THE STANDING SENATE COMMITTEE ON AGRICULTURE AND FORESTRY
EVIDENCE
OTTAWA, Thursday, October 5, 2023
The Standing Senate Committee on Agriculture and Forestry met with videoconference this day at 9 a.m. [ET] to examine Bill C-234, An Act to amend the Greenhouse Gas Pollution Pricing Act.
Senator Robert Black (Chair) in the chair.
[English]
The Chair: Good morning, everyone, it is good to see you here. I would like to begin by welcoming members of the committee and our witnesses online, as well as those watching the meeting on the World Wide Web. My name is Robert Black, senator from Ontario, and I am the chair of this committee.
I would like to start by asking the senators around the table to introduce themselves, starting with our deputy chair.
Senator Simons: Paula Simons, Treaty 6 territory, Alberta.
Senator Burey: Sharon Burey, Ontario.
[Translation]
Senator Dalphond: Pierre J. Dalphond from the senatorial division of De Lorimier, in Quebec.
[English]
Senator Woo: Yuen Pau Woo, British Columbia.
Senator Oh: Victor Oh, Ontario.
The Chair: Today, the committee is meeting on Bill C-234, An Act to amend the Greenhouse Gas Pollution Pricing Act.
Our witnesses today are William David Lubitz, Associate Professor, School of Engineering, University of Guelph, who is joining us by video conference; and Chandra B. Singh, Senior Research Chair, Agricultural Engineering and Technology, Lethbridge College, who is also joining us by video conference. Thank you, and welcome.
We will begin with opening remarks from Professor Lubitz followed by Professor Singh. You will each have five minutes for your opening remarks. At one minute, I will raise my hand and that gives you an idea that you have a minute left; if you see two hands, it’s time to wrap it up.
William David Lubitz, Associate Professor, School of Engineering, University of Guelph, as an individual: Thank you, and good morning everyone. I appreciate the opportunity to speak to you today. As mentioned, I am William David Lubitz, Associate Professor, School of Engineering, University of Guelph, and I have served there for the past 16 years. My research areas focus on renewable energy and energy efficiency. I do a variety of research in those fields, including in hydropower technology. We also have several projects in greenhouse energy efficiency under way, and we have also done some work in grain drying, some of it going back a number of years, looking to improve the efficiency of grain dryers. I will speak to you today as an individual researcher, not on behalf of the entire institution of the University of Guelph.
Our history with the grain drying research in particular goes back at least eight years. We started a partnership with a farmer and engineer, Greg Dineen of Kenilworth, Ontario, looking to develop possible alternative ways to provide energy to grain dryers. The alternative we were looking at specifically was using air source heat pumps, which are electrically powered, to provide the conditioned air needed for a grain dryer to operate. We have done a series of full-scale experiments over the years at his farm doing different grain drying, and in the last few years, we have entered into a project funded by the Grain Farmers of Ontario that involves building a prototype grain dryer specifically designed to utilize this heat pump approach to maximize the efficiency and potential commercialization opportunities of this new technology.
We have also done some related research funded by the Ontario Ministry of Agriculture, Food and Rural Affairs on the noise emissions from grain dryers — the environmental noise. The reason this is relevant to this committee is that the first part of that research involved a survey of grain dryer operators, both farmers and elevator owners, in Ontario. This survey was done in the summer of 2021 and we did have some limitations due to COVID restrictions at that time, so it was primarily telephone and internet-based surveying. Admittedly, our sample sizes were relatively small, but we believe we did get a good overview of the grain drying situation in Ontario. Most of what I know about grain drying and my experience with grain dryer owners and operators is based in Ontario, particularly in southern Ontario, the region in which I am.
The survey we did was particularly enlightening. We found a number of interesting things. We confirmed that all the respondents we spoke to used either natural gas or propane to dry their grain, we confirmed that propane was more expensive than natural gas for those operators and we confirmed as well that their most significant concerns were about energy, about the cost of it and also about the security of it.
Historically, there have been some interruptions in energy supply, particularly a rail strike several years back that caused propane shortages in parts of southern Ontario that directly impacted farmers. We learned a number of interesting things there.
To come back to our research on the energy efficiency of grain dryers, we are particularly interested in the non-fossil fuel alternatives not only for carbon reduction but also for energy security and the reliability of financial projections — if you are farming — of the cost of this energy. Fossil fuels are variable in price, and if you are a farmer elevator operator you have to take that price.
We only identified two possible alternatives for energy supplies that were not fossil fuels, and that was biomass — or biofuels — or electricity, which is what we worked on with the heat pumps. I’ll note that both of those have infrastructure limitations on farms. You need to ensure supply or you need enough electrical infrastructure to supply the electricity to run it.
We also noted that development will take time. We have been working on this for a number of years. We believe that this technology has a lot of potential and we will be able to commercialize it, but we have multiple years to go before we reach a scale where farmers would be able to buy this in quantity or in large numbers. Thank you.
The Chair: Thank you very much.
Mr. Singh, I know it’s an early morning for you. Thank you for joining us today. The floor is yours.
Chandra B. Singh, Senior Research Chair, Agricultural Engineering and Technology, Lethbridge College, as an individual:
Good morning. I thank the honourable chair and the committee for inviting me.
My research focuses on post-harvest storage and handling of grains including in-bin drying, high-temperature drying, aeration, mathematical modelling, sensing and automation. My passion for grain storage research is based on the fact that, at this very moment, we have over 710 million people worldwide without sufficient food while we still waste up to 30% of the food produced globally, which could feed an additional 1.3 billion people.
Canada is among the top grain-producing countries in the world and plays a leading role in providing global food security. However, agriculture production is one of the riskiest businesses in the world, which I witnessed growing up on a less-than-10‑acre farm in Northern India, and our producers here are not immune from those risks. Canadian farmers are not only affected by the adverse climatic conditions during the short production season, but they also face market volatility and trade barriers in the form of export bans and increased tariffs due to the changing geopolitical environment. Recent bans on canola exports and high tariffs on pulse crops are the two big examples.
In the Prairies, the 2019 crop year was termed as the “harvest from hell.” Team Alberta estimated that unharvested crop losses due to poor harvest conditions were at $778 million. Cold and wet conditions are always a challenge for harvesting the grain in a narrow time window. Any tough grain left undried during winter months leads to the development of hot spots, mould growth and carcinogenic mycotoxins resulting in grain spoilage and significant economic losses. Therefore, grain must be dried to eliminate the spoilage risk and ensure food security through long-term, safe storage.
Drying allows farmers to harvest crops early, which mitigates the weather-related risks to a certain extent. There are relatively large energy use and greenhouse gas emissions from crop production, which include farm equipment operations, fertilizers, herbicides, fungicides and transportation. Therefore, grain spoilage has a large carbon footprint and an enormous economic impact.
Grain drying in Western Canada is always a race against time, before the winter. Cold air has poor drying potential due to its low water-holding capacity hence it must be heated both for low‑temperature, in-bin drying and high-temperature drying. Propane and natural gas are the only two practical fuel sources for grain drying in Western Canada. Federal carbon pricing, with its proposed annual increase to $170 per tonne by 2030, will impact the farmers and, ultimately, the consumers who are already struggling with high food prices.
I strongly support Bill C-234 to amend the Greenhouse Gas Pollution Pricing Act. Here in Western Canada, we are involved in a province-wide grain-drying study which focuses on energy efficiency and bin quality. I am happy to answer your questions and provide more specific information.
Thank you, Mr. Chair.
The Chair: Thank you to our witnesses today for your opening remarks.
We begin our questions starting with our deputy chair. I encourage everyone not to lean into the microphone to avoid sound feedback that could negatively impact those around the room.
As per our previous practice, we will have five minutes for questions and answers. We will go into rounds 2, 3 and 4 if necessary.
Senator Simons: Mr. Singh, thank you for reminding me of the terrible summer of 2019, which as I referred to in Edmonton as “the year without summer.” It just never warmed up at all and rained the whole time.
I’m curious to know from each of you gentlemen what alternate technologies you think are the closest to being viable and practical. I met with somebody last night from the propane industry at a hydrogen reception who said that technology exists right now to create propane made from hydrogen, which would have a very low carbon footprint. That was the first time I’d heard of that technology. What technology is closest to being viable? Could it be viable within the period of the eight-year sunset clause? Do you think things are more or less likely to come to market with a higher price on carbon? Would that be more of an incentive to get technologies available to people in a practical way?
Mr. Lubitz: Thank you. It’s interesting. For the technologies that are under development, it’s difficult to say.
We mentioned the heat pump technology; we are looking at that. Others are working on biomass and other things as well. One could argue some of these are close to being ready for small-scale, prototype, experimental use, but I think the big question is when will they be ready for large-scale deployment? I believe some of these will be ready within the eight-year window, but not in the next year or two. Our project will not reach that in the next year or two, but it has potential in the next six or eight years. Similarly, I’m not aware of other technologies that are ready for that large-scale deployment in the next year or two. It takes a long time to go through those steps to roll out and scale up. This is large infrastructure that takes a long time to build, test and build again.
Senator Simons: Mr. Singh, over to you. What technologies are closest to being ready? Can they be ready within eight years? Do you think they might move faster if prices went up?
Mr. Singh: To be honest with you, based on the data that I have — and I spent a lot of time on the grain-drying projects, writing book chapters and papers and looking at not only Western Canada but also at Australia, where I was associate professor before joining the college, and at the U.S., where I spent some time — it doesn’t look like there’s anything that will be ready in the coming years given the volume we are talking about here. Each grain bin holds 40,000 or 50,000 thousand bushels of grain. The farms are getting bigger and bigger.
As Mr. Lubitz mentioned, the others can work. Heat pumps and biomass are being used in many Asian countries, but the farm sizes are very small, relatively, so they can use it there. The big challenge for us is that the farm sizes are not very small. As we also mentioned, it’s the time. We are in harvest season now. Sometimes, we are getting early snow, sometimes rain or it’s too cold. We don’t have any other solution to take care of the grain that we have.
Senator Burey: Thank you for being with us. I really appreciate having engineers on so we can drill down on some of the questions. The central issue is the premise of the bill, which is that there are no scalable and viable alternatives, and that’s what we’re trying to sort out.
The other part of that issue is, where there are clean technologies, how can farmers access these technologies? In September, I asked Agriculture and Agri-Food Canada this question. What percentage of farms can access clean technologies?
Interestingly, but not surprisingly, they reported to me that only 22% of farms received any funding for clean technologies. However, there was oversubscription of this program, obviously. From your knowledge, how could this process be accelerated? Maybe through research and development or more programs? Obviously, there is a behavioural change of farmers wanting to update to clean technologies. Could both witnesses comment from their vast knowledge of this area?
Mr. Lubitz: Thank you for that question. Access is difficult. Part of the challenge is that this is very long-lived infrastructure, and it’s very expensive and time consuming to install. So if in addition you have capital challenges or you have recently invested in a dryer or other equipment, it is very difficult to upgrade it again.
Generally, farmers want to improve. They want to reduce energy use. With or without a carbon incentive, energy is expensive. So, potentially, if there are ways to provide additional capital or other supports, that might be a way to allow the farmers and elevator operators to accelerate their adoption of and transition to new technologies or upgrades.
Senator Burey: I would like a comment on the research and development question — in terms of funding for more research and development.
Mr. Singh: Thank you. There are some programs. One example is that the farmers can automate their in-bin grain drying system. They can buy sensing cables and automated controls. The program covers 50% of costs, which is up to $100,000. Any new drying system will cost way more than that. The incentives that are in place are not sufficient or not good enough motivation for them to switch and have the extra capital investment.
The other thing is communication. I talked to some farmers, and they were not aware that there is a program where they can access extra money.
So there are two things: more campaigning from the government, the grower associations, the grower commissions and provincial governments as well as more support. These are the two things.
Research and development takes time, as Professor Lubitz mentioned, so there is a requirement for more funding and more focus on energy efficiency. It is now in focus, but I feel that it has not been so much in discussion, except in 2019 when we had the problem and everyone was struggling at that time. These are my views.
Senator Oh: Thank you, witnesses, for your presentation.
My question is for Professor Lubitz. I understand that part of your research with the Dineen Farms involved prototype dryers that use heat collected with an air source heat pump. However, you found the drying rate was slow and the design could not be scaled up to keep up with the modern combine. Can you elaborate on these issues?
Mr. Lubitz: Yes. The heat pump-based drying that we looked at has several advantages. Heat pumps give you much more heat per unit of electricity than other ways of using electricity. However, they are most efficient when you are only increasing temperatures by small amounts, so the type of drying we are doing is low-temperature drying. Most commercial drying is high-temperature drying. High temperatures allow faster throughput. We know this as part of the design, and we’re designing the prototype to work best within this limitation. However, it will have some limitations on capacity compared to the capacity of the existing large-scale dryers now. There are some other advantages, but that is a limitation. In order to do high temperatures, you need to go to combustion, which brings us back to propane and natural gas. This is one of the reasons those are the fuels of choice on farms.
Senator Oh: Over 20 years ago, I tried a heat pump in my house, and I experienced that the heat pump only works when it is hovering just under zero degrees. Has the technology been improved today? I live in Toronto, and, of course, in the countryside, the temperatures are much lower. Can you explain?
Mr. Lubitz: Yes, heat pump technology in general has improved over the past 20 years. They have become more efficient and also more reliable, including operating at lower temperatures.
When we are drying grain, we’re not normally at those extreme cold temperatures of winter. We’re normally closer to around freezing, at least in Ontario in the fall when we are drying grain.
The other thing is that part of our research is that you can further optimize the design of the heat pump for the specific application. We’ll make adjustments to the details of the heat pump so it is optimized specifically for delivering air to a grain dryer, which is a little bit different than, say, conditioning a house.
In our initial tests, we’ve seen some promising results — probably more so than you might have experienced 20 years ago.
Senator Oh: Why are we not using more propane? Canada produces so much propane. What is the reason the government does not fully support the use of propane, which is the cleanest source for the environment — I believe — to burn?
Mr. Lubitz: That might be outside my expertise. I’m not sure I can provide a lot of information on that level of detail on fuels.
Senator Oh: Thank you.
Senator Woo: Thank you, Professor Lubitz and Professor Singh.
What we have been talking about so far is how to push out the technology frontier by the use of alternative technologies and whether farms can then reach that new technology frontier. But we already have a technology frontier now based on existing technologies. That technology frontier, insofar as energy efficiency and greenhouse gas emissions are concerned, is not just about natural gas and propane, right? It is also about efficiency, insulation, automation, GPS, better farming techniques and a whole suite of technologies and practices that can be applied.
We learned from a witness a few days ago, for example, that he had only just upgraded his 1970s-era dryer to a modern dryer, which I think he said improved efficiency by 30% or more.
My question to both of you is whether you can give us a sense of where most farmers are in terms of their distance to the technology frontier. I’m not talking about alternative fuels; I’m talking about the suite of efficiency and greenhouse gas-reducing measures that are available already. For example, are there many farms out there that use 1960s-, 1970s- or 1980s-era crop dryers still?
Mr. Singh: In our project across Alberta, it varies a lot according to where you are. For example, in Lethbridge where I am — my centre is here — it is pretty dry, so none of the farmers would have those modern drying systems at this point because most of the year — though sometimes they also face a problem — they are okay. They can dry the crop in the field or in the bin, and there is minimum risk. However, there are our partners, the farmers up in the North in the Peace Region. When I visited the first time, and we started the project, they were asked if they dried every grain. The response was that they dry every single kernel every year.
It depends because there is such a variation within the province. It also depends on the farms. Some farms have a very advanced system, but others have systems that are 20, 30 years old still in use. Efficiency-wise, in the study, we showed that, yes, if you automate the system you can save on average 30% because the conditions with the old systems and new systems, approaches to monitoring — we found there is a big difference in how they operate and in what conditions.
Yes, with automation and newer systems, there is a very good opportunity to save. We also support a combination approach where you don’t have to dry everything in a high-temperature dryer which burns a lot of fuel. You reduce the risk by drying it a bit, then move the grain to the bin and slowly take out the rest of the moisture. There are opportunities for the farmers to upgrade their system, to manage it in a different, non-traditional way, to remotely monitor the sensing technology and use automation. Everything is in there, but the focus is not yet there. There is opportunity for them to upgrade. There is an incentive for them. I totally agree on this, yes.
Mr. Lubitz: Thank you. I will just note in the surveying that we did in Ontario we did find a wide range of dryers as well. I think that’s because these are very long-lived pieces of equipment. They are long-term infrastructure, and it takes many years to pay them off. So when farmers have them, they continue to use them. Some farmers reported they would upgrade components in a dryer or add parts instead of completely replacing a dryer. The newer ones are more efficient.
The other thought is that some of the other methods mentioned by Mr. Singh like dry aeration or conditioning the grain in the bins, sometimes those also require an investment in additional infrastructure, maybe additional bins or grain handling and so forth.
Senator Dalphond: Welcome to our witnesses. You have shared very interesting and helpful comments.
To follow up on the line of the previous questions, I see companies advertising the new generation of dryers, like the NECO grain dryer, which saves between 20 and 30% in costs of energy because they are more efficient. I see a program from the Ontario Ministry of Agriculture that suggests modifying an existing dryer to add the recirculation of air, outside air and cold air — I’m not an engineer; you are — which also saves about 30% in the cost of energy, way more than the price on carbon.
Are you aware if there is a trend of farmers switching to that? I understand from your last comment, Professor Singh, that farmers are not aware of the existence of these things. Could your research indicate to us how many are converting and what is the potential for immediate conversion while we wait for new technologies?
Mr. Singh: Thank you. The number one thing for the farmers to adopt any technology is the cost. When we ask them why they don’t, sometimes we have to convince them that they are part of the project. They want to learn. They want to know what’s going on at their farm. But the farmers’ number one question is how much their cost will be. Anything that relates to upgrades, cost is a big barrier for them.
The other thing is they have something that works, and they think that’s fine. Sometimes they play with it, modify or upgrade it. Some farmers are aware of the technologies. What I said they were not aware of was any program or funding supports for them to upgrade the system.
The other thing you mentioned about the new dryers, yes, they are efficient and we have seen that on some farms. As part of our extension program, we are trying to reach out to the grower groups through their network and show them the features. We’re hoping that will change down the line and there will be more support from the government.
Senator Dalphond: You say that you are supportive of the bill, but by being supportive of the bill, aren’t we sending the message to those who look only at cost and have something that works that it’s fine as long as it continues to work and not to convert or to move to new technologies that are more efficient or add something to their existing drying systems to make them more efficient?
Mr. Singh: As a researcher, I always explore new ideas. I’m not against it indefinitely, but in the meantime, there have to be solutions. Grain has a very limited shelf life. It’s cumulative. If the grain has a life of 100 days and you waste 50 days without taking care of it or slow drying or something, then even if you dried it, you invest in the fuel and everything, you are left with 50 days. That’s my example.
Senator Dalphond: My question is not that. You are left with 50 days, but if you have a dryer which is more efficient because you just add something to the existing dryer and you save 30% of your cost, how should we make sure that farmers will buy into that and add this feature to their dryer?
Mr. Singh: Yes, on our part, that’s what we are trying to do, reaching out to tell them that there is a new system. You mentioned one dryer company. We are not telling them about a specific company or particular product, but we are telling them that if they automate the system and use a sensing technology so they can monitor the actual moisture in the grain, how much drying is needed, what are the different options, whether you need a high-temperature dryer, what are your fuel sources and what are the costs, that is the approach we are trying to develop. Hopefully it will help the growers and we will be able to convince them they need to automate.
Senator Dalphond: On the same issue, Professor Lubitz, in Ontario, for example, have you seen movement in converting existing dryers or moving to new dryers based on your surveys?
Mr. Lubitz: I would say farmers are doing that when they can, so we do see that happening. Again, it can be difficult for them to make that decision to do it just because of the costs and the amount of work involved.
Some of the efficiency improvements, like heat recovery through air recirculation, sometimes improve efficiency, but sometimes in practice it was found at a cost of additional labour. You might have to clean the dryer and the heat exchangers regularly whereas before they did not. So you might save on energy, but you might add costs on labour, for example. It’s not necessarily universal, but is something to watch for with any new technology. You might save on the energy, but there may be other costs or disadvantages.
Senator Dalphond: Thank you.
Senator Simons: I want to pick up on this theme. Last night, I had the chance to be at a hydrogen fuel reception, so people at the hydrogen fuel reception are promoting hydrogen fuel, of course. That is the purpose of the exercise. However, they were making a case to me that you could make propane out of hydrogen, which would then have a much lower greenhouse gas consequence, and I was quite excited by that prospect. They explained to me that if you convert it to propane then you can transport it much more easily than you can transport hydrogen.
But in order for companies to develop products like that and bring them to market, there has to be an economic incentive that farmers will say, “Okay, well, I’m going to do that. I won’t just get regular propane. I’ll get this special greener propane.” I realize that you are engineers and not economists, but you think about systems and how they work together.
My concern is if we are to remove the carbon levy from these products, will it slow down the adoption and the development of new and alternative technologies? Or does the price signal actually incentivize more research, more funding for your universities and more companies to do the R&D?
Mr. Lubitz: It’s a good question. I’m also, as you noted, not an economist, but historically, there has always been a price signal for farmers just in terms of the cost of fuel. It’s the largest cost of their operation. In some years in Ontario, the energy used to dry corn, for example, can be more than the energy used in all the field operations, the tractors and so forth. On the accounting, the farmers see that already, and they work to reduce it.
What I wonder is, is there already a price signal, and at what point can you have an excess price signal, maybe an unnecessary price signal? I’m phrasing that as a question because I don’t know the answer, but I have wondered about that.
Senator Simons: Mr. Singh, I want to put the same questions to you.
Mr. Singh: Thank you. I have not looked at this alternative from the cost point of view. There are two things. One is the direct need of something. The other thing is on the R&D side. Academic institutions — universities, researchers, companies — they always try to be ahead of what is in the market.
Both things can be turned before we get something which is realistically applied, but costs will be a factor. If any incentive is given for the new alternative for propane from hydrogen, I think industry will adopt it, or if there is enough of a timeline given so that there is a smooth transition without any disruption to the current methods of drying.
Senator Simons: Your sunset clause provides sufficient incentive for people to give themselves an eight-year deadline to get this stuff to market.
The Chair: Was that a question?
Senator Simons: Yes. That was the question to Mr. Singh.
Do you think an eight-year sunset clause is an effective tool? Should it be a five-year sunset clause? Should there be no sunset clause? What do you think?
Mr. Singh: I am not sure because I don’t know what the development of propane from hydrogen is in R&D. I don’t know if it takes three years or five years and if it’s available in a way that farmers can use. Maybe or maybe not. I’m sorry, I don’t have a clear answer for that.
Senator Simons: Thanks very much.
Senator Woo: Witnesses, I want to go back to the question of the technology frontier. Ideally, I will get you to tell me where farms, in aggregate, are with respect to the frontier. Are they at 60% of the frontier or 80%? You probably can’t give me that figure.
I’m going to frame the question differently. If I were to say to you that you decided to spend all your time in the next few years helping farmers with grain dyers and with barns that require heating — the farms covered under this bill — if you were to spend all of your time helping them improve efficiency of energy use and reduction of greenhouse gas emissions through a suite of existing technologies, how busy would you be if that were your only job?
Mr. Lubitz: It’s a very good question. I’m not sure I can give the best answer. I think I would be very busy and for varying reasons: the communication, the range of possibilities and then the amount of work to be done on these different things.
Senator Woo: There’s lots of doing, essentially, even with the current technology frontier?
Mr. Lubitz: Agreed.
Senator Woo: Thank you. Mr. Singh?
Mr. Singh: Thank you. In fact, I’m very busy. This is what my current work is. We are visiting the farmers. We cover almost 1,400 kilometres in one go to different farms, different systems.
I would say some farmers are very up to date, very advanced, very innovative and they have modified by themselves, but there are people who are doing it the same way that they have been doing it in the past.
That’s my work, collecting the data and also creating a benchmark. We can talk about there being 30% energy efficiency. How are you comparing where that 30% is coming from? That’s what we are trying to do. We are comparing at the same farm, side by side, bin by bin, dryer by dryer, same bin type, same dry time, but then we are comparing different farms, different locations. There are so many variables and so many things.
That’s what my focus is. It’s not just the drying. We are looking at the quality and what kind of grain we’re getting and what moisture. So many variables are in there. That’s what I do, and that’s what my work is.
But, yes, a bit in terms of the storage, monitoring, automation, energy efficiency and mathematical models. If you combine that all as a management tool, there is a very good opportunity that we can maintain the quality, maintain the profitability and market completion for the farmers. We can safely store the grain. I’m always concerned about spoilage because that’s where we lose most of it.
Senator Woo: Thank you, Mr. Singh. There is a lot of work to be done.
I don’t know if you are aware, Mr. Singh, that the current situation, in the absence of this bill, already provides for a rebate for the costs of the use of natural gas and propane to farms in aggregate such that there is no net payment to the treasury for pollution pricing paid on propane and natural gas. In other words, farmers, in aggregate, get all the money back that’s paid by them for the price that is imposed on natural gas and propane.
I don’t know if you are aware of this, if this comes up in your discussions with farmers and how it might affect your thinking around this bill.
Mr. Singh: No, I’m not aware. My feeling is that the incentive is maybe there is a carbon rebate for other things, how they manage the farm or they get incentives, but I’m not aware of anything that they directly get that is subsidized or a refund on this carbon tax.
Senator Woo: Thank you very much.
Senator Dalphond: Adding to the last question of Senator Woo, Professor Singh, those who use more efficient dryers will pay less in costs, but they will receive the same rebate because it’s based on the overall costs of the farm operation. You still get a percentage of fuel. It’s based on the overall cost of the operation.
My question is for Professor Lubitz. You did many studies, and I guess you must have realized, as I did when I listened to witnesses, that over 60% of the grains that are dried in Ontario are done by commercial operators and not by farmers. We also heard that these commercial operators are more efficient in drying grains because they have larger equipment, larger installations. Are you aware of that?
Mr. Lubitz: The 60% number that you cited, I would agree that is roughly in line with what we would have found as well in our survey. I think that is the case, that level of drying by the commercial operators.
We did not specifically ask in our surveying if an operator was commercial or a farm. We asked them more if they were described as an elevator or a farm, so I can’t say anything too precisely on that.
In terms of efficiency, one thing that was interesting was we found the costs for fuel between farms and elevators were actually very similar, which surprised us a little bit. We were expecting the elevators to have some sort of leg up on lower fuel costs and so forth.
There is wider efficiency variation among the elevators and farms than there is between them. Some farms can be very efficient; it depends more on the specific dryer and the specific approaches they use to drying. There can be very efficient, smaller scale dryers.
It’s interesting to note in farming, though, a small-scale dryer is still one you supply with semi-truck-sized loads of grain. The absolute scale of grain farming, including the drying, is one thing that made quite an impression on me when we got into this field.
Senator Dalphond: In your surveys, did you find out what the energy for drying was, what the costs were representative or compared to the overall cost? We heard witnesses who referred to less than 1%.
Mr. Lubitz: Less than 1% for drying sounds too low.
In terms of total farm operations, we didn’t ask about total farm operations. We only asked about energy costs for the drying. I don’t know that I can extrapolate out to full farm scale. I know on the line items on farms that have to do drying in Ontario, it’s probably more than 1%.
If you think of Ontario, all of the corn that’s harvested in Ontario, virtually all of it must be dried, for example, and large parts of the other crops as well, even in a normal year.
Senator Dalphond: If we were to exclude the carbon levy from the price of energy, it would be less than 1%?
Mr. Lubitz: I don’t think that would be the case either. I think it’s still more than that. However, I must admit I’m conjecturing at this point. I don’t have the numbers in that granularity, especially related to the carbon levy.
Senator Dalphond: In your survey, did people see that there would be an imbalance with Bill C-234 between those who use commercial operators to dry their grain versus those that will do it on their own farms?
Mr. Lubitz: I think you are referring to Bill C-234; it does not exempt classes of larger commercial operators. I would expect that would increase the costs of the larger commercial operators. Again, we didn’t ask questions specifically aimed at that.
Senator Dalphond: You haven’t done any research on that aspect?
Mr. Lubitz: No. We mainly focused on engineering and energy questions as opposed to costs and policy.
Senator Dalphond: I see. Thank you.
Senator Woo: Can you, Mr. Lubitz, say more about the variation in efficiency of grain drying between the commercial dryers and the on-farm dryers within the commercial dryer community and within the on-farm drying community? I’m trying to get a sense of how much variation there is and what might account for this variation.
Can we start with commercial versus non-commercial?
Mr. Lubitz: Yes. This is actually a difficult question to answer.
We noted there were differences in amounts of energy used and grain dried. Unfortunately, I don’t have the numbers broken down that way with me. We mainly looked at means. It’s back in the raw data. I didn’t separate it out that way. I don’t have it right now.
Senator Woo: Let me ask you from an engineering perspective, because that’s your background, is there a reason to expect that the commercial grain dyers — higher throughput, economies of scale, better insulation, I don’t know — should you expect that they have a higher efficiency and less output of greenhouse gas emissions than on-farm operations?
Mr. Lubitz: I’m not sure that I would expect a large difference in efficiency overall. Part of the challenge — and one thing we noted, again, as a newcomer into this field when we started — we can optimize for efficiency as much as we want. But in practice, at least here in Ontario, there are windows of weather for harvests. Winter is coming soon. There are large amounts of grain that needs drying. Often the dryers must operate in a way that maximizes capacity as opposed to maximizing efficiency. That includes the commercial dryers. There might be differences there too.
Part of that is both on the farms and at the elevators, at those peak harvest times, there is always a capacity limit in the overall drying available. It’s hard to be maximally efficient if you have trucks backed up and grain that must be dried down so it can be stored.
Senator Woo: Thank you.
Senator Dalphond: Surveys are surveys. But your field of expertise is the new technologies. Would you say that we should distinguish between drying operations versus heating barns and buildings in terms of improvement to technology? Can we say that we are in a world where there is no available alternative to heat farms, barns and farm buildings?
Mr. Lubitz: Thank you. To some degree, they are similar. They both require large amounts of fuel to provide heat. In some ways, they are different.
It was mentioned earlier that you can insulate a barn. You can potentially do some things with heat exchangers. That’s not an avenue in a grain dryer. In both cases, you do need to supply a certain amount of heat, from whatever source it came from, in order to ensure that the system is working. In practice, it takes a certain amount of energy to dry grain, to get that moisture to come out of those kernels and take it away. Similarly, in a cold climate like Canada, you will also need to heat the barns.
In the work we have done on greenhouses — on a large scale, this translates to barns as well — whether you have plants or livestock, you also have to do things like remove moisture. It’s not just about heating and ventilating. In order to remove moisture, you have to take that air out and replace it with outside air. You end up with minimum energy requirements.
Senator Dalphond: It’s easier to use a heat pump on the farm, on the building, than for the dryers?
Mr. Lubitz: In some regards, yes. I would actually say it’s a challenge at both. Commercially, for the buildings, I’m not sure that heat pumps optimized for barns are available widely in the market yet either; it is another technology that’s evolving. Again, I’m less aware of that field.
Senator Dalphond: Thank you.
Senator Oh: My question is for Mr. Lubitz.
I was in southwestern Ontario at the end of August for the Bean Festival where I met many farmers. During my three-day tour, I went to many farms and grain elevators. The farmers’ feedback to me was they wanted Bill C-234 to pass as soon as possible because this is a very important bill to them and they need to get this going for energy costs. Have you spoken to any of the farmers there or have they approached you?
Mr. Lubitz: At times, in the course of our work, we have spoken with different farmers, both grain farmers and some other fields like greenhouse operations. The support of this bill was universal among everyone who was in farming and used fuel.
Senator Oh: Okay, thank you.
The Chair: There seems to be no other question so, my first and last question for our two witnesses is: Given that you have both worked with builders and providers of grain dryers and we have heard about the technology frontier, would we hear anything different than we did today about that technology frontier and where we are at if we heard from other witnesses in the days and weeks to come?
Mr. Singh: Thank you. To my knowledge, and we reviewed most of the drying systems at least in North America or Europe, I don’t think we are going to see anything new, disruptive or totally different that offers some magic numbers in terms of energy efficiency of the drying or the costs, no. These are the NECO dryers, they are mixed flow grain dryers, they are much more energy efficient right now. This is the state. I don’t expect that there will be something new in the short term.
The Chair: Thank you.
Mr. Lubitz: I never like to say never. If you talk to additional people you always learn something, but I wouldn’t expect to get a large amount of new information or new things going on.
Our observation was that if you want to transition grain drying to a non-fossil fuel, it’s going to be electricity or some form of biomass or biofuels. Even using those, you will still need to supply a significant amount of energy to do this process. There are a lot of interesting things going on and being developed, but I don’t think there is technology in those areas quite yet that’s widely available for farmers to start adopting right now. It will take some time for them to adopt increased efficiency and to adopt these technologies as they develop in the coming years.
The Chair: Thank you very much. That’s my question.
With that, I would like to thank our witnesses today for your participation in the meeting, your assistance in the committee’s examination of this bill is very much appreciated. Thank you for joining us at a very last-minute time. We appreciate it.
Thanks to committee members for your active participation and thoughtful questions. I would also like to thank, as I often do, the folks who are behind the scenes: interpreters, debates staff, committee room attendants, multimedia service technicians, the broadcasting team, the recording centre, the Information Services Directorate and our page in the room today. Thank you very much for your help.
Colleagues, our next meeting is Tuesday, October 17, at 6:30 p.m., where we will proceed to clause-by-clause consideration of this bill. Committee members who intend to propose amendments are encouraged to consult the office of the Senate Law Clerk to ensure any amendments are drafted in the proper format in both official languages. It is also helpful to send your amendments in advance to the clerk of the committee, which will allow the clerk to organize and distribute copies at the appropriate time in the meeting. Please note that your amendment will be treated in a confidential manner and will not be distributed prior to the meeting unless you wish it so.
After clause-by-clause consideration, the committee may wish to append observations to the report. It is recommended that members provide prepared text of any draft observations and that the text should be short and must be in both official languages. The clerk can assist you in translation if necessary.
With that, thank you again to everyone for being here.
(The committee adjourned.)