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Proceedings of the Standing Senate Committee on
Agriculture and Forestry

Issue 23 - Evidence - Meeting of February 5, 2015


OTTAWA, Thursday, February 5, 2015

The Standing Senate Committee on Agriculture and Forestry met this day at 8:01 a.m. to continue its study of Bill C-18, An Act to amend certain Acts relating to agriculture and agri-food.

[Translation]

Kevin Pittman, Clerk of the Committee: Honourable senators, we have a quorum. As clerk of the committee, it is my duty to inform you of the unavoidable absences of both the chair and deputy chair, and to preside over the election of an acting chair.

[English]

I am ready to receive a motion to that effect. Are there any nominations? Senator Unger.

Senator Unger: Senator Maltais.

Mr. Pittman: Are there any other nominations?

[Translation]

It was moved by the Honourable Senator Unger that Senator Maltais serve as acting chair of the committee.

[English]

Is it your pleasure, honourable senators, to adopt the motion?

Hon. Senators: Agreed.

[Translation]

Mr. Pittman: I declare the motion carried.

[English]

I invite the Honourable Senator Maltais to take the chair.

Senator Ghislain Maltais (Acting Chair) in the chair.

[Translation]

The Acting Chair: We will start the meeting by having the senators introduce themselves.

I am Ghislain Maltais from Quebec.

[English]

Senator Merchant: I'm Pana Merchant from Saskatchewan.

Senator Tardif: Senator Claudette Tardif from Alberta.

[Translation]

Senator Dagenais: Senator Jean-Guy Dagenais from Quebec.

[English]

Senator Plett: Good morning. I'm Don Plett and I'm from Manitoba.

Senator Oh: Good morning. Victor Oh from Ontario.

Senator Unger: Good morning. I'm Betty Unger from Alberta.

Senator Enverga: Tobias Enverga, senator from Ontario.

Senator Ogilvie: Kelvin Ogilvie, Nova Scotia.

The Acting Chair: Today we will be continuing the study of Bill C-18, An Act to amend certain Acts relating to agriculture and agri-food.

[Translation]

With us today, from Fédération des producteurs de cultures commerciales du Québec, we have William Van Tassel, First Vice-President; from Cereals Canada, we have Cam Dahl, President; and from Grain Growers Canada, we have Gary Stanford, President, who is joining us by video conference.

Welcome to you all. We'll start with you, Mr. Van Tassel.

William Van Tassel, First Vice-President, Fédération des producteurs de cultures commerciales du Québec: Mr. Chair, members of the Standing Committee on Agriculture and Forestry, good morning.

My name is William Van Tassel, and I am a grain producer in the Lac-Saint-Jean region in Quebec. I am speaking today on behalf of my organization.

The Fédération des producteurs de cultures commerciales du Québec, or FPCCQ, represents over 11,000 grain producers across Quebec. The grain sector generates farm income of roughly $1.1 billion.

Bill C-18 proposes changes to several laws that affect the agricultural sector. Those of interest to my organization relate to the Plant Breeders' Rights Act, or PBRA. The FPCCQ supports these changes, which would bring the legislation in line with the 1991 International Convention for the Protection of New Varieties of Plants, also known as UPOV 91, which oversees breeders' rights and protects the intellectual property resulting from research into the development of new crop varieties.

The FPCCQ is actively involved at various levels of the value chain in grain production. It spearheads investment in research, specifically in regard to genetic improvement in the development of new crop varieties that meet the needs of markets and consumers and allow producers to remain competitive by guaranteeing expected levels of returns. This involvement has allowed us to better assess the dynamics of innovation in developing new crop varieties that meet producers' needs.

A concrete example of why we support this bill is the genetics improvement cluster in the grain industry led by the Canadian Field Crop Research Alliance, or CFCRA. As you know, these agri-science clusters are a joint government-industry partnership in research funding. This formula has helped mitigate the negative impact of reduced public investment in research in the agricultural sector. It has helped achieve concrete results. It has led to the registration of 39 new crop varieties for Eastern Canada under Growing Forward 1, from 2010 to 2013. So the involvement of industry in research promises results. The industry I am referring to is that of research companies and corporations in an investment field in which results are not rapidly obtained or, in some situations, the return on investment is relatively weaker than in biotechnology, for example. One of the main drivers for these companies to be involved in investment and development is the regulatory safeguards surrounding intellectual property. So the modernization of Canadian laws and their harmonization with UPOV 91 would be a major incentive for breeders to develop their discoveries, knowing they will be compensated for their efforts.

Quebec has several public and private institutions that specialize in plant breeding research. These institutions work in the area of genetic selection and are the first to be affected by the section of Bill C-18 amending the PBRA. These companies are relatively small compared with multinationals that produce and distribute seeds and grain. These companies target niche markets and specific needs in regions that do not use genetically modified crops, which ensures an additional seed supply to more northern parts of the province that are focused primarily on grain production. These crops are less attractive to multinationals specializing in seed production because of the low return on investment and small market share.

This business research model meets producers' needs. Better protection of plant breeders' rights is essential to ensuring the presence of small businesses in the market.

Moreover, modernizing the current legislation provides a guarantee to foreign plant material suppliers selling seeds in Canada. This guarantee allows a more diversified supply that benefits Quebec and Canadian producers.

Some groups have expressed reservations about change and modernizing laws out of fear of restricted access to seeds. In Quebec, the majority of grain and oilseed producers use certified seed. Beyond the requirements of some insurance programs, either crop insurance or income stabilization insurance, the use of certified seed has become almost systematic, as the use of new and improved varieties that meet the specific needs of markets and producers can only be supported. So modernization and technological innovation are tools to remain competitive. That is also one of the reasons why we support this bill.

Finally, introducing guarantees for breeders is an incentive for more investment in developing new varieties, which can improve the seed supply in terms of number and performance. Diversification and increased supply could lower seed prices, which benefits producers. In these circumstances, the FPCCQ believes that the amendment to the PBRA will not change seed source or supply in Quebec. Rather, better protection for breeders' rights would benefit producers by reducing their production costs.

Ladies and gentlemen, thank you for your attention. I would be happy to answer questions.

The Acting Chair: Thank you very much, Mr. Van Tassel. We will now move on to Mr. Dahl.

[English]

Cam Dahl, President, Cereals Canada: Thank you, honourable senators, for the opportunity to appear before you. On behalf of Cereals Canada, I really do appreciate that chance.

Helping to create an environment that sees Canada as a first choice for agricultural innovation is one of the key priorities for Cereals Canada. Bill C-18, or the Agricultural Growth Act, is an important step in this direction that will encourage required investment. My name is Cam Dahl and I am the president of Cereals Canada. While the organization is new, I won't review our structure in the interests of time, but I'm more than happy to answer questions in this regard.

I am going to be concentrating my remarks on the portions of this bill that deal specifically with plant breeders' rights. Cereals Canada supports these measures, and we encourage all parties in the Senate to come together quickly and adopt them.

Canada has a strong reputation for consistently delivering quality products to the international marketplace. Cereals Canada looks for opportunities to build upon the Canadian brand.

Building a strong Canadian cereals brand goes hand in hand with renewed investment in research and development. The Canadian industry today has an opportunity to develop and implement an innovation strategy that will facilitate increased research investment in the quality traits demanded by our customers.

There is a resurgence of interest in innovation and research in cereal crops. This presents the Canadian sector with an opportunity to make Canada a top choice for investments in innovation by helping to create a policy environment that ensures a return on investment for all stakeholders in the value chain. Taking advantage of these opportunities will increase the value of Canadian cereals production for farmers, grain marketers and crop development companies while delivering strong value to our customers.

Providing a legislative framework for intellectual property protection encourages and promotes investment, innovation and competitiveness for Canadian farmers and plant breeders. This includes access to plant varieties developed in other parts of the world, which can provide benefits to Canadian farmers. Bill C-18 would accomplish this goal by bringing our legislation into compliance with UPOV 91, the current convention of the International Union for the Protection of New Varieties of Plants.

The fact that Canadian law does not conform to UPOV 91 means that companies face a disincentive to bring to Canada varieties that were developed elsewhere and also have an incentive to invest outside of Canada. Bill C-18 will help correct these problems.

The introduction of Bill C-18, even before it has become law, has already had a positive impact on the environment for investment in innovation. Last fall I had the privilege of attending the sod turning of Bayer CropScience's new wheat breeding facility near Saskatoon. Bayer has been explicit — the prospect of Bill C-18 and the adoption of UPOV 91 was one of the key factors convincing the global centre in Europe to invest in wheat breeding in Canada.

This is not the only example of increased investment in cereals research. Canterra and Limagrain have formed a partnership to bring new varieties to Canada. KWS, a company based in Germany, has formed a partnership with FP Genetics to bring new hybrid rye varieties to Canada. As an aside, Bayer, Canterra and FP Genetics are all members of Cereals Canada.

