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Proceedings of the Standing Senate Committee on
Agriculture and Forestry

Issue 24 - Evidence - Meeting of October 23, 2012


OTTAWA, Tuesday, October 23, 2012

The Standing Senate Committee on Agriculture and Forestry met this day at 5:05 p.m. to examine and report on research and innovation efforts in the agricultural sector (topics: innovation in the agriculture and agri-food sector from the producers' perspective; and coordination between federal, provincial governments and the private sector to fund research and innovation in the agriculture and agri-food sector.)

Senator Percy Mockler (Chair) in the chair.

[English]

The Chair: Honourable senators, I want to take this opportunity to welcome you to this meeting of the Standing Senate Committee on Agriculture and Forestry.

My name is Percy Mockler. I am a senator from New Brunswick and chair of the committee. At this time, I would like to ask all senators to introduce themselves before we proceed with the witnesses.

[Translation]

Senator Robichaud: Good afternoon, I am Senator Fernand Robichaud, from Saint-Louis-de-Kent, New- Brunswick.

Senator Chaput: Good afternoon, I am Senator Maria Chaput from Manitoba.

[English]

Senator Callbeck: Catherine Callbeck, Prince Edward Island.

Senator Plett: Don Plett. I am from Manitoba.

[Translation]

Senator Demers: Good afternoon, I am Senator Jacques Demers from Quebec.

Senator Verner: Good afternoon, I am Senator Josée Verner, from Quebec.

[English]

Senator Wallace: John Wallace, New Brunswick.

The Chair: Thank you very much, honourable senators.

On behalf of the committee, I would like to take this opportunity to thank the witnesses for accepting our invitation to share with the committee your opinions, comments and vision on going forward in agriculture.

The order of reference given to us by the Senate of Canada is that the Standing Senate Committee on Agriculture and Forestry be authorized to examine and report on research and innovation efforts in the agricultural sector. In particular, the committee shall be authorized to examine research and development efforts in the context of —

[Translation]

First, developing new markets domestically and internationally, and second, enhancing agricultural sustainability.

[English]

Finally, the improvement of food diversity and security.

On this, honourable senators, the committee has the privilege to have two witnesses.

[Translation]

We welcome Mr. Victor Santacruz, Executive Director of the Canadian Nursery and Landscape Association.

[English]

Also, Mr. Kevin Schooley, Executive Director of the Ontario Berry Growers Association.

Again, we are honoured that you are with us today to share your opinions. I would now invite Mr. Schooley to make his presentation, to be followed by Mr. Santacruz. After your presentations are completed, the senators will ask you questions and you can share your opinions, over and above the presentation you have made to the committee.

Kevin Schooley, Executive Director, Ontario Berry Growers Association: I am representing the Ontario Berry Growers Association. We have a voluntary membership of growers. The focus of our association is primarily on education, research and promotion. We also have a clean plant program that provides a disease-free planting stock to Canadian nurseries, as well as several nurseries in the U.S.

The primary innovation that I want to speak about today is season extension. Historically, strawberries have been a traditional summer crop that lasts approximately three to five weeks. Growers have utilized research and some innovative techniques, including row covers, high tunnels and I guess the most important one of all in strawberries is day-neutral production or, as we like to refer to it, ever-bearing strawberry production.

From a three- to five-week season, we now have many growers who are working towards a five-month crop, starting near the end of May and usually going well into October if weather permits. We have two planting times in the summer to ensure a continuity of supply throughout the summer months. That has been a big innovation. This is still new to many of our growers who are experimenting with it, but we are able to provide a more continuous supply of strawberries.

With raspberries, we have a similar season extension. Again, we have a summer crop traditionally in July that lasts four or five weeks. Fall-bearing raspberries have been introduced over the last few years, as well as the use of high tunnels, and this again has lengthened our season well into October for these fall-bearing raspberries that start in middle or late August.

Blueberries, the other major berry crop, had a recent introduction of some new and improved later cultivars to extend the season.

That is the theme for season extension. The berry industry, in general, has seen increased competition from imports. Strawberry and raspberry imports are very common. With strawberries, for example, more than 84 per cent of sales in Canada throughout the year come from imported berries.

Senator Robichaud: Eighty-four per cent?

Mr. Schooley: Eighty-four per cent, yes. This is part of the reason for some of these innovations, to try to compete with the imported products.

The blueberry industry in Ontario is rather small. Other jurisdictions, such as B.C., have expanded their production and are doing a lot of exporting outside of the province, within Canada and within the U.S. as well. That has not been the same in Ontario, as we do not have as ideal a climate for those.

We do have some concerns as an industry. We have seen an erosion of research in Canada in general. Our biggest example is that we had this year, going into 2012, four public breeders across Canada, and starting in January 2013 we will be down to one. Two of these were with AAFC and have lost their positions, and one is retiring from the University of Guelph and we believe he will not be replaced. That is one of our concerns.

Funding for promotion and research, especially promotion activities, has dwindled as well. Our commodity groups in Canada are looking at forming national research and promotion councils, one for raspberry, one for blueberry and one for strawberry. The raspberry one has actually been submitted for review, and the strawberry one we hope to have submitted in April; that is our goal.

These councils give us the opportunity to impose levies on domestically produced fruit from our own growers, and that gives us the opportunity to collect levies on imported fruit. Through these imports we would be able to increase research funds, and also we would be able to have a lot of dollars available for promotion. We are looking forward to that.

