THE STANDING SENATE COMMITTEE ON AGRICULTURE AND FORESTRY
EVIDENCE
OTTAWA, Thursday, May 18, 2023
The Standing Senate Committee on Agriculture and Forestry met with videoconference this day at 9:01 a.m. [ET] to examine and report on the status of soil health in Canada.
Senator Robert Black (Chair) in the chair.
[English]
The Chair: Good morning, everyone. It’s great to see you here. I’d like to begin by welcoming members of the committee and our witnesses and those watching on the web.
My name is Rob Black, senator from Ontario, and I’m the chair of the committee.
Today, the committee is meeting to continue its study to examine and report on the status of soil health in Canada.
Before we hear from our witnesses, I would like to start by having the senators around the table introduce themselves.
Senator Simons: Good morning. I’m Senator Paula Simons from Alberta, Treaty 6 territory.
Senator Burey: Good morning. Sharon Burey, senator from Ontario.
Senator Klyne: Good morning and welcome to our guests this morning. Marty Klyne, senator from Saskatchewan, Treaty 4 territory.
[Translation]
Senator Petitclerc: Good morning. Chantal Petitclerc, senator from Quebec.
[English]
Senator C. Deacon: Colin Deacon from Nova Scotia.
The Chair: Before we begin, I again remind you that should there be any technical challenges arising as we go through the meeting, particularly in relation to interpretation, please signal to either the chair or the clerk, and we’ll work to resolve the issue. If we have to, we’ll suspend for a time.
For our first panel, we welcome, from CarbonTerra, Jason Mann, Chief Executive Officer; and Rachel Hor, Chief Operating Officer. And from Carbon RX Inc., we have Marty Seymour, Chief Executive Officer.
I’ll invite you to make your presentations. We’ll begin with Mr. Mann and Ms. Hor, who will be delivering a joint statement on behalf of CarbonTerra, followed by Mr. Seymour from Carbon RX. You will have five minutes each. When we get down to about a minute, I’ll put one hand up, and when we’re close to the five minutes, you should be thinking about wrapping it up.
Rachel Hor, Chief Operating Officer, CarbonTerra: Good morning, honourable chair, senators, ladies and gentlemen. It’s a pleasure to be here. I’ll kick into the statement that I would like to make.
CarbonTerra is a wholly Canadian organization comprising distinguished leaders in soil sciences globally. Our aim is to establish a climate-friendly, carbon-neutral agricultural ecosystem that improves a farmer’s return on investment in sustainable farming practices. Today, I want to address the vital topic of carbon sequestration and express my belief in Canada’s potential to lead the way in driving change.
Climate change poses significant challenges to our planet, impacting our environment, climate and future. Carbon sequestration plays a crucial role in combatting climate change, with nature-based solutions like no-till farming bearing highly effective outcomes.
No-till farming involves growing crops without disturbing the soil, resulting in numerous benefits such as reduced soil erosion, improved soil health and air quality and increased water retention. Notably, no-till farming has the ability to sequester carbon by increasing soil organic matter. Conversely, tilling the soil releases carbon dioxide into the atmosphere, contributing to global warming.
Research indicates that no-till farming in the Canadian Prairies can sequester up to 1.5 million tonnes of carbon per acre per year. Scaling up the adoption of no-till farming across 153 million acres of annual cropland in the three Prairie provinces could have significant impact, sequestering approximately 138 million tonnes of carbon annually. This amount of carbon sequestration is equivalent to the emissions of over 112 million gasoline-powered passenger vehicles for a year. The potential of carbon sequestration through no-till farming on Canadian croplands is thus substantial.
Incentivizing sustainable practices through carbon credits is pivotal for enhancing the sustainability of our current system and achieving climate goals. Carbon credits allow businesses and individuals to offset carbon emissions by investing in projects to reduce greenhouse gas emissions. While carbon credits have played a role in various sectors, including agriculture, the current system does not fully recognize the contributions of no-till farming. Early adopters of no-till practices are disadvantaged due to the technical definition of additionality and permanence. To address this, Canada should lead by recognizing the contribution of early adopters of no-till farming and set an example globally.
Engagement in no-till carbon sequestration is not limited to producers alone. Consumers have a role to play. By supporting producers who implement sustainable farming practices like no‑till farming, consumers can contribute to adoption of these methods. Policy-makers are urged to provide incentives and funding for producers who have already demonstrated the benefits of sustainable farming. This collaborative effort can drive the recognition of no-till farming with carbon credits, incentivizing its adoption, reducing greenhouse gas emissions and mitigating climate change effects. Ultimately, this approach benefits the environment, fosters a sustainable and profitable agricultural sector and aids Canada in achieving its climate goals and promises.
Our current dilemma is really supporting and acknowledging the early adopters of no-till farming through policy recognition, which is vital for encouraging more producers to adopt this sustainable agricultural practice. These pioneers have embraced sustainable farming methods that benefit both the environment and society. They have demonstrated long-lasting carbon stock availability, and scientific evidence affirms that there’s always room for improvement.
To avoid putting early adopters at a disadvantage or penalizing them — and I’d like to mention that when I use the word “penalize” here, it is referring to an unrewarded good husbandry that has been demonstrated in the forefront of Canadian farming — policy should refrain from indirect penalization through the absence of this specific procedure. Historically, agriculture policies have often incentivized and penalized producers based on short-term outcomes, which is detrimental to those who have invested consider time, money and resources in transitioning to this practice of no-till farming.
I have quite a bit more to go, but I’m out of time. I’d like to stress that policy is truly the issue, and policy revision is a necessity to acknowledge the valuable contribution of these early adopters of no-till farming to sustainable agriculture and carbon sequestration. I have a list of reasons that I would like to share why policy should be altered to recognize all these individuals because we need to encourage the wider adoption of sustainable practices. By acknowledging this and rewarding them for their efforts of early adoption of no-till farming, policy will motivate the producers to transition to adopt other sustainable farming practices.
The Chair: When I get to my question, I’ll ask you what that list is, and we’ll allow you that.
Ms. Hor: That sounds good. That would be super.
The Chair: We need to wrap up, as it has been five minutes. Mr. Mann, you won’t have a chance to say anything. Hopefully, in your questions, maybe one of my colleagues can ask a question that might satisfy it.
I’ll move to Mr. Seymour.
Marty Seymour, Chief Executive Officer, Carbon RX Inc.: Good morning, Mr. Chair and respected senators. As the CEO of Carbon RX, a Canadian carbon credit origination and streaming carbon credit company, with our origins dating back to 2006 and that first generation of carbon crediting in Canada, we’re grateful to have the opportunity to speak with you today.
To set the table, we can and should stand proud of the work our Canadian farm and food system does to ensure the long-term sustainability of our land and food system. We need to stay disciplined and ensure carbon remains a vehicle to measure and manage soil health, and not become a weapon for change.
I want to hit on a few key themes we can unpack in more detail in the Q & A. I think it will complement what you heard from my colleagues.
The first theme is measuring. As much as carbon is a climate play, I actually think carbon is a data play. It really is a hot mess of data and source quality, to be honest. Soil testing methodology seems to drive some of the confusion. Standardizing and simplifying what’s required is a good place to start.
Conversely, standardizing land characteristics is a challenge. The variability of land characteristics overlaid with 100 years of individual practices makes generalization of soil carbon a serious challenge.
The second one is the adoption of technology. It’s relatively mixed in this space. I’m a big fan of remote sensing and using satellites, for example, but not everyone is aligned with me on the ability to do this from a quality and quantity standpoint in terms of carbon. What I see is that the pursuit of perfection is getting in the way of progress on this topic of technology.
The last piece is around leakage. “Leakage” is a great carbon term, an important principle that applies specifically to the Canadian food system. Canadian cattle and grain production would be really good examples of an opportunity for proper land use related to low-carbon footprint models. We have to be careful not to regulate our producers out of business and defer production to other countries where practices like subsistence rice farming or cattle in the rainforest area would have a much higher carbon intensity. We need to think in terms of intensity as much as net zero when it comes to measuring carbon footprints in this country. It honestly puts Canada as a preferred trading partner in many cases.
Maybe in order to drive some of the Q & A and the conversation, I thought I’d hit on the role of government or how I see government can help.
First is to facilitate the growth of the voluntary carbon market. It might be counterintuitive that the government might help to support the voluntary market, but it allows private-sector money to flow into the Canadian food system. It’s a great vehicle to help finance and move producers along that change curve. The federal and provincial government carbon schemes actually create market confusion. Global buyers want nature-based carbon credits, which Canada is rich in, and agriculture and forestry offer this great opportunity for carbon removal, as you heard from my colleague Rachel.
The second is to invest in protocol development. This part of the industry is underfunded, moves very slowly and is expensive. Carbon protocols are the recipe for how to measure and manage, and it costs a lot for the private sector to bring those to market.
The other one is additionality. I was pleased to hear my colleague’s comments around additionality and the opportunity there. This is rather provocative, but I think the government can set the bar on when the additionality principle starts. I’ve been a huge advocate of suggesting that day zero for how we farm should start at the Paris Agreement, December 2015. All practices beyond 2015 and the signing of that accord would, for me, be the baseline for net zero. I’m happy to chat more about that.