It is important to stress that the benefits of complying with the 1991 convention will also accrue to public entities, such as universities, government departments and smaller independent breeders. I note that close to 50 per cent of all Canadian plant breeders' rights applications for agriculture crops actually come from public institutions. Royalties collected are an important source of funding for these breeding programs.

If Canada fails to modernize our regulatory environment, then the upswing that we are seeing in investment in cereal innovation will not take place in Canada. Instead these investments will be made in countries like Australia and the United States, with the benefits like increased yield or improved disease resistance going to farmers who compete with us in the international marketplace.

I would like to comment on some of the misperceptions about this bill. I have heard some questions regarding the adoption of UPOV 91. These questions are largely based on misunderstandings of what the convention means for Canadian farmers and plant breeders. I would like to address a few of these as they may be raised with you as you review Bill C-18.

One myth that seems to have propagated on the Internet is that farmers will be prevented from saving their own seed for replanting. This is just simply wrong. The current version of the legislation, based on UPOV 78, is silent on the ability of farmers to save seed. An updated Plant Breeders' Rights Act under Bill C-18 would specifically address this right and provide a clear farmers' exception, allowing farmers to save and plant their own seed.

Would it be okay for a farmer who saved their own seed to sell some of this seed to their neighbour for planting? No, that is not okay. Selling "brown bag" seed eliminates a return on investment for developers, discourages investment and, in fact, is illegal under the current version of the legislation.

This is just one of the myths that have grown up around UPOV 91 and, as a result, Bill C-18. This is not the only misperception surrounding the bill. For example, I have heard some express the mistaken view that the legislation will only benefit large corporations. We should not ignore these misperceptions but, rather, strive to have the right information in the public domain. Members of the Senate can play a key role in setting the record straight. Of course, I would be happy to address any further misperceptions in the question and answer period.

In conclusion, Cereals Canada supports Bill C-18 because the strengthened plant breeder protection it provides will help improve the environment for investing in plant breeding in Canada. By conforming to UPOV 91, we will come into line with legislation and regulation around the world which will encourage breeders to release their varieties into Canada. The result of increased investment will be more varieties to choose from for farmers, giving them options to source the high-yielding varieties and high-value varieties that work best for their farm. Increased investment in Canada will mean that varieties are developed to meet our growing conditions and tailored to deliver the quality characteristics that match our international competitive advantage.

Increased investment in innovation is critical for the ongoing success of our industry. Bill C-18 is one of the tools necessary to create that environment in which the investment will occur.

Again, thank you very much and I'm open to any questions or comments.

The Acting Chair: Thank you very much, Mr. Dahl.

At 6:00 in the morning, thank you very much, Mr. Stanford, for joining our committee.

Gary Stanford, President, Grain Growers of Canada: Good morning. It's very early over here, but I thought it was important that we get to have our voice in this new change in the bill. I farm at Magrath in southern Alberta, just south of Lethbridge, and I grow wheat, barley and canola on my farm. I wanted to be able to be here today. I'm at the Lethbridge Research Centre, one of the largest research stations in Canada. In the summertime, with the summer students, there are over 500 people working here, so it is very important for all Canadians to be able to have this research facility.

I'm honoured to be able to speak to you about the Canadian Bill C-18, agricultural growth act. In the Grain Growers of Canada, we represent 50,000 farmers across Canada with 14 different organizations at our table.

The agriculture and agri-food industry is a significant contributor to the Canadian economy. In 2012, it accounted for 6.7 per cent of Canada's GDP and our sector continues to depend on the ability of farmers to access and use new technology and innovation.

The proposed amendments in Bill C-18 to the plant breeders' rights will align Canada with UPOV 91. This is important for ensuring farmers have access to the newest varieties so we can remain competitive in the world. Most importantly, it will create a regulatory environment that will encourage investment and innovation in the new crop varieties.

In the case of cereals, more than half of the varieties protected under the current act were developed at public institutions like universities and government research facilities. This legislation does not take away any of that. What it does is create a regulatory environment that will increase research investment by private companies, especially as it pertains to new cereal varieties.

Just like the impact of patents on inventors, plant breeders' rights will give seed developers the ability to recapture and profit from their investment. We strongly believe that this will pave the way for increased investment in the development of new varieties which will deliver higher yields and better agronomics for farmers.

When deciding where to invest their dollars, private companies have many international options. It is vital for continued success and we need these investments to come to Canada in the grains and oilseed sector, that a good portion of this investment will be made in our backyard.

The government's commitment through the introduction of Bill C-18 has clearly signaled to private companies that we are open for investment and we have already seen the positive effects of these proposed changes. Last September, Bayer CropScience broke ground on their new state-of-the-art facility south of Saskatoon. As Bayer will tell you, this would not be possible without the changes coming in UPOV 91.

The adoption of Bill C-18 will also bring our regulations in line with international standards. Canada is one of only a handful of developed countries not covered under UPOV 91. This has put our farmers at a disadvantage. Aligning our regulations will not only level the playing field for our producers, but it is also expected to encourage more foreign plant breeders to release their varieties in Canada, which would give us new varieties our competitors are already using.

It is also important to note that the ability of farmers to save, clean and store their own seed is entrenched firmly in Bill C-18. Canadian farmers have always been able to save their seed, but this was never guaranteed. This bill changes that and any future conditions or restrictions on this farmers' privilege will only be possible through regulation after consultation with producers.

Finally, I would like to take a moment to talk about the amendments to Bill C-18 with the cash advance program. Grain Growers welcome these changes as they may reduce the administrative burden on farmers to obtain cash advances and increase the overall value of the program. The proposed amendments will create a one-stop shop, simplifying the process by giving farmers the option to obtain their advance through one administrator.

That being said, if there was an opportunity to increase the capital on advances from $400,000, we feel this would be an important enhancement in the program. Increasing the limit would better reflect the inflation, input costs and farm sizes as grain producers' farms get larger.

In closing, we urge the Senate to pass Bill C-18. With the world's population expected to reach close to 10 billion by 2050, Canada's grain producers will need the most innovative technology and varieties as they grow in order to maximize their production. Developing such varieties will require investment from all sources, public and private.

Bringing plant breeders' rights legislation up to date will encourage investment and make sure Canadian farmers are competitive.

Thank you, and I look forward to your questions.

The Acting Chair: Thank you very much, Mr. Stanford.

Senator Plett: Thanks to all three of you for being here this morning and telling us what your opinion of Bill C-18 is. We've had a number of witnesses before us prior to you. I have the list here. Other than the minister, we had 15 other witnesses on this particular piece of legislation. Both my colleague Senator Tardif and I have posed similar questions on what is wrong with this legislation or what can we do to improve it. With the exception of I think three, maybe four, witnesses, the answer was fairly unified. You haven't passed it fast enough; get it done a little quicker than what you are.

My first question doesn't need to take a lot of time. I would like to ask the three witnesses today: Would you concur with that assessment of what the other witnesses have said?

Mr. Van Tassel: Yes, a hundred per cent. To tell you the truth, I was a little surprised you were still talking about Bill C-18. Yes, I think it's time it gets passed.

Mr. Dahl: As very quick answer, yes, I would concur with that. We'd like to see it passed as soon as possible.

I know from speaking to some of my members making investments in crop development that there are millions of dollars — and that is not an exaggeration — of investment that are sitting on executive desks, that are waiting for a signature. That final signature will not come until this bill receives Royal Assent.

Mr. Stanford: I appreciate that. We've been looking to get this bill passed for quite a while. Being a farmer myself and talking to the other farmers out here, we need to get this improved. If we can also get the new research from the private sector involved and work with us up here, I would really look forward to that.

Senator Plett: You say you're a farmer yourself. Mr. Van Tassel, I think you also said you were a farmer. But, nevertheless, you represent significant organizations. Mr. Stanford said that he represented 50,000 grain growers. We had Mr. Boehm from the National Farmers' Union here two nights ago.

A few years ago when I sponsored a different great bill, the Wheat Board bill, he also testified. I asked him at that time how many members their union had. He couldn't give me an answer. I thought, having given him a few years to think about this, he would have been able to give me an answer on Tuesday. The only answer he could give me was that it was not less than 200 members. Other than that, I couldn't get an answer.

You talked about the structure of your organization. I would like to know how many people you represent. Mr. Van Tassel, I think aside from being a farmer yourself, you are representing an organization or a group of people.

I would like to have the numbers, if I could.

Mr. Van Tassel: Yes. In Quebec, we represent 11,000 grain farmers who market at least a certain amount of their grain.

Senator Plett: Thank you.