We have been fortunate that Agriculture and Agri-Food Canada has provided funding for innovation products through several programs over the years. The most recent one we are active in is the Canadian Agricultural Adaptation Program. The Ontario Berry Growers Association has utilized these programs in the past, but our biggest challenge for our organization is finding matching dollars to qualify or to have funding for these programs. As I said, our membership is a voluntary membership, and so we do not have all the growers in Ontario as members of our association.

There are some other programs, the cluster projects that were part of the Growing Forward program, that have been administered through the Canadian Horticultural Council. We were very fortunate to receive a project for all three of our commodities: raspberries, strawberries and blueberries.

The Farm Innovation Program has just ended. We have really enjoyed this project, as well as its predecessor, and this provided industry with dollars that we could direct, as our board saw fit, to address some of our immediate needs. It was not large dollars, but it was good for short-term projects. We are hoping that the next Growing Forward program will have something similar to this Farm Innovation Program.

Another concern amongst our commodity groups and our association, but also amongst others in Ontario and other parts of Canada, is that historically most of the funding was managed by regional adaptation councils, and the projects were reviewed and approved by farmers in that region who sat on those council boards. Earlier this year it was announced that this responsibility would be centralized to one location in the country. We believe that will be Ottawa, and this has been a very unpopular decision amongst many Ontario organizations, as we will not have the same input as we had in the past.

Overall, we believe the future for berry growers is bright. We have the recent trend of increased interest in buying local, which has been very helpful to our growers. We do have a few challenges to face, but we are optimistic that we can meet those challenges.

The Chair: Thank you very much, Mr. Schooley.

Now I would like to ask Mr. Santacruz to make his presentation, please.

Victor Santacruz, Executive Director, Canadian Nursery and Landscape Association: Good afternoon. We appreciate having the opportunity, as the nursery landscape industry, to come and present before your committee today.

The Canadian Nursery and Landscape Association is a national association of nine provincial associations representing Canada's ten provinces. We represent 3,800 members. It is a voluntary organization in the nursery, landscape, retail garden centre, greenhouse and other parts of ornamental horticulture relating to nursery and landscape.

We are an older organization, dating back to 1922. In 1998 we changed our name to better reflect our stakeholders: the nursery and landscape industry.

As I go forward, and in the submission that we handed in, we often have the term ``landscape horticulture.'' Just to advise you, that is synonymous with nursery horticulture or ornamental horticulture, just to understand the terminology. We often use ``landscape horticulture'' because it is easier for the public to understand what it refers to, which is trees, flowers and shrubs that are in the environment.

The Canadian ornamental horticulture industry is a green industry, and we have strong economic, environmental and lifestyle-enhancing benefits that cultivate healthy communities. The creation of green spaces is not only aesthetically pleasing but practically pleasing as well. Properly placed plants provide security, reduce energy costs and add to the quality of life, while professional landscaping improves property values and curb appeal.

We often say that our sector is environmental horticulture as well. Many of our products and services are quite often used for reducing infrastructure costs, such as storm management systems and what we would call green infrastructure.

I have some quick facts about our sector. We employ over 200,000 individuals with over 135,000 full-time jobs who earned a collective salary of $3.8 billion in 2010. We are the second-largest employer in primary production, second only to cattle farming.

The Government of Canada predicts that in the current decade opportunities in our industry will increase so much that there will be more jobs than qualified job seekers, and in fact we are there already.

Ornamental horticulture services, or landscape services, are the fastest growing segment in our total horticulture industry, with an 11.8 compound annual growth rate in the last decade.

Consumers spent nearly $6.3 billion at the retail level on our products and services, and another $1.8 billion specifically on landscape services in 2007, with Canadian average household spending at $650 which was expected, and we estimate has increased already.

In relation to the direct economic impact, our landscape nursery production contributes to the gross domestic product of every single province. We do have primary producers in every province in the country. While nearly 90 per cent of the sales are distributed amongst Ontario, B.C. and Quebec, we find the greatest opportunity continues to be in the Atlantic provinces for our industry, and the greatest growth in the last five years has taken place in the Prairie provinces.

Based on economic multipliers from Statistics Canada, our economic impact study indicates — as was verified by Deloitte & Touche in 2009 — that we represent $14.48 billion of Canada's economy, $6.98 billion in direct output from the industry and $7.5 billion in value-added impacts.

We generate $3.8 billion in employment income, as I mentioned before, and we produce another $820 million in taxes through GST and HST.

Our industry continues to grow, even though the economy has been quite tough the last couple of years. Our members have, overall, seen a slowdown, but we continue to grow at a 2.1 per cent rate, and that is adjusted to inflation.

With regard to research and innovation, research and innovation is fundamental to our sector and to our future. We are trying to access more resources for research in our industry because it has made an impact already. We have seen it first-hand. It is one of our top priorities, and the outcome is aimed at bringing the greatest impact to the sector, specifically in long-term sustainability, focusing on environmental standards, international relations, innovation and best management practices.

We have utilized strategic alliances and partners, such as Vineland Research and Innovation Centre. We are very thankful that they have been revitalized in the last few years by both the federal and provincial government in Ontario. They have been our key in conducting research in the landscape and nursery sector. We have invested, largely through the Canadian Ornamental Horticulture Alliance, into the Canadian Ornamental Horticulture Research and Innovation Cluster. We were the smallest out of, I believe, the 18 clusters at $1.8 million. We would appreciate more funding in the future, because we felt that industry was quite engaged, quite involved and were willing to invest.

Having said that, we are very thankful for what we have been doing so far with those funds, and the Canadian Ornamental Horticulture Alliance, which we are part of, is a strategic alliance between ourselves, Flowers Canada Growers, and the Fédération interdisciplinaire de l'horticulture ornementale du Québec.

Additionally, we are involved in hardy Canadian rose breeding, which I will speak about later, with the Vineland Research and Innovation Centre, and that is a spin-off from the old heritage Morden Research Station in Manitoba, and the Saint Jean station in Quebec.

I will outline some of the following projects that we are involved with in innovation, and we are categorizing into some of our main priorities. One is environmental standards. Most of the research projects being conducted through the Ornamental Horticulture Research and Innovation Cluster relate to improved environmental practices in our sector, and also various projects conducted under each research priority, which we will outline in a second.

For us, environmental issues have been very important because, as you are probably well aware, there has been a public movement across the country towards requirement of more environmentally sustaining practices, especially in regard to the ornamental industry where there have been many pesticide bans.

A lot of our future depends on being able to not only adapt but embrace these environmental practices, which our industry has been proud to espouse for many years.

One of the research projects that we have under the cluster is individual plant microclimate in the greenhouse, and we have been doing dynamic greenhouse climate control to conserve energy and improve crop quality, as well as winter greenhouse consumption reduction. That is a major movement for us to be more environmentally sustainable but also to enhance our competitiveness in the international market.

We have been doing work to enhance the diversity and efficacy of pest and weed control agents and to optimize management practices for biological controls of thrips and other important pests of the landscape, greenhouse and nursery crops. We have been doing biocontrol strategies for the control of aphids on greenhouse environments and landscapes, as well as biocontrol agents for turf pests, alternative weed control methods and bioherbicides in turf and nursery production. Again, this is an environmental response to the public outcry.

As a point of reference, the initial public pesticide ban began in Halifax and has been adopted, for the most part, in many jurisdictions in the country.

Our third project under environmental standards is investigation and application of water use reduction technologies, specifically in water treatment technologies, pathogen suppression in substrates, reducing water applications and expanding the adoption of precision plant-based irrigation technologies to reduce water use in both greenhouse and nursery products.

In the ornamental horticulture, we are the lowest users of water in agriculture, yet we feel it is a vital strategy to become even more efficient and more responsible in our water use for the public, again espousing the fact that we are an environmental industry. That water issue affects our competitiveness, environmental factors and best management practices.

We have also been working on analysis and reduction of nutrient runoff by evaluating turf fertilization runoff impact and mitigation techniques. These are very important, not only from a primary production standpoint, but also on the urban environment, when we talk about urban conservation.

With respect to international relations, as the national body representing the nursery landscape industry, it is important to maintain and improve international relations, especially in regard to exports. Ninety-eight per cent of our trade is currently with the United States of America, and as an industry, we feel that we have greater opportunity to expand our market, especially in Europe, Asia and the former Communist Bloc.

We are a large proponent of interaction on the international level, so we involve export and import of plant material as well so we can propagate it further in this country. Three research projects address the health care of plants in the shipping process with direct ties to our long-term international strategy, which we have developed with assistance from the AgriMarketing Program that ties into our innovation and research strategy as well.

One of the projects was product quality enhancement during shipping and point of sale, pre- and post-harvest treatments to maintain quality and control of diseases of greenhouse and nursery crop species, plant height control through nutrient management practices and evaluation of novel materials post-harvest storage of bare root nursery stock. That is very important because as we try to export products to other markets, many markets do not accept soil. As you know, plants grow in soil, which makes it very difficult for us to export and in having plants last a long shipping period. We are looking at research and innovations to help us not only enhance the distance we can ship products but also the quality and competitiveness of our materials.

As a side note, Niagara Falls, Ontario, has recently been selected and sanctioned to host Flora Niagara 2017. This will be the largest international event for horticulture celebration in Canada, and we have been sanctioned by the International Association of Horticultural Producers. We are very excited about this because not only will this generate $600 million plus to the region in tourism, but it would also help primary production and will be a showcase for our research innovation and for our industry. This will be 150 days of celebration, by the way.

It is something very similar to what took place recently and is taking place in the Netherlands with Floriade. Our industry recently went out there for the second time to get a better understanding; we were first there 10 years ago. We are very excited about this process.

The last time we held something similar here in Canada was Les Floralies Internationales de Montreal back in 1980. It was a very exciting event that attracted over 1.7 million visitors from 24 countries. We expect this event to be substantially greater. Europe has a long-standing tradition of holding these events, and now Asia, and we believe it is Canada's time to do so as well. Benefiting from the growing interest in our country and our place in ornamental horticulture, we have great news to report, that for the last two years a member company in our industry has been selected as International Grower of the Year.

As far as innovation goes, we have done a lot of work to adapt the former program for Morden Research Station. The Government of Canada allowed us to take on this program because, as you know, you are getting out of research in many institutions, in many locations, so we took on that program. With the government's assistance, we have further developed Canadian hardy roses. Again, in our work with agri-marketing, we found out that Canadian hardy roses are widely viewed and accepted as very hardy and part of most of Europe's breeding programs in regard to roses. Now that we are doing this innovation here and taking it a step further, we believe it will put us in a very great competitive spot for our sector internationally.

I have one last comment on innovation. We are supporters of the Scientific Research and Experimental Development credits, the SR&ED credits. We are happy that you have them. Our members are starting to use them, and we believe this will help innovation. Unfortunately, the SR&ED credits are not well designed for agriculture and primary producers — it is quite complex — and those that end up benefiting most from accessing this program are accountants.

Under best management practices, which is our last point — I am almost done; thank you for your patience — we worked with government to create the Canadian Nursery Certification Institute, which looks at best management practices and feeder programs for export development. Those best management practices are now helping us deal with diseases such as C. boxicola, which is a fungus that came into this country and the U.S. from Europe and Oceania. Now we are dealing with this great threat, which could affect up to $600 million in primary production in this country.

Luckily, we have created these programs of best management practices and certification to try to adapt them, but of course innovation is always part of this, and we need your support and government assistance so we can leverage our funds and better research other solutions for not only pest diseases but also looking at opportunities going forward.

In conclusion, our sector is very engaged and thankful for innovation and for the work to support innovation in primary agriculture, as well as the rest of the integrated value chain.

Senator Plett: Thank you, gentlemen, for coming out this evening. We appreciate it. Thank you for your presentations.

I have a few fairly basic questions. Mr. Schooley, did you say at the beginning that your biggest problem — I do not know if ``problem'' is the right word, challenge — is your short growing season?

Mr. Schooley: Historically that has been the case. Being in Canada and in Ontario in particular, we have a limited time frame where we can produce and harvest fruit, so that has been the reason for the push for innovation to be able to produce for a longer period of time because there is a demand for local fruit.

Senator Plett: I think you said 84 per cent of berry sales are imported?

Mr. Schooley: That is strawberries in particular.

Senator Plett: How about blueberries and raspberries?

Mr. Schooley: For raspberries, I think it is about 60 some per cent, and I am not sure exactly about blueberries. In Ontario, the blueberry industry is quite small comparatively. In B.C., for example, they are quite a bit larger. Even with B.C. producing blueberries, it has a shortened season as well. There has been expansion of production areas in both California and South America.

Senator Plett: Do we export?

Mr. Schooley: Very few strawberries are exported from any province in Canada. There is probably a little bit produced in Ontario and Quebec and maybe the Maritime provinces that I see close to the border.

We do export quite a few blueberries from British Columbia, highbush blueberries and, of course, lowbush, the wild blueberries primarily grown in Nova Scotia. Quebec and New Brunswick all see a lot of exports, not only to the U.S. but also internationally as processed product.

Senator Plett: Mr. Santacruz, you talked about the amount of business we do with the United States. What was that number?

Mr. Santacruz: It is 98 per cent of all our exports that go to the U.S.

Senator Plett: How about imports?

Mr. Santacruz: I do not know the percentage or the dollar value of imports, but we have a positive trade balance with them. Ontario tends to be balanced, whereas B.C. is high on the export side, and Quebec is balanced as well.

Again, depending on what we mean, when I am talking about those numbers, they are usually nursery and turf production. Greenhouse would be a separate number that I do not have, and Flowers Canada might be able to answer that question better. Christmas trees would mostly be in the Atlantic region and Quebec. We are exporters in that.

Senator Plett: I think you said 90 per cent of sales are in three provinces.

Mr. Santacruz: That is of production.

Senator Plett: Is that simply because they are the three largest provinces, or does climate play into it?

Mr. Santacruz: It is a variety of things. It is climate for sure. It is population for sure, but it is also where industry has settled. The Christmas tree industry tends to be in Quebec and Nova Scotia and, to an extent, New Brunswick. That would be very different from the rest of the ornamental sector. It depends on where the land is suited and where the investment has been by the private sector to get into this industry and trade.

Senator Plett: My last question is for both gentlemen. You talked very briefly — and I appreciate that it was very brief — about funding, but tell me what your expectation of funding is. Is it private-public partnerships? Is it grants? What is your idea of funding and what would you like to see — ideally and reasonably like to see, not just like to see?

Mr. Schooley: As an industry, and our industry in particular, we do not have a lot of matching dollars. Some of the funding projects we have had have been smaller amounts but that we can direct in the way we want and, again, some short-term one-, two- or three-year research projects for immediate needs. Those have always been very thankful; there have been only two rounds of those, about six years' worth.

We are appreciative of the cluster projects that have just started. They just finished their first rounds. This, I believe, required about a 15 per cent financial contribution for us, which is pretty good. Many of the other programs, for example, the other adaptation programs, were 50 per cent or upwards of 50 per cent.

As an industry, if we were to be able to form national councils, we would at least have a little more opportunity to leverage money, whereas we are not in that position right now.

Mr. Santacruz: From our perspective, we manage to match $480,000 of industry funds to access $1.8 million, and we would be willing to do more, but there was a limitation in the program. Even though there are a lot more priorities that we are willing to work on and funds, we simply cannot because there is only so much to go around, and every sector is looking for innovation funding.

I agree that even though our industry has been successful at raising funds, it is difficult for many ag-groups, including us to an extent. Right now with the cluster program being four to one, one dollar gets multiplied into four. It makes it difficult for many ag-groups to access research and propel themselves forward, especially in a competitive environment where Europe and the U.S. are investing in research.

Having said that, I think it is favourable to have an industry-government partnership to ensure that industry is engaged and helping to lead the direction of research. I think without that direct commitment and involvement, you leave a lot of the work in the direction to scientists, and I think there is a definite benefit from having that industry engagement.

Senator Callbeck: Mr. Schooley, you represent the berry growers of Ontario. Are there similar organizations in other provinces?

Mr. Schooley: Yes, I think nine of the ten provinces have an association that represents them at some level.

Senator Callbeck: Do you share research with one another?

Mr. Schooley: I would say that over the last eight to ten years it have been increasing. The Canadian Horticultural Council that went through the cluster project was a joint effort amongst provinces with our regional adaptation councils. When projects that will benefit more than one province come about, they are reviewed. They are passed around to the different provinces, and we get the results at the end of the project. We are working together more and more, and I think with the national councils that we are pushing forward that that will make us that much stronger as a group.

Senator Callbeck: You talked about councils that can impose levies. Are those your national councils?

Mr. Schooley: Yes, this is national.

Senator Callbeck: Has legislation gone through for that?

Mr. Schooley: No, this is something fairly new. I think it is the farm products marketing council federally that will give or deny that opportunity.

The beef industry is the first one that has gone through. They were successful in forming a national council. They have imposed levies on their own producers, but they have yet to be able to put those levies on imported product coming into Canada.

We have their lead and we are following, and there are other groups interested in these councils as well.

Senator Callbeck: Does this require legislation?

Mr. Schooley: No, the legislation exists.

Senator Callbeck: It is already there.

You are a volunteer organization, so do you have fees?

Mr. Schooley: Yes, we have an annual membership of $150 for our growers who wish to become members.

Senator Callbeck: You mentioned that 84 per cent of the strawberries sold in Canada are imported.

Mr. Schooley: Yes.

Senator Callbeck: Earlier in your brief you talked about extending the season until October. Has that increased the growth a lot?

Mr. Schooley: If you look over the last 10 years, I think, as an example, the consumption of strawberries has almost doubled, a 94 per cent increase in consumption in Canada. That has been driving, but our industry during that same period has remained fairly flat. That change or increase in consumption has been taken up by the imports.

Senator Callbeck: It looks as though there is a lot of room here for research if we are bringing in 84 per cent of the strawberries, yet your research dollars are going down.

Mr. Schooley: Yes, research dollars and our research personnel are going down. We used to have base funding from some of the organizations, for example, the University of Guelph, which was funded through a partnership with the Ontario Ministry of Agriculture, and some of that base funding has eroded and no longer exists.

Senator Callbeck: Mr. Santacruz, the Canadian Ornamental Horticulture Research and Innovation Cluster was approved in 2010. That is in one place, and where is it?

Mr. Santacruz: The innovation cluster is a cluster. The management of the cluster is being run at Vineland Research and Innovation Centre in Lincoln, Ontario, but we have research taking place in Memorial University, Nova Scotia agricultural college, Guelph University, Kwantlen University in B.C. and Olds College, so the cluster is nationwide. We have stakeholders in the industry being engaged and even financing the program in every province. That cluster is over as of this March coming up.

Senator Callbeck: Is there any indication it might be renewed?

Mr. Santacruz: The Government of Canada has indicated it will establish another research innovation program going forward so we will be applying for another cluster. My understanding is that there are more funds available but many more organizations requesting funds. I am not sure if more will be invested into the industry or not, into our sector anyway.

Senator Callbeck: Of that funding, 75 per cent is from the federal government and 25 per cent from the industry. Do you have fees, or how do you get that money?

Mr. Santacruz: Yes. We are also a volunteer organization. We have fees. Our structure is a bit complicated because we are a federation, so each of our provincial associations across the country charges fees. Our newest association, by the way, is Prince Edward Island.

Senator Callbeck: Good.

Mr. Santacruz: It just came on board last year. They charge fees, and out of those fees they pay us $135 nationally, but fees only make up 20 per cent of our operating budget. We generate the rest through programs and education.

Senator Callbeck: What is your budget, roughly?

Mr. Santacruz: We are about $2.2 million a year.

Senator Robichaud: In relation to what you said about public sources of finance for research in the U.S. and Europe, how do we compare here in Canada?

Mr. Santacruz: I do not have specific hard numbers, but through my experience, being the executive director the International Garden Centre Association and being an active participant of the International Growers Association, I think we are a bit behind. The amount of innovation technology taking place in the Netherlands is where most of us are going; they are the leaders. It is not a question; it is for certain. Germany is very much well ahead as well. Part of that is perhaps necessity because they have less land, but clearly they are further ahead in many things.

Most of our plant material tissue culture is imported from Europe. We do not have it in Canada. That is a big part of the value chain that we are giving away to another country that could be quite easily produced in this country if we had the technology and the resources to do so.

Having said that, Canada being a smaller country population-wise, we are still one of the top players in ornamental horticulture. I think we do have a good competitive spot, but I am not sure if we will keep it. It is tough competition now against the Europeans and even the U.S. They have had a tough economy, but they are still doing very well and they invest a lot of money in research, especially tools. Whether those are tools for farm pesticides, whether they are a type of fertilizer, technique, they are further ahead than we are. Industries and companies that have private research and development cannot justify on 10 per cent of the market putting all that cash here, where they do that in the U.S.

Senator Robichaud: How much resource would you need to be competitive with the Netherlands and Germany, which you just mentioned? Just give us an idea.

Mr. Santacruz: If you give us $100 million tomorrow, I do not think it will help us any more than giving us incrementally more, meaning that we have to build upon a foundation to add to it. We do not have the capacity yet. Vineland Research and Innovation Centre is a fine start for all of the horticulture and agriculture to start developing that foundation and capacity building. Before that, we did not have it in the private sector. They are the first private sector organization. We are investing with them, and they are not our only tool, but the colleges and universities have also been investing in more research, including NSAC, Kwantlen and Guelph, to name a few, and Memorial University in Newfoundland as well.

It just needs to take place and it is not an approach only through the research innovation clusters. It is also at the university level. My colleague here, Mr. Schooley, mentioned that there have been cuts to agricultural programs, research chairs. We have seen that at the University of Guelph and others. This is the reality we are facing. It has to be a multi-pronged approach that cannot just be answered by industry-government partnerships and research. It also has to be with the educational and research facilities.

Senator Robichaud: Mr. Schooley, you mentioned a levy. A levy would have to be imposed on our producers first so that we can then make the case to impose it on imports. Am I reading that right?

Mr. Schooley: That is correct. That is what the legislation says right now, that before you can look at an importer to provide a levy it has to be the same levy in Canada.

Senator Robichaud: You are looking to that to provide you some start-up funds for research that you would direct.

Mr. Schooley: Yes. A big part of that money, as you can imagine, would come from the importers, so they have to be included as partners in this. Although we can direct money to different areas, we also have to have general funding for promotion and research that would benefit the importers as well.

Senator Robichaud: How do your members see that levy? Do they realize that it would be quite advantageous for them to cooperate as they would be the beneficiaries of the money that would be put into research?

Mr. Schooley: Yes. We did have good support. The raspberry and blueberry councils were the first ones initiated. They were led by British Columbia. The raspberry council was supported by all provinces that voted and the blueberry one was not supported by B.C. in general, but they will have another vote because of that.

The strawberry one is just under way and Quebec is leading that. We just met last week for three days with them in Toronto. They have a very good program and they have been fortunate to be the last ones to develop their council. They have taken away the strengths from the other groups. They have a fantastic program. I think we will get very strong support from our growers because of what will come back to our organization and to the provinces as a whole.

Senator Robichaud: How far off is this from exercising the powers of this levy or getting funds from it?

Mr. Schooley: Our partners in Quebec are very optimistic that we might see this within 12 to 18 months, if everything goes through. The biggest challenge for us will be collecting the levy on imports.

Senator Robichaud: I would think so.

Mr. Schooley: We feel, and others feel, that the ideal scenario would be for the Canada Border Services Agency to at least provide numbers and so on because that is where all those imports come through. That seems to be logical, but they may not think that that is their business.

Senator Robichaud: It does not always work the way you think it will.

You mentioned that you had four public breeders and you are down to one.

Mr. Schooley: Yes.

Senator Robichaud: I do not know if that ties in, because we had a research experimental farm in Bouctouche, New Brunswick, which is scheduled to close. I know they did some work with the blueberry producers down home. I think they also did some work with the cranberry producers, because there are many cranberry producers where I come from.

Mr. Schooley: There was one researcher that we have worked closely with from Bouctouche. He was not a breeder but was involved a lot in production research. He has done a lot of very good work and has reported on that work across the country. He was not necessarily a breeder, but he was a very good advocate and good researcher.

Senator Robichaud: Was that Mr. Privé?

Mr. Schooley: Yes.

Senator Robichaud: I know he did a lot of work with the local producers and had a very good rapport with them. I do not know how he will continue to do his work with the locals, but we are sure going to miss him and the farm.

Mr. Schooley: Yes; I agree.

Senator Chaput: My first question is for Mr. Schooley. You talked about this trend of buying local. I like hearing that because I believe that once that starts, it helps both the local economy and the regional economy. What is the state of that trend in Ontario as an example? What percentage of what is being grown is maybe going towards buying local? Would you know?

Mr. Schooley: I do not have any numbers that I can provide. I just know that we, as an industry, have seen greater interest. There is a large increased number in local farmers' markets and that has seen good opportunities for our producers. We have also seen renewed interest from the major chain stores to buy local. You will see many campaigns that have indicated ``grown close to home'' and some different strategies that they are using. They have had renewed interest. It has been much easier for them to buy from a supplier who supplies 10 or 11 months a year than from one that used to supply for three to five weeks. I think the fact that we have some innovations and extension in our season is making our product a little more appealing, in addition to the fact that it is local.

Senator Chaput: Currently, do you believe that those who are growing the vegetables, or whatever, make enough money to be able to live adequately?

Mr. Schooley: Yes. Our industry, in particular, when we go to meetings, has what I would call a youthful industry. If children are coming back to the farm or staying on the farm, that is an indicator that you have a healthy industry. So far that has been the case in our industry, so I think that they must be happy with the payback for their work.

Senator Chaput: So there is promotion of buying local, it is being done?

Mr. Schooley: Yes, as much as possible.

Senator Chaput: One question for Mr. Santacruz. You talked about the work that you are doing with the schools. You talked about courses and training. How do young people react to this career, if I may call it that? What is the reaction of the young ones?

Mr. Santacruz: That is a tough question because our industry involves the landscape trades, which is the fiftieth trade in the fiftieth year that was made a Red Seal; we also have nursery, which is primary production; and retailing. It is a bit loaded, but for the majority of our employees, which are landscape and nursery, it is typically not a trade that is well seen, mostly by the public. It pays well, but, as I asked before at another hearing, who here wants their children to become landscapers or trades people? It just does not have a good sound even though it is a great, respectable industry and a great trade. I think the general public and many people do not see it. Everyone wants to have a university degree. Frankly, our members' employees make more money than the average university graduate. If I had to do all over again, I would love to be a landscaper.

It is tough, but we have been doing a lot of outreach work with many universities and colleges. We have been working with 4-H Canada to try to promote our sector. We have been working in different provinces. In Alberta and B.C. we are close to creating a specialist, high skills major. We have one in Ontario for nursery and landscaping and we work closely with colleges and universities to ensure that we have a good horticulture program in those areas. We are also trying to invest in Guelph to create a new chair for horticulture because, again, we are losing many of these key educators from important roles.

Senator Chaput: Is anything being done with Manitoba?

Mr. Santacruz: Yes. We are working a lot with Red River College on the apprenticeship program and the Red Seal Program, and with the university there, too. We are always working with them. They have been known for doing great landscape architecture programs. We have a provincial association in every province or region and we are engaged with every single post-secondary education institution that offers education our industry.

Senator Chaput: Thank you.

Senator Wallace: I am unclear on this. Each of the growers that are under your association is an individual grower. I have some sense of what each of your associations do for their benefit, namely, research and, as you say in the berry business, Mr. Schooley, to expand the season. However, with any business it is a matter of getting your product to the market; it is a matter of having expanded markets. It seems with both of you that the markets are very competitive with imported prices. I would think in Canada the market is controlled very much by the big players, the big box stores, whether it is berries or ornamental shrubs.

What does your association do, if anything, on that end to provide your members with access to markets that they may not otherwise have and to assist them in getting the best possible price they can? Is there any collective effort, or do they basically individually do their own thing?

Mr. Schooley: From our association members, the industry was built a lot on direct farm sales. If you look at where a lot of the berry farms are located, they are located around populated areas, larger cities. That is where the population is. Many of them are still getting retail prices right at the farm level, so financially that has been good for them.

We interact with some of the produce marketing associations. We try to meet with the chain stores when possible to bring attention to issues if there are any, but much of what we do is through education. We meet as an association and we talk about our successes, marketing, and so on. I guess probably the biggest engagement is by interaction through our membership and education with our members.

Senator Wallace: For any of the individual berry growers, if they want to access Sobeys, or Superstore, or Costco, it is up to them individually to try to access those markets; they do not do it collectively?

Mr. Schooley: No. It has gotten to the point where there are collective meetings of growers that have served them historically, but as a new grower it might be more challenging. If you have a product now, because the demand is higher, we think there is greater opportunity than there has been in the past.

Mr. Santacruz: For us, in regards to the big box stores, they drive a lot of the business and, in a way, they do influence a fair bit of pricing. Having said that, many of our retailers have gotten together to create larger buying groups to try to compete on the price, but they also compete against their own sector in primary production so it is a bit awkward for us. Our primary producers do have one advantage, which is our climate. The same thing that in other sectors you might find is a downfall, for us it is quite fortunate, because you can grow something for outdoor ornamentals in Florida and it will not survive in any part of the country. The hardiest plants in our industry come from Manitoba and Saskatchewan. Frankly, nothing can compete with them on hardiness. Some Russian products can, but our problem is getting it out to their markets.

We do a lot of training and education for export development. We work with the Canadian Agricultural Human Resource Sector Council to do training on export development. We work with AgriMarketing and we have trade missions. We created several market studies of the main markets that we have identified under our long-term international strategy, so we do work together, but our industry is quite independent. They will sell individually to big box stores. Big box stores now account for over 50 per cent of our consumer sales in this country on ornamental products.

Senator Wallace: I suspect the pricing to a large extent is driven by the offered import pricing that is coming in.

Mr. Santacruz: It definitely affects it, but prices are more driven by what the stores are willing to pay than what the importers are because the import does affect us, especially when there is a downturn in the economy in the U.S. and a lower American dollar. Our growers, especially in B.C., have suffered because of that. In Ontario the trade is pretty much net neutral, but in B.C. they are heavily driven on exports. When there are more American imports coming in, our B.C. market is quite affected negatively.

Senator Wallace: I believe you said the hardiest shrubs that are grown in Canada are in Manitoba and Saskatchewan.

Mr. Santacruz: Yes.

Senator Wallace: Yet you indicated that the opportunity for the greatest growth in the domestic market was in the Maritime provinces or the Atlantic provinces, which is a relatively small market. Right now it is B.C., Ontario and Quebec, which accounts for 90 per cent of your business.

Mr. Santacruz: Why?

Senator Wallace: Yes; why would Manitoba and Saskatchewan not be the target market?

Mr. Santacruz: They are definitely a target market and that is where we have seen the greatest growth. They have grown the most — almost exponentially in the last few years — because of a great economy, access to education centres, et cetera.

Atlantic Canada has just not had the investment in education and research fatalities by government or the private sector. There are few producers, yet a large market. A lot of their products are coming from overseas or the U.S. For our industry, opportunity lies in Atlantic Canada. The greatest growth has been on the Prairies. I would not say it has been easy, but it has been easier than dealing with growth in the Atlantic region.

In our industry we do definitely have regional disparity for a variety of reasons, but that would be the reasoning, yes.

Senator Wallace: Good; thank you very much.

Senator Mercer: My question relates to the discussion about buying local. Mr. Schooley, are you familiar with the program called A Taste of Nova Scotia? It is a program that promotes the province-wide sale of products grown, produced and delivered in Nova Scotia.

Mr. Schooley: I was fortunate to spend three days in Nova Scotia back in August, visiting a number of berry farms. We got a very good introduction to some of the programs and some of the different things that are going on in Nova Scotia.

Senator Mercer: Of course Nova Scotia is the blueberry capital of Canada and the Christmas tree capital of Canada.

Senator Robichaud: We help in New Brunswick.

Senator Mercer: Some of those smaller berries are from New Brunswick.

Generally, one of the issues in buying local in agriculture has been the quality of the product after it leaves the farm because of the time it takes to arrive on the store shelves. Some farmers talk about the trend by all of the major stores to centralize their shipping. For example, there is one major chain in Nova Scotia that centralized their produce purchasing just outside of Truro. Farmers have to ship everything to Truro and the product will then be re-shipped, in some cases back to the store half a mile from the farm where it was grown. Of course by the time that happens the quality is affected.

Have you tried to address this with the retailers? The concern for me, as someone who is the principal food shopper in my family, is quality. However, I also try to buy local. When I see something from a farm that I am familiar with and the quality is not there, but I know the quality was when it left the farm, I can only determine that it was caused by the trip it took back and forth.

Mr. Schooley: Yes, there are these large centres or warehouses to which the growers deliver. You are correct, it does head one way and then right back. This has been a challenge for us because we are competing against some other areas in North America that may have a dryer climate, and is less stressful on berries in particular but gives them a little bit of longevity.

We have always prided ourselves on having a better tasting or a fresher product. We have always felt that because we like to pick our product mature, versus something that may come from California that is picked a few days earlier than ideal so that it is able to be shipped.

Yes, this has been a concern with us as primary producers, but with the demand for local there have been more direct store deliveries so they tried to eliminate direct store delivery. Now, with the demand and the pressure being put on by Canadian consumers to have local product in stores, we are seeing a little bit of that change in attitude from the chain stores. They are allowing direct store deliveries in some areas, on some commodities.

Still, you are right; it can take a day to get to one of the warehouses. It could sit there for two days and take another day to get back and then maybe sit in the storeroom. It is definitely not ideal, and we have met and talked with the chain stores regarding this.

Senator Mercer: Thank you, chair.

Senator Martin: My apologies to you for being late. I did miss your presentations, but this is such an interesting topic that I have two questions. One is regarding the role and impact of media. As a consumer, it can be very confusing when you hear about how organic foods are not any more nutritious. We have heard different media reports. There is also The Food Channel, which I know is extremely popular among kids and is probably attracting the next generation of individuals for certain industries.

Would you talk about the role of media in Canada? Has that been helpful, detrimental, confusing, or all of the above?

Mr. Schooley: Probably all of the above. I would say it can confuse certain issues. There are people who have certain beliefs or certain values they may try to push upon others. That becomes a challenge for us. We try to work with the media as much as possible. I know that as long as things are going well you do not receive a lot of attention from the media, but if there is a concern or a question we usually hear about it.

We try to work with the media as much as possible. In particular, we have been very active with social media in trying to provide good news stories and information about production and what our growers and members do. That has been advantageous to us far more than I ever expected.

Senator Martin: I think it is an important role.

I have another question. How has technology played a role in the training of the next generation of workers? Do we have better-than-average programs, technology, facilities, et cetera, compared to other countries? Are we keeping up? Things are so cutting-edge now and it is changing really quite rapidly.

Mr. Santacruz: In regard to training, Canada is doing quite well with agriculture education in regard to technology. A lot of our youth and people in second careers are doing a lot of distance learning. There are a lot of tools and equipment being used in a lot of facilities in the agriculture industry. As far as being high tech, compared to many countries I do not think we are at the top but we are doing quite well in education and training. There are new programs being developed and old techniques are coming back, such as on-the-job training for primary production and a lot of emphasis on health and safety, which is an improvement here for Canadian agriculture.

Senator Plett: What all do you do at the Morden Research Centre?

Mr. Santacruz: We had research, but now not so much. We inherited what we call the heritage group of research. We had hardy ornamental shrubs and the big rose program under Dr. Campbell Davidson, and our association was very fortunate to receive the sole licence agreement from Agriculture Canada to retain the plant genetics and continue researching under the private sector. We continue doing that right now. Much of it is being done at Vineland Research and Innovation Centre. There are still trials. They cannot be in Morden anymore, but we have them at a farm nearby at Portage la Prairie. We are still doing some trials on the existing plants, and we will continue that research.

We receive actual royalties from some of the old genetic material that is still being sold, and we are reinvesting back into continuing to develop hardy ornamentals, especially for the prairies.

The Chair: Witnesses, thank you for sharing your thoughts and your vision with us.

On our second panel, we have Mr. Pierre Meulien, President and Chief Executive Officer of Genome Canada; Mr. Dale Patterson, Vice-president of External Relations, Genome Canada; Mr. Philip Sherman, Scientific Director at the Canadian Institutes of Health Research, and Mr. Paul Bélanger, Assistant Director at the Canadian Institutes of Health Research.

Witnesses, thank you very much for accepting our invitation to share with us your opinions, comments and vision going forward in what we all know is the best country in the world to live and move forward in agriculture. I am informed by the clerk that the first presenter will be Mr. Sherman.

Philip M. Sherman, Scientific Director, Canadian Institutes of Health Research: Thank you, Senator Mockler, for this opportunity to speak about the Canadian Institutes of Health Research and its contributions towards research and innovation in food and agriculture as it relates to human health.

I serve as the scientific director at the CIHR Institute of Nutrition, Metabolism and Diabetes. I am a staff gastroenterologist and a senior scientist at the Hospital for Sick Children in Toronto, and I hold a Canada research chair in gastrointestinal disease. I am also a professor of pediatrics, microbiology and dentistry at the University of Toronto, where I have been on faculty since 1984. I am here in my role as scientific director of CIHR today.

We believe that the future of our health care system lies in the ability to innovate, not only in the practices and treatments we employ today but also in our approaches to health promotion and health care for the future. We will need to shift our focus towards health protection and chronic disease prevention. Innovations in food and nutrition can play a major role in such a shift.

The mandate of the Institute of Nutrition, Metabolism and Diabetes is to support research to enhance health in relation to diet, digestion, excretion and metabolism.

In 2009, we engaged a number of partners in an extensive strategic planning process, which included representatives from Agriculture and Agri-Food Canada, other governmental agencies and external partners such as voluntary health organizations and researchers. Food and health research emerged and was strongly endorsed as an important research priority. As a matter of fact, the World Health