The other one is adding water. When you’re from Saskatchewan, we talk a lot about water and irrigation. When you think about improving soil health, organic matter and sustainability, anchoring water in these drier climates, particularly in the West, where I’m from, is another role the government could play to facilitate soil enhancement.
The last piece, and I’m not clear where the government sits on this or how it can help, but I want to seed this idea. It’s that sustainable financing and Scope 3 emissions will be the sleepers and big disrupters in the carbon market. Further thought is needed here on the role of government in terms of sustainable financing and how banks are regulated, as well as Scope 3 emissions and how to track and manage.
In closing, the government will set the weather when it comes to important issues attached to climate change, but it’s the landowners who hold the power when it comes to the execution. Thank you.
The Chair: Thank you very much. We’ll proceed with questions from the senators. We’ll start with our deputy chair. Before asking and answering questions, I’d like to remind folks to be careful with the microphone and refrain from leaning in too close in case it affects the sound system and the folks who are interpreting for us today.
I’d like to remind each senator that you have five minutes, and that’s including the question and the answer. We’ll start with Senator Simons.
Senator Simons: Some of my colleagues on this committee are members of the Banking Committee, and one of them is a member of the National Finance Committee. I am not. I wondered if in order to set up a carbon market that actually returns value to farmers, that a credit is worth something, that it’s tradeable, that it’s backed by value — it seems to me if we have a bunch of little voluntary markets, it’s mostly just a good‑conduct flag that we’re trading back and forth.
How do we set up an actual — is the phrase “fiat-backed”? Is that what I’m looking for, banker colleagues? How do you set up a credible carbon market that, one, you can prove that you deserve the credit because you actually have sequestered the carbon, and it’s in the ground, and you’ve done the mapping and testing to prove that; and, two, my carbon credit I can sell to Senator Deacon, and Senator Deacon can sell it to Senator Petitclerc, and Senator Petitclerc can sell it to Senator Burey, and it’s not just like a gold star? It’s actually something that has value, which will then encourage people to adopt the practices.
The Chair: Is there a question there?
Senator Simons: Yes. Do you have to set up something that is traded like a stock exchange, like a commodity? How do we make this something that isn’t just patting ourselves on the back?
Mr. Seymour: I’d be happy to start. There’s a tripwire in setting this up for our industry we need to be mindful of. I learned this early on. I used to work for a federal Crown agency, so I had a bias for “Canada first” and the Canadian-centric ecosystem. I jumped in the carbon space and realized it’s an international market, so a made-in-Canada solution from a voluntary standpoint is something we have to be careful about.
If we want to just trade domestically and we set up a registry — I’ll call it a voluntary registry — we may limit ourselves to only Canada. We have to think about how that adjudication and verification process gives us international exposure so I can trade. That’s where the big trades are happening. That is my first thought.
I’m proud to be working on one of the solutions to this — it’s a longer story — building a new registry owned and managed by the industry. When I say the industry, the best practice I watched the cattle industry do was when they built the sustainable round table. McDonald’s, Cargill and the Canadian Cattle Association got together and said, “We need to set the definition of sustainability that McDonald’s could create a brand for and market that.”
Fast-forward to 10 years later, and that ecosystem of companies includes Ducks Unlimited, Nature Conservancy, World Wildlife, the accounting firms, banks; everyone is participating. The industry got together and said that this is what constitutes sustainable beef. I think we can do the same in carbon. I think an industry-owned and industry-driven carbon economy — and I don’t mean Canadian-industry-owned; I’m talking about international partners and members as well. You have to think beyond our borders.
I’ll stop there on that point and give room to my colleagues.
Jason Mann, Chief Executive Officer, CarbonTerra: There is voluntary versus compliant. We have a lot of debate on whether voluntary is going to drive the changes into compliance credits or vice versa. We spent the last couple of years dealing with some of these voluntary markets, and it’s tough because it’s an ever-changing landscape. It’s hard to set a path forward because you don’t know the rules.
Developing something that could be endorsed by the federal government, whether it’s voluntary or compliant, would be a great tool where you can put something here that’s fungible; you can say that this credit has a value, even if it starts to trade in Canada and then can be adopted globally.
That’s what we’d like to see. We need the federal government to work with the provinces instead of this mishmash of one province wants to do this, and the feds want to do something else. We need a coherent system that we can almost bank on, where we can say that now we have a path, let’s build something. Right now we’re guessing. We’re trying to steer it, but we’re just a small company. We need the government to step in and take some leadership.
Senator Simons: If it’s not fungible, if it’s not backed by anything, then it’s just the new bitcoin. It has to have an enduring market value; otherwise, people are not going to invest, because what are they buying except a participation certificate to put on their fridge?
Mr. Mann: Do you peg it to the Canadian dollar, to the U.S. dollar or leave it as a bid offer? I’m not sure. The market is the market in some ways. But I think the market will grow if you have backing behind it and people have the confidence in it. If it’s sponsored, then people aren’t worried that it’s some kind of greenwashing. This is a legitimate credit. And they are legitimate. We need that kind of support.
Mr. Seymour: I would back it with a methodology — if you look at the role of government — a methodology, a testing mechanism and maybe validation. We have a system in Western Canada in crop insurance that might be a tool or agent that starts to give that backing credibility you might be chasing.
[Translation]
Senator Petitclerc: My question is for Ms. Hor.
Ms. Hor, you said in your introduction, about all those who adopted the practice first, the early adopters, that they should be recognized and encouraged. You’re not the only one to have told us about early adopters, those who adopted best practices first; we’ve heard a lot about them from several groups.
My question is very simple: what can we do? Everyone says it’s a problem and that we haven’t recognized them enough, but what else can we do? Do we reward them, or go backwards? Concretely, what should we do for them?
[English]
Ms. Hor: Thank you, senator. I think what we don’t recognize here right now is early adopters in Canada are truly unique, and we are in the forefront of Canadian farming. People actually look up to us.
We are also climatically very fortunate. That’s why it allowed us to farm the way we farm, and therefore we don’t till.
We are now sitting on a carbon sink, and I’m sad to say that we’re not doing anything about it. The ineligibility of what’s being recognized is not there. We’re advocating to perhaps come to a time to say that maybe it was 20 years ago that we should have started recognizing this because we’re already doing the right thing, or maybe, as my colleague mentioned, the Paris Agreement of 2015 should be the time we should start taking into consideration.
What people don’t hear is, “Hey, farmers, I know you’ve been doing the right thing.” We can’t roll back for the last two decades. But because we started recognizing all the climatic changes, and we’ve been recording this in the Paris Agreement, maybe 2015 would be a good cut-off date.
I want to touch on permanence. Everybody argues about permanence. When it comes to nature-based, I would say we have the best permanence. If we have been doing this for the last two decades, we have been storing this, and we have quantified all the carbon sinks we have, why are we arguing about permanence? We’re sitting on it, we’re standing on it, we’re living and breathing it. I would say there’s no argument about the science because it’s showing itself.
It comes to the value and how it’s backed. That’s where I think we are showing and demonstrating how we’re backing it with Canadian farming. This is where we should really stand up and say that we should lead the stage of carbon.
I always get so passionate about this when I talk about permanence and additionality because we don’t understand it, and people don’t see it. Science is there, but nobody is reading into it, and we’re standing on it, and we are so fortunate to be Canadians here.
Therefore, I strongly say that no-till should be recognized, should be looked back at. It may be 2015 or 2010, but this will help farmers propel into all other additionality. Because if they’re not recognized, how will they be funding all these things? It’s not cheap to buy equipment or to adopt all these technologies. Farmers are fearful: “If I change anything, what’s going to happen to me?” If you say, “I know you’ve done good; I have confidence in you, and I’m using this confidence and reinvesting in regenerative farming,” then it’s going to work.
Sorry, I get so excited about this.
The Chair: It’s hard to see your passion.
Mr. Mann: The policies are plagued with, “What have you done for me lately?” That’s the problem. We need the carrot and the stick. Yes, there needs to be improvement and more adoption. We need to improve the wetlands and do cover crops, more grasslands and take marginal land out of production, and we need to have a better use of fertilizer. But let’s reward what has been done. It’s not just, “What have you done for me lately?” The issue is how farmers look at it.
Mr. Seymour: There might be an opportunity here to explore avoided conversion, something you apply in forestry: “I’m not going to cut the trees down.” Or in grazing: “I’m not going to plow the dirt.” I’m not clear how long we need to be zero‑tilling to say that is the standard, but it’s generally accepted as the standard. If we’ve been zero-tilling in Saskatchewan for 20 years, and we agree we will not convert that land to tilled land, there may be a carbon conversation in that. It’s a nuance in the recipe. We’ve been so focused on rewarding for the practice. Maybe we’re missing an obvious one to say, “Wait a minute, if we don’t convert and release 20 tonnes of carbon, that’s carbon credit by definition.”
Senator Klyne: I hope you’re as generous with time because I get the sense we probably could use another hour on this.
While you’re on a roll there, I’d like to go back to the comment that policy is really the issue. On that note, what’s the message for policy-makers that we should be delivering in terms of incentives for the early adopters of no tilling and incentives to adopt new technology? We have incentives for electric vehicles, and perhaps we should have incentives for new technologies to be employed in the areas where Canadian farmers can be seen as the leaders. I have the sense that potential is globally to be held out as that.
