Proceedings of the Standing Senate Committee on
Agriculture and Forestry
Issue No. 26 - Evidence - Meeting of March 28, 2017
OTTAWA, Tuesday, March 28, 2017
The Standing Senate Committee on Agriculture and Forestry met this day at 5:50 p.m. to study the potential impact of the effects of climate change on the agriculture, agri-food and forestry sectors; and, in camera, for the consideration of a draft agenda (future business).
Senator Ghislain Maltais (Chair) in the chair.
[English]
The Chair: I welcome you to this meeting of the Standing Senate Committee on Agriculture and Forestry. I am Senator Maltais from Quebec, chair of this committee. I would like to start by asking the senators to introduce themselves, beginning with the deputy chair.
Senator Mercer: Terry Mercer from Nova Scotia.
Senator Oh: Victor Oh from Ontario.
Senator Runciman: Senator Bob Runciman, Ontario.
Senator Ogilvie: Kelvin Ogilvie from Nova Scotia.
The Chair: Today, the committee is beginning its study on the potential impact of the effects of climate change on the agriculture, agri-food and forestry sectors in Canada.
Today we welcome, from the Canadian Federation of Agriculture, Ron Bonnett, President and Drew Black, Director of Environment and Science Policy; from the Canadian Horticultural Council, we have Rebecca Lee, Executive Director; and from the Ontario Greenhouse Vegetable Growers, Justine Taylor, Science and Government Relations Manager.
Welcome, ladies and gentlemen. We will begin with Mr. Bonnett.
Ron Bonnett, President, Canadian Federation of Agriculture: I thank the chair and committee members for the invitation to attend.
I will present some of the perspectives of the Canadian Federation of Agriculture on adaptability and resilience of agriculture producers to climate change. As Canada's largest farm organization, our members include provincial general farm organizations, as well as national and interprovincial commodity organizations from every province. Through our members, we represent over 200,000 farmers and farm families right across Canada.
I should mention at the start that it is interesting to be having this discussion about agriculture and climate change in light of the Barton report that came out about the economic opportunity of agriculture recently and the recent budget that centred on agriculture as well. Dealing with climate change issues is part of that package of ensuring that agriculture can prosper.
Farmers are inherently adaptive. We have a long history of embracing innovation through technology, education and best management practices to improve environmental, economic and social sustainability. This has led us to where we are today, with a strong record of continuous improvement, as one of the most sustainable producers of agricultural products in the world. This is reflected in our use of natural capital, and in recent reports such as the Economist Intelligence Unit and the Canadian Roundtable for Sustainable Beef.
I think it can also be demonstrated in our sector's commitment to building and implementing a variety of other sustainability programs across the value chain such as the Canadian Roundtable for Sustainable Crops, the National Environmental Farm Plan and others.
In order to support agricultural producers in taking additional adaptive actions, we need to expand investments in research. This includes everything from how to sequester more carbon in the soil, reducing greenhouse gas emissions from equipment, crop inputs and enteric fermentation from livestock, which adaptive actions are the most effective, and addressing the adoption curve for new technologies and management change. There are many research questions that remain to be addressed if we want to position Canadian agriculture to continue to grow and support economic, climate, innovation and clean technology agendas.
We are often careful not to confuse weather with climate, but there is a need to understand how climate will be changing at a finer detail than is presently available in many areas. Agricultural producers often produce specific commodities or varieties that are best suited to their agronomic and environmental local conditions and we need to understand how those are changing. In fact, many of us have already made the change to new varieties in response to a changing climate. Believe it or not, we have growing areas in Canada that are not covered by weather radar. This is a highly important predictive tool that all farmers should have access to. Further investment and research to refine predictions can also benefit producers across Canada.
With climate change, we recognize that we are going to have constantly refine our pest management strategies. In many parts of Canada, a long and cold winter has been an excellent deterrent for many pests and has inhibited the impact of resurgence in the spring, as well as stopped some pests from becoming entrenched in Canada. Increasingly, we are not able to rely on this natural deterrent and will need to look to control new pests, and we are going to need to look at new strategies and technologies to do so.
Some of these new risks can be managed and adapted through appropriate strategies and investments in new technologies, while others will undoubtedly extend beyond the capacity of on-farm management. Canada's current suite of risk management programs has been around for about 10 years, with the basic structure for some of these programs dating back multiple decades prior to the recognition of these emerging risks and the subsequent investments needed to address them.
At this point we believe it's critical that governments and industry step back and take a more fundamental review in partnership as to whether these programs are still contributing to the management of risks producers face. We need to ensure that Canada's business risk management programs continue to assist producers in managing those risks beyond their control, when factors like climate change continue to see those risks evolve over time. Canadian agriculture needs an effective suite of business risk management programs so that producers have the confidence to proactively invest in strategies and technologies to adapt to those risks within their control.
We've clearly seen this government take a more focused approach to addressing mitigation of climate change. This has been reflected with the Calgary Statement that signals the direction that the next agricultural policy framework will take once it is launched in 2018 to replace Growing Forward 2. We've been active in making our positions clear about how Agriculture and Agri-Food Canada and the provincial agricultural ministries can support producers to reduce emissions and adapt to climate change's impacts. Now we're are waiting to see how many of these suggestions are taken up within the multilateral agreement.