Mr. Dahl: I struggle with putting a number to it, but I can go through it and indicate the producer representation. The membership of Cereals Canada is made up of three membership pillars: farm organizations, crop development and seed companies, and the grain-handling firms. The producer representation composes 37.5 per cent of the board of directors, and that number is important because that's also how the budget is split. We have members from the Atlantic Grains Council, from the FPCCQ, Grain Farmers of Ontario, Manitoba Wheat and Barley Growers Association and Alberta Wheat Commission, as well as the B.C. Grain Producers.

Senator Plett: Mr. Dahl, we had witnesses here again on Tuesday that said this legislation was only going to be good for the Monsantos of the world, if you will, the large multinational seed companies. That same evening we had somebody from Canterra Seeds, from our own hometown of Winnipeg, and I think she said they had 27 employees.

Will this benefit only the multinationals, or will the Canterras of the world also benefit? Do you have any idea how many small seed companies there are in our country that might benefit from this?

Mr. Dahl: I think unequivocally I can answer that question. The benefit will accrue to the smaller, independent developers, as well as the public institutions. Places like the Crop Development Centre in Saskatchewan, for example, are supportive of this legislation because it allows them to provide that structure for return on investment.

I spoke of some of the misperceptions or myths that have grown up around this bill. That is one of them. I can unequivocally state that, no, the benefits accrue to all parts of that development chain.

Mr. Van Tassel: As an example, we have at least seven small organizations that do breeding in grain, plus one public — six or seven private. The reason is that in Quebec, since 1991, with crop insurance they had to use certified seed. They were certain they would have a market for their product. That's the reason why we have seven; in my province we don't grow that much grain. We're not Saskatchewan. There are seven reasons. They were certain to have at least a return on their investment, and Bill C-18 will help them even more.

Small companies or organizations will need more than the big guys, because the big company can do hybridization in wheat and things like that so the farmer is obliged to buy seed every year. But smaller companies don't have the capacity to do it. I think it helps small companies, like I said in my presentation, maybe even a little more than big companies.

Senator Plett: As my last question, I'll ask Mr. Stanford and possibly Mr. Van Tassel to answer, as both are farmers. Neither one of you spoke about the cash advances. I would like to know what the cash advances will do for you as farmers as opposed to you as somebody representing 50,000 grain growers.

Mr. Stanford: With the cash advance for small farmers — there are younger farmers just starting — you get the first $100,000 interest-free for a year. That really helps out the younger fellows getting started with the smaller land base. Then, we go up to the $400,000 limit. If you're a larger farmer and you need to have a lot of operating capital, say you have your grain bins full because the railways didn't move all the grain, you can still borrow against that with a cash advance. But if you're a larger farmer, $400,000 doesn't go a long way anymore, so we were looking to see the limit increased.

I'm not sure how much we'd like to increase it. We've had $600,000 to $800,000 presented to us, but we're thinking that maybe there's an opportunity here to make this a little bit larger so a producer can just go to one place and get their cash advance to get their crop in the ground in the spring. That's how we view it as grain growers.

Mr. Van Tassel: My federation manages the cash advance payments for the grain growers in Quebec. It's been around 25 years, as far as I know.

For the farmers, it gives them the capacity, since they have a certain ability to have more financing, to market the grain in an orderly fashion, which it's supposed to be. So, yes, it has been popular in my province since 1984. So, it's very important. For us, the changes don't affect us too much, but we are very happy with the program.

Senator Tardif: Thank you for being here with us this morning. I want to get back to some of the comments that we heard on Tuesday evening. Senator Plett is right; the large majority of the testimony that we've heard is supportive of the bill. But there are stakeholder groups that are concerned with the bill. They've indicated that we're seeing a greater genetic uniformity of the varieties that are in the marketplace due to increased corporate consolidation; that there's a huge different between public plant breeding programs and private plant breeding programs; that the public plant breeding programs encourage a greater sharing of information and exchange of germ plasm and that what we're seeing with private breeding programs is a protectionism, where private breeders really do not want to disclose what they're working with and make it hard to get the information. Therefore, this would diminish the varieties of plants that would be made available, and they would be at greater cost to the farm. Would you care to comment on this, please?

Mr. Dahl: I would be very happy to comment on that because, again, I think that there have been some misperceptions that have grown up around the bill. This idea that it will restrict our genetic variability in crops in Canada is one of those. From my perspective, it comes from two reasons. One of those we have talked about already — the idea that the legislation will only benefit large corporations. In fact, that's not the case. The public breeders and the smaller breeders will also significantly benefit.

The other thing that this bill does is actually open up access to genomics from around the world. It allows Canadian plant breeders to have better access because it provides that framework for gaining access to other organizations and other countries' genetic research. So, I actually see it quite the reverse. I actually see that providing that framework and bringing Canada in line with the international conventions will give our plant breeding organizations, public and private, greater access to the world's genetic bank and, in fact, will improve our genetic diversity instead of restricting it. So I see it quite differently.

Mr. Van Tassel: If I can comment on that, my federation, along with different organizations, like Grain Farmers of Ontario, puts quite a bit of money into breeding in public organizations because we believe that there has to be a balance between public and private. Yes, this helps the private companies, but it also helps the public. Like I say, we have a provincial research farm that does breeding in wheat and soybeans. For them also, it can help to have a better return on investment because we fund, but they also need to make some money. There needs to be a balance between the two also. Yes, private, but we have to continue to have public breeding.

Senator Tardif: I understand that 90 per cent of the varieties that are available are hybrid varieties and that hybrid varieties cannot be saved by farmers. Is that correct?

Mr. Van Tassel: If you are talking about canola, yes, there are quite a few hybrids, and, yes, they cannot be saved by farmers. But it all depends on the crop because, right now, there are no hybrids in wheat or barley. Corn has been 100 per cent hybrid since the 1930s. That's a good example because, with corn, you have increasing yield, around 2 per cent a year almost. Why? Because the company who does the breeding has to have a certain return on investment. It puts huge amounts of money in, and you see the yields continue to increase accordingly.

Senator Tardif: That was one of criticisms that was brought forward by one of the witnesses on Tuesday, that 45 per cent of all agricultural research by the private sector worldwide is on one crop only, corn. So that's a real concentration in just a few areas.

Mr. Van Tassel: If I can answer that, yes, but why is it corn? Because they can have a return on investment. This bill is going to help companies to ensure that they have a return on their investment, also. So now there will be increased investment in other crops.

Senator Tardif: I hope that your expectations are realized. I sincerely do.

I want to get to the question of — and I know I've brought it up before; I just want to make sure that all of these stakeholder groups are comfortable with the legislation — the possibility of ministerial changes by order-in-council. Farmers' privilege is now exempt from the Plant Breeders' Rights Act, but changes could be brought forward through government orders-in-council. How comfortable are you with that?

Mr. Dahl: I will invite both Mr. Van Tassel and Mr. Stanford to answer as well. The fact that the right of farmers to save their seed is entrenched in legislation is actually something that can't be changed by order-in-council.

Senator Tardif: Yes, it can.

Mr. Dahl: The current legislation is silent on farmers' privilege. From my members' perspective, this is something we've talked about across the value chain. Are we comfortable with the consultative process that is outlined in the order by reference? Are we comfortable with those changes and comfortable with allowing the system itself to evolve over time? The answer is yes, because it will give us a far more nimble approach to the Canadian investment and research environment. Again, that applies to both public and private, and big and small plant breeders.

Senator Tardif: I can understand that seed companies would see efficiencies in having regulations passed and not necessarily published in the Canada Gazette. It's a form of streamlining. But I'm wondering, from a farmer's perspective, how do you feel about that, Mr. Stanford?

Mr. Stanford: In my presentation, I put that Canadian farmers have always been able to save their seed, but it was never guaranteed in regulation. This bill, Bill C-18, changes that, and any future conditions or restrictions on this farmers' privilege will only be possible through regulation, with consultation with producers.

I realize that the minister could come in and say, "I want to change that," but, according to the way the bill is written, it says regulations after consultation with producers. The way I read this and the way I see it is that there will be consultations before any of this is done.

Senator Tardif: Well, you have good faith. I hope that that turns out to be the case. I don't doubt our current minister's good will, but things change down the road.

Mr. Stanford: Okay, thank you. That's a good point.

Senator Tardif: I'll leave it at that, chair.

[Translation]

The Acting Chair: Before moving on to the next senator, I would kindly ask all the senators and witnesses to keep their questions and answers more brief. That way, all the senators will have an opportunity to ask their questions. Senator Oh, the floor is yours.

[English]

Senator Oh: Thank you, witnesses. My question is: Can you tell us a little bit more about the benefits of Bill C-18 after the adoption and before the adoption? What are the benefits for us? Also, do you believe Bill C-18 will bring Canada up to international standards in terms of us getting more research, investment and innovation for our crop breeding?

Mr. Dahl: I will quickly answer that question and say absolutely yes. The reason I can say that is that we have seen companies move to invest because the legislation is introduced. I know that there is investment that is sitting on the table waiting for a signature after the legislation is passed. So, yes, this will see increased investment in Canada.