So that’s for policy-makers; incentives and the absence of that, I agree, is a form of penalizing. That being the sense, how do we get them into the accelerator lane to make up the two or three decades that have been missed? As you’ve described carbon sequestration and no-till farming as a good climate-change best practice, is that good for all regions? Does one size fit all, or are there some regions where the soils are not necessarily adaptable to no-till farming and need to have some regular till?
Ms. Hor: I think there are a few questions there. I’d like to address the last one first: Does one method of farming apply for all? The answer is, “Yes and no.” “No” because, of course, certain climatic situations or soil conditions probably do not encourage as much of no-till farming as we would like. But there’s something called “min-tilling” that they can still apply. That would also enable adoption of another sustainable farming practice.
People need to, again, invest to try. That’s another angle that we need to look at.
In terms of all these technologies that are made available there, to encourage farmers to adopt this, they need to have the comfort to take them on. Therefore, now we are seeing all these other forms of encouragement coming from — even financial services are now offering lending on sustainable farming, and that’s another angle that is allowing them to do so.
I think, again, there are no policies or encouragement that is put in place to say, “Hey, farmer, we are not going to penalize you in any shape or form because you are doing it not right for the first year.” Because, normally, in the first year, when you adopt any change, it is not going to instantaneously show you that you are going to get the results that you want, but we are always constantly expecting immediate results.
Even with carbon, it is all sequestered over time, and here we are looking at immediate change, and we are saying that we have to measure year over year of additionality, and it doesn’t work like that. The reality is that science and nature work their own way, and we have to allow time to see the evidence.
To me, carbon stocks that are in the ground need to be measured over time, but it is not like you are going to measure every now and then and see that.
Senator Klyne: You had mentioned — and I maybe never captured the whole thing — but on carbon credits, it doesn’t recognize no-till farming?
Ms. Hor: Right now.
Senator Klyne: And so is there a policy change needed there?
Ms. Hor: Currently, there is no policy, but because there is no policy, it becomes an ineligibility for anybody. This is how it is already cast globally.
All these registries — there are four big registries globally — they don’t have anything that actually allows any participation in that shape or form. Canada, being Canada, sometimes we kind of just copy and paste, and then we are just listening to what people are doing, and we are not doing our own thing. But we are just different; we are special.
Mr. Mann: I think the direct answer is yes, there does need to be a policy change, and, yes, the government does need to recognize soil carbon sequestration, absolutely.
We could be leaders in that if we started with that, because we are the leaders. We are the leaders in min-till. I farmed starting back in the 1980s, and we had droughts in Western Canada. The ditches were full of dirt. The grasshoppers were mowing down the crop. We changed to min-till and zero-till because of the climate.
Now we are saying, “Well, you can’t be rewarded for that, because you had a benefit from that,” but we really need to reward farmers for taking that innovation, and that innovation is being transplanted around the world. It’s in Australia; it’s in Ukraine.
Senator C. Deacon: Don’t worry, I’m going to pick up where you just left off.
Canada still has the world’s most important mining and minerals investment conference every year in Toronto. I have a dream that perhaps some day we will have a carbon market that attracts that level of attention globally, and the fact that we are not taking on that challenge and opportunity is a source of immense frustration for me and, perhaps, for others around this table.
I’ll speak just for myself. Every interaction I have had with officials at Agriculture and Agri-Food Canada, or AAFC, and advisers to the minister has left me frustrated because they are not reflecting what we hear from scientists and from people on the ground and from farmers as to what is possible here. And the amount of time that we can buy in fighting climate change if Canada were to become a global leader in exporting the technology and know-how around the world, to have markets that had trust — so, yes, government-backed policies and methodology with an opportunity to take advantage of a world opportunity and world crisis need right now.
Let’s get very specific on the things that need to be changed. I’ll start with you, if I could, Mr. Seymour. We need specific advice because I think there is a lot of shared frustration about the fact that we are just leaving this opportunity behind. We are saying, “Somebody else do it. We are not courageous enough; we don’t believe in it.”
Mr. Seymour: That’s a big question, senator, and wise.
Two thoughts come to mind. The first one is that this conversation is more than just AAFC. This is Environment and Climate Change Canada, or ECCC, as well, and it would extend beyond. But my advice directly to that is that, collectively, the departments need to align on outcome-based decisions. Collectively, those departments need to share the same vision. I’m not convinced they do. I couldn’t give you an example. I’m just using the easy answer to not get deep in the weeds.
Then I think the other decision is whether you want to do this through a compliance mechanism or through a voluntary mechanism. I love the compliance mechanism because the economics look really good, but the compliance mechanism is slow. So if you want to move at the speed of business, then use a voluntary mechanism, and, perhaps, the government actually plays a role in establishing a voluntary market.
My desire would be to trade those credits internationally. That is super important to me because the market in Canada, we are sitting on a ton of nature-based credits with a limited buyer pool simply based on the size of our economy.
I’ll stop there. Those are two potential things to explore.
Mr. Mann: I think we need to set up an exchange. We should be the global leaders in this. Going back 30 years or longer, we are the leaders in nature-based. Quite frankly, the other countries are eating our lunch.
Why is Singapore — of all places — they are just way out in front of us. Temasek group and the Standard Chartered bank are out there setting up these nature-based exchanges. It’s happening all over the place in countries that have a land mass of, what, the size of southwest Ontario. What are we doing? This is our domain. We should be leading it, like Senator Deacon says. I would love to see where we are the go-to place, and we are the go-to conference, and we have the exchange that, globally, people trust. Government, back it, and let’s get on with it.
Senator C. Deacon: Yes. And don’t penalize farmers for the carbon they use and not reward them for the carbon they sequester.
Mr. Mann: Yes. There is so much more the farmers could be doing and would do.
Again, they need some guidance. All they hear about is, “Oh, my gosh, there are carbon credits coming from Ottawa.” That’s what they think. They don’t understand all the opportunities that are here. Yes, they see it from the perspective of benefits of min‑till and better utilization of inputs and whatnot, but there is so much more that could be done if we just empower them.
Senator C. Deacon: Hear, hear.
Anything else, Ms. Hor?
Ms. Hor: I echo both my colleagues here, and I really hope that we are at the right platform to voice our frustration.
Senator Deacon, you spoke my heart. I have spoken to a lot of senators here, and I hope today I am really heard, together with my colleagues here, because we are here to really change this. With the technology, we will build all this. We just need to push the envelope a little bit, and we need the backing to make that happen.
Thank you.
Senator C. Deacon: Someday I want to find out why there is this barrier, because it is nonsensical.
Ms. Hor: I’m with you.
The Chair: Thank you.
Senator Burey: Good morning, everyone. Thank you for all this passion. I just love it. I come from another field, but I think there could be lessons from other fields.
I heard from many, I would say, mainly government officials saying that early adopters, when they adopt early, they gain the benefits of increased production, so that’s it. First of all, what would you say to that statement, “You have already got increased production over time. Why should we reward you for that?”
Ms. Hor: I guess your question is very much on the public benefit versus the private benefit. A lot of times it is argued that early adopters are actually doing this because of a private benefit. I would then refer to the statement that Jason Mann just made, “What are you doing for me today?”
At the end of the day, we all know that no-till farming would have been a carbon sink for all of us. But we didn’t know that. Did they actually know that no-till farming was going to create that kind of yield? Similarly, they did not know that.
So I would argue that everybody’s intention was to do something — yes — for their own good, but, right now, we have done all this research and findings over time. We have done all this good, and we are continuously doing all the good for all other geographies. Why are we then penalizing ourselves? We found this, and other people are learning from us, and then they get to do all the good. But we are not doing anything for ourselves, and we are sitting on this.
Senator Burey: I’m sorry, Ms. Hor, I have another question. Are you wanting to jump in there, Mr. Seymour?
Mr. Seymour: Thank you very much. As you can tell, I have thoughts on many topics.
We keep banging around on the additionality principle, and that’s the core of carbon. It depends on what side of the pendulum you’re on. If I’m talking to a buyer, they generally want carbon removal. If I’m talking to a seller, they would like to get credit for all the good they have done for 20 years. There’s an inherent tension in that, and that tension is okay. But that’s really what we’re battling. We have to choose which side of the ledger we want to address. I don’t know that we can address both at the same time, but that is an important distinction for me — are we trying to satisfy the buyer or the seller?
In this case, one of the ways I would try to satisfy the buyer is with co-benefits. To speak to your point about “I made the change for the productivity lift” — sure, that’s great. That’s how the farming system was really structured. The co-benefit is, “Oh, I also captured carbon, created jobs in my community and did these other things.” We are probably not celebrating the co‑benefits of some of these changes.
My friends here at CarbonTerra have said that it’s very clear that the dollars per acre farmers are receiving are minimal. The additionality principle says that the money has to change a behaviour. That’s the simplest. If a dollar per acre doesn’t change the behaviour, then how do we move that dollar to two to three to four? My theory is that we get better at measuring so that we can demonstrate more carbon per acre. That’s part of the equation. Driving the price of carbon up is the other one — to pull more money in. The only third lever I can think of is that the government tops that up. Some programming exists today, although it’s not going to cover the industry. However, that’s the formula.