Overall, we need a whole of government approach to addressing the challenges that climate change possesses for agriculture. For example, the innovation, green infrastructure and clean technology agendas all play a significant role. Part of the challenge in bringing clean technology to farming is that in many cases, the technology requires high upfront capital costs with rates of return over many years. Accelerated depreciation for agricultural equipment could help incentivize producers to take these investments. Even more broadly, I would suggest we need to begin to look at a tax credits for investments in clean technology.
The bioeconomy has promised for many years, but has always suffered the same challenges at the commercialization level. Agriculture waste and purpose grown feedstock can significantly reduce the carbon footprint of many products when it replaces oil and gas feedstock. This goes above and beyond fuels to include composites, fibre, specialty chemicals and sugars. The challenge has been a lack of investment in the processing capacity and building the supply chain in most areas. The bioeconomy is one of the clearest areas that Canadian agricultural can be part of the solution to climate change.
Agriculture producers also sequester significant amounts of carbon through soil conservation practices. There were 8.5 megatonnes of carbon last year alone. However, we have found that in the development of offset protocols, many of the provincial governments have been reluctant to create the necessary incentives for producers to participate in the program if they are already practising conservation tillage. It must be recognized that we should have policies in place to protect the carbon that is already sequestered in soils. In other words, we don't just need to be mindful of filling up the sink, but also providing the right policy environment to keep the plug in place so that management or technological change doesn't begin to release carbon from the soils again.
This must be implemented in a balanced approach that recognizes that producers will need to retain flexibility to make the right management choices to respond to unusual excess precipitation, as one example. It is possible that in one or more unusual years, soils may release carbon, but overall the long-term trend will remain one of sequestration.
Productivity improvements through genetics can also greatly reduce the amount of emission per unit of product and may be one of the most tangible pathways to produce more food, fuel and fibre for a growing and more affluent global population, while reducing emissions.
We see the need to take a more holistic approach through climate-smart agriculture. That is one that recognizes that we need to equally increase yields through sustainable intensification, mitigate the impact of climate change and implement adaptation. In the past, we had seen a lot of focus to adaptation at the expense of mitigation. Now the feeling is that the pendulum may have swung too far the other way. We need to maintain a cohesive approach that addresses all three pillars.
With the divergence that provinces have been taking in implementing carbon pricing, we are beginning to become more concerned about competitiveness issues developing here in Canada. Some provinces have provided allowances for exemptions or rebate systems for producers on carbon price, while others have insisted that agricultural producers in their jurisdiction will have to pay it. Some sectors are large users of energy, with no easy technology switching available for their commodity. Most of the proven energy efficiency improvements that are available have been made in order to reduce costs. As price takers in the market, this is of significant concern for us as unlike other sectors of the economy we are not able to pass off higher input costs to our customers. That will come out of our own margins and make us less competitive compared to imports from jurisdictions without carbon pricing or that have more favourable policies toward agricultural producers.
The federal-provincial working group on mitigation options could only identify relatively small opportunities for the reduction of emissions from agriculture, some of which were very expensive on a per tonne basis. Agriculture also remains unique compared to other sectors in that most of our emissions have biological in nature through nitrous oxide from crop production as part of the nitrogen cycle and methane from ruminant production. These are not so far covered under carbon pricing, nor should they be.
However, we do need an expansion of offsets and other approaches that cover these biological emissions so that producers have the right incentives and knowledge of how to reduce biological greenhouse gas emissions. Industry, through programs like the fertilizer4R Nutrient Stewardship Certification Program, has demonstrated clear leadership in trying to do so, but we need supportive governmental policy environment to achieve large reductions.
In conclusion, our key recommendations are to set research priorities, produce and disseminate the right tools to make the right adaptation decisions, inspire changes in management practices through incentives and program support, address internal and international competitiveness issues, implement a cross-sector strategy to support sustainable and resilient food system, and to do it all with a partnership based approach with farmers.
As it stands, we feel that Canadian agriculture is a strategic sector of the economy that requires strategic investment in order to achieve our full potential of providing low carbon food and agricultural products to an expanding global population.
Thank you.
The Chair: Thank you very much, Mr. Bonnett.
[Translation]
Before continuing, I want all the senators who have just joined us to introduce themselves. Rest assured that they're not late. We can't start committee meetings until the Senate debates are finished.
[English]
Senator Beyak: Senator Lynn Beyak, Ontario. Welcome.
[Translation]
Senator Tardif: Hello, Claudette Tardif, from Alberta.
Senator Pratte: André Pratte, senator from Quebec.
[English]
Senator Tannas: Scott Tannas, Alberta.
Senator Woo: Senator Woo, British Columbia.
Senator Bernard: Senator Bernard, Nova Scotia.
Senator Gagné: Welcome. Raymonde Gagné from Manitoba.
[Translation]
The Chair: Following the appearance of the witnesses, the meeting will be held in camera for a few minutes, at the request of the senators.
We'll continue now with Rebecca Lee, Executive Director of the Canadian Horticultural Council. Ms. Lee, the floor is yours.
[English]
Rebecca Lee, Executive Director, Canadian Horticultural Council: Good evening, chair and committee members. Thank you for the opportunity to appear today to discuss the impacts of climate change on Canada's horticultural sector.
The CHC advocates on the national level on behalf of fruit and vegetable growers across Canada, and we have been doing so for almost 100 years. We are one of Canada's largest agri-food sectors, as we generate over $11.4 billion in real GPD out of $4.7 billion in annual direct farm cash receipts.
