THE STANDING SENATE COMMITTEE ON AGRICULTURE AND FORESTRY
EVIDENCE
OTTAWA, Thursday, November 9, 2017
The Standing Senate Committee on Agriculture and Forestry met this day at 8 a.m. to continue its study on the potential impact of the effects of climate change on the agriculture, agri-food and forestry sectors.
[Translation]
Senator Maltais: The Standing Senate Committee on Agriculture and Forestry is continuing its study on the potential impact of the effects of climate change on the agriculture, agri-food and forestry sectors. This morning, we have the privilege of hearing from Jean-Denis Fréchette, Parliamentary Budget Officer, and Philip Bagnoli, Analyst-Advisor.
Before you make your presentation, I would like to ask the senators to introduce themselves. I am Ghislain Maltais, a senator from Quebec, and I will be chairing the meeting.
[English]
Senator Mercer: I’m Senator Terry Mercer from Nova Scotia.
[Translation]
Senator Tardif: Good morning. I am Claudette Tardif from Alberta.
Senator Gagné: Good morning. Raymonde Gagné from Manitoba.
[English]
Senator Woo: Good morning. Yuen Pau Woo, British Columbia.
Senator Lankin: Good morning and welcome. Frances Lankin, Ontario.
[Translation]
Senator Petitclerc: Good morning. Chantal Petitclerc from Quebec.
[English]
Senator Griffin: Diane Griffin, Prince Edward Island.
Senator Doyle: Norman Doyle, Newfoundland and Labrador.
[Translation]
Senator Dagenais: Jean-Guy Dagenais from Quebec.
Senator Maltais: This morning, we are not only hearing from the Parliamentary Budget Officer, but also a well-known beekeeper, who is certainly aware of our latest report on bees.
Mr. Fréchette, it is a privilege to have you with us. We are listening to you. I would like to remind you that the shorter your presentation will be, the more questions senators will be able to put to you. We have 60 minutes with you.
Jean-Denis Fréchette, Parliamentary Budget Officer, Office of the Parliamentary Budget Officer: My presentation will in fact be very short. I am also glad that you mentioned beekeeping. I’m happy that Senator Mockler and your report have led the Senate to potentially set up urban bees in the new Senate. I congratulate you on that, as it is extremely important to have bees in urban areas.
Thank you for this opportunity to report to the committee based on the analysis that we completed last year on Canada’s greenhouse gas emissions, especially their impact on the GDP over the past 30 years. Carbon emissions in the agricultural sector represent some 10 per cent of all emissions. They come primarily from livestock — 5 per cent — and crops — 3 per cent — but also from on-farm energy and transport — 2 per cent.
Since methane is a powerful greenhouse gas, when including on-farm energy and transport, emissions from agriculture contributed more greenhouse gas emissions than the oil sands extraction did in 2015. Historically, from 1990 to 2015, emissions of methane from agriculture varied significantly, but ended only 7 per cent higher — even though products from livestock were up by more than 7 per cent over that period. Livestock is the main source of methane emissions.
[English]
To reduce carbon emissions or their equivalents from agriculture, either an explicit price on carbon such as a carbon tax or an implicit price in the form of regulatory actions is needed to create the appropriate incentives. The challenge when using regulatory tools is to ensure that they impose the same costs to a carbon price as it does in other sectors. This is not a question of fairness. It is a necessary criterion to ensure that the cost to the economy as a whole is kept to a minimum.
The challenge when using a carbon price is that emissions are calculated based on averages such as per animal, or per unit, or per fertilizer used. Unlike those for emissions from fossil fuels, emission factors for agriculture are calculated over a wide variation of results. The implication of the emissions from livestock are asserted to be identical no matter where and under what condition they live.
An even more important implication of using emission factors is that they make infeasible the direct measurement of emission reductions. However, with the explicit carbon pricing, measurement of emission reductions is necessary, in part to determine what cost, if anything, will be left to the farmer.
Ideally, carbon prices could be combined with a mechanism for allowing a farmer to report verifiable reductions of emissions. These credits could be based on research that has allowed scientists to measure emissions reductions from various activities relative to the norm embodied in the emission factor. So some farms could get immediate credits from the emission price if they are already operating better than the norm.
[Translation]
The essential element of an emission abatement policy is to provide incentives for farmers to apply it. The final cost of that policy to farmers is largely independent of that objective, since numerous options exist to mitigate the cost to a farmer, such as revenue recycling. This latter observation is particularly germane since agricultural commodities trade on world markets. There is thus limited ability for farmers to pass on additional costs to consumers.
We would now be happy to answer your questions.
[English]
Senator Mercer: Thank you for being here, Mr. Fréchette and colleagues. You startled us a bit this morning. Prior to the meeting, we were glancing at your notes. You said that agriculture contributed more GHG emissions than the oil sands extraction did in 2015. You have specifically mentioned 2015. Is that a constant? Because later on in your presentation you talked about averages. Is this the average that agriculture contributes more greenhouse gases than the extraction of products of the oil sands?
Mr. Fréchette: The short answer would be the methane produced by livestock. Philip, can you add to that?
Philip Bagnoli, Analyst-Advisor, Office of the Parliamentary Budget Officer: To get at the exact question you asked, 2015 is the last year for which we have very good data. The national inventory that was reported to the UNFCCC was for 2015. It was released in June this year.
To go deeper, if you look historically at both agriculture and oil sands, this is not oil and gas writ large; this is just the oil sands part. Oil sands has been coming up. If prices were up around $100 for oil or well above $60 for oil — because I think at about $60 for oil, the oil sands basically stabilize, that is, prices that were inducing a continued increase — the rate of increase in oil sands would eventually overtake agriculture. It just hasn’t happened by 2015.
Senator Mercer: Let’s put this in context. In New Zealand, the single largest contributor to greenhouse gases in the entire country is the dairy industry. That is, the animals are the large contributor to greenhouse gas problems in New Zealand.
Mr. Bagnoli: Yes.
Senator Mercer: Let’s put it in context in Canada. How big a problem are agricultural greenhouse gases for the entire country? Put it in that context.
Mr. Bagnoli: Regarding agriculture, Mr. Fréchette answered that question already. Cattle, dairy and beef, is 5 per cent; crops are 3 per cent.
Senator Mercer: Overall?
Mr. Bagnoli: Of all of them, yes. The fuel that’s used in agriculture is another 2 per cent. Comprehensively, it is 10 per cent.
So far, agriculture has been left out of the picture of policies that have been put in place. In four provinces where policies are in place, agriculture is out. In the framework published by the federal government, agriculture is out. And the federal program also leaves out landfills and waste.
You have effectively left out 12 per cent of all emissions. If you leave out 12 per cent of all emissions, it means the other 88 per cent has to do that much more. There are other exceptions of sectors that are out as well.
By leaving out agriculture, you are missing potentially inexpensive things that you could do within agriculture and making them more expensive outside of agriculture. This is the idea of a uniform carbon price. You take advantage of the cheapest opportunities where they exist.
Senator Mercer: Is the Parliamentary Budget Officer suggesting to this committee that agriculture not be excluded from the greenhouse gas emissions carbon tax, et cetera?
Mr. Fréchette: The PBO never makes suggestions or recommendations. That’s the privilege of committees to do that.
As I mentioned in my presentation, it has to be uniform. Everybody has to bear the price of a carbon tax or something like that.
Senator Mercer: But it is not uniform if we exclude somebody.
Mr. Fréchette: That’s right.
Senator Mercer: So even though you are not going to say the words, you are giving us the message.
Senator Doyle: Thank you for being here. I was looking at some notes in the executive summary of your report, and you said that to achieve the government’s target means removing more than the equivalent of all the emissions from all the cars, trucks and off-road vehicles in use today.
The bottom line from the PBO is getting GHGs 30 per cent below 2005 levels. That’s an incredibly tall order to get it done. Can you tell me whether any economic impact analysis has been done for the whole country or for each of the provinces? Is there anything we can look at that would indicate that?
I read some of the notes that you had on Newfoundland and Labrador, in particular, and the very hard place it’s in economically, and I wondered how it would be able to contribute to the cost of reducing these emissions.
Mr. Bagnoli: Our study was focused on what the national costs would be, and the conclusion there is — I don’t remember the exact number — between $900 and $1,500, or something of that scale, per person in 2030.It’s between 1 and 3 per cent of what GDP would be in 2030. That is set against an economy that’s going to be more than 11 per cent bigger at that point.Instead of it growing by about 11 per cent over that period, it may grow by only about 9.5 or 10 per cent in that period, depending on how we recycle the revenues and keep it going. We do provide a national number.
We didn’t do it with provincial models, but we do give a pretty good idea of what some of the impacts are. There’s a chart there that shows the impact by sector across provinces. You can see the ones with the highest emissions per unit of GDP.
We were very careful in this report to say that there are huge differences across sectors and areas of Canada. That poses problems, but that does not mean that it can’t be done. Redistribution policies that account for differences across the federal government’s proposal at this stage of the framework explicitly say they are going to give the money back to the source regions. They don’t say how, but when I read it, it looks like they’re going to write them a cheque. It doesn’t say how. It just says that the money is going to be returned to the source region. So there is some attempt to address the income effect.
Just to be clear, if you want to change somebody’s behaviour, you can do that by changing their incentives, the relative price. You can redistribute money to them so that their income in the end is virtually unchanged and still get them to change behaviour by changing the prices of the things that they’re buying or facing in the market.
The government has, at least to some extent, if not a large extent, embraced the idea of dealing with the regional and sectoral disparities.
Senator Doyle: Are you aware of any other consultations that have taken place between the federal government and the provinces on the impact of the measures? If there is to be some economic impact analysis, who would do it? Would it, without responsibility, fall to the AG or to your office? Could you enlighten me?
Mr. Fréchette: Certainly the department, Environment Canada, should be the master behind such a study -- with the provinces, of course, because there will be an impact. Because of the redistribution of the carbon price that will be redistributed to provinces, you need some kind of federal-provincial agreement on how they will manage this.
As we mentioned before, if you have a patchwork on mitigation or abatements all across the country, it could be difficult if you exclude some sectors compared to other sectors. It could be difficult to manage such a process eventually.
Just for the record, if I may, we projected GDP will increase by 11.5 per cent, which is from $55,000 per capita in 2014, to $61,800 in 2030. With the mitigation and with the carbon tax, if we want to reach the target, it will be a reduction of about 1 to 3 per cent, which is about $600 to $1,900 per person.
Senator Doyle: Yes, significant.
[Translation]
Senator Tardif: Many thanks to our witnesses for their presentation this morning. You told us that methane produces a tremendous amount of greenhouse gas emissions in agriculture. Do you think farmers who embrace green technologies such as biodigestors should be able to benefit from offset credits? Do you think that could be a potential incentive?
Mr. Fréchette: If the established measures targeted such incentives for farmers who use that kind of an approach or that type of new technology, it could definitely be a good way to compensate them. The two of us are economists, and we really believe in behavioural changes through incentives. We see that in everyday life, and I don’t see why it would be different in agriculture.
New technologies have helped reduce greenhouse gas emissions by 7 per cent. Animals can be fattened up more quickly, and so on. That is true for livestock and for the chicken industry. Those incentives are likely to improve the situation in terms of making changes in genetics and research possible. If there was an incentive that could advance our cause, it would really be this one.
Senator Tardif: I am trying to understand something. During your presentation, you said that there were variations and some difficulty in measuring methane emissions. Can you clarify that? Are there variations in terms of geography or in terms of animal type? What elements are behind the variation in methane emissions?
Mr. Fréchette: You know your agriculture, as those are two parts of the answer I was going to give. Geography is important. We know very well, for instance, that there is much less chicken production in southern United States than in northern United States because of the temperature. It’s the same thing for livestock. Senator Maltais talked about the dairy industry. For example, the dairy industry has to heat buildings, but not in southern or central U.S. The difficulty lies in measuring methane emissions per animal, and I can draw an analogy with oil, natural gas, fuel, diesel, and so on. We know what the emissions are and, no matter where we are, carbon emissions will be the same, but the situation is completely different when it comes to animals.
[English]
Senator Woo: My question is a little bit beyond the scope of your report, but it has to do with measurement, and your office is the expert on measurement. I wanted to get your view on it. It is how you look at international substitution effects based on carbon policies in one country.
If a carbon policy in one country results in a substitution effect in another country that is less carbon emitting, how should that be factored into our contribution to the global reduction in greenhouse gases? I’m talking specifically about LNG. I know it is beyond the scope, but it is a measurement question, and it is important to a range of other issues that will come up globally as well, because we all know this is ultimately a global problem. Even if we can solve our problem here, we’re not going to make a huge dent if the rest of the world doesn’t solve its emissions problem.
Hypothetically, if the production and export of liquefied natural gas in Canada reduces the use of coal-fired plants in China and Korea and Japan and so on, which is the primary source of energy, certainly in China and Korea, how should that be factored into our contribution to the reduction of greenhouse gases, if at all?
Mr. Bagnoli: It is a good question. It is particularly interesting because historically the way that it has been brought up is that Canada’s policies are going to raise Canada’s costs and force it into countries that have higher emissions and, therefore, raise global emissions as a result. But this is the opposite.
This one may actually be easier to deal with in the sense that we have a global agreement. That is what Paris is. If China is able to reduce its emissions and meet its target using our natural gas, then that’s fine. It works out well.
The issue is in producing that natural gas because we don’t get that natural gas counted against us as soon as it leaves our shores; it's in producing it. There is some cost in producing it, but the margin is small enough that if we were just shoving a whole bunch of natural gas out to help other countries it would not make a huge difference in our emissions.
Even if it makes a difference, the profits from sending that natural gas abroad would pay for those permits that we would have to buy or other activities we would have to engage in to reduce the emissions by an offsetting amount. It really is an economic question: Are we making enough money from those sales abroad to pay for that little bit of extra emissions that would come from that activity?
Senator Woo: I’m not asking about the financial decision on the part of the companies. I am asking whether or not we should get some credit for the fact that we’re indirectly reducing emissions in China and whether that should be factored into the fact that the upstream carbon emission costs of LNG should be discounted, if you can put it that way, because there is a further downstream reduction in another country.
Mr. Bagnoli: In general, because of the way that emissions are counted these days —
Senator Woo: Because of national calculations.
Mr. Bagnoli: If you build a widget and it has a certain amount of carbon embodied in it and it’s built in one country, the carbon that’s embodied in that widget is counted in the producing country in that case and not in the consuming country. But because natural gas will be burned over there and the emissions will be over there, for Canada — I have actually heard this question before and to an economist it is clear — it shouldn’t be counted because we’re getting economic benefits from producing that natural gas and they’re getting emission benefits from reducing it.
They have taken on, in an international context, obligations to do it, and we have taken on obligations to do it, and we should all be heading towards something that is the ultimate target.
To say that their reductions should be counted for us is, in a sense, making their choices. Natural gas may be more expensive than their extremely cheap coal in China, and if that’s the case, they’re taking on a cost to move to natural gas which they have to import from Canada, and I think it is at a higher cost than it would be to continue just using their local coal. If you bring in environmental factors that might not be the case, but certainly on a commercial basis.
They’re making choices in using natural gas. If we take away some of their gains from that choice, we may make it uneconomic for them at the same time. It gets complicated. It is better to count what’s in your country and leave what is elsewhere to them.
Senator Woo: I understand. Thank you.
[Translation]
Senator Dagenais: I want to thank our two guests. I would like to come back to the issue of equipment used by farmers. Could you elaborate on the pollution produced by the equipment? What could farmers do to support a faster reduction in greenhouse gas emissions stemming from the use of their equipment? For example, we know that some farmers will not really plow their fields every year in order to avoid using equipment.
Mr. Fréchette: As we previously mentioned, livestock accounts for 5 per cent, crops for 3 per cent, and equipment-related emissions account for 2 per cent of greenhouse gas emissions.
As for the solutions, I must say that I know a lot about beekeeping, but I know less about production. You mentioned plowing or no plowing because, if the land is plowed, more emissions are produced because it is a way to capture greenhouse gases.
We should also mention that nitrogen control in fertilizer is another significant source, as is anything done to control the reduction of nitrogen use, be it in terms of natural products or other methods.
It was also mentioned earlier that, comparatively, methane is the most harmful gas. So anything to do with controlling the feeding of animals that release methane probably becomes the main criterion, since methane is the most harmful gas. Anything being done in terms of research and food becomes imperative to follow as a method or an approach.
It is also necessary to encourage behavioural changes, and we must always keep in mind that those changes come at a price. If there are no incentives to change behaviour, there will be no change.
Mr. Bagnoli: Some foods and activities are now recognized for reducing greenhouse gas emissions. A type of bromoform that comes from kelp was discovered in Australia, and it could apparently significantly reduce methane emissions.
Concerning compost, spreading manure directly onto fields is an effective method that helps reduce the creation of nitrous oxide. There are methods that are recognized today for reducing emissions.
Senator Dagenais: When a farmer makes efforts to work on rapidly reducing greenhouse gases using the methods you mentioned, can they benefit from certain credits that will encourage them to continue working on that?
I have known many farmers, and they like to make efforts, but they also like to receive credits for those efforts.
Mr. Bagnoli: Emission factors are applied to animals to measure emissions. Animals are not used to measure emissions. So a system must be established — either a carbon tax, regulations or even developing farmers’ behaviours that will then be used to measure the emission levels. The farmer’s activities must be observed rather than the emissions because it is impossible to measure changes in emissions. We can then develop a policy or impose an implicit tax on each animal and, afterwards, give the farmer a receipt so they can declare what they did, but a credit on taxes and grants can be provided at certain levels. That is the type of policy we should adopt. We don’t want to propose any policies to you, but there are many options to integrate agriculture into the greenhouse gas reduction policy.
Senator Petitclerc: Thank you very much for your presentation. I have a question, and I hope it will not take you too far away from your expertise. You talked a few times about the importance of consistency, a sort of standardization in the greenhouse gas reduction measures. We have heard from a number of witnesses — mostly from small farms, smaller agricultural operations, especially in organic agriculture — who were saying that they had different methods. But investments made in the research sector are very small.
Do you think that the consistency will remain fair, so that those small sectors or niche sectors would not be penalized, especially in a more ideological context where they already operate based on an environmental protection process? Can you tell us how you see that?
Mr. Fréchette: Thank you for the question. We are two economists who believe in justice. Sometimes, justice is fair in that, the more exceptions there are, the harder it is afterwards. I won’t discuss the Income Tax Act, which is a perfect example of a statute with so many exceptions that it is difficult to administer.
Indeed, smaller sectors do exist, and, despite being more marginal, they are still important; organic farming is one such sector. We know organic farms generate fewer emissions, because, as we mentioned, they engage in composting and recycling. They tend to use methods that have less of an environmental footprint.
That said, the system should not only be fair and equitable for everyone, but also apply to everyone. If a producer has an environmental footprint, that producer should have to bear the same cost as everyone else.
I’ll give you an analogy. In our report, you will see the figures I mentioned in relation to GDP growth; in order to achieve that target, it would be necessary to impose a tax of 26 cents per litre. Everyone would have to pay that tax, except those who drive electric vehicles. Are owners of electric vehicles already compensated because they have an electric vehicle? Conversely, should they be given a special credit? The whole debate comes back to you. Given my analogy, what will you do with those recommendations? It is up to you to examine the analogy and decide what you are going to do with that kind of recommendation.
Senator Gagné: Thank you for your presentation. You said that either an explicit price on carbon or an implicit price in the form of regulatory measures was needed across all sectors.
You also stressed the importance of granting research-based credits. We have heard from many witnesses that research investments are rather limited, especially funding for researchers at the various agriculture faculties and, basically, for any agricultural research. The whole challenge around data analysis and knowledge transfer is another issue.
From your standpoint as an economist, did you analyze the costs of greenhouse gases and the investments in research that would be needed to reverse the gases — methane may be a better word — in an effort to reduce the impacts?
Mr. Fréchette: We did not consider that aspect specifically. We always examine the costs, but we do not evaluate how the compensation could work. My response would be in agricultural terms. As I said, in a former life, I started my career here, sitting next to the chair, in the analyst’s seat. Agriculture and research are very time-intensive when it comes to tangible results that will achieve a given efficiency or greater profitability for producers.
Canada’s dairy sector is the classic case we are all familiar with. It took someone with the political will in the 1970s to create the supply management system: the late Senator Whelan. It was about more than supply management, though, given the need to build a Canadian dairy herd that was recognized. Clearly, the tool in question was different, but it took 25 years before we had a recognized dairy herd.
I’m not sure whether Mr. Bagnoli has anything specific to add on research funding amounts.
Mr. Bagnoli: I would add that a lot of recognized research already exists. I forgot to mention alfalfa. It has really helped to reduce methane emissions. Thanks to technological advancements, we now have many options for reducing emissions by 20 per cent to 30 per cent. The issue is whether the price should be $10, $20 or $50 per kilogram of carbon dioxide and whether the technology is sophisticated enough to meet the target.
For people, though, there is always a short-term response and a long-term one. What I just described is the short-term response. In the long run, people will receive incentives to carry out research in national and private laboratories. Those incentives are necessary. In agriculture, whether the price is implicit or explicit, those research incentives will be accessible.
That doesn’t exactly answer your question. It’s more of a general comment to point out that we have the capacity to adopt measures, we can make progress with what we have available today and we can do better in the future.
Senator Gagné: Basically, much of the analysis, from an economic standpoint, focuses on, as you say, the costs, but not necessarily on the amount of investment needed to find new ways of supporting producers in reducing their emissions.
Mr. Fréchette: Once again, it’s a matter that comes back to the federal and provincial governments. Remember what I said earlier: when it comes to carbon pricing, there are costs and revenues that will be generated at the end of the day. You are well versed in the division of powers in the area of agriculture. Clearly, the cost will be imposed, given that it is a national program. The revenues will be generated at the provincial level; even though research and improvements will take place at the federal level, through Agriculture and Agri-Food Canada, many of the efforts to enhance effectiveness and efficiency and reduce environmental impacts will happen at the provincial level.
That is where one of the challenges of your study will lie. You will have to determine who will be responsible for supporting research to achieve a national target, but in a way that helps everyone across the country.
Senator Gagné: Thank you.
Senator Maltais: Mr. Fréchette, I am going to continue along the same lines as Senator Gagné. Under the European model, as you know, the European Parliament collects the carbon tax in Europe and redistributes it on a per-capita basis. The problem is that it has made no difference because there is no accountability. If you go to Europe, you will see they have more cars and buses that run on diesel. The diesel sector has never been so prosperous, and I don’t think that is how Europe will achieve the objectives of the Paris accord.
In Canada, however, we have an opportunity to be future-forward. Quebec collects a carbon tax and redistributes it in support of transportation, agriculture and even marine research. Ontario is in the process of doing the same. If the federal government implements a national carbon tax and, let’s assume, collects and redistributes it on a per-capita basis, should the federal government not impose an accountability requirement on the provinces?
Mr. Fréchette: Thank you for the question. It’s more of a political issue than anything else. Before we get into the issue of accountability, I would certainly say that transparency is necessary. As you well know, parliaments authorize not just the collection of taxes, but also income distribution, and the Parliamentary Budget Officer exists precisely to check for transparency and proper income distribution. There should always be an accountability requirement, and that applies to any program. The government can invest in whatever idea it pleases, but should, in return, show some accountability for results, since the government is the one that authorized the investment. You are absolutely right about that.
As for Europe, the matter is slightly more complicated. We are talking about a large federation with different crops and different types of production. Yes, the autonomy of Europe’s nations has always taken precedence over its central government. Clearly, the result is that the central government redistributes the money to the national governments without necessarily ensuring any accountability.
You will likely encounter the same problem here, in Canada, where we have different types of agricultural production. Some provinces, for example, are oil-producing, whereas others are not. Without some sort of accountability mechanism, you will wind up with the same problem associated with equalization.
[English]
Senator Mercer: Gentlemen, thank you for being here. I want to go back to your original presentation, because you say that the challenge when using carbon price is that emissions are calculated based on averages. That is a problem. Because the problem with averages, of course, is that they’re based on a number of numbers, some high, some low, and an average. What’s more interesting or telling, I think, are trends. If in calculating the average the low numbers are at the beginning and the higher numbers are at the end, the averages will still come out the same. But if the trend is for higher, as we move along, that would be more interesting, I think, to us and more telling as to what the situation is.
Can that be done?
Mr. Bagnoli: There may be a bit of a misunderstanding here. The averages are the emission factors per animal, so per cow, and dairy cows have more than double the emission factor of a beef cow. Those emission factors are per animal, and they haven’t really changed recently, even though the animals have gotten bigger, so we’re getting more milk per animal. The emission factor hasn’t changed very much. They are averages in the sense that they are averaged across Canada, but there are differences in those emissions factors a little bit across provinces. So there is a recognition that in some areas the cows are not producing quite as much gas. That’s what we’re trying to get across. It makes it hard to apply a policy. There isn’t really a time dimension there quite yet.
Senator Mercer: Mr. Fréchette, you talked about zero tillage and the importance of zero tillage as a percentage. Do we know what percentage of our farmers have gone to this style of zero tillage? If we have that number, can we also calculate what greenhouse gas reductions have been seen because of moving to zero tillage?
Mr. Bagnoli: The answer is yes, but I don’t know right now. It’s actually in the documents I have in front of me. It can be worked out from Environment Canada’s national inventory report. I haven’t done that calculation. But there is something there. The trends are changing, and zero tillage reduces emissions, and that’s been helping with emissions also. Summer fallow is a source of emissions because when it’s left low and then it’s plowed, accumulated, gets exposed, it creates emissions, and summer fallow has been reduced over the years. It used to be big. Now it’s a lot smaller. That has reduced emissions from there. These are all things for which there are details; we just haven’t calculated it for this meeting.
Senator Mercer: If you do the calculations, we would be happy if you could share that with us at some time in the future.
We continue to talk about carbon pricing in some form or another, and the federal government is talking about unified carbon pricing across the country and, indeed, has mused about imposing carbon pricing on provinces that don’t meet their standards.
Does a unified system acknowledge regional disparities? Because various provinces and various regions may not have the same ability to respond. The effect of carbon pricing may be more drastic in one region compared to another. It is not unusual in Canada that we take into account regional disparities when we impose programs. I have not seen any indication that the federal government when talking about carbon pricing has recognized that region X or region Y may not be able to meet it, but region Z may be able to meet a higher standard because of their ability. Am I correct?
Mr. Bagnoli: We did recognize that there are differences across regions. If you look at the report, Figure 3.1, it really shows a very big difference in emissions per GDP across the regions. Quebec is at the lowest end. They have 200 kilograms per $1,000 of GDP. In 2014, Saskatchewan had on a scale of 12 more than 1,000 kilograms of emissions per unit of GDP. That’s a very strong obstacle. That does not mean that Saskatchewan should necessarily be left off the hook, for a very important reason.
Quebec is so efficient that the next tonne of emissions could be very expensive in Quebec, whereas in Saskatchewan, it could be that the cost to whoever is giving that last tonne is very low because essentially there’s no price or policy on it. There’s no implicit price on it. In that context, it would actually be good to pay Saskatchewan to reduce because we would get a lot more reductions for fewer dollars. That’s where we get into the issue that we were talking about before, a uniform price, but then you overcome any regional disparities by secondary policies so that you don’t burden one section more than others. The federal government, in saying they’re going to give revenues back to the provinces, is really trying to achieve that.
Just so we’re clear, though, the federal government’s proposed policy at this stage is carbon taxes on some sectors, standards on other sectors. So for large industrial emitters, more than 50 tonnes per facility, they’re going to face standards of so many emissions per unit of output. This almost plays into the issue we were just talking about. Are you always sure that standard will be hitting the $20 carbon tax? Will it be higher or lower? These things always have implicit costs.
To give you a nice example, Ontario has a program where they’re paying for people’s thermostats to be replaced in their house with artificial intelligence thermostats. I suspect that when you take into account the emissions being reduced by those thermostats versus the cost of those thermostats, the cost per tonne of carbon dioxide will be quite high, but it’s a program that they’ve been wanting to do in order to motivate.
Senator Mercer: It is short term though?
Mr. Bagnoli: Granted. You have to look at the life of the buildings. Buildings should be built to a standard so that you recover efficiency over a long time, 50 years. We don’t have the kind of standards in place to be able to do that. The whole point is to get costs that are the same as much as possible in order to keep the costs to the Canadian economy down as low as possible.
Senator Mercer: I wanted to talk about one other subject, specifically based on agriculture. By 2050 it’s estimated there will be 9.7 billion people on the planet. Right now we do not have the ability to feed 9.7 billion people. If we can’t feed these people, they will be angry and hungry and they will try to find ways to feed themselves.
Only a few countries in the world — Canada is one of them — can put more land into production. Global warming is a bad thing, but in Canada it means we can probably start moving farms further north. Have you done any calculations that show what moving farms to northern Ontario, northern Quebec and in the Prairies might do to our greenhouse gas emissions? Obviously, it will not be Florida up there. It still will be cold in the winter. Have you made any calculations of that and any benefit analysis?
Mr. Bagnoli: We haven’t, but we’re economists. It’s the scientists who are more in tune with the movement of various climatic zones with changes in climate due to global warming.
A few years ago I was involved in a project. We know now that the production per acre in Canada is actually significantly lower than the production per acre of most crops in Europe. If China, which is currently a food importer, were to adopt Canadian technologies in its production of its crops, it would be self-sufficient. Then, if it were to adopt European technologies, it would be a large exporter. The conclusion I drew from that is that it’s not a question of enough land space. It’s how much we’re willing to pay for agriculture. If land becomes scarce, the price will go up, and we will motivate people in Canada to apply more intensive things like they do in Europe, and the production would go up.
Senator Mercer: Okay. Thank you very much.
[Translation]
Senator Tardif: According to data from Agriculture and Agri-Food, a price of $50 per tonne of CO2 by 2022 would mean higher production costs for average-sized farms in Western Canada than for average-sized farms in Eastern Canada. Do you agree with that assessment? What is the reason for the difference?
Mr. Fréchette: In my remarks, I referred to calculations we had done on a per-farm basis. I can provide you with the tables, which are available and would largely answer your question. I did not include them because they were in response to a special request and were not part of the report. I would be glad to forward the information to the clerk for the committee’s future discussions.
Senator Tardif: Thank you very much, Mr. Fréchette. We would be very pleased to have that information.
Senator Dagenais: Mr. Fréchette, in order to create policies, we need to put the infrastructure in place to manage those policies more effectively. However, the infrastructure can sometimes cost more than the money invested to achieve climate change targets. Do you have an idea as to the breakdown of the amounts needed to set up the infrastructure tied to climate change targets?
Mr. Fréchette: No, we did not examine the infrastructure costs, per se, since we do not know what exactly that infrastructure will look like.
Senator Dagenais: Thank you.
Senator Maltais: Mr. Fréchette, in 1986-87, the Quebec and Ontario governments signed a memorandum of understanding on greenhouse gas emissions in the Great Lakes region. You realize that much of the pollution in southern Ontario and Quebec comes from U.S. cities along and near the Great Lakes. We used to refer to it as no-responsibility pollution, in other words, we had no say in the matter, but we had to suffer the consequences.
If the Canadian government decides to impose a federal carbon tax, what would happen to these agreements? Would we enter into individual agreements with lakeside cities like Chicago, which are the source of pollution in Canada because of the wind? Even though we are not responsible for the pollution, we will have to pay the price. What approach could we take with the U.S. government?
Mr. Fréchette: I am old enough to remember acid rain. You’re referring to the impact it had on the sugar bushes in southeastern Ontario and Quebec. You recall the debate and the fact that it was never resolved.
My answer is that of a politician. I can’t tell you how Canada could deal with the issue in its negotiations with the United States. Responsibility-sharing agreements are in place, but it comes back to the same point we have always made. In a North American context, where we export and import products, and the same goes for pollution, all of the costs cannot be borne by only one country; the agreement has to apply to both countries so that what happened in 1986 doesn’t happen again.
Senator Maltais: Thank you, gentlemen, for being here this morning. Your input means a lot to the members of the committee.
We know full well that, if a carbon tax is introduced, it will influence the decisions you make and the budget you have to work with. Yes, agriculture does produce greenhouse gases. Without agriculture, however, we get rid of not just greenhouse gases, but also human beings. Let us keep in mind that it is through the belly that humans grow, develop and become scientists able to combat greenhouse gases. Agriculture is the first link in the chain for humankind. As my colleague Senator Mercer pointed out, Canada can no longer think about just itself. Today, the internationally and universally minded Canada has to think about the hungry. It has to transform its agricultural system, making changes while still producing more for the global population.
We now have the privilege and pleasure of welcoming Stéphane Lemay, Director of Research and Development at the Institut de recherche et de développement en agroenvironnement. He joins us by video conference, from Quebec City.
Welcome Mr. Lemay. You may go ahead with your presentation, after which, the senators will ask you questions.
Stéphane P. Lemay, Director of Research and Development, Institut de recherche et de développement en agroenvironnement: Good morning everyone. As mentioned, my name is Stéphane Lemay, and I am the Director of Research and Development at the Institut de recherche et de développement en agroenvironnement, or IRDA for short, in Quebec City. It is my pleasure and privilege to appear before you this morning to share IRDA’s views and vision as they relate to the effects of climate change on the agricultural sector.
IRDA is a research institute with approximately a hundred regular employees and two main sites in Quebec. IRDA’s mission is to engage in agri-environmental research, development and transfer activities, with a view to ever better farming practices whose use of basic resources — soil, air, water and biodiversity — is increasingly sustainable. Our goal is to make these practices efficient and socially acceptable, while protecting public health. In other words, IRDA works to provide access to sustainable development research in agriculture.
In the interest of time, I won’t say any more about the institute. For more information, you can consult the corporation’s annual report, which I attached to my brief. I would be happy to answer any questions you have on the subject.
IRDA is a major player when it comes to building environmental knowledge in Quebec’s agricultural sector. Like many stakeholders, we believe that the effects of climate change can represent either risks or advantages and opportunities for the agricultural sector. I won’t discuss all the climate change scenarios that various organizations have put forward. Nevertheless, if we take rising temperatures as an example, we can easily show that they represent either benefits or risks for the agricultural sector. A rise in temperature would make it possible to farm land in more northern regions that were previously inaccessible. It would extend the growing season and increase crop production in previously inaccessible conditions.
On the other hand, an increase in temperature will have an impact in certain cases, for example on land with a high level of organic matter that has not been cultivated. Working that land will increase the greenhouse gas emissions from the soil. You may well also see new crop pests. The increase in temperature will perhaps bring with it the need for air conditioning in the buildings, or parts of buildings, meant for livestock. That will have an effect on production costs.
A number of other aspects of increasing temperatures will have advantages or disadvantages for agriculture. One might think of new crops, water management, and other potential impacts of climate change.
The changes in climate will have a major impact on the environment for agriculture but also for society and for other aspects of the economy. In our opinion, it is important to always take a broad view of the solutions to be chosen with a view to reducing emissions or adapting to climate change.
In agriculture, the impacts are complex and a number of parameters are not yet understood. It is not yet clear how greenhouse gas emissions can be reduced and therefore what the impact of climate change will be on some aspects of the production system. In our opinion, we are significantly behind in terms of developing the knowledge, both scientific and technical, that we need to be able to contribute effectively to the fight against climate change. We also need to be able to tackle the problem on two main fronts: first, the ability to mitigate greenhouse gas emissions from various aspects of our processes, and to adapt to the changes in the climate that we will be seeing in the short and long term.
We wish to stress that the approach in agriculture must be different from the approach in other production sectors. In agriculture, the sources of greenhouse gases are many and varied, and often at low levels. I do not want to go into the details, because I believe that you are certainly well aware of all the values in terms of the significance of greenhouse gas emissions in agriculture on Quebec and on Canada under different conditions. But it is important to stress that, if we want to make significant progress in agriculture, we must keep in mind that we are dealing with many and varied low-level sources.
Over the years, our institute has focussed on certain approaches, certain themes, in order to reduce the production of greenhouse gas emissions. We are actively continuing our research and development projects. Examples are improving the management of nitrogen in the fields, managing the diet of some animals, some breeding, and the genetic selection of animals. We can replace energy from fossil fuels in producing feed, in heating buildings, or in operating machinery. Each time you reduce or replace fossil energy, you do so in its entirety. We can also work differently in managing animal waste and reduce greenhouse gas emissions in that regard.
As for adaptation, we are going to have to be able to develop new growing practices, new ways of doing things, in order to mitigate the negative effects and to grasp the opportunities that will arise.
In terms of potential approaches, we clearly have to find new ways of fighting new pests, new threats to our crops that are going to appear, by modifying our treatment strategies. What do we mean by that? We are certainly going to have to develop new tools and products to combat those threats. We are possibly going to have to look at alternative methods, to consider how techniques and tools can be combined and how they can be applied at different times or in different ways so that they are adapted to the new climate that we will be facing.
For example, with water management, various climate scenarios predict the likelihood of more frequent extreme events. This will mean that we will have to manage water differently in irrigating our crops and to ensure that we have either back-up reservoirs or different rules for irrigation.
A number of animal herds will be sensitive to higher temperatures, either in the animals’ growth rate or in productivity. So the ventilation systems of buildings will have to be re-designed to include, in some places, either cooling options or other solutions in order to reduce the impact of higher temperatures.
The other message that we want to pass on to you this morning is that, if we want to reduce or mitigate greenhouse gas emissions and adapt to a new context, it will be important to do so globally, by consolidating all our knowledge, in the best way we can, so that the overall result, at the end of the day, is genuinely positive. We will have to work on production systems. We must not focus solely on small parts of the system because there are many examples of how that easily moves the problem somewhere else. We know, for example, that, with animal waste, we can find alternative solutions to reduce ammonia emissions inside buildings and keep more nitrogen in the waste. However, if we do not manage it adequately, when we use it on crops in the fields, we may, to an extent, lose the gains we were trying to make.
Some examples can be highlighted, if you will, where we have to make sure that we have an overview, a global view, so that, at the end of the day, the results are really significant and desirable in terms of their positive impact.
We must also ensure that we do not shift the problem from one sector of activity to another. When we consider producing ethanol from agricultural waste or from an agricultural crop like corn, we must not cause a conflict, in terms of the availability of a food item for humans or animals. We have to make sure that the system functions as a whole.
In our neutral opinion, it seems to us that we have to ensure that we are fully developing the knowledge we need for complete solutions. Research, development and knowledge acquisition will play a central role in this respect.
For the impact of a price on carbon, the only message that we want to share with you is about measuring greenhouse gases. In Quebec, I believe that one single protocol is currently recognized to measure the emissions from storage structures. If we want to be able to implement a system to trade or measure carbon emissions, it will be important to have good measurement protocols to ensure that we are quantifying and processing the values fairly and reproducibly.
Again, attention must be paid to the model used because the sources are very different from those in a number of other sectors such as transport and industry. We just need to make sure that the protocols developed are properly tailored to agriculture. Once again, I believe that technical and scientific guidance will be necessary in order for those protocols to be properly developed and effective over time.
In conclusion, clearly, one of the roles that the various levels of government can play is certainly seen to be the encouragement of agricultural production systems that have low emissions and that are tailored to climate change. The various levels of government must be in a position to support research work in order to increase the speed at which knowledge is developed and in order to have that knowledge transferred and applied to the agricultural sector, given its uniqueness and inherent territorial and sectorial realities.
That, briefly, was the presentation I wanted to give this morning. I will very happily answer your questions.
Senator Maltais: Thank you so much, Mr. Lemay. Perhaps you remember when the committee on agriculture and forestry visited your institute in Quebec City a few years ago. It enabled us to see the extraordinary work you do. You have our thanks for it.
Senator Gagné: Thank you for your presentation. You concluded your presentation with a remark about investments in research. You told us that our country has fallen behind in developing knowledge and technologies. Can you tell us more about the challenges that arise with access to investments to develop that knowledge and those technologies, in Quebec and in Canada? Can you also tell us what your institute does to make sure that knowledge is passed on to farmers? Basically, do you work as a network with other research institutes and faculties elsewhere, at home and abroad?
Mr. Lemay: If I understand correctly, the first part of your question deals with access to the means of implementing projects and research activities. The way in which an institute like ours can set up projects designed to further knowledge in an area such as reducing greenhouse gas emissions is often by responding to calls for proposals from various levels of government or funding agencies that can provide financial support for the development and implementation of such projects.
Often, the research in an institute like ours is focused in specific directions. With climate change, one of our objectives is to find solutions that will reduce emissions. When programs are established and calls for proposals are issued, our research teams can then conceive and develop solutions for the projects, that they will suggest so that they can be evaluated and so that better solutions to reduce those emissions can be found.
You are asking me to talk about the tools. I can tell you that it is very important for the financial tools provided to be tailored to the research teams working in agriculture across Canada. By that, I mean that, ideally, the money provided has to be sufficient to carry out projects of considerable scope and to allow us to do the work needed to raise the level of knowledge. The money also has to match the agricultural environment; the way it is invested has to match the reality of the agricultural environment.
Let me try to make things even clearer for you. If the funding available for a research project does not allow a number of teams to work together adequately, with sufficient means to support the personnel and the materials, and to do the job properly so that the level of knowledge can be raised, it will not be possible to do projects that make sense. After all, if you are putting together a number of research teams, you are talking about a research project of several hundreds of thousands of dollars in order to be able to move forward in an area like this at a reasonable speed.
Let me take another example in order to comment on the other part of my point. In Quebec recently, there was a call for proposals for action projects to reduce greenhouse gas emissions in the agricultural sector. In that case, given the way the call for proposals was done, they wanted projects in the order of $6 million or more. It was possible to ask for financial support to the tune of a minimum of $3 million with a 50-per-cent contribution from the private sector to make a $6-million project.
In my opinion, in the agricultural sector, a project of that kind is too big to end up with a concrete result on the table. The agricultural sector will not be willing or able to invest amounts like that, given the capacity of the sector and the level of the knowledge. I do not want to talk about specific amounts, but I do want to illustrate my point. If you want to have a certain number of research teams working together on a problem that will take three to five years, it is not going to take only $10,000, but it is not going to take $6 million either. So, when you ask me about access to those amounts, that is the answer I can give you.
The other important aspect to keep in mind is the monitoring of the money allocated to research. In my humble opinion, this is true for all economic sectors in Quebec and Canada. I understand very well how it works; I have been working in research for more than 20 years. I have worked as a researcher and now I am a director. It is very important to achieve the best possible balance between financial monitoring and fair accountability that means that Canada’s resources are correctly used in the best way. At the same time, those efforts have to be proportional, because you have to keep in mind that, each time a research team has to redo a status report or provide more accountability on a project, you are holding up the development of the knowledge and using your energy on something else. That is a little bit of what I wanted to say on the first part of your question.
Second, you asked me how we pass on information. In our institute, we try to work on a number of levels and we use regular channels of communication, meaning that our research teams have to reach out on all levels, to the scientific community, to the users and to the sector as such. That may take the form of scientific conferences, public lectures, articles, publications or interviews. We try to use all available channels of communication in order to transfer parts of the information.
In addition, for some topics and some projects, we try to go further and to form alliances with partners in the sector to ensure that the knowledge we are developing is applied and demonstrated on a farm, with a company, so that we can properly evaluate everything that is being done. We also work with those who communicate more so that, basically, the information reaches its intended application as much as possible.
You also asked me how we are networking in Canada or internationally. The research world — and I believe that this is true in all sectors — is very small. By that I mean that we now have all the available means of communications. In very specific areas, the world is very small. As with other institutes, our researchers at the IRDA are very closely connected to other researchers in Canada and around the world. Projects are done collaboratively and specifically. For example, we have projects in various areas in which we are working with other Canadian researchers. We also take advantage of international exchanges, through conferences, student exchanges and collaboration exchanges between laboratories. The types of networks we have available vary greatly with the sectors.
Senator Gagné: Thank you very much, Mr. Lemay.
Mr. Lemay: My pleasure.
Senator Dagenais: Mr. Lemay, thank you for your presentation.
Adaptation sometimes seems like the number one enemy; you have outlined the possible actions effectively. Are there programs or strategies for producers, who are very busy people, programs that can reach them and have an impact in their communities? In other words, can you measure the success of your protocols and share them with us?
Mr. Lemay: That is an excellent question and it is hard to answer it, but I will do my best to further clarify the issue.
In order to measure our protocols or the impact of our research, we ultimately need to measure how the knowledge of farming practices, techniques and information we have developed has been adapted in the end. I would also like to point out that the agri-environment is a very broad horizontal sector affecting all sectors of production. At IRDA, we do not have exact and accurate measures of the adaptation or of the acceptance of all the information we develop, but we tried to do the exercise in certain sectors with some of the technologies we have developed, to see what outcome was ultimately achieved. It is difficult to have a fair, specific and accurate measure to determine whether potato growers, for example, will have adopted 30 per cent of the philosophy or strategy that we developed to fertilize their crops in such and such a way.
I would say that the strategy we are trying to put in place to try to have our work adopted as much as possible is to have a different or customized strategy for adopting the techniques from our work. To do so, we will use traditional means of dissemination and carry out demonstrations on the farm. We also have direct communications with producers. For example, last summer we put in place what we called an “irrigation caravan”. This means that, during the summer, our research teams travelled to farms and did about 15 activities directly with the producers. We are able to work with them and help them manage their irrigation systems.
Those activities allow us to get directly involved with our project recommendations. To measure whether the recommendations have been adopted, we will once again visit those producers next year to see how many of them have adopted the techniques. When you work with farming practices and the goal is to reduce greenhouse gases and adapt to climate change, all farming practices will ultimately have an impact. It is difficult to measure the impact exactly, but we must have a way to transfer the information as effectively as possible.
[English]
Senator Griffin: Thanks for your presentation. As the chair mentioned, I am from Prince Edward Island. In our province, something that’s very popular is environmental farm plans. In these plans, of course, farmers indicate how they’re going to farm more sustainably, and they outline the specific actions. In your province, are environmental farm plans a popular mechanism on the various farms?
[Translation]
Mr. Lemay: In a way, some tools or methods may seem like that approach. For example, Quebec has a comprehensive agri-environmental club structure in place in the agricultural sector, allowing producers to contact those clubs. The clubs are made up of professionals and agronomists who can support or help farmers in implementing or applying best farming practices for environmental protection on the farm. They provide assistance with farm fertilizer management, planning grass buffer strips, and water or mineral fertilizer planning. In the network of agri-environmental clubs in Quebec, producers pay a certain amount, and the professionals can support and help them with their decision-making.
This system may be a little different from the one you mentioned, but I think it has more or less the same goals, and they are similar.
[English]
Senator Griffin: That’s terrific. Thank you. We’ve been told that organic farming practices help to reduce GHG emissions. In your experience, is that a significant reduction of GHG emissions?
[Translation]
Mr. Lemay: Not always, unfortunately. We must look at the big picture. I actually think it is paramount that we become more knowledgeable about organic farming in order to reduce the use of pesticides and mineral fertilizers that generate greenhouse gases when they are produced, because we use fossil energy to do so.
In terms of greenhouse gases, if a producer must carry out more mechanical work on the soil to deal with weeds or crop pests, we should look at the whole picture, because the fossil energy being used can increase significantly.
This is also true for organic livestock production under certain conditions where the soil surface must be expanded to be able to produce the same number of kilograms of meat. Lifecycle analyses will enable us to find out whether we are practising organic farming in such and such a way in a particular sector, and also whether we can reduce greenhouse gases.
[English]
Senator Griffin: I was suspicious that might be the answer.
Mr. Lemay: That’s nice.
Senator Griffin: It’s like any form of farming; it depends on how you’re doing it and what you’re doing, of course.
My last question relates to methane. What specific examples could you give me of production systems that would help to cut down on the amount of methane being produced by animals?
[Translation]
Mr. Lemay: I could give you two examples. I am an engineer by training, not a nutritionist, and therefore not an expert in animal nutrition, but I know that it is possible to change the diet of cows by adding certain ingredients to the diet or by altering the diet so that the microorganisms in the cow’s body change in order to reduce its production of methane. Much work needs to be done, because to my knowledge, we have not yet managed to come up with an efficient, economical and cost-effective diet formula, but this may be a way to reduce the methane production of dairy cattle.
One of our research teams has worked on the biofiltration of the air leaving storage structures to break down methane. It is possible to install a biofilter at the exit of a slurry tank or of a manure storage structure. Then, we must filter the air that will be removed from the top of this structure to capture the methane, and the biofilter bacteria will feed on the methane to prevent its release into the environment. These are just some examples off the top of my head. Once again, it’s a methane biofiltration system, and we know it’s feasible on a small scale from a technical point of view, because we’ve tested it on a small amount of real animal waste. We still have to take it further and try it on a commercial scale.
Senator Petitclerc: Mr. Lemay, thank you very much for your interesting presentation and your very enlightening and very well-developed answers.
I would like to come back to the funding for research. I know very little about it. I would like to hear what you have to say about the structure of the funding. Earlier, you mentioned an example where 50 per cent of the research funding came from the private sector. Is that common? Is there a lot of private investment? What are the implications, be they positive or negative? Does the private sector have a financial or other interest in that investment?
The reason I’m asking this is because we have had some witnesses, particularly from the organic sector or niche sectors, such as wine, who said that a very small percentage of the research is devoted to their sector. Could you paint us a picture of what this type of funding looks like? Are we missing out on some research because the private sector is focusing on one area rather than another?
Mr. Lemay: Thank you very much for your kind words. I will try to do the same with my answers. I think your question is very relevant. In terms of research funding in Canada — and I think this is true across all sectors — I have seen a trend over the last 20 years showing a shift to short-term issues, and the private sector is increasingly being asked to show a financial interest in a project before it is supported with public funds.
The basic principle in itself is good, because, at the outset, you want to make sure that the work is of interest and that it will serve the private sector; the private sector is asked to invest 10 per cent, 20 per cent, and sometimes up to 50 per cent of the funding needed to complete the work.
But in our sector, we are confronted with this practically every day. We work in agri-environment. The topic of our work is very important because we have to protect our resources. When we look at the food production horizon, by 2050, given the increase in population and climate change we are talking about this morning, it will be very important for us to be able to protect our basic resources. But for producers, it does not always pay off immediately.
So it is extremely difficult sometimes for us to go and get that portion of private funding, even if sometimes we ask for 10 per cent or 20 per cent of funding. It is very difficult for the agricultural sector. First, resources are limited at to begin with, and producers have no direct, immediate financial interest that can justify such an investment.
So my message in response to your question specifically is that you don’t ask for a large contribution from the private sector for issues such as agri-environment, climate change and the reduction of greenhouse gas emissions to help the agricultural sector adapt. I’m almost wondering whether we should even ask for a contribution at all, since it is very difficult to obtain one. At the same time, I’m not saying that all researchers across Canada should be working on projects as they see fit without a purpose or a focus on needs. But it’s very important to understand that, when you’re developing these funding programs and making requests for issues such as greenhouse gases, agri-environment, or the environment itself, it is very difficult to set them up. This may mean that we are missing out on interesting projects that are not supported. Then it is difficult for teams to come together and put the funding in place to move forward.
In terms of farming practices, the other thing to consider is that often, to get the winning recipe, you have to say to producers: “You have to fertilize the crops, manage the manure in certain ways in combination with the fertilization, and we will incorporate or integrate organic fertilizers into the soil in such and such a way”. But not even an industrialist can invest a lot of money in those farming practices, and hope for a return on investment if the practices are changed.
Suppose that a technology is developed and is sufficiently advanced to make it possible to control the reduction of greenhouse gas emissions. Imagine, for example, that we are able to develop a system that would be installed at the exit of an agricultural building and that would fully capture the methane from cows. In that case, when we are sufficiently far ahead, the private sector can start investing to take the baton in a certain way. But we must not require it too soon.
Then, in terms of the exchanges and the ways in which the projects are set up, throughout the entire research system — and it really is all over the place — I think today, many Canadian researchers spend a huge amount of time setting up the funding and reporting. Every time we have to do that, we are not finding a cure for cancer and we are not finding a recipe to reduce greenhouse gas emissions. We are not always efficient in that respect. When you build funding programs, I think you have to constantly keep that in mind, and you have to strike the right balance between fair and socially just accountability, and what is being asked of the research teams. Does that answer your question?
Senator Petitclerc: Yes, that completely answers my question. Would you go so far as to say that, because of private sector interests, which are not necessarily always short-term, in the agri-environment, research in this area is underfunded, and that it would essentially be important to lighten the administrative burden that you experience with research? Those are two separate clarifications.
Mr. Lemay: I would answer yes to both of your questions. Of course, any good researcher will always tell you that they do not have enough funding; I am absolutely sure about everything I said about funding. Is the agri-environment underfunded? I will never answer no. In all seriousness, the agri-environment, climate change and the reduction of greenhouse gas emissions are areas that need more resources and funding, in my opinion. To make the connection with your second question, certainly, for much of the beginning of the program, you do not always have to ask for the private sector’s contribution to implement good ideas, because we will not have that contribution. It will be very difficult to put in place and it will be difficult to propose good projects that will move forward.
If I may, for the second part of your question, I do not have a full answer but I personally and firmly believe that the research system in Canada, and in the world, is a little sick. The challenge we face is the same everywhere. And my answer to your question may be broader in scope, but I think overall we really should review how research funding is allocated to advance knowledge, and that applies to all sectors.
If we did a proper calculation, I would not be surprised to see that, in sectors across the board, from medicine to social sciences, including all the technical aspects, the time spent writing research proposals, looking for money and reporting on it is a major percentage of researchers’ time. It’s probably around 30 to 40 per cent. So it’s significant.
Senator Petitclerc: Thank you very much.
Senator Dagenais: Mr. Lemay, you alluded that we would talk a bit about politics. There is no doubt that sometimes between the budgets and accountability, the budgets remain in place, so you don’t necessarily have the opportunity to spend them. I will venture to ask this question: can politicians at times be overly ambitious about the capacity of research? You can answer or not. You know, sometimes politicians can have great ideas, they have perceptions. But aren’t they overly ambitious about the capacity of research when it comes time to convey these perceptions?
Mr. Lemay: I’m not a politician, and it isn’t my role to comment on this.
The answer I would like to give you is that I believe the financial support that has to be given, or the expectations of the support that will be given to the research must be considered with the sectors concerned. As I mentioned earlier, I believe that when the federal, provincial and territorial governments want to get involved in issues such as climate change and greenhouse gases, the point I can make is that the way to deal with these issues is to make sure you understand the industry you’re in. It’s also necessary to ensure that the means are well adjusted or there is the right balance with the sector considered.
It is difficult for me to say if the ambitions are excessive, and I do not want to venture into this field. However, what is important to remember is that one must always make sure to consider the tools with the sectors concerned.
[English]
Senator Griffin: I’m coming back to the fermentation that happens in animal intestines, in the hind gut. Several months ago, I heard about seaweed being used in an experiment in Prince Edward Island, and that feedstock seemed to help reduce the amount of gas. Have you heard anything about this project or anything about this use of seaweed as a feedstock in general?
[Translation]
Mr. Lemay: I am not aware of this particular project, but I believe that it is highly likely that food additives or combinations of nutrients, such as feeding cattle with different plant rations or different additives to plants, may have an effect on the microflora of our intestines. From this point of view, I can’t comment on the study as such — I don’t know enough about it — but it could be plausible. It should be examined in detail, but it doesn’t seem impossible to me.
What you need to do next is to try to understand that when you change a diet like this, you have to be able to see what effect it will have on the animal’s productivity, and the composition of emissions and animal waste. We must also be able to see what the impact, among other things, is on dairy cattle, and nutritional changes in the taste of milk. It’s necessary to go that far. When you want to work on an ingredient of this nature, again, it’s important to be able to look at it in its entirety, to have an overview.
There is a similar work that I can talk about as an example. In the past, as a researcher, I did some work on changing the diet of pigs to understand the impact of changing the level of crude protein in the diet of animals on ammonia emissions and odour emissions. We know that, technically, it is possible to change the pig’s diet and change the crude protein content of the animal’s diet by adding sugars, in order to reduce ammonia emissions and change odour emissions. We know it’s feasible. But there is a cost to that, and it’s always a balance. Once knowledge on the issue has been established, in this specific case, it’s much more of an economic impact, and it’s the cost of changing the diet that makes it more difficult to implement. In this specific example, the cost of changing the diet could be as much as $5 per pig produced, which can represent an increase of 7 to 10 per cent of the cost of feeding the animal. I know it’s possible to do that for pigs.
Senator Maltais: Mr. Lemay, thank you very much for your testimony, which was very instructive for the members of the committee. As you rightly said, research is financially sick. Maybe you should start finding the cure in order to get enough help to continue your research.
I have one last comment. You know, the earth’s population may reach nine billion people in a few years. It will be necessary to produce much more, without damaging the environment. Undoubtedly, a great transformation will have to take place in agriculture. I know that Quebec, Ontario and the Maritimes support this prospect. I hope that your research — or part of it, at least — will be done with a view to the future, to allow Canada to become sort of a global grocery store to help developing countries, which are extremely poor countries when it comes to food.
Thank you very much, and good luck over the next year.
(The committee adjourned.)