Mr. Van Tassel: I believe there will be increased investment, also.

Mr. Stanford: Yes, in the Lethbridge Research Centre — where I am now — I visit with the plant breeders all the time, and that was a question I had for them. If this bill comes through, will that affect the work they're doing in the public system now and they said no, that it will open up more opportunities for them and open up more opportunities to work with the private sector. So, yes, this will be very good for Canada.

Senator Merchant: Thank you to our guests. You did tell us something about the structure of your companies, but can I ask you a little about funding? Where do you get your funding from?

Mr. Dahl: All of our funding to date — again, we're a new organization — has come from our members. We're funded by our membership and the split is the same as around the board table. The board is 37.5 per cent producers; 37.5 per cent is grain handlers and processors; and 25 per cent is the seed companies and crop development companies. That's how our budget is split.

Senator Merchant: You do get some funding from the seed companies?

Mr. Dahl: Yes, the funding comes from all the membership pillars and that is a deliberate structure to ensure that the entire value chain is represented. If we don't consider the entire value chain, if we come forward with investment or new innovation in anything and one part of the value chain doesn't benefit, it doesn't proceed. If there's a wonderful new variety that our customers in Asia really want to purchase, but Gary and William can't make any money growing it, it's not going to be grown. All parts of the value chain need to be involved and all parts of the value chain need to be profitable.

Senator Merchant: Any others?

Mr. Van Tassel: My organization is 100 per cent funded by the farmers who market the grain. There is a check-off and, to be certain they're 100 per cent impartial, the funding only comes from the farmers.

Senator Merchant: Mr. Stanford, the same for you?

Mr. Stanford: We have 14 organizations that make up the Grain Growers of Canada. There's the Atlantic Grains Council, then into Manitoba, we have to jump over William there, but we'll work with him on lots of projects. It's from British Columbia to Atlantic Canada, and they pay a membership fee to join the Grain Growers. Part of our funding is done by crop life companies and fertilizer companies that do help us pay for our membership. But over 50 per cent of our income always comes from the farm organizations because we want to stay totally run by farmers and have the farmers' voice.

Senator Merchant: One more question: You talked about the benefits to producers and you spoke about feeding the world, about the growing population. Could you tell us how passing this bill, Bill C-18, will help at the consumer end? It may not be the same parallel but with pharmaceuticals, for instance, Canada has developed a very good industry in producing generic drugs. We know that this is where people are buying the generic drugs from. So why should we give this different kind of protection under Bill C-18 to this other group or society, because I think the consumer has benefited from the generic.

Mr. Van Tassel: If I could answer, we talked about different crops. With corn, since it's a hybrid, the companies haveput a lot of money in and they have increased the yields almost 2 per cent a year. In Quebec, the farmer gets a bigger return on investment, and normally the crop is cheaper because he can grow more for the same acreage at a lower price.

At the other end, I'll give you the example of wheat. Wheat is harder to breed, but there is underinvestment in wheat because there's not a certainty to have a return on investment, so the increase in yield in wheat is much lower. For the Quebec farmer, for the highest yield in return, the best return on investment is corn; the lowest is wheat. So we have less acreage of wheat. We should have more.

This should help increase investment in wheat so more work will be done, the yields will grow up and we'll have better varieties.

Mr. Dahl: I would concur with William's comments and also add, getting back to that discussion of the value chain, that we need to consider all parts of the industry, working together, from our consumers and our customers, through to farmers and grain handlers, processors and the plant breeders. Everybody needs to benefit.

You mentioned consumers. This bill will open the door to some of that investment in the niche market where customers may be looking for specific quality traits they would like to purchase from Canada, but the opportunity to get that return isn't sufficient right now to make that investment in research. This legislation will help close that loop.

Mr. Stanford: We were just talking about that in Saskatoon two weeks ago at the crops fair in the wheat and the barley sector because there has not been a lot of investment in the pharmaceutical part of it. Wheat and barley has always been for food, so with the new varieties that can be brought into place now, maybe there is an opportunity for us to go down a different avenue. Your question is very timely as we were just discussing this. I'll try to keep you updated in the future of what we're going to do.

Senator Unger: Thank you, gentlemen. It's very interesting. My question is around controversy between public and private funding levels, specifically that public funding levels will decrease, shifting to private organizations. In your opinion, what should be the role of public sector research following the adoption of Bill C-18?

Mr. Van Tassel: If I can, that interests me because I always found it is very important to have, as I said before, a balance between the public and private. At certain times, the public gives more leeway. I will use the example of canola. Canola came out because there was a huge investment in canola for many years and maybe the private wouldn't have done it.

There should still be good public investment in breeding. The only thing is that we haven't been seeing it. We're seeing programs being closed. As a farmer, I would love to see increased public breeding. I'm not certain it will be there, so I think we need the two for it to become competitive.

Mr. Dahl: Senator, my view is that I don't see that this legislation is shifting the balance between public and private plant breeding investment. It's not just slicing up the pie differently. It is making the pie much bigger, and not just to see investment shift from public to private but to see greater investment overall, and I'm very confident that that will happen.

If you compare some of the other crops to wheat, for example, only 5 per cent of investment in research and development for wheat breeding in Canada comes through the private sector. I don't want to see that grow because the public gets smaller, but we need to see that 5 per cent increase significantly and the opportunity is there. If it doesn't take place in Canada, it will take place in our competitors' backyards and I do not want to see that happen.

Mr. Stanford: I would like to see the public sector stay the same or maybe even increase, like William said, but we need to keep the public sector in place. I don't want to see all of our wheat breeding in Canada go to the private sector. I think it's for the public good that we have the public sector in place. I talked to Minister Ritz about this and said that we need to keep the public in place.

I think that there could be partnerships. I think even the plant breeders were willing to share their germ plasm and work together, but it's very important that we keep the public in place as it is.

[Translation]

Senator Dagenais: Bill C-18 may give producers access to more seed varieties. Do you think that producers would be less likely to keep part of their harvest to use as seed, as a result?

Mr. Van Tassel: Of course, when there are new varieties with better yields, producers will buy them — at least, I hope so. In Quebec, under crop insurance programs, producers are required to use certified seed. They are already buying it, and the difference is noticeable. Yes, some companies are investing in that regard, but more certified seed will probably be sold.

[English]

Mr. Dahl: I agree with Mr. Van Tassel. I think that you will see more varieties and greater interest because of the benefit of the new varieties.

[Translation]

Senator Dagenais: I got my answer, and it was a good one.

[English]

Senator Enverga: Thank you for the presentation. Stakeholders have suggested that the privilege contained in Bill C-18 could be restricted by passing new regulations. For example, clause 50(4) of the bill allows the Governor-in-Council to pass regulations exempting classes of farmers and plant varieties, and placing restrictions on the use of harvested material. Have other UPOV 91 countries exempted certain farmers and plant varieties from the farmers' privilege? Do you know of any exemption? If so, which classes of farmers and which plant varieties? Have you heard about that?

Mr. Dahl: My understanding is that the Canadian interpretation of UPOV 91 included in Bill C-18 is unique, so it's not exactly the same as the legislation in other jurisdictions. I don't think you can make that direct comparison, but other countries do have different methods of supporting research. There are different ways of collecting royalties, for example. I know that, in the United Kingdom, there are end-point royalties in place, but my understanding of the legislation around the world is that the Canadian interpretation of UPOV 91 is unique. So that wording in the bill can't be directly compared to other countries', but that's my understanding.

Mr. Van Tassel: I cannot answer too much, but, if you talk about end-point royalties, I studied that a little bit. France has a different way. There are different ways, as in Australia. Probably Canada is also going to have certain ways of having end-point royalties. We'll see this come in sooner or later. Apart from that, I can't really answer your question.

Mr. Dahl: The reason why I raise the fact that the Canadian interpretation is unique is that the convention does allow countries to have individual interpretations of how the convention will be implemented. I expect that to continue in Canada, as well. As our system continues to evolve over time, we will continue to have a Canadian interpretation of the convention.

Mr. Stanford: The way we view it is that, if we go to an end-point royalty — I'm looking at 10 years down the road — for now, I would just look at it as partnerships and the private learning how to work with the new sector. Bill C-18 will be changing the playing field, so, as the Grain Growers of Canada, we want to see this move ahead, but slowly so that we can understand how it works and make sure that all the regulations are in place. We're not going to jump to any conclusions about whether we go to end-point royalties or whether we go to just strictly straight seed royalties. We'll have to look at the situation.

Senator Enverga: I was thinking more that we are the biggest grower of soybeans and other crops, maybe canola. What kind of exemption do you expect, or would you suggest that we exempt any particular farms or crops?

Mr. Van Tassel: Can you explain a little better? There's one part that I'm not certain I understand.