Climate change is a global challenge that requires action on the part of the governments, industries, businesses, communities and individuals alike. However, horticulture by nature is subject to shifts in the environment and to weather, which makes our growers especially sensitive to issues like climate change.
Our growers' ability to produce safe, affordable food also affects the food security of Canadians across the country.
Today, we would like to provide an overview of climate change as it impacts horticulture and highlights challenges and opportunities for various types of crop production.
Regarding adaptability and resilience measures in the Canadian horticulture sector, our sector is always looking for ways to address the issue of climate change. Many consequences of climate change can be seen across our sector. For example, our growers are concerned with unpredictable and changing weather patterns, more frequent and more severe droughts, increased exposure to invasive pests, plant diseases that are costly to manage and expensive renewable energy alternatives.
Because of these many issues, our sector often leans on research and innovation to ensure the sustainability of our environment and the safety of the food we produce. For example, grape growers now use wind machines to reduce the risk of frost and extend the growing season and strawberry growers use irrigation and floating row cover technology to prevent frost. GPS technology allows vegetable producers to minimize the use of pesticides by spot spraying. Improvements in crop varieties, such as the ever-bearing strawberry and enclosed high tunnel shelters, allow for a six- month strawberry harvest instead of just two to three weeks.
Access to water and advanced irrigation technology will be critical for fruit and vegetable growers to be able to deal with more severe and frequent extreme events.
Regarding sustainability efforts of greenhouse growers, because greenhouse farming occurs in a closed, protected environment, many of the risks associated with climate change such as climate control and invasive pests can be more easily managed. In general, greenhouse growers are early adopters of innovation. Many greenhouses have installed state-of-the-art equipment to help reduce crop inputs such as water, fertilizers and fuel, which results in an overall reduction of greenhouse gas emissions.
As an example of efficiency, many greenhouse farmers capture food-grade carbon dioxide from their hot water boilers, allowing this combustion byproduct to be delivered to the crop during periods of high photosynthetic activity resulting in enhanced production.
On economic impacts of carbon pricing on horticultural producers, in general terms for fruit and vegetable growers carbon pricing means an increase in the cost of fertilizer, packaging and transportation, not to mention the increased costs of various types of fuel. In 2017 alone current estimates show that carbon pricing is expected to cost greenhouse vegetable growers up to $20 million in out-of-pocket payments. Rebates as outlined by the B.C. and Alberta governments will provide some relief to the growers of those provinces.
Growers compete in a global marketplace against jurisdictions that don't have a carbon pricing mechanism in place. These costs cannot be passed on to the consumer while remaining competitive. In this instance carbon pricing effectively acts as a non-tariff barrier to trade.
Allow us to explain some of our concerns over competitiveness. Currently, the greenhouse vegetable sector is the only horticulture commodity that has a positive trade balance with the United States, with exports totalling $826 million in 2015. However, this balance could easily be upset if Canadian greenhouse farmers cannot remain competitive with their U.S. counterparts.
President Trump recently cut the Environmental Protection Agency's budget by 31 per cent. Climate change is no longer a priority for the U.S. government.
The lack of national carbon pricing policy in the U.S. results in competitive disadvantages for Canadian growers who cannot increase the price of their produce to offset their increased costs of production. Retailers will simply buy cheaper produce from the U.S., Mexico or elsewhere to satisfy consumer demand. This economic reality results in what is commonly known as carbon leakage where companies choose to move their operations to jurisdictions that don't have carbon pricing policies.
These farm and greenhouse closures also mean lost job opportunities for Canadians. Each new acre of greenhouse represents an investment of approximately $1 million. With such a significant upfront investment it is critical that Canada's business climate is conducive to continued growth.
We do, however, recognize that B.C. and Alberta have worked with growers and offered an 80 per cent rebate for carbon taxes applied to commercial greenhouses. On the other hand, this now leads to business conditions that vary greatly from province to province. Carbon taxes will also negatively impact food security within Canada because we will be increasingly reliant on imported fruits and vegetables.
Regarding the role of governments in meeting greenhouse gas emission reduction targets, during consultations on the government's next agricultural policy framework or NPF, we outlined how we needed support to advance the environmental sustainability of our sector and help fight climate change. However, the Canadian horticultural sector needs access to a clear envelope with targeted funds beyond that of the NPF to satisfy the government's climate change initiatives. We believe this can be achieved by aligning programming between the NPF and the Pan-Canadian Framework on Clean Growth and Climate Change.
The aligned programming would support long-term research into low carbon or renewable energy technologies, recognizing activities to reduce greenhouse gas emissions such as past upgrades by early adopters within the structure of the carbon credit system; continued policy incentives to reward greenhouse gas reductions; access to funds for knowledge and technology translation and transfer; growing practices and technology that protect the sector against the impacts of climate change for all farm sizes; a strategy for responding and adapting to the presence of new and increased pest and disease pressures; the development of new plant varieties that require fewer production inputs such as varieties that require less light or that reduce the need for pest control products; and a collaborative approach to building public trust in Canadian agriculture with regard to climate change.
Specific to carbon pricing, our sector needs continued federal leadership in harmonizing policies across the country and within free trade agreements and relief for growers until such harmonization is achieved. Furthermore, by deferring the rise in carbon prices currently targeted to reach $50 a tonne by 2022, the government would help to ensure the continued competitiveness of Canadian horticulture until similar policies are reflected by our trading partners. We are looking to the federal and provincial governments to work together to address these competitiveness issues with funds generated by Canada's new carbon pricing policy.