Senator Burey: I’m jumping on what you said there, Marty, about the additionality principle and making sure that people are aware. I’m thinking about how people jumped on getting organic farming and buying organic. I think there is a huge gap in knowledge in our consumer base. I want to know — you can answer later — how you are dealing with that and if there are any strategies you could tell us about. Also, what could we do to act on that?
Thank you.
The Chair: I have a question, but first let me say we may not get around to the second round, colleagues. What we will ask you, though, is for you to ask your question, and the witnesses have the opportunity to submit written briefs to those questions.
My question is this: You mentioned four or five items in your opening remarks. Can you be very brief on what those four or five things you wanted to make sure we knew about are? I’m not sure we got to those. You said you had four or five things you wanted to leave with us.
Ms. Hor: The first one is very much touching on the policy. It is really a mechanism to encourage wider adoption of sustainable practices. I think we have covered that quite a bit. In promoting the mitigation of climate change, we are actually setting an impedance with how we are acting towards the whole ecosystem.
The other thing that is in my notes is really addressing equity concerns. Recognizing early adopters of no-till farming is actually addressing the equity issue that is prevalent in the agriculture sector. All the significant investment of time, money and resources to transition needs to be recognized to foster continuous adoption of other sustainable and regenerative farming methods that could actually be pricey in terms of how we are looking at it.
The other thing is the technology part that Mr. Seymour talked about. Right now, with the current structure of how we are measuring carbon, it’s not very enticing. We spend so much money with boots on the ground, saying we have to keep testing and testing every single patch of soil. That actually erodes what the farmers are going to be paid in terms of the carbon credit. So all the methodology and science are there, but we are ignoring it. If you look at all the research that is there, people are already moving away from satellite imagery and remote sensing. People are already diving into other things, and here we are, struggling and saying we still need boots on the ground and lab tests. That’s just insane because you can do it with lower costs, be scalable and deploy that and put money back into the pockets of the farmers — and we’re not doing that.
Senator Cotter: I apologize for missing your presentations and the early part of the questioning. I have benefited from conversations with Rachel Hor and Jason Mann in the past, so I have a fairly good idea of the perspective they would bring. My apology is more with respect to you, Mr. Seymour.
Mine is a bit less of a question and maybe more of a statement. A lot of this discussion — and sometimes inspired by interventions from Senator Deacon — on the question of early adopters feels like the story of the prodigal son, which Senator Simons sometimes refers to, in the sense that all kinds of people doing good achieve the same kind of reward as the person who comes along at the eleventh hour, and we all get to heaven. Is that how it goes? It’s frustrating in the sense that we forget about all the other sons and daughters who have been living a good life and contributing up to then, and they tend to be no better off.
Secondly, there is a kind of disincentive to be bold in early adoption here, not just in this area, but in almost all other walks of life where government has a voice. Why would we take risks at the beginning when we can let somebody else do it and we’ll all end up in the same spot and maybe better off? It is a comment, but I invite your reflection on that.
Mr. Mann: It resonates with us. It’s the “what have you done for me lately” policy madness. Senator Black, you asked us about the things we want. We want a made-in-Canada registry. We are relying on Verra, Climate Action Reserve and Gold Standard. We need a made-in-Canada registry that reflects what we value as Canadians, and we can lead with that. We need to get government backing to give it credibility.
I think we need an exchange — a made-in-Canada exchange. Why let Singapore do it? We should be doing it here. We have the nature-based credits. We’re just exporting them like every other commodity. Let’s add the value here.
As well, we absolutely have to recognize this historical min‑till. We have to do that if we want farmers to adopt more and empower them to do more. We have to recognize that min‑till whether we go back to 2015 or 2010. We can pick an arbitrary date, but we just have to do that. Because farmers are investing money. To buy a new air seeder to do this kind of min‑till is $1 million. Who is going to pay for that? They expect to make it off the price of canola.
There are other things there. I represent thousands of farmers across Canada who are investing in building a new nitrogen plant. There is a big target on nitrogen because of its emissions, but we are looking at building a plant with green ammonia. These are the things that farmers are doing to be proactive. They are putting up seed capital money to do all the engineering and design work — millions and tens of millions of dollars to try to improve the use of fertilizer. There is a big target on nitrogen’s back, and farmers are scared. They say, “Oh, are you going to make me use less nitrogen?” I don’t think we need to use less nitrogen. I think we need to use it smarter. However, to use it smarter, you have to produce a better-quality product and you have to have the equipment to apply it. This all takes money.
We have to find the rewards for them so they can get paid for the good things they are doing so they can reinvest it. The farmer will reinvest. We know that. That’s where they like to spend their money. They like to spend it on their farm and improve their farm. As they say, “Every dollar we spend passes main street seven times.” Let’s invest in Canada and invest in our farmers.
Mr. Seymour: I can offer a new thought around this. I think Scope 3 emissions and sustainable financing might be a tool to look at here. Scope 3 opens the door for supply chains. Leaning into farmers, if you have been tilling for a long time and capturing carbon, your Scope 3 value change would see monetary value in that. It will show up in different ways. In industry, we need to explore that. I think Scope 3 is an absolute dumpster fire in terms of accounting and being able to track, but there is something in there.
Sustainable financing tools are another way to reward growers. There are a couple of examples in market from some of the lenders where they are incentivizing practices that have been validated — not new practices, but you are doing them and validating.
Senator Cotter: Thank you.
Senator Duncan: My sincere apologies for being late this morning and missing part of your presentation. Thank you for the passion that you bring to this. I’m interested in your comments about “made in Canada.”
I’m from the Yukon. We are not known for our farming or for no-till. However, our melting permafrost is releasing a fair amount of carbon into the air. That leads me to your made‑in‑Canada idea. Is there any mechanism that we could use to move this to a whole-of-Canada approach by government? Too often we see one-size-fits-all in their policies, and that doesn’t work across the country. Could we do something — for example, carbon credits — that would apply throughout the country? How do we bump this to encourage some federal-provincial cooperation? Federalism has to be the most difficult style of government, but perhaps we could somehow have the carbon credits achieved in Saskatchewan apply to Northern Canada or to Western Canada. We have problems elsewhere, in Northwestern Canada, to put it that way. Could we have a made‑in‑Canada solution that would apply to the whole country for carbon credits? Do you see that? Do you have a suggestion for bumping this to the Council of the Federation discussions?
Mr. Seymour: My colleague was recommending a national registry. In this case, a voluntary registry is one way.
I would discourage standardizing or gifting carbon credits to everyone who operates similarly. For example, in Saskatchewan, everybody would get credit for no-till. It actually diminishes the value of the credit. When I go to sell that on the market, it’s the standard, so the buyers on the other side would devalue it. That doesn’t mean it has no value, but there is something inside of that tension that needs to be considered. If we made the Yukon and Prince Edward Island the standardized carbon story, I’m not convinced how liquid those credits would be outside of the country. We haven’t tested that, but I have a hypothesis that if everybody gets it, it has less value.
Senator Duncan: Then you get a bunfight at the federal-provincial table. That’s why I’m looking for something innovative.
We can have a mineral exploration tax credit that applies across the country. Why not something similar? Why not a tax credit of some kind?
Mr. Seymour: Actually, there is a thought partner that Senator Black and I know well, but I shouldn’t give his name away here in case he’s not ready. Regarding a tax credit in terms of zero-till practice, nobody loves a tax credit more than farmers. You wouldn’t have to pay them for this. You could say, “As government, we recognize that you’ve done this practice for 20 years, and there is a credit in that if you can measure it.” And it shows up on my tax forms. I want to give credit to the person who seeded this idea, but I don’t know if I should at this point.
Mr. Mann: A tax credit for this makes a lot of sense. Again, farmers are concerned about the carbon tax credit coming down the pipe. We all get it on our energy bills now. They’re looking for some offset for that for the good work they’ve done. It doesn’t have to be a cheque. It could be a tax credit. There are other activities that could find their way onto an exchange. I think some kind of a government-backed exchange, we could lead that globally. I’m certain of it.
Senator Duncan: Would it penalize other jurisdictions that, through no fault of their own, are releasing carbon?
Mr. Mann: That’s a complicated question. I have to think on that quite a bit.
Senator Duncan: Thank you.
Senator Simons: I want to talk about grasslands. We have talked about no-till farming. However, in Alberta and Saskatchewan, there are people trying to develop carbon trading markets for the preservation of natural grasslands and for turning marginal land back to forage. That’s not directly what you do, but how would you see incorporating that into a carbon trading scheme?
Mr. Seymour: We do a bit of that work. It seems rather simple. You come back to the principles of permanence and additionality. It is about demonstrating and being able to measure how much carbon was either not lost or captured. It comes back to one of the gaps in the industries, namely, how we measure.
The challenge with the grasslands, from a volume perspective, is that the Canadian grasslands story is rather unique, so it’s hard to find good data. There is a data gap in terms of doing that well and with confidence, but we are working on it as an industry.