Senator Enverga: The bill allows the Governor-in-Council to pass regulations exempting classes of farmers and plant varieties and placing restrictions on the use of harvested material. Are there any particular crops that you are thinking about in this, or are there any that you can think of that would need to be exempt from this?

Mr. Dahl: I think the answer to that question, at this point, is no. I don't know of any particular value chain that is looking to the government and is going to come and say, "We want this enacted now." I would agree with Mr. Stanford that these are ongoing discussions that will occur over quite a length of time.

Senator Plett: I will be brief. I have one question, and it's probably mostly for Mr. Van Tassel and Mr. Stanford.

Our agriculture minister has made it very clear that there was significant consultation done on this legislation, and he has always believed in that. Our government believes in the democratic process and doing what the people want, most certainly doing what the farmers in Canada want. They are very capable and very innovative. Our concern is that they should really be the ones telling us the direction that we should be going, and I think we've been doing that.

You represent large organizations. I think, Mr. Van Tassel, you said 11,000, and I know Mr. Stanford said 50,000. That's 61,000 farmers, and we've had other organizations here and other farmers here. What kind of a consultation process did you use to get your direction here today? You're speaking on behalf of these farmers. Did you have some kind of a vote? What kind of consultation process did you use to get your marching orders?

Mr. Van Tassel: The way it works in my province, we have regional annual meetings, so the resolutions come from there and go to the provincial annual meeting. It comes from the farmers, from the base, from the grassroots level. Then it goes provincial, and then we bring it here.

Mr. Stanford: It's the same with Grain Growers of Canada. We have our AGMs. We discuss these issues, and then we have committees on the Grain Growers of Canada — our market committee and research committees. They bring to the board what they think is right. All of the producers that are on our boards are all onside with what I'm saying today. We want to see this move forward. We want to see the opportunities to be more competitive with the other countries in the world. Underneath this bill, it will give us that opportunity, so we're onside this with.

Senator Plett: Knowing that we maybe cannot always have 100 per cent, I'm gathering from what you're saying that, if you don't have 100 per cent support, you're awfully close to having 100 per cent support on this.

Mr. Van Tassel: I think it's not an issue for my province. Since 1991, since our crop insurance obliged us to use certified seed, we've been using certified seed. I haven't been using farm-saved seed since the 1980s. The biggest part of my province always does it. In corn, it's an obligation. In every other grain, maybe 90 per cent is already certified seed.

I come from Lac-Saint-Jean, which is in the northern part. We don't grow very much corn. We need to have more yield in straw crops, barley, wheat, oats, so we need to have more investment. That is what I'd hope with this bill — to have more investment, to have bigger returns for my farmers so that they will be able to live better from their crops. That's the reason I'm talking here right now.

Senator Plett: Mr. Stanford, do you want to add anything?

Mr. Stanford: Yes, I'd just like to say that the research work we do in Western Canada is very large, but we have the Atlantic Grains Council on our board. They are having concerns with the quality of their wheat and the quality of their barley. So working with research stations in Western Canada, and then also having the private sector come into place with some of their diseases like fusarium that they have in Prince Edward Island, this will give them an opportunity to have better varieties with more disease resistance. We see nothing but opportunities with this bill.

Senator Tardif: I have a comment and a quick question. You've expressed your support for continued public research and infrastructure. Unfortunately, Agriculture and Agri-Food Canada just announced I believe a $4 million cut, and I'm sure that will have an impact somewhere down the line. Hopefully that won't affect your areas.

I want to get back to a question of end-point royalties. When I asked a question of the minister when he appeared before the committee in December about the possibility of plant breeders collecting revenue on harvested grain, not only in the seeds sold, the minister indicated in his response that it would have to be worked out in a commercial agreement; that is, the contract signed between the farmer and the seed company.

Mr. Stanford, you said you wanted to move slowly on this. I believe you said, Mr. Van Tassel, that for end-point royalties it is just a question of time, that we're going to be seeing it in 5 or 10 years. Is it of concern to you that you may not have that decision and it will be the seed company that will decide, when you sign the contract and buy that seed, that he may want to put it at the end point, that it all depends? The onus is now on the farmer to sign a good contract with the seeds companies and he will have to negotiate that.

Mr. Stanford: I see this as an opportunity for the farmers. The farmers are well-educated now. They understand these bills. If you're going to sign a contract with canola, you know the variety you will be growing, so you decide how much money you want to spend and how expensive a seed you want to buy. When I sign a contract with a public variety and I pay for that certified seed upfront, I know that's what I will be paying. If I want to buy it from the private sector and they have an end-point royalty, I know. If the private sector says we will come in and take it over, they will have to prove to me the value or I will not be purchasing their seed. It will have to be a much higher yield and better quality.

One thing I want to mention is that registration in Canada is very strict. If there are new varieties brought into play, if they don't meet our quality standards, they can stay in the feed market. Farmers can certainly grow them, but for our international markets, we need to keep our quality up. That's how I see it.

Mr. Van Tassel: I was already on a national committee looking at how to fund the public research, among other things. End-point royalty came out, but it's one or the other. I buy certified seed. I pay for the right, for the research and all that when I paid for the certified seed. But if somebody doesn't use ordinary seed, normally you have to pay for a little bit of the work being done on it. That part would probably be end-point royalty. Then they will have the choice. There will be the possibility to have a return on the seed that wasn't already paid for with the certified. A person grows seed that is certified, and maybe a certain amount of that is to the companies for the work they've done on breeding.

Senator Tardif: You don't see a chance that somewhere down the line the bakery could ask for a return because of the wheat that's in the bread being sold?

Mr. Van Tassel: No. It will be with the seed developer and the farmer.

Senator Tardif: End points go down the line.

Mr. Dahl: If I could make a brief comment on your question about the bakery, one of the things is that in a robust environment that encourages investment, you might see a bakery saying, "I want a particular quality characteristic because I know I can get more for that in the market."

Warburtons that buys from Canada is an example of that, and they sell it for four times the price of other bread in the U.K. They could go to a plant breeder and say, "I want you to develop a variety with this particular quality." They could make those arrangements directly with producers. So it opens up those kinds of opportunities for providing value to customers that maybe we don't have today.

Senator Unger: I have a question for Mr. Dahl, just as a little point of clarification. Even though I was born and raised on a farm in northern Alberta, I know that things have changed so much. It's really quite amazing.

Mr. Dahl, you mentioned farmers saving their own seed. Can they sell it to their neighbour? No. You talk about how selling brown bag seed discourages investment and is illegal. But I'm wondering, brown bag seed would be seed that someone else had produced and you can't sell that?

Mr. Dahl: No, sorry. It's a little bit of a colloquial term. "Brown bag" seed would be if I grew a commercial crop and I saved some of that seed, cleaned it and sold it to my neighbour. So that's going outside of the process. I can take that seed and clean it and use it for my own use. That is the farmers' privilege. But what isn't legal is to sell that as seed to my neighbour.

Senator Unger: Even if you had developed that seed yourself?

Mr. Dahl: No. That's entirely different, because then I'm the owner.

Senator Unger: I have a quick question for Mr. Van Tassel. In 2011, you gave a speech to the House of Commons committee and you talked about how in Quebec there's an area dedicated to GM production and that it had increased from 100,000 hectares in 1999 to 400,000 in 2009. Has that gone up again by a significant amount?

Mr. Van Tassel: You check the parts very well. It all depends. For corn, it is maybe 90 per cent GM. Canola is 99 per cent genetically modified. The other one that plays more is soybeans. If companies want to have more non-GM IP beans go to Japan among other things, they will put up the premium. For us, sometimes it can be 75 per cent GM, sometimes 40 per cent GM. Soybeans play in between. It's probably more than 400,000, around that.

The Acting Chair: Thank you very much, Mr. Stanford, Mr. Dahl, Mr. Van Tassel, for your good information. Our time for this panel has finished.

[Translation]

Now, for a period of 45 minutes, the committee will hear from Ariane Gagnon-Légaré, Community Organizer, Agriculture and Food, Les AmiEs de la Terre de Québec, joining us by video conference; and from Matthew Holmes, Executive Director, Canadian Organic Trade Association.

Ms. Gagnon, you may start us off.

Ariane Gagnon-Légaré, Community Organizer, Agriculture and Food, Les AmiEs de la Terre de Québec: Good morning, ladies and gentlemen. The AmiEs de la Terre de Québec, or ATQ, seeks to promote innovation and prosperity in cooperation with the federal government. The ATQ supports innovation and prosperity that improves the quality of food and promotes the well-being of those who work in the agri-food sector, not only in Quebec and Canada, but also around the world.

We will discuss the impact on agricultural biodiversity of the provisions of Bill C-18 that define plant breeders' rights and harmonize Canadian laws with the UPOV 91 standard, recognition of the common good, innovation, public engagement and food sovereignty.