In conclusion, Canadian growers invest and operate in a unique and competitive market producing a highly perishable product. Costs associated with carbon pricing cannot be passed on to consumers. We are therefore becoming less and less competitive on the global scene. Our sector has a strong record of environmental stewardship, innovation and sustainability and we are eager to work with the government to build on this progress.
Thank you for the opportunity to testify. We hope our comments have been informative and helpful.
Senator Mercer: Thank you for putting a lot of issues in front of us. I'm wrestling with where to begin.
One obvious problem was brought up by both of you, although not by using the same words. For example, Mr. Bonnett, you said that with the divergence that provinces have been taking in implementing carbon pricing, we are beginning to become more concerned about competitiveness issues developing here in Canada. Then you talked about the different credits that happen in Alberta and British Columbia as opposed to elsewhere.
If Canadians manage to do this, have we created problems where there shouldn't be problems? We do not have the same programs across the country. A problem in our Confederation is that agriculture is a responsibility of the federal and provincial governments and there's no uniform application. Is it time for the federal minister and the provincial ministers to sit down and get their act together? Is it time to say that we need good programs but we need them to be uniform across the country so we're not competing with each other? Is it time to compete with the rest of the world and not with each other?
Mr. Bonnett: I think you have identified one of the core issues within Canada. There are many different carbon schemes. You mentioned B.C. They have a rebate program on a carbon tax. Alberta is working on a cap-and-trade system. Ontario is putting their tax in place. The impacts are hugely different.
I was recently talking to a greenhouse producer near Sarnia. He's estimating that he will have an extra $80,000 in costs this year just because of the impact of a carbon tax on his energy. Those are creating the distortions. We have to unify that in Canada, but we can't ignore the fact that south of the border it doesn't look like there will be any type of carbon pricing mechanism there. How are we going to stay competitive? That same greenhouse operator in Sarnia exports all of his product into the United States and all of a sudden he could be at a huge disadvantage in production costs.
It's a combination of getting our act together across Canada and taking a look at how we deal with it internationally so we're not at a disadvantage competitively.
Justine Taylor, Science and Government Relations Manager, Ontario Greenhouse Vegetable Growers: I will second what Ron said. We're very familiar with the circumstances of our growers in Ontario. Our estimates are that growers below the 10,000-tonne threshold for opting into the cap-and-trade program in Ontario will see an additional $6,200 per acre per year in the first year of the program. Up to 30 acres would be about where you might be able to opt yourself into the program. At 30 acres you're looking at $180,000 in the first year of the program. If federal floor pricing is in place and impacts the provinces, obviously that will scale over time up to $50 per tonne. It's a significant impact on our growers.
Senator Mercer: Ms. Lee, in your point 27 you say that we recognize activities to reduce greenhouse gas emissions such as past upgrades by early adapters within the structure of the carbon credit system. It seems to me if we're not doing that we're missing the opportunity.
A number of years ago this committee visited a small egg farm in Nova Scotia where the farmer had put up a windmill that was generating electricity and was reducing his costs. This was going right to his bottom line, allowing him to become a producer that supported his family and indeed in his case supported his mom and dad who used to have the farm before him.
Is this not being recognized now by the taxman, both federally and provincially?
Mr. Bonnett: There's not really a recognition of tax policy for some of those investments. In our brief we talked about looking at using tax measures to incentivize investments in capital investments.
You mentioned at the start of your comments that there's a lot of stuff in this presentation. I know if I had let Drew loose he could have prepared another 10 pages for me. What's interesting from agriculture's side is that while we are a contributor to carbon, we also have the ability to sequester carbon. That's what makes it so complex and so broad.
There was mention in the brief about looking at bioproducts as a mechanism to replace petroleum products. We have livestock farms that could put in methane digesters that could be generating into the grid.
We're talking about taking a broad approach to looking at how it is dealt with and how we can take advantage of maybe some of the credits, but when we have such a mixture of approaches to carbon pricing within different provinces, it's really difficult to say this policy or this program will work because it might work in one province and not work in another.
I think leadership has to be shown. The Prime Minister and the premiers really have to take a look, specifically with respect to agriculture, at how you pull this whole carbon pricing situation together.
Ms. Taylor: I was going to talk specifically about some of the past actions that you were talking about being recognized. For instance, since energy is a significant portion of our cost of production in the greenhouse sector, many of our growers already installed the latest technology to be as efficient as they possibly can. While there is an allocation under the Climate Change Action Plan in Ontario to put some of those cap-and-trade funds back into innovative technologies, if you have already installed the most innovative technology you can't access those funds.
Senator Mercer: There is a need to recognize the innovation and to go to greenhouse growers. We visited a greenhouse just north of Trois-Rivières, a very large facility that grows nothing but cherry tomatoes. It's marvellous but their energy costs are a major concern. One of the things they've done is to draw on methane coming from the adjacent municipal waste disposal facility.
It's recognition of that and it's recognition of putting a greenhouse next to a waste disposal system which makes it efficient. It seems to me, especially in a place where we have a cold climate, if we want to help grow food for ourselves and also export we have to get creative. We also have to champion those people who have been creative.
Ms. Taylor: Absolutely. As part of our climate change strategy we see developing these co-location techniques as a key mid-to long-term solution to dealing with some of these energy concerns.