Senator Simons: The branches that I have been speaking with have been working with Texas to try to find a market that works for them. It seems to me you have a twofold problem: How do you give credit to somebody for not ripping up an Indigenous grassland that has been there for 5,000 years versus crediting someone for taking what had been a marginal canola field and putting it back to forage?
Mr. Seymour: The current protocol is within 60 miles of farmed land that is eligible for avoided conversion protocol from the Climate Action Reserve. They are modernizing that protocol now for southwest Saskatchewan.
Senator Simons: Thank you very much.
The Chair: We have time for Senator Klyne’s question.
Senator Klyne: I don’t know if there’s time for an answer, but I’ll get the question in and you can provide the answer.
I was going to ask Mr. Seymour earlier for a 101 course on the carbon market. I don’t think we should take it for granted that everybody understands the carbon market. There are buyers and sellers. What is in it for each? What are they looking for, and what are the benefits? And the bottom-line question is this: How does this contribute to climate change and moving us closer to net-zero emissions? That’s one area.
The second area is that, as you have related or included in some of your statements and on your website, the First Nations in Canada have sovereignty over 150 million acres of land. Senator Simons would be pleased to know that includes farms, grasslands and forests that naturally take in carbon. You stated in an interview once before that although Indigenous people have always worked on protecting the environment, they haven’t been given a fair opportunity to participate in the carbon market. What are the barriers there? What are the solutions to overcome the barriers and get them fully engaged in the carbon market?
The third area is that I’d like you to expand on this role of government in terms of everything from validation, financing and the additionality principles. You talked about how the money has to change the behaviour. What data might you have to support that? I’d also like to hear more about the carbon protocol development. They facilitate the role of government, again. This is all under that. The last one is to facilitate the voluntary adoption.
The Chair: You have those questions and you can watch the testimony and get them again. Senator Deacon, you have time for a question, not the answer.
Senator C. Deacon: I understand that, chair. Thank you for your gracious offer. If you were to get together with others in this space, maybe competitors or collaborators, and present us with clear direction as to where we need to focus — one of them could be literally defining the marketplace: What does that look like? What are the variables that need to be managed?
We’ve talked about soil being considered a natural resource in this country. Jonathan Wilkinson got this when he was at ECCC. Unfortunately, I haven’t found anyone else who does since at AAFC or ECCC. If you can help us in any way to get more specific, especially as a group of companies, I think it would be helpful for us to know how to push harder, further and more explicitly because the dream you put forward is a dream that I share and I think others around this table do.
The Chair: You have some homework cut out for you, our witnesses. Mr. Mann, Ms. Hor, Mr. Seymour, if you wish to present back to us in written format, we would welcome that. You can send that to our clerk.
I want to say thanks for your participation and your passion. It shone today, and we really do appreciate it. It’s a long-term study, and your assistance has been very much appreciated.
For our second panel, via video conference, we welcome from Protein Industries Canada, or PIC, Mr. William Greuel, Chief Executive Officer. And from Miraterra, we have Mr. Nate Kelly, Chief Executive Officer; and Ms. Kim Haakstad, Vice President, Stakeholder Relations.
Before I invite you to make your presentations, I wish to recognize that you’re joining us from Saskatchewan and British Columbia, where you would have had to log into our meeting around 6:30 a.m. and 5:30 a.m. respectively. Thank you very much for joining us at such an early hour.
We’ll begin with Mr. Greuel and we’ll proceed with questions after. Senators will have five minutes for the questions and answers.
William Greuel, Chief Executive Officer, Protein Industries Canada: Good morning to the chair and the committee. Thank you for allowing me this opportunity to appear in front of you today. My name is Bill Greuel, and I’m the CEO of Protein Industries Canada.
Over the past four years, through the Global Innovation Clusters program, along with the industry, we have invested nearly $0.5 billion into research and development related to plant-based food and ingredients. We have recently entered our second mandate and are continuing to build Canada’s plant‑based food, feed and ingredient sector. We believe plant-based foods are a sector for the future not only for our economy, contributing $25 billion by 2035 —
The Chair: Mr. Greuel, I’m going to interrupt. You seem to have frozen on our screen.
We’ll move to the next set of witnesses. Apologies, Mr. Greuel.
Kim Haakstad, Vice President, Stakeholder Relations, Miraterra: Thank you, Mr. Chair and committee members, for inviting us today. I’m Kim Haakstad, VP, Stakeholder Relations at Miraterra, which is a Vancouver-based tech company recently spun out of Terramera. I’m joined by our CEO, Nate Kelly.
Miraterra is a clean-tech company that believes that many of the challenges facing our planet have one thing in common: degrading soil. We have gathered the best minds from around the world and are utilizing the most advanced technology available to help solve this problem.
Our comments today will focus on the role that new technologies will play in managing and improving soil health.
Nate Kelly, Chief Executive Officer, Miraterra: At Miraterra, we have a team from across multiple industries working to reverse the four trends caused by degrading soil: loss of biodiversity, increasing food insecurity, reduced farm profitability and changing climate. Fortunately, improving soil health is one of the greatest actions we can take to address these challenges. With healthier soil, we can reduce inputs, reducing costs and improving soil biodiversity. We can improve crop yield, reducing the amount of farmland needed. We can allot new revenues for farmers via carbon markets and, most importantly, we can take carbon from the air and put it into the ground, where it belongs.
These are massive problems, and we don’t think we can fix them all, but we can help by generating meaningful, actionable insights that change soil management processes.
Insight starts with data, and data comes from measurement. That’s where we found the problem we are tackling — accurate and regular soil measurements. It is estimated that only 20% of farmland in North America is tested, and the results are scattered in binders, emails and hard drives.
We attempted to measure soil quickly and cheaply by observing what was happening on the ground from above the ground and by using machine learning to solve accuracy problems with sensors available on the market, but only yielded inconsistent and unreliable results.
We concluded that the only soil measurement trusted by agriculture is from traditional soil-testing labs. Unfortunately, the traditional process needed to collect, ship and analyze samples is labour-intensive and expensive. Lab processes need multiple pieces of equipment and use lots of chemicals to extract information from soil, taking a long time to go from sampling to results.
We set out to invent a solution that was faster, cheaper and cleaner than anything on the market and could also deliver lab‑grade results. Our team, along with the University of British Columbia and the support of government funding including AAFC and Sustainable Development Technology Canada, or SDTC, has delivered a novel soil sensor that meets those stringent requirements.
I can’t divulge the specific details of our invention, but we took a discovery made over 100 years ago, which up to now has been completely unusable in soil, and using a combination of lasers, fibre optics, signal processing algorithms, computational chemistry, quantum mechanics, molecular mechanics and machine learning, we were able to deliver a novel soil sensor and computational modelling platform that can read soil at the parts‑per-million level. Think of our technology as a transformative force in soil testing and measurement, much like how digital cameras and smartphones revolutionized photography.
Digitization has revolutionized numerous industries such as music, finance, education and communications. At Miraterra we are doing the same for soil.
Our technology will be used in labs in the field and in the ground to measure soil, generating the data from the soil which will power the insights needed to help land stewards make better land management decisions. Better decisions lead to healthier soil. This is how we are helping to leave a more livable planet for our children and their children.
Thank you so much for your time today. Kim and I look forward to your questions.
The Chair: Thank you very much. We have Mr. Greuel back. We’ll give you five minutes now. Thanks so much for your patience.
Mr. Greuel: Good morning to the chair and the committee and thank you for allowing me the opportunity to appear in front of you today.
We often say that plant-based foods are a solution from our soil. Plant-based foods contribute to a healthier Canada and healthier Canadians. We know that an increased consumption of plant-based foods leads to a healthier population while also helping Canada reach our climate change goals.
Personally, I’ve been involved in the agriculture industry my entire life. I grew up on a farm in Bruno, Saskatchewan, the central part of the province for those not familiar, and witnessed first-hand the devastation of drought, including the destruction of our soils, in 1988. I also witnessed the drought of 2021, considered by many as dry as 1988.
However, unlike that drought in the late 1980s, we were still able to produce a substantial crop. That’s because of Canadian farmers’ adoption of innovation such as zero-till and the three‑crop rotation of cereals, pulses and oilseeds.
It’s largely because of our farmers’ adoption of technology, including the introduction of pulses into a crop rotation, that we’ve been able to restore our soil health and continually produce high-yielding crops year after year. While you may not think about soil when choosing lentils for a healthy dinner, perhaps we should be doing that more.
A secure and reliable food supply chain that can feed Canadians and the world begins with our ability to grow crops. A healthy Canada and healthy Canadians depend on healthy soil. Pulses such as lentils and peas naturally fix nitrogen, some of which is stored in the soil and used by subsequent crops, reducing the need for nitrogen fertilizer.
There’s an important link between the global demand for protein and soil health. The construction of the largest pea processing plant in the world at Portage la Prairie, Manitoba, is an example of this. Roquette chose Canada partly because of our ability to grow some of the most sustainable crops in the world, and it all begins with our soil.
To ensure the continued health of our soil, we need to continue to invest in areas that support the advancement of Canada’s pulse- and plant-based food sector. To this end, I have four recommendations for the committee to consider.