Bill C-18 expands the use of plant breeders' rights, a measure that helps large companies, which have the resources and organizational capacity necessary to complete the administrative steps to obtain these rights. The Convention on Biological Diversity attributes the loss of agricultural diversity to the homogenization of agricultural production systems and standardization caused by globalization. Large companies fuel all these trends.

Yet historical data show that greater diversity in the agriculture sector, particularly the coexistence of many small farms that freely manage their own seeds, has promoted diversity in plant varieties.

By adopting the UPOV 91 standard, Canada would undermine efforts to maintain and enhance agricultural biodiversity.

Furthermore, the seeds we use today are the fruits of the work and ingenuity of millions of farmers who chose the varieties best suited to their geo-climatic conditions, lifestyles and tastes over thousands of years. Created by age-old processes of innovation and diversification, agricultural biodiversity and the seeds carrying that diversity should be recognized as a legacy for all of humanity.

The ATQ believes that this common heritage should not be patented or quasi-patented using plant breeders' rights.

To stimulate innovation, instead of copying the patent and copyright system by using plant breeders' rights, Canada would be better off following the example of the open source software and open data movements, in which leading information technology companies, many governments and hundreds of universities and research institutions participate around the world.

Adopting UPOV 91 goes in the opposite direction, even though these movements have repeatedly proven to be effective and productive.

Given the vital importance of seeds, the public must be able to manage them. By establishing a more burdensome legislative framework, Bill C-18 would hamper public involvement in seed management.

More broadly, it is critical that the development of new plant varieties not be directed primarily by profit-driven companies. We believe that a broader range of stakeholders, from different backgrounds and driven by a wide variety of incentives, would result in seed development that meets the needs of current and future generations. Accordingly, the ATQ would prefer that public authorities support innovation in seed development in accordance with an orientation set through public debate.

Through our work concerning agricultural biodiversity, its recognition as the common heritage of humanity, open access to seeds and democratic participatory management, we are seeking to advocate for food sovereignty. Food sovereignty is defined as the right of peoples to healthy and culturally appropriate food processed through viable methods, and their right to define their own food culture systems, without that right harming others. Food and agriculture should, by definition, be managed collectively so as to be adapted to the environmental, social, economic and cultural conditions of communities.

The objective of food sovereignty can be viewed as a legitimate reason to adopt measures to protect local production, distribution and marketing, and establish job quality and environmental protection criteria. Measures that some economists might label protectionist would consequently become basic community development tools.

Adhering to the principle of food sovereignty would allow for reversing the disappearance of small agricultural operations and energizing the economy of rural regions, all while protecting against the ups and downs of global markets. Supporting small agricultural businesses can also help provide local access to high-quality, fresh foods. These high-quality foods, along with involvement in agriculture, play a role in promoting healthy living.

Starting with seed management, the ATQ is putting forward a vision that takes environmental justice, public health and poverty reduction into account. Our vision is one where our food system — given its critical role for the economy, the environment, regional development and public health — is shaped by community-led debates and decisions for the benefit of current and future generations.

The ATQ recommends that the Government of Canada adopt the food sovereignty approach and govern accordingly; facilitate the management and free sharing of seeds; recognize agricultural biodiversity and the seeds carrying that diversity as the common heritage of humanity; and publicly fund innovation in seed development in accordance with an orientation set through public debate.

[English]

Matthew Holmes, Executive Director, Canada Organic Trade Association: Thank you, Mr. Chair and honourable members of the committee, for the chance to appear before you today. My name is Matthew Holmes. I am the Executive Director of the Canada Organic Trade Association. I'll tell you a bit about COTA. We're a membership-based representative association for Canada's organic business community, including organic farmers, provincial organizations, manufacturers, inspectors, exporters, distributors and retailers.

The latest global figures show the global organic market is now valued at well over $64 billion per year in consumer sales. Canada is now positioned as the fourth largest market with $4 billion a year in sales. Organic is poised for continued double-digit growth and our biggest challenge is truly supply. We don't have enough producers or ingredients to keep up with demand, quite simply.

There are over 5,000 certified farms, handlers and manufacturers in the country. COTA's research has shown that organic farmers typically earn more than the average conventional farmer, that organic agriculture attracts the next generation of farmer — we're 8 to 10 years younger, on average — and that organic farm operations create jobs at twice the rate of conventional farms. We feel that policies that support organic farming in Canada now will also support a diverse and robust future for Canadian agriculture in general.

This past year, COTA conducted research commissioned by USC Canada on seed use within the organic sector. We found that the organic sector uses approximately $78 million per year in organic and ecological seed. However, very few commercialized varieties are developed with the traits that organic farmers require, and we simply don't have the market scale currently to justify widespread development by most plant breeders. Therefore, many organic farmers rely on saved seed for their own specific needs. In fact, for certain field crops, we found that over 60 per cent of planted seed was sourced from saved seed. We conclude, therefore, that any new seed legislation must protect farmers' ability to save, store and use seed for their own purposes.

Due to specific agronomic needs and a lack of commercialized varieties targeted for organic application, the organic sector relies on essential derived varieties. Many organic growers use small test plots of seed for trial to understand their localized yield, performance in low-input agriculture, natural pest resistance or to ensure the absence of GMO traits. For this reason, we must provide our farmers with the greatest possible flexibility and self-determination in deciding what they can source, store and plant.

I was pleased to appear before the house Standing Committee on Agriculture and Agri-Food on this same legislation in the fall. We based our testimony on the research I've just told you about and voiced our tentative support for Bill C-18 if our basic concerns regarding the farmers' right to save and store seed were addressed. I was pleased to see the amendments adopted by the house in the legislation at third reading before it was referred to the Senate, especially the language in section 5.3. In our opinion, this language is essential if the bill is to pass the Senate.

However, we are still concerned that the bill can introduce regulations that may withdraw or restrict the farmers' privilege on a crop-by-crop basis or for specific groups of farmers. Organic farmers are often overlooked by plant breeders, and we are therefore concerned that this could create a situation in which we have no access to appropriate seed. This privilege or right should be irrevocable.

Finally, Bill C-18 also prepares the way for an eventual end-point royalty system. I know the committee here has been discussing that. This would allow the plant breeder to collect royalties on harvested material.

COTA strongly recommends that the bill include language that makes explicit that any EPR can never be greater for saved seed than it is for purchased seed. This is a simple safeguard that can be put in place in this legislation.

To this last point, I note that the European Court of Justice has ruled that seed-saving costs cannot be more than half the price of seed royalties, ensuring fairness for all parties in the value chain. We feel these minor adjustments to the bill will have real impacts for Canadian farmers, while also supporting the basic intent of the bill as drafted and proposed.

Thank you for your consideration. I would be happy to answer any questions of the committee.

[Translation]

The Acting Chair: Thank you very much. Before we get to the senators' questions, I would just remind everyone that we need to leave the room at 10 o'clock because another committee is coming in. So I would ask everyone to keep their questions and answers brief, please.

[English]

Senator Tardif: Mr. Holmes, you indicated that although you're giving tentative support to the bill and that you're pleased with the amendment that has been brought forward on the house side, you still have some concerns that Bill C-18 would compromise your ability to have access to appropriate seeds and that there are few varieties that are being developed for organic crops, if I understood correctly.

What can we do to assure you that your interests are preserved and respected?

Mr. Holmes: Thank you, senator. I feel that the amendments that were introduced provide at least a basic safeguard that organic producers in Canada can continue to save seed from their operations, condition it, store it and replant it so that, at a very minimum, we can maintain what we have.

The growth of organic will continue, and we're seeing a very robust growth. We're seeing Canadian organic farmers receive 300 or 400 per cent premiums in terms of bushel rates in some of the crops they're growing compared to conventional farmers, so there's a tremendous demand both in the marketplace and at the farm gate as well. The situation that should promote and grow that industry is there.

Over the longer term, to ensure that there are innovative new varieties and new seeds, there's a lot of work being done to stimulate and look at very specific potential varieties for organic farmers. The reality is, in organic farming especially because it's such a low-input system, it's very dependent on the regionalized needs of the growers. So, a large system, a large company providing new varieties typically cannot be a precise tool or a precise seed for those localized growers.

Senator Tardif: So you're saying that a private plant breeder would be less interested in perhaps investing in organic seed?

Mr. Holmes: There will be opportunities for private investment and development of organic seed, because organic growers must use organic seed if it's available for them. So that creates a good incentive, but it will always be a very localized, very specific or regionalized smaller-scale operation.

Senator Tardif: I've heard some Canadian citizens express their concern that heirloom seeds will not be allowed to be saved. What's your reading of that?

Mr. Holmes: My reading of this legislation does not preclude the continued availability of heirloom seeds.

Senator Tardif: Would you read to us again the proposed amendment that you thought would help your interests?

Mr. Holmes: There were two points that I raised. One was that any withdrawal or restriction of the farmers' privilege is a concern for us, so that would be for a future regulation under this act that might remove certain crops or classes of farmers from the farmers' privilege. Particularly for organic farmers, we always require that right to save seed.

The second one is if we were to develop a regulation under this act with end-point royalty systems in place, those end-point royalties should never be greater for saved seed than they are for purchased seed. In our recommendation, there should be language that would protect those who do save seed and reuse them from paying, in essence, a penalty for saving seed.

[Translation]

Senator Tardif: Ms. Gagnon-Légaré, would you care to comment on that?

Ms. Gagnon-Légaré: I would like to point out that we presented our concerns in general terms. Our organization advocates for collective rights, but we certainly share Mr. Holmes's concerns, with respect to seed management and free sharing of seeds.

[English]

Senator Plett: I will ask both of you the same question that I've asked most witnesses. You're here representing organizations. I would like to know the size of your membership, Mr. Holmes, as well as Ms. Gagnon-Légaré. Do you have a membership that you're representing? If so, what's the size of it?

Mr. Holmes: Thank you, senator. We do have a membership. We're a membership-based organization. We have a couple of different forms of membership. One is through direct membership, where a company, farm or manufacturer would join outright and be a trade member of the organization. We also include in our membership most of the provincial associations who speak for organic farmers at the provincial level. So, by virtue of that relationship, we also reflect and work closely with them on their concerns or issues for their region.

Our membership, in terms of hard numbers — I already spoke to you a bit about the size of the sector in Canada — 5,000 certified operations across the entire value chain, from farmer through to retail. We have about 200 direct members in COTA as well.

Senator Plett: Thank you. Ms. Gagnon-Légaré?

[Translation]

Ms. Gagnon-Légaré: We have about 280 direct members and 1,200 supporters. We are located in the Quebec City region, in Quebec. We are a local and regional organization.

[English]

Senator Plett: Mr. Holmes, I think have you said one of your main concerns has been addressed. You're a little apprehensive that the guarantees will stay there as opposed to the legislation not being what you want. The minister has assured us, of course, that in order to take the farmers' privileges away, it cannot be done without consultation. Would you not agree that consultation, if whatever minister of the day wanted to deal with farmers' privilege in any sector, would then in fact happen with that sector? The legislation would not allow him to do that without consulting with your organization and your group of people, and what incentive would any minister have to want to hurt or kill an entire industry? I don't follow the reason that you would have a concern about it, considering that your actual concern has been addressed in the legislation.

Mr. Holmes: Thank you for the question. As I said, we did provide support to the legislation. We raised some concerns and the major one was addressed, so I'm reflecting some of the other concerns we also raised in that process at that point in time. I have, subsequent to the house passage of the bill, written the minister and the parliamentary secretary to express our appreciation for the amendment that was introduced, so we've been very transparent in that regard.

I think there are still areas where this bill could be just improved slightly. On the question of consultation, we fully expect to be consulted and we fully commit to being there at that time. However, I do, as always, speak for a minority shareholder in the agricultural space and, as a minority in Canada, we always expect to have our concerns well heard.

Senator Plett: Absolutely, you are representing a group of people and that is who you need to be concerned about. I certainly appreciate that.

Senator Tardif: Were you consulted prior to the bill being written up?

Mr. Holmes: Prior to Bill C-18 being introduced in the house?

Senator Tardif: Yes.

Mr. Holmes: We were made aware that there were UPOV 91 considerations being discussed and we were meeting with members of Parliament at that time and preparing ourselves, so we knew that it was coming.

Senator Tardif: But you weren't directly consulted in drafting?

Mr. Holmes: We did not participate in any drafting process.

Senator Tardif: I understand that, for example, the Canadian Seed Trade Association was very involved in the drafting.

Mr. Holmes: That is my understanding, yes.

Senator Tardif: But not yourself?

Senator Plett: But with your main concern, clearly you prepared some form of a brief, you testified and your main concern was addressed.

Mr. Holmes: Yes.

Senator Plett: Thank you.

Ms. Gagnon-Légaré, I have a question for you. In your presentation, you use words such as "profit" and "large companies" like they are bad words. I'm not sure how anybody is supposed to continue to eke out a living when they don't make profits, and large profits are good. Large companies are usually formed as a result of a small company selling to somebody. On Tuesday we heard testimony from a witness that said farms he represented range from 30,000 acres down to under a thousand acres. A 30,000-acre farmer didn't wake up one morning as a 30,000-acre farmer. He became that as a result of buying out small farmers and, in a free enterprise system, the small farmer sold and is possibly sitting in Hawaii now reaping the benefits of his sale. I'm not sure why you seem to believe that companies should not make profits, we shouldn't have large companies.

I'll finish with this, chair. Number two of your recommendations was to facilitate seed management and free sharing of seeds. I'm not sure how we would grow our industry if we had free sharing of seeds. If I came up with some kind of a seed that I thought would benefit me, I don't think I would want to freely share that. I think I would want to sell that. There needs to be rights for that. I'm not sure how we would ever get the industry to agree with a recommendation like that. I know that's maybe more comments than questions, but I would like to hear your response.

[Translation]

Ms. Gagnon-Légaré: Thank you for your question. Two of my arguments were mixed up here. When I was talking about large companies, it was more in a context of concern for agricultural biodiversity. The fact that seed management and development are mostly in the hands of large companies reduces the number of actors involved in seed development and ultimately reduces agricultural biodiversity. This phenomenon is documented by the Convention on Biological Diversity and its program on agricultural biodiversity. Canada is signatory to that convention.

So this is a fairly well-documented phenomenon. Seed homogenization is occurring in parallel with an erosion of agricultural biodiversity. That's what I said about large companies. We are not saying that big companies should not exist; we are saying that coexistence with smaller companies should also be encouraged. With seed management becoming burdensome, those small companies are having more difficulty.

As for benefits, what I was saying is that financial gain shouldn't be the only incentive for developing agricultural biodiversity and new crop varieties. So those are two different points.

Our concern over seed innovation potentially being left in the hands of companies is that other incentives and objectives of seed development may not be taken into account. Those are two separate issues. We think that seeds can be developed for the sake of profit, but there may be other reasons for doing that, such as to benefit rural populations and meet other objectives.

As for our second recommendation to facilitate seed management and free sharing of seeds, opinions definitely may vary when it comes to the ethics of seed management and the quasi-patenting of life. We at AmiEs de la Terre de Québec feel that life and seeds should not be patented, but should rather be recognized as humanity's common heritage and shared freely.

I am expressing this in broader terms, but it pretty much boils down to what Mr. Holmes was saying. A farmer being able to save and share seeds does not prevent the existence of companies that market certain seeds. Simply put, other stakeholders should not lose their right to collect seeds and share them as they see fit.

[English]

Senator Plett: Thank you for that. I want to say that I certainly agree with you when you say that small seed companies should be able to coexist alongside large seed companies. This week we had a witness from Canterra Seeds out of Winnipeg, my city. They have 27 employees, and they were here testifying in the positive on this legislation, saying that it would help their small company as much as it would help the Monsantos of the world. I think we're on the same page in that we do believe that, and there are many small companies that agree this legislation in fact will do that. Any comment to that?

[Translation]

Ms. Gagnon-Légaré: That is entirely possible. I think some small companies also have concerns, and those may be the concerns we are putting forward today.

[English]

Senator Enverga: Thank you for the presentations. My first question is for Ms. Gagnon-Légaré. You spoke in your presentation today in regards to culturally appropriate food. Can you tell me more about that? Does it mean that we should have protectionist measures to allow for culturally appropriate foods for increasing Canadians? How do you present that with lots of immigrants coming to Canada? Would you mean that we have to produce so much other culturally appropriate food for each and every immigrant?

[Translation]

Ms. Gagnon-Légaré: You are talking about protectionist measures. Yes, we think it may be appropriate to introduce measures that would protect local agriculture, not only in terms of food sovereignty, but also in terms of other sustainable development issues that worry us. Those protectionist measures would promote local agriculture to address concerns related to climate change. At AmiEs de la Terre du Québec, we worry about that a lot, and we are establishing a link between local agricultural production and global climate change.

The provision of culturally appropriate food has to do with the approach we are proposing whereby agricultural systems would be developed with community roots. From that perspective, immigrants are part of a community and should be able to participate in developing the agricultural system and determining local agri-food productions within their community.

So the answer is essentially yes. However, those immigrants are also part of a community. By becoming involved in their community, they should be able to obtain food that meets their needs.

[English]

Senator Enverga: Yes, but that would mean that you would require a lot more farmers and more farms to make it specifically for their own culture, right? Is that what you're referring to? We would need more participation from other cultures, so we would need more farmers — different farmers and different farms — to ensure that culturally diverse communities will be helped. Right? Is that what you're saying?

[Translation]

Ms. Gagnon-Légaré: Those needs can be met in various ways. We have absolutely nothing against more farms, as that would help create local jobs and make rural populations more dynamic. So that could be seen in a favourable light.

[English]

Senator Enverga: But it would not be commercially viable if you think about the whole country.

If I could, Mr. Holmes, I have another question for you. Your association promotes trade in so-called organic products. If companies could have better protection for the seed they develop and the investment they make, would this not lead to better and sturdier hybrids that are more suited for the local conditions and, therefore, less dependent on pesticides as long as there are no GMO varieties? Is this going to help your organization?

Mr. Holmes: I think what we've seen in the development of the organic sector, both here at home and in major markets like the European Union and the United States, is that the organic sector shows a real streak of innovation, of being able to develop new markets and bring new products to market, some of which have been overlooked by the, if you will, mainstream agricultural system.

We see certain traditional ancient grains that had been forgotten being reintroduced, products like kamut, that you may have seen, which is a Khorasan wheat, an ancient wheat. We have seen, in Canada, in particular, the introduction of food hemp crops as a major and very lucrative new seed crop that's coming out, and much of that is because of the organic sector. So there's a tremendous amount of potential there.

What we have seen, though, is that enabling and keeping the system flexible and open to that dynamic explorative space is the best way to bring and identify those new products to market. The more layers and the more restrictions and parameters we put around the seed system, the more it concerns us that it could ossify and create a system that does not encourage the discovery of some of those forgotten traits or crops.

Senator Enverga: But you would also believe that it will open up more potential, because it's going to open up a lot of markets, a lot of seed varieties in the market that will help you?

Mr. Holmes: We certainly hope so. I don't see anything in Bill C-18 that I can put my finger on and say that that will lead to more opportunity for organic farms to have new varieties of seed available to them, but, should there be the development of something that perhaps really addresses a specific agronomic need within a specific region of the country, I could see that being developed for specific application by the organic sector under this legislation.

[Translation]

Senator Dagenais: I want to thank our two guests. Ms. Gagnon-Légaré, I am referring to notes from October 21, 2014, which were sent to the standing committee on agriculture and are related to today's discussions.

You say that, to guide the development of new varieties, companies should not necessarily be motivated by financial gain. I have a number of farmer friends, and rare are those among them who are not motivated by some sort of profit, or else they would give up agriculture. Don't you think a desire to achieve some financial gain is necessary? As you mentioned, this creates jobs and, while producing profits, can benefit current and future generations.

I'd like to hear your thoughts on this.

Ms. Gagnon-Légaré: Thank you for that question. My point is that I do believe innovation motivated by financial gain can be a useful part of seed development. However, we are concerned about this becoming the only option in terms of seed innovation. That is why we think it's important for governments to also invest in developing new seed varieties.

The possibility of achieving financial gain often corresponds to large-scale uses. However, needs can exist on another level and deserve to be considered, as well. To that end, we think that maintaining companies or organizations that develop seeds based on a different logic is something that would benefit everyone and enrich our agricultural biodiversity.

[English]

Senator Tardif: Mr. Homes, you indicated in your comments that one of your concerns is that the bill could introduce regulations later on that could modify farmers' privilege, the exemption from the Plant Breeders' Rights Act that has been included in the bill. What is your position on the incorporation by reference that is allowed in the bill, the fact that changes could be brought in, documents could be incorporated by reference, there could be third-party sources, external reviews that have not been debated publicly in Parliament or in the public domain and would not be published in the Canada Gazette? How do you view that and its impacts?

Mr. Holmes: Incorporation by reference itself is not a threat to us. As always, the devil is in the details. It's the substance behind the administrative tool. In fact, the organic regulations in Canada were the first, to my knowledge, to incorporate by reference, and they were seen as a bit of a test case, at least in agriculture. So the organic standards are developed through the Canadian General Standards Board system, with a full participatory consensus-based process, and are very transparent. Those standards are then incorporated into the Organic Products Regulations of 2009.

The administrative or technical means to incorporate by reference is not threatening to us. What I would say is that any incorporation by reference, particularly for something that is of such import as this, should meet basic ground rules. Those, to my mind, would include such things as following a process at or similar to the Canadian General Standards Board which ensures that all interested parties have equal sitting at the table, that there is a full transparent process involved in the standard-setting process, that there is an appeals process involved.

Sometimes when you have an incorporation by reference, if the actual document you're referring to outwards hasn't met some of those basic tenets, then you could see situations in which a very small group or a strong interested party may just have things that are designed to benefit themselves incorporated. So that would be the threat.

Senator Tardif: Thank you. That would perhaps bring on legal challenges down the road?

Mr. Holmes: I could see that as one possible outcome, yes.

Senator Tardif: Are intellectual property rights the only way to stimulate innovation?

Mr. Holmes: No, not at all. I think, as my co-presenter today has addressed, there are many ways to develop new innovation and the discussion around cultural foods is an interesting example. You just need to go to any farmers' market right now in Montreal or Toronto, even Ottawa, and you'll see all kinds of incredible vegetables and produce, even in our grocery stores, that are from traditional cuisines of some of our Canadians here. That, to my mind, is an incredible opportunity for Canadian growers to start tapping into very lucrative markets. These are high premium, very select, very specific possible areas. That does not come out of an intellectual property rights system; it comes out of traditional seed saving. It comes out of an appreciation of opportunity and diversity and seeing in a very basic way what is at the root of our market system, which is seeing an opportunity and creating something to fill that need.

Senator Tardif: Knowing that some countries have not adopted UPOV 91 — and even with UPOV 91, there are some countries that have no farmers' privilege. Canada has a modified farmers' privilege, which means that regulations can be brought on further down the line. Do you feel that it's in Canada's and Canadian citizens' best interest to sign on to UPOV 91?

Mr. Holmes: We hear a lot of concern expressed around UPOV 91 from some of our constituents, I'll be perfectly honest with you.

I feel that we can adapt. Our sector is mature enough and able to respond if UPOV 91 is in place in Canada. We compete regularly with other jurisdictions and producers from other countries who are creating and developing new varieties, organic products from countries that have promulgated UPOV 91.

I feel that we can live within that environment. Whether or not it is the best model or something we need is a different question, and I can't tell you that I have a crystal-clear vision of that, unfortunately.

Senator Tardif: Ms. Gagnon-Légaré?

[Translation]

Ms. Gagnon-Légaré: You asked several questions, and I will answer them quickly.

Regarding incorporation by reference, our concerns were also brought up by Mr. Holmes. What worries us is participatory and transparent democratic management. Those are the aspects we want to put forward, so that Canadians would be aware of what is controlled and standardized when it comes to seeds in Canada.

Concerning the more general question about adopting the UPOV 91 standard, we at AmiEs de la Terre de Québec are very concerned about all international negotiations processes, such as those relating to trade. The control and standardization logic that underlies this standard worries us, and this concern is related to considerations such as the conservation of biodiversity. As I was saying earlier, standardization through those conventions reduces agricultural biodiversity.

Moreover, when it comes to participatory democratic management, by adhering to those major international agreements, we, as citizens on a local level, sometimes lose the ability to control what is done when it comes to seeds.

The Acting Chair: Senator Plett can ask one last quick question.

[English]

Senator Plett: As Senator Tardif pointed out, there are only two countries left of the developed countries, once Canada has passed this, that won't be part of UPOV 91. Knowing that many countries around the world are more advanced than Canada when it comes to organic crops, do you have any evidence that UPOV 91 in those countries has been anything but positive?

Mr. Holmes: We endeavoured to reach out to colleagues in numerous countries that are similar to Canada in terms of their organic sector, the stage they're at right now, and we took a slightly different tack. We tried to find specific benefits under UPOV 91 for the organic sector, and we weren't able to find any, sir. On the flip side, we did find many situations, conflicts and challenges that the sector faced, but I think in agriculture, that is kind of like the weather: You can always expect some.

I don't know that we can put the blame for those challenges on UPOV 91 in those countries. Again, I'm speaking from certain ambivalence here, where we feel that we can respond to this. The language that I specified in section 5.3 was absolutely essential. It needs to be maintained in that bill; otherwise, our position will become somewhat more pointed.

With UPOV 91, we have not found particular benefit for the organic sector, but we haven't found anything specifically detrimental, either.

Senator Plett: But most other countries, European countries for sure, are more advanced with organic crops than Canada, so they have managed to increase their productivity with or without UPOV 91. They're part of it.

Mr. Holmes: Absolutely. The European Union is a fantastic example. They have a very robust organic sector that has been supported by a broader platform of legislation and supports that I would be happy to discuss with you at a future opportunity.

[Translation]

The Acting Chair: Thank you for your testimony, Ms. Gagnon-Légaré. I hope it's not too cold in Quebec City

Mr. Holmes, thank you for your testimony.

(The committee adjourned.)