Senator Oh: Climate control is a big topic. Everybody is talking about it. Is our policy that is in place the same as the policy of everyone in the world? Eventually our product will be selling to the south and elsewhere. Other countries will be coming here and that will affect the price. The bottom line is the economics.
Is Canada ready to go into climate change? It seems it is going to cost a lot of money. Who is going to pay for this?
Mr. Bonnett: I think you've hit on the core issue, on competitiveness. At the end of the day products are priced internationally. If the person producing peppers to ship to the United States is all of a sudden at a competitive disadvantage because of their carbon pricing then somebody else will produce those products. In fact, we've already heard stories of people moving production facilities into Michigan and other states because of the cheaper cost.
I think that's one of the things we have to be aware of. If we're really planning and building the ag sector, we must have a competitive pricing system for carbon in place. It varies. We've been talking a lot about greenhouse because it jumps forward. Even crop farmers are starting to be concerned because for everything from fertilizer inputs to fuel there will be an associated carbon cost they'll have to deal with as well.
Ms. Lee: That is one of our core concerns. It's not just the fact that we are concerned the greenhouses and other industries will go to areas that do not have a carbon pricing policy. Once we have lost those businesses here in Canada, we will then be obliged to import. We may be importing from countries that do not have that policy, so we will have lost globally on an initiative.
Canada is way ahead of a lot of countries, and that's laudable, but I think we have to do it very carefully so that we don't end up losing as we are the early adopters.
Senator Oh: So developing or Third World countries are definitely not going to go into climate control. It's too costly and they can't afford it.
Mr. Bonnett: There is another side of this that hasn't been talked about yet. We're talking about the expense side but there has been some discussion, especially with cap-and-trade systems. Is there a way that we could get rewarded for some of the things that we do, for example a crop farmer using no-till tillage? You're a livestock farmer and you're using rotational grazing. You're increasing productivity. Are there ways you can get credit for that?
You mentioned capturing the CO2 off the boilers. If there were a mechanism whereby we could be rewarded for some of those things that are sequestering carbon, that might have an impact of reducing the cost. Those systems are not fully developed. Everyone seems to be scrambling to put a carbon pricing system in place, but they have not given as much thought to the offset side and how we deal with that. The whole issue of competition will capture both what's paid out and what we can be rewarded from any type of carbon pricing scheme.
Senator Oh: If the government subsidizes you, it will start a pricing war on subsidizing.
Mr. Bonnett: Another thing is that I'm not a great fan of government subsidies because elections take place and then the subsidy is gone. We need some kind of market-based system that works because otherwise you're always vulnerable. Your business plan can't be based on a four-year election cycle.
Senator Woo: I want to follow up on the issue of sequestration and how we can capture the benefits of sequestration through the design of a system that will reward farms that serve as sinks.
I guess I'm asking you to help us think about the characteristics of a carbon pricing/cap-and-trade carbon market system that would allow for sinks and other ways of sequestering carbon to end up being a benefit for you, as opposed to the cost of carbon pricing.
Is there a design of a system that you can think of that would enable you to capture some of those benefits?
Drew Black, Director of Environment and Science Policy, Canadian Federation of Agriculture: One of the important things we'd like to note is that Alberta has had that type of approach for quite a while, where there are a number of different offset protocols in place that support producers and sequestration of carbon and some of the other approaches to reducing emissions on the agriculture side as well. As long as it's rigorously documented, there is quite a bit of a process to go through to satisfy the requirements.
As the first criterion we would say is we need to have some type of offset protocol system in place to address a wide variety of agricultural commodities to make sure it's there and it's supportive of industry in order to reduce emissions.
There is a bit of a Catch-22 here. In some cases you might want to have a very high carbon price in order to justify the potential payments you can get through the offset to sequester carbon, but then that could disadvantage other sectors within agriculture. We don't necessarily want to go that route either. It can be tricky to balance that off.
The main point is that there has been a lot of work done over the past decade and more to develop some of these protocols. We have a strong knowledge base to work on and expand across Canada. My understanding is a few other provinces are beginning to do that. We should really be working to build off something and try to get more policy coherence from one province to another rather than recreating it from scratch.
Senator Woo: Who is working on a design for a more coherent system? It is you guys, perhaps?
Mr. Bonnett: I think the whole farm community is engaged in it. Some of our universities have been fairly involved with research. Common to both briefs is the need for research and to be able to quantify what actions will result in the best carbon sequestration.
We have information on some types of practices that will sequester carbon. There are other ones that have to be examined. The big thing is to figure out how to put a system in place that can roll that money back to the producers that are taking action. I think it's fair to say that right now there is a lot of confusion on this.
We had our annual meeting a month ago in February. We did have a panel of people talking about carbon issues and how to deal with them. I don't think I have seen as lively a conversation at our convention in the last five years.
People are concerned. They are seeing expenses go up and they don't see anything being proposed that tells them what they can do to offset that. There is a level of frustration there about how we will continue to produce and compete if we don't know what we can do and how we can be rewarded for some of the practices we are doing.
Senator Woo: Another way to reap a return on low carbon agricultural practices is through higher pricing of the farm product. This is a naive question, I suppose. We have seen it with organics, shade-grown coffee and all of these practices that essentially try to be environmentally or socially sensitive. Is there a possibility that a low carbon agricultural product can command a premium in the market?
Mr. Bonnett: For maybe 5 or 10 per cent of the people. That would be my estimate. It would be the same type of market share that there would be for organic. I think most people will talk the talk but when they walk through the supermarket they look at price.
Ms. Lee: I would add that there are already a number of regulations that the farmers have to follow. We also need to make sure they are not overburdened with these regulations and they actually can do their farming.
I would also add to what Mr. Bonnett was mentioning about working together on getting academia working on having a strategy, aligning it with the policy and trying to work on it at the same time, rather than having the policy and then trying to figure out how to make sure competitiveness is not lost. I think that has to be done very much by the federal and the provincial governments.
We have often talked about it at our AGM, which was 10 days ago, and in our board meetings. It would be very important for the federal government to be able to give guidelines on how the provinces should be implementing it so that competitiveness is not lost on a national level.
Senator Ogilvie: The majority of your presentations focused on the economic impact of political decisions around the idea that carbon dioxide is evil and temperature is going to increase. This has a dramatic impact on your farming industry and so you rightfully concentrated on this area.
If these issues are real, we know over a period of time that small permanent changes in the ambient temperature affects living organisms, that is the populations that can survive under given conditions. We know as well that permanent changes in carbon dioxide concentration affects plants. In fact, Dr. Lee referred to the deliberate use of it to stimulate plant growth during high growth periods.
My question to you is based on the idea that we assume these warming trends are real and that carbon dioxide will continue to increase for a while. You didn't mention anything about the idea of the research into plant survival under permanent increases in temperature. We know we have greenhouses in Canada that have controlled atmosphere capability, controlled temperature and controlled temperature relative to the ambient temperature outside so that you can set the temperature inside to, say, two degrees above whatever the temperature is outside because you have a thermocouple on the outside.
If these changes are real then we have to plan for potentially different plant varieties, those that can do much better under increased temperatures, and there is potentially quite an opportunity for us in this country where our ambient temperatures are below those of many other countries in the world.
Could you give us a sense of where we stand in research in Canada with regard to planning crop productions down the road?
Mr. Bonnett: In our presentation we talked briefly about the research but that is very broad. You rightly mentioned the impact of climate change. Farmers are seeing that quickly. It is not just about a warming climate; it is about changing weather patterns. It is a combination of things.
On my own farm we are seeing increasing periods where you are wet weather and drought. We are actually planting specific crops to pasture our cattle so we can get through that period in the summertime. We are planting sorghum sudangrass that came from the southern United States to do that offsetting.
There is a lot of research being done on what types of plants you have to grow to adapt to that. We are starting to see pests or insects come into the system, whether it be in crops or in livestock. That is where there will have to be a lot of work done to adapt to the impact of climate change. We can't change that; we will have to adapt to it.
One of the interesting facts you mentioned was temperature. I said it is a combination of temperature and weather patterns. Regarding the temperatures, when I grew up in Bruce County in southwestern Ontario it was almost at the maximum for heat units for growing corn crops. Now we're growing them at latitudes higher up. Manitoba is growing crops. There has definitely been an increase in the warmth.
Even more significant is the variation in the weather patterns we are getting. That has to be a focus of cropping systems: designing plants that can withstand periods of drought but at the same time if they get periods of wet weather they can work their way through that. It is creating a whole new type of research that needs to be done for field crops and horticulture. Again, these are similar types of issues.
Ms. Lee: I would expand on the aspect of invasive pests as well. Right now there are some quarantined or regulated pests or pests that are not quarantined or regulated pests that could affect greenhouse crops that in the future might actually get out and be able to live in the regular field crops. We could almost use the greenhouse as an indicator area for future pests.
Our growers definitely have mentioned the changing weather patterns, the need to have varieties that are developed in Canada for these situations and to strengthen the capacity in the country for researchers in apple growing, which are long-term investments for crop and cultivar development, and then shorter term products as well. There is a concern. There is incipient research but there is definitely more research required.
Senator Ogilvie: These areas that you explored in response to my question are in fact more important in terms of impact on your industry in the long term. The current issues around carbon taxes, carbon credits and energy cost increases deliberately designed to change patterns will go through a rocky period. We are already seeing a major political upheaval in Australia where these things are far advanced. You have very serious problems here in Ontario as a result of political decisions and the impact on the cost of energy with little apparent benefit in the long term.
If the changes are real, I would submit that the kinds of things you are talking about will be the long-term answer to the economic viability of your industry. I am delighted to hear that you really are thinking about it and that there are real examples in play. We know that the technology exists to give us a good idea as to how these things will impact. Thank you very much.
Mr. Bonnett: Again, the issue is complex. We may find areas of the country that see an advantage to warming climate. Western Canada is starting to grow different crops like soybeans and corn in Manitoba that would have been unheard of years ago.
In reference to what the bigger issue is I think they are in combination. We have to get through this economic crisis of how we deal with the carbon issue. We still have to keep our farms and greenhouses operating as we go through it, but at the same time we can't lose sight of the fact that we need the research, the innovation, the transfer of technology and the investment in new capital and equipment to make sure we are in a position to ensure that there is food security not only for Canada but to meet that target of $75 billion in agricultural exports as announced in the budget recently. We will have to pull all this stuff together to make it work.
Mr. Black: If I could add a quick comment, by a lot of measures in research Canada is one of the most sustainable producers of agricultural products when you look at the greenhouse gas emissions intensity per unit per use. We don't want to find ourselves in a position where we are limiting expansion of industry or possibly even de-expanding it here in Canada and having that offset elsewhere in the world because that may result in higher global greenhouse gas emissions yet make Canada look slightly better. We need to take that fact into account as we consider some of these competitiveness issues as well.
