you taught us all, we the senators, through your work, your respect for the institution and especially your great respect for Canadians. I am disappointed that I did not know you before your career as a senator. I would have been a good agent for you.
I wish you a very long and fruitful second career, with your much-loved family and grandchildren. And if ever you are thinking about returning to the political stage, there is a lieutenant-governor position vacant in Quebec. You could have an office in the new coliseum.
Good luck, Senator Mahovlich!
[English]
Senator Mahovlich: I was honoured to be appointed to the Senate and to be part of the Agriculture and Forestry committee — one of my favourite committees and one that works very hard. We did some great work, as the witnesses here today will probably mention. Canada is called the ``breadbasket of the world,'' which we will be if we keep doing the good work that we are doing in this committee. We have a lot to look forward to in the future.
Senators, I will be looking for an agent.
Hon. Senators: Hear, hear!
The Chair: On behalf of all senators and staff, may God bless you and your family, Senator Mahovlich. You will always be a friend of this committee.
(The committee adjourned.)