The first is continued investment in breeding and genomics. As mentioned above, the adoption of a diverse crop rotation is fundamental to restoring and maintaining our soil health. Canada has been at the forefront of the introduction of new varieties and genetic improvements, and we must continue to invest in those areas to ensure that our farmers have continued access to the varieties that not only meet the needs of our downstream processors but also provide high returns, while contributing to soil health.
Second is an effective measurement, reporting and verification system, or MRV. Over the course of this study and just the previous panel, you have heard many times what an effective carbon sink Canadian soils are and how Canadian agriculture is some of the most sustainable in the world. But to truly quantify and be able to tell our story, we need a whole-of-value-chain MRV system that will allow us to truly understand the sustainability of our ingredients and, more importantly, know where to design and implement meaningful interventions to reduce greenhouse gas emissions and to continue to contribute to the health of our soil.
Third is downstream processing. The global demand for protein is growing at an incredible rate, and Canada has a unique opportunity to meet this need, with both animal protein and plant protein. We need to continue our investment in ingredient processing to capture this opportunity. While we are pleased to have large ingredient manufacturers like Ingredion and Roquette here in the Prairies, the reality is that Canada could support several more large-scale ingredient-processing facilities. These facilities provide farmers with marketing options and higher profitability for their pulses and other crops, leading to more acres and contributing, again, to soil health.
Co-product utilization is the fourth, as well as support for the circular economy. One of the amazing elements of the research and innovation is that you never know for sure where you may end up, and our realization that co-products of ingredient processing can also be used to contribute to soil health is one example.
Canada should be proud of our commitment to soil health, and we cannot rely on what we have accomplished in the past. We must continue to invest in and adopt innovation to not only ensure soil health but also support the economy of our farmers. Thank you.
The Chair: Thank you very much to the three of you for meeting the time and your presentations. We’ll proceed to questions. As in the past, we have five minutes for questions and answers, and we’ll go through a second round if there’s interest.
Senator Simons: I wanted to start with Mr. Kelly and Ms. Haakstad. You have a magic machine that you can’t tell us much about. Does it test in situ? Does it test back in the lab? If it’s in situ, does it require satellite or Wi-Fi technology to work? Can you tell us how the machine learning part of it makes it more efficient?
Mr. Kelly: Great question. By the way, we’re an early-stage start-up. It works in labs and in situ, and the goal is for it to work in-ground as well because that’s where you truly get to carbon measurement. The sensor itself is basically a digital reader. We can deploy it in multiple form factors, as I said, in the lab, in the field or in the ground.
The reason why we need machine learning is because the data that is being generated — as we basically shoot lasers at the soil to stimulate the molecules, which is the base of our invention, it generates data. It generates signals that we’re capturing from that instrument. Then that signal goes up into the computational platform where, basically, it’s unmixing millions and millions of data signals that we’ve collected into constituents, into analytes. You get a whole bunch of data sent up to our computational model, and it separates it into nitrogen, potassium, carbon, organic matter, et cetera. The machine learning is needed to actually pull all that data apart.
In the field, it will not require Wi-Fi as it’s being used because it will store that data in the device, and then when we get to Wi‑Fi, it will send that data up into the cloud for processing.
Senator Simons: We’re talking about carbon markets. You can’t make them functional if you can’t prove that the carbon is there. This could be a huge breakthrough.
But, economically, is this something that farmers will be able to afford? Who is the market for your product?
Mr. Kelly: Again, as an early-stage start-up, our first market is the labs. We feel we need to help transform where samples are going today. As we looked at where samples flow today, they are not — samples are not being taken and read by farmers, and even agronomists are not wanting to become labs. Agronomists just want the results. We decided to go to the heart of where sampling is happening today. There are about 12 million soil samples being collected this year. We wanted to go to the place where those samples are being analyzed. We’re talking to labs in North America today, to bring our equipment there to help transition that process over to a cleaner, cheaper process.
Then the goal of stage 2 is to work with the labs to take that into the field and into the ground, and at that point, it will just be something that is part of your data that you’re collecting as you farm as opposed to digging soil out of the field and shipping it across the country.
That’s where we want to get to, where it becomes part of what happens in your farming practices. But like all technology, it takes time. We’ll get there, but we’re starting right now with transforming the area where soil samples currently go, which is the lab.
Senator Simons: Presumably, then, this isn’t just in terms of knowing what the soil carbon is; this is going to look for all kinds of other factors that will then help you to target your use of nitrogen fertilizer or where you’re seeding, I presume, the way soil mapping does now.
Mr. Kelly: That’s right. We are going after what I consider the input side, which is how much you’re spending, inputting into your land, and then we also want to unlock the output side, which is the carbon markets. Our data does address both carbon — the ability to measure for carbon markets — but also to help make smarter decisions about the inputs that you’re putting into your land. It does do both, and that’s our goal.
The Chair: Thank you very much. You’ll note, colleagues, that we’ve lost Mr. Greuel, but we are in touch with him and we’re working to get him back.
Senator Klyne: Does that mean I can’t ask Mr. Greuel a question?
The Chair: Until he gets back. Let’s be fair to him.
Senator C. Deacon: Thank you very much. I’ve been following Terramera prior to it becoming Miraterra or creating this subsidiary. I’m a big fan of the work you’re doing and have actually done a commercialization along the lines of what you’re doing now in an entirely different field.
What you’re doing is a foundational element of a whole value chain that needs to be created, and it is a big opportunity that faces Canada. We’re trying to figure out where to put our attention. What’s really important, as we’re learning from you, is that there are technologies coming along rather rapidly that can make soil testing at a fine-grained level quite affordable, which is a validation measurement tool to validate an entire market that we were discussing in the previous panel.
I’m wondering how you might be seeing a company like yours working with others that I think are important in creating this global opportunity for Canadian farmers and how you fit together in that. Could you give me a bit of context? I see you as a key piece, but not the only piece, by any means.
Mr. Kelly: In fact, I spent over 20 years in technology where I think the model for start-ups is win-lose: I win, and you lose. In this world we all have to win in order to solve this. The problem is too big for any one company.
It’s funny. I was travelling to the Midwest last week visiting labs, and it struck me that we’re all looking at different parts of the elephant. If you look at the parable of the blind men and the elephant, we are all taking a look at different parts of the elephant, and if we can all come together and describe what we’re seeing, we can solve this together. But if those of us who are working on this think that we alone can solve it, we will never get to a solution that will solve it for our planet.
In simple terms, I personally am looking for partners. I’m looking for other folks who are doing similar work to start partnering with us because I think it’s going to take a lot of us to solve this problem.
The only line we draw is where — I’m going to be careful how I say this — there are folks out there promising things that we don’t think are possible to deliver, and we want to be careful with that. We don’t want to be out there giving wrong information to the market, so we will not be partnering with those folks. But folks who are working on different parts of the same problem, we 100% want to partner with them, and we think that’s the only way to solve this problem.
Senator C. Deacon: I hear you very clearly that you want to have partners around the table that all have a similar level of credibility.
Mr. Greuel, we’ve been hearing from a lot of credible possible partners, people who could be working together who are all aiming at the same direction and bringing different important talents to create the global opportunity. What are your thoughts about what role government could play in that and what roles or approaches you think are important to achieve that if partners, competitors or others get together to try and create this big global opportunity for all of us?
Mr. Greuel: Thank you, senator. I must apologize for my technological difficulties today.
At Protein Industries Canada, we’re built on a model of collaborative innovation. We have seen first-hand what happens when we bring together different verticals of the value chain aimed at solving complex problems. The issues and challenges that we’re looking at solving today in Canada’s agriculture sector in the context of global agriculture needs and the increasing need for calories and food production certainly demand collaboration across the entire value chain. To my colleague Nate Kelly’s comments, yes, I would wholeheartedly agree on the need for collaborative innovation.
Senator, to your specific question on where government can play a role, innovation is inherently risky, and companies will largely underinvest in innovation. Particularly, in Canada — and we could go into the statistics around business expenditures on research and development — government certainly has a role to co-invest in innovation in some of these areas that are nascent, new and present large opportunities for Canada. We have a number of programs at the federal level that could be better aligned with the outcomes that we’re trying to achieve in agriculture. We’ve done a great job of supporting other industries in this country. We need to think about agriculture as a strategic focus or one of the sectors in Canada’s industrial policy that represents an opportunity for global growth.
Senator C. Deacon: Hear, hear.
The Chair: Thank you very much, Mr. Greuel. I wanted to point out that it appears that all the money Protein Industries Canada has received has gone into the infrastructure and not the fibre optics, because you’re having issues, and that’s all right. Thank you very much. We appreciate your patience.
Senator Klyne: Mr. Greuel, great to see you joining us here on the panel. I’m always excited to hear about what our superclusters are doing out there in the West.
One thing I’d like to ask you to speak to, if you will, is the Soileos fertilizer. It was a moment of Saskatchewan pride watching the announcement on that when the partners, including PIC, Lucent BioSciences, AGT Food and Ingredients and — I don’t recall Federated Co-operatives Limited being at the announcement, but I’m pretty sure they are a partner today, if they weren’t on that day. It was also nice to see the Minister of Agriculture and Agri-Food at the announcement as well.
The excitement about Soileos as a fertilizer is because it helps increase yields in crops and it contributes to both soil and human health. I’d like you to explain to this committee what Soileos is about, with a particular focus on the soil health.
Mr. Greuel: Yes, thank you, senator.
That’s a really exciting project, and it represents one of the key features in my recommendations around support for the circular economy in agriculture.
For those of you who are not familiar, the Soileos product is using what we would normally call a waste stream or by-product from protein extraction and value-added processing. Whereas AGT Food and Ingredients, which many of you know, is a company that produces pea and lentil protein concentrates, the fibre or the seed coat of that is used as a carrier for micronutrient fertilizer by Lucent BioSciences. It represents an example of a great approach to the circular economy and returning carbon back to the soil by the utilization of fibre hulls that would normally go into some other lower-use waste stream.
A focus of our research and innovation going forward will be on this concept of circular economy, which really helps build out soil health, utilizing all of the products of agriculture. I think that represents a key foundation for agriculture in the future in terms of the work we’re approaching.
Senator Klyne: Could you comment on whether that, as a fertilizer, will replace any other fertilizers or whether it can be used in combination and mitigate some of the other fertilizers?
Mr. Greuel: Yes, thank you, Senator Klyne.
The focus of Soileos today is on micronutrient fertilizer. It’s not designed to reduce synthetic nitrogen fertilizer but to augment micronutrient fertilizer. For those of you who are not familiar, that would be copper and magnesium — some of the micronutrients that crops use.
The important aspect is to think about the application and the leveraging of that technology across other potential uses in fertilizers that we could be utilizing in the future.
Senator Klyne: Thank you.
Senator Petitclerc: My question will also be for you, Mr. Greuel.
I’m interested in knowing, when it comes to plant-based food and pulses production, what is the scope of organic farming? What place does it have now, and what place should it have?
Again, thinking about soil health, do we do enough? If it is a good solution, should we invest more in organic farming? Is it even quantified, the result on soil health?
I’m curious about that.
Mr. Greuel: Thank you for the question.
I am a firm believer in consumer choice, and consumers will choose to consume products derived from conventional agriculture or from organic agriculture. I think it’s important that we recognize in Canada that we have a very robust and strong regulatory system for the approval of crop protection products and fertilizer products, meaning that they are very safe.
If I look at the global need for protein, which is increasing — both for animal and plant protein — I certainly am a supporter of conventional agricultural production. I think the farmers and the crop protection industry and the life science industry have developed, and farmers are utilizing technologies in a sustainable manner, which is actually leading to increased soil organic matter. I’m a firm believer that conventional agriculture leads to as healthy or healthier soil than organic agriculture.
Now, that doesn’t mean that organic agriculture doesn’t have a place. Again, I believe in consumer choice. Consumers can choose to grow and utilize organic products, but I think what I’ve seen in agricultural production is that conventional agriculture, when applied sustainably — which our farmers do in Western Canada today — leads to highly sustainable crop production, a low-carbon footprint agriculture that we produce here in Western Canada, and contributes to soil health.
Senator Petitclerc: Thank you. For clarity, my understanding was that organic farming produces better soil health. Are you saying it’s not that clear? Is it not that documented?
Mr. Greuel: I personally don’t think it’s that clear. One of the methods that organic producers use — and I’m speaking about row crop agriculture in the Prairie region, with which I am familiar. Again, the previous panel spoke to regional differences in Canada, and that certainly is true.
One of the methods employed for weed control in organic agriculture is tillage, and we have all just heard about the issues and challenges that tillage produces from an inability to sequester additional sources of carbon. It is not fair to say one or the other. It is a very complex set of production practices that lead to carbon sequestration and soil organic health. I don’t think we can say organic is good, and conventional is bad or vice versa. It really depends on how each individual farmer chooses to utilize the tools at his or her disposal.
Senator Petitclerc: Thank you. That’s very helpful.
Senator Burey: Good morning, everyone. Thank you for being here. It’s so exciting listening to this. I’m getting chills just listening to all this technology and science.
Let’s get to the question. First of all, a lot of my questions have been asked, but I’m going to go into an area that is very near and dear to me. As you may have heard, I am a pediatrician. I’m always interested in the pipeline, the human resources and continuing to make sure that there is knowledge exchange to the next generation. I am wondering if you know of any policy or program recommendations that could facilitate some of this exciting work that you are doing. Can you share any of that with us? This question is for everyone.
Ms. Haakstad: I can start on that, senator. Thank you. There are a few ways we look at that at Miraterra and our parent company, Terramera. One is having a really robust early talent program in the company, bringing in people who are at the cutting edge of their disciplines and having them be a part of our team. We have done that through the support of programs like Mitacs, which receive federal government funding, as well as through internships, co-op programs and direct entry as full-time employees. Those programs are wonderful. They also help us as a start-up offset some of the labour costs and make the money that we have raised on the capital markets go a little bit further. Those programs are great.
We also think that the more that we can get out there and talk to young people and get them excited about agriculture as a career and as a technology career, just like many other sectors. We work across all sorts of disciplines, as Mr. Kelly alluded to earlier. We have people in machine learning, computational chemistry, biology, agronomy and many of the other disciplines that help make a company like ours run. Agriculture should be part of a whole bunch of different education programs and disciplines.
Mr. Greuel: I would just take this opportunity to agree with Ms. Haakstad in terms of increasing — as a sector, we need to increase the profile of agriculture as a career opportunity for not only youth but people transitioning from declining industries, new Canadians and under-represented groups. There are a lot of opportunities. Agri-food is already Canada’s largest employment sector if you look across the entirety of the value chain. We just need to continue to increase the profile of it as an exciting place to work. As Kim stated, often people who have these interesting backgrounds in machine learning and data science are looking at fintech or health tech as the most exciting sectors to work in, but agriculture and food is one of those, and we need to continue to increase the profile and awareness.
Mr. Kelly: If you could walk around our office and meet some of the young people and the work they are doing on soil and see the sparkle in their eyes, you would realize there is a lot of room for brilliance in agriculture. Having been in tech, where the model was leave your farm, go to the big city and join the big tech firms, we can help reverse that because there is exciting and cutting-edge work happening in agriculture.
Senator Burey: What recommendations would you make to this committee that we could put in our report so we could increase that? Tell us what we need to do.
Ms. Haakstad: I think it would be particularly useful to make sure that agriculture is included in any of the programs that are available that the government is funding, like the Canada Summer Jobs program and others, and that it is not just for on‑farm work — that we recognize there is a full value chain of work that is happening. What is happening on the farm is incredibly important, but in technology companies and other places, there are lots of opportunities.
Mr. Greuel: Over the course of the last year to 18 months, I have heard a lot of people calling for revised industrial policy for the country. If we are thinking about new industrial policy for the country, I would contend that we have to raise agriculture’s profile as a strategic sector that Canada needs to go after in terms of investment and really focused industrial policy, one pillar of which includes workforce development. I would encourage this committee to think about raising the profile of agriculture as an overall important sector for investment across everything, from financial incentives to competitiveness of the sector and workforce development.
The Chair: Thank you very much.
Senator Cotter: Thank you to the witnesses for inspiring us in your presentations. Let me offer a confession that I think builds on Senator Burey’s observations. I was a student at the University of Saskatchewan quite a long time ago, and there was an agriculture college there. I used to imagine, disparagingly, that people were being taught to drive their tractors and combines in straight lines up and down the fields and not much more.
But I have found over the years and in conversations with you, Mr. Greuel, and lots of others around this committee a complete inspiration with respect to agriculture, research in agriculture, the collaborations each of you has spoken about and the way in which science can turn its mind to improving crop yields and sustainable agriculture. It is spectacular, frankly.
On your last point, Mr. Greuel, about a Canadian industrial strategy where agriculture and agri-food is one of the pillars, my understanding is that we are moving in that direction. Some work that Senator Klyne and I did with a few other senators, including Senator Deacon, on what the future of Canada looks like included a focus on agriculture as a pillar of the Canadian economy going forward.
My question along those lines for you, Mr. Greuel, is whether the idea is sustainable and achievable. You identify an enormous objective in terms of growing the protein-based agriculture economy. Can that be done without burdening more land, which we might need for other purposes? Can it be done in a sustainable way? We have a big road map. Can we get there and still meet some of the sustainable goals that both agriculture and our society have?
Mr. Greuel: Thank you for the question. I’ll say that both Mr. Seymour and I are graduates of that college of agriculture where we did have to take some classes as you have described.
To your question about sustainable and achievable growth in the agriculture and agri-food sector, I’m a true believer that innovation will underpin the growth of the sector. If I look at what we are trying to do at Protein Industries Canada, we want to increase processing capacity of Canadian crops by about 5 million metric tons over the next 10 to 15 years. If you look at the yield growth trajectory from the crops that we are producing on the land base that we already have, it is increasing by almost 2% per year. That’s based on the adoption of innovation of new varieties, new farming practices, better application of fertilizers and better crop protection products. It is driving yields up over time. The incremental processing we are trying to achieve over the course of time is really just that incremental production.
So, yes, I’m a firm believer that we will be able to achieve the goal set out in both the Barton report and the Agri-Food Strategy Table work that came out of that, in addition to the work that we are doing at Protein Industries Canada, just because of the adoption of innovation at the production level.
Senator Cotter: One of the things that you identify is investment, including foreign investment, in the kind of industries that can provide the processing capacity and enable Canada to be beneficiaries of part of the agri-food chain.
The practices being developed and these collaborations that focus on achieving those goals in sustainable and healthy-soil ways, are they factors in investors’ making commitments to build plants and the like in Canada? Is that part of the equation of attracting investment?
Mr. Greuel: Absolutely. My board chair and I had the great opportunity to attend a conference in France last year called Food Ingredients Europe. We talked to a lot of ingredient manufacturers who were heading into a challenging winter because of some of the issues around energy security in Europe. That’s forcing them to look outside of Europe for additional investments. They’re interested in Canada because of the sustainability of our ingredients, energy supply and what we offer as a country.
Senator Cotter: Thank you. I have said this a couple of times here about the agriculture field and the soil health project that I came to doubt and stayed to pray. These kinds of discussions, with both Mr. Greuel and Mr. Kelly, tempted me to want to join the monastery.
The Chair: My goodness! You would be missed here, Senator Cotter.
I have a few questions. I’ll start with Mr. Kelly and Ms. Haakstad. One of your scientists, Dr. Forum Bhanshali, has committed a lot of research to biochemical soil matter and measurements and how agri-chemicals interact with soils. How do you see the practices that she is researching being better used by farmers? Could you explain green chemistry for us so that we can understand how farmers can adopt these practices?
Mr. Kelly: I’m not familiar with that person, so I would have to do some research.
Ms. Haakstad: Going back to one of the previous questions, Forum joined us as an intern and has now become a leader in the company. She does a ton of research. She works for our parent company, Terramera, focusing on building biopesticides that have an opportunity to help biologics to become a replacement for some of the conventional chemicals we are utilizing today. We look at the impacts of what you put on the plant and how that impacts the soil as well as how that impacts the plant’s health. That’s some of the work that Forum is doing in her lab.
Mr. Kelly: I’m slightly embarrassed that I didn’t know that was the same Forum you were referring to. I apologize. She is wonderful.
Green chemistry on the Terramera side is about taking natural ingredients and using them to help with crop protection. We feel like there is a whole industry that has been built around chemicals, and those chemicals are quite destructive to the soil microbiome. We are formulating a lot of products that come from organic or plant-based sources to be used for crop protection, so taking things that exist in nature already and then helping to use that and amplify it to help with crop protection. That’s what we talk about when we talk about green chemistry, namely, biologics versus synthetics in that space.
The Chair: Thank you very much. Mr. Greuel, Protein Industries Canada has received about $150 million in funding from the Government of Canada’s Global Innovation Clusters program. You have accepted expressions of interest for project funding just up to about a month ago to use this funding. Your mandate notes that 62% of your active projects focus on the reduction in environmental impact, and your funding disbursements focus on genetics, crops, ingredients and products. Have any of your projects worked to correlate soil health with these fields within these areas? Are you hoping to interact with soil health as an aspect around climate goals?
Mr. Greuel: Thank you, senator. You are quite accurate in terms of the number of projects that we funded and supported that lead to good environmental outcomes. We take a whole-value-chain approach to innovation. Some of these projects that we funded and supported that are having good environmental outcomes are at the processing stage, helping ingredient and food manufacturers reduce energy consumption and water use. We have to think about food systems as a whole and reduce greenhouse gas emissions in all verticals of the value chain.
To your specific question about some of our projects that have funded and supported soil health, I did speak to the Soileos project that adds carbon back into the soil through a bit of a circular economy approach.
We need to think about agriculture in a holistic manner. Some of the things we have done in terms of advancing breeding technologies and improving genetics and variety production will have an impact on soil health because they can lead to more diverse crop production. We have supported genomic and breeding work in peas which makes them more profitable and helps diversify crop rotation. We have made some investments that directly affect soil health but a lot of investments across the value chain — that is, if we think about this in a holistic manner of agriculture — all of those investments will influence and improve soil health.
The Chair: Thank you very much.
Senator Simons: I worry a bit that some of the technologies that we are inventing that help with precision agriculture and help farmers to figure out exactly how to maximize their efficiency are priced out of the reach of those selfsame farmers. We are demanding that people buy machines that cost $750,000 to plant the seeds, which may pay off in the long term. I guess this is a question for Mr. Kelly and Ms. Haakstad.
When you are working on new technology like this, how will we make sure that the people who need it most will be able to afford to access it — and not just your machine? Having your data then requires you to have a special machine to plant that gets the best use out of your data.
Mr. Kelly: Yes, that’s an important question. We recognize that it feels like the growers and farmers are all having to foot the bill for not only the changes that are happening in the world around them but also new tech. That’s a very important calculation that we use when we set out to invent this new product. It should actually drop the bottom out of the system, and not increase the price.
What I mean by that is if you think about photography 20 years ago — the price of cameras, the film, the processing and the shipping — today you take a picture, and it’s just there. That’s where we want to get to. Our technology will enable the ability to get real-time readings cheaply as opposed to having an expensive process. We see this transformation with technology. Usually, when you digitize an analog process, it becomes cheap and affordable.
We talk about democratizing testing all the time because we want to get to a point where it becomes part of what you do. We think technology is the unlock for that. It is not the price adder but the unlock for making something cheaper. Something that might have cost $20 will cost $2 with our technology because we have digitized a process that is expensive today. That is one of the fundamental principles of our product — it has to actually drop the price out of the system and not increase the cost to the farmer.
Senator Simons: Thank you very much.
Senator C. Deacon: I may be raining on a parade here that we have all been enjoying, watching, feeling a part of and feeling as possible.
There is an early adoption premium, as you just mentioned, Mr. Kelly. We need a collaborative and cooperative approach to make these changes to create the global opportunity. We can’t just stand back and wait for some big global agricultural company to take the lead and own the market. We have to actually create a Canadian solution we can export to the world.
I have been in Ottawa for almost five years. There is a term I have learned here that I had never heard before called “horizontality.” Supposedly, public servants in Ottawa are rewarded for horizontality when they work across departments. I don’t know what the reward is, but I think it is punitive. Things happen in silos in Ottawa. For us to make real headway here, we have to get AAFC; ECCC; Innovation, Science and Economic Development Canada, or ISED; and probably the Treasury Board of Canada Secretariat involved because we will need to have new standards being incorporated by reference to replace outdated regulations in order to allow these technologies to actually start to work in the marketplace.
The amount of change needed says to me that we can’t hope that the leadership is going to come from Ottawa. We have seen no evidence of it. So here is my question: Is there a group in Ottawa that you have found is actually seeing this opportunity to help us find a path from within Ottawa that really engages the innovators in Canada? Or is there an external plan that we could be investigating and trying to understand — bodies coming together that can help Ottawa reluctantly go down this path? At this point, I think it is reluctance because they just don’t see it.
Which way do we go? Do you see any hope there? I get discouraged.
Ms. Haakstad: Thank you, senator. I understand some of what you are talking about. Certainly, we have sometimes found ourselves having a conversation with ISED and then sharing that with AAFC and ECCC. We can do that at this stage of our company. Many companies cannot. We had some conversations with ISED in the past about using their role as a convenor to bring together industry, academia, government and across government to look at what some of the hurdles are to making this happen. One of the things we heard on the previous panel was around the soil carbon regulations for carbon offsets. Two years ago, we thought they were imminent. They are still not published. We do need to get some of those things moving.
I also think there are programs out there that are doing a good job of this and that are slightly external to government. We are obviously joined by Protein Industries Canada. I’m also a board member of the Digital Technology Supercluster. Both of those organizations are bringing together people in industry, academia and, in some cases, government — certainly in our case in past projects — to find ways to unlock technology and bring it to market.
I do think we can look around across the country and see how we can have government learn from what we’re doing that is slightly external to you. There is a lot of coordination and cooperation going on.
Senator C. Deacon: So you see an outside-in approach. Where do we get the leadership to make sure we actually capture this massive opportunity that will just slip through our fingers if we allow the status quo to continue?
It’s a hard one.
Mr. Greuel: Thank you. I would go back to some of my earlier comments about revised and refined industrial policy for Canada and elevating agriculture as a sector and just continuing to express the economic opportunity that this industry brings.
Senator C. Deacon: Thank you all.
The Chair: Thank you. That brings to a close our questions from our senators. Mr. Greuel, Mr. Kelly and Ms. Haakstad, I want to thank you very much for your participation. As you can appreciate, and based on the interest around the table, my colleagues are passionate about this project. It is a study that we look forward to completing down the road.
I want to thank my colleagues around the table for your active participation and thoughtful questions. As I try to do every meeting, I would also like to thank the staff who support the work of this committee — those in the room and behind us — through interpretation and transcription, as well as the committee room attendants, multimedia services technicians, broadcasting team, the Information Services Directorate and our page. We really appreciate it.
Our next meeting is scheduled for Tuesday, May 30, at 6:30 p.m., where we will continue to hear from witnesses on the committee’s study on soil health.
If there is no other business for the committee, I’ll declare the meeting adjourned.
(The committee adjourned.)