Senator Tardif: Mr. Bonnett, I wanted to follow up on the comment you made about opportunities. I am a senator from Alberta, and I understand that Alberta may be one of the provinces that has the most to gain from climate change. With ncreasing temperature at sea level, agricultural activities in Alberta may become broader, more varied and more profitable. Would you concur that Alberta perhaps has the most to gain?
Mr. Bonnett: Most of the Prairie provinces and parts of northern Ontario and Quebec would fall into that. I believe it was to the committee that was looking at land issues that I made a presentation earlier. I spoke about the fact that there is a lot of land in the northern regions that could be developed for more high-value crops in agriculture, particularly with the pressure around urban areas in some of the southern regions of the country right now.
Senator Tardif: There is one comment in your brief that I want to make sure I understand correctly. You indicated that we tended to focus more on adaptation rather than mitigation in the past and now that the pendulum is swinging. Could you elaborate on that?
Mr. Black: A lot of political focus both in Canada and internationally has been focused on adaptation for some time. I know you have noticed over the last year that we have all been talking about the impact of the carbon pricing, the carbon tax or a cap-and-trade system, depending on which province you reside in. That sucked a lot of air out of the room, quite frankly. We advocate for a policy that addresses both equally and substantially. We are talking about trying to improve the resiliency of agriculture as a sector by improving adaptation on the farm as well as trying to address opportunities to reduce emissions.
Senator Tardif: Your point is that you have to do both adaptation and mitigation and not one at the expense of the other.
Mr. Black: Correct.
Senator Pratte: I want to make sure I understand your point of view as far as carbon pricing policies are concerned. I want to follow up on Senator Ogilvie's questions because the way he approached it is very important and should be a signal of how we approach our whole mandate. It should be a two-prong approach of climate change itself and then policies that address climate change which have an impact on all industries including agriculture.
Carbon pricing is a policy to address climate change that will have an impact on all industries including agriculture. Are you suggesting that agriculture, because of its characteristics, should be compensated or protected from carbon pricing policies as other industries should not?
Mr. Bonnett: There has been some talk of exemptions for agriculture. At this point we don't have a strong position on it but a resolution came to our convention asking for an exemption.
At the same time we want to take a look at the other side. Are there things that we could do that would benefit society in general by sequestering carbon, producing products to remove us from dependency on fossil fuels and things like that? Again, it is not one side of the issue or the other. As was mentioned, in B.C. some exemptions were granted for the greenhouse sector. I believe it was a rebate program.
The simplest thing is to thrash through how the system will be designed. It will likely be an exemption at this point until a system is developed. Maybe in the long term there would be a system where a payment would be made but there would be a way to get rewards back. The rewards back isn't there yet. I think it will take some time to develop that.
Likely an exemption will be one option to be looked at.
Ms. Lee: We also had some resolutions at our AGM about that. One of them suggested that we have in place targeted innovation and adaptation funds to drive fundamental research and help farmers mitigate the impacts of climate change in order to increase production efficiencies and tools to reduce the introduction, for example, of invasive species and emerging diseases.
Also, it was suggested that programs and funding be used to ensure the competitiveness of Canadian horticultural producers not compromised by the imposition of a national carbon pricing policy.
We are very much in the same lines as CFA. The problem is that the policy was implemented. We see the need for actions on climate change. There is no doubt about that. We want that to be very clear. However, we don't feel that our sector was ready to be able to take on that carbon pricing and not have the wherewithal to maintain the competitiveness of the sector. Preparation should have been done ahead of time to be able to sustain that.
Senator Pratte: The issue you raise about competitiveness can also be raised by other industries. The political change that happened in the United States and the fact that they will not have carbon pricing or any kind of climate change policy is of concern to any other industry that will have to face a carbon pricing or a cap-and-trade policy in their province. They will have to compete with American companies that will not have to face the same kind of policies.
It is a matter of whether you think carbon pricing or a cap-and-trade system is a good way to fight climate change. If so, the best thing we can try to do is have the smallest impact possible, but it is that or no policy at all.
Ms. Lee: Or it could be deferred until we know more about what will happen south of the border. It could be deferred or spread out over a longer period of time so that the impact is not as heavy on the industry.
Mr. Bonnett: I would agree with that situation. Although the administration has been quite adamant about where they are going with climate change, I am not sure that they will not face some pushback from both Congress and the Senate on that, especially at the state level because some states have become very engaged in the climate discussion as well.
What makes this issue so complex is that not only in Canada do we have different provinces putting different things in place. In the United States it is the same type of approach where states are sometimes stepping ahead of the federal government to respond to some consumer concerns.
I would also echo what Rebecca said. We are not climate deniers. We realize that there has been a change in climate. We see changes in weather patterns. We know something has to be done, but we don't want to be saddled with an expense that does not make us competitive or allow us to make some investments we need to make on our farms or in our greenhouses to adapt to the change.
Senator Beyak: We owned a tourist resort on Lake of the Woods for many years, and every year it seemed like a well-meaning politician in Toronto brought in a new regulation that was supposed to help but just cost us more money and was very hard to implement.
Can you see any point in our committee recommending a regulation overview? You mentioned the United States and apparently Trump is asking them to remove two regulations for every new one they put in place. Could we use something like that in Canada?
Mr. Bonnett: I guess it depends on the regulation.
Sometimes I think it makes a speaking point. The agricultural sector has been calling for effective regulations for some time, but just going out and making a statement that you will create one and take away two sounds good as a sound bite. However, the other side of it is that there is a need for regulation.
We should be examining all regulations to see whether they are accomplishing the purpose for which they are designed. We have been going through discussions with the Canadian Food Inspection Agency recently. They are trying to revamp their regulatory system. I'm not sure if it will be a two or one system, but I think it is dangerous to get caught up in a little numbers game like that.
Ms. Taylor: I will add one further point to that. Greenhouses tend to be the example of the day, but when farms are making their decisions about where they want to invest it tends to be not just a single item that makes them want to relocate. It is the cumulative regulatory burden that they bear. It is not just cap-and-trade or electricity pricing. It is everything layered together. That is a significant issue that should be addressed.
Senator Mercer: I had a lot of questions but most of my colleagues have picked them up. I want to go back to the one issue that was addressed by a number of them, though.
We keep talking about the problem, but we don't talk about the solution. We have had so many successes in our country. To me, it seems that we need to take the successes and find a way to capitalize on them. We need to find a way to take the small egg farmer that I talked about in Masstown, Nova Scotia, who was successful because he was innovative and put a windmill on his farm to generate electricity and make his farm a lot more profitable than it was.
We need to find some way to offer an incentive to people, not just in agriculture but in all industries, to be much more innovative and to capture the opportunities we have. God knows in my province we have enough wind to keep going for a long time and in this city we have a lot of hot air to keep going.
Is anyone in the agriculture sector keeping record of the best practices that are happening? There are all kinds of good practice practices. I have talked about a small farmer and the greenhouse north of Trois-Rivières. I am the principal grocery shopper and the principal cook in my home. I have told the produce manager when I go into the local Sobeys store in Nova Scotia that I get very frustrated when I pick up a tomato at this time of year and it is from Mexico. I want to know why because there are all kinds of greenhouses in Canada that are growing good quality tomatoes. I want to know why I am forced to buy a tomato from Mexico. I go across the street to Loblaws to buy from them, but they have the same tomatoes. I have tried that but I am stuck.
Another thing we need to do is educate consumers to complain about that and to demand it because we need to continue to put pressure on the retailers to start buying Canadian.
Mr. Bonnett: There are a number of good news stories out there. The agriculture community has been doing a lot of work to push that forward. I even have to give the Farm Credit Corporation full credit. They have their Agriculture More Than Ever campaign talking about some of the innovation taking place on farms.
Mr. Black and I have been working actively on looking at the whole issue of public trust and explaining to consumers some of the practices agriculture is doing now and how some of what we are doing on farms today is better for the environment, better for climate change and better for water quality from a number of different measurable than what we were doing in the past. There has been a concentrated effort to try and pull not only primary producers but processors and retailers together to get some of that messaging out.
I had to chuckle when you talked about the windmill in Nova Scotia. I don't know whether it is safe to say it, but Ontario has high pricing on electricity. I have two solar units on my farm that I am getting paid very well for. However, it does show you what happens if you put an incentive in place. When that program came out the estimate was that 3,000 or 4,000 farmers would put up solar panels but a bunch of farmers sat down and did math on it, and they had 24,000 applications within three months.
Again, it is interesting when you start putting incentives in place. We built our solar units. From the time that program came into place we were about nine months in when we put ours up. What happened was that the price of those units had dropped something like $40,000. Innovation and technology are interesting. I am not a great fan of subsidizing something forever, but sometimes if you incentivize you can get the technology to develop. A lot of stuff like that could be done.
Ms. Lee: I would like to add that one of the areas we are beginning to work on a lot more is telling the farmers' stories. We believe that farmers are the best stewards of their own land. They will not knowingly produce poorly. Part of the public trust is in getting the farmers' stories out. We are working with various organizations to try to do that. Hopefully that will be a way of being able to collect the best practices that Senator Mercer mentioned.
Do you want to address the tomato issue?
Senator Mercer: Tell me about the tomatoes.
Ms. Taylor: Greenhouses that don't have supplemental lighting in place do take a small break, so tomatoes and peppers aren't being produced in the January-February time period. We have many growers that are transitioning to lighted production but the challenge is accessing competitively priced electricity. There is a bit of a barrier to entry into that market. The lights themselves are capital intensive. You have to be able to access competitively priced electricity in order to make that off-season production work.
[Translation]
The Chair: Mr. Bonnett and Ms. Lee, I want to congratulate you on your excellent brief and especially on your response to the senators' questions. I think it's very important for us to see people who have both feet on the ground. Your testimony will be very useful to us, and I think you were able to see the senators' interest in the issue. Unfortunately, we can't spend all evening on the issue. I'm sorry about the wait time, but remember that we can't control it. The House decides when to adjourn. During the year, if you ever have any other ideas to send us, because the work we're undertaking is important, don't hesitate to do so. Also, if you want to speak to our committee again, you would be welcome here.
Thank you for being here, and I hope you have a good trip home. Mr. Bonnett, are you looking for cheap electricity? Quebec has a few kilowatts to sell. . .
[English]
Mr. Bonnett: Thank you again.
Ms. Lee: Thank you very much.
Senator Mercer: Before we go in camera, will that be committee members only and no staff?
The Chair: Yes.
(The committee continued in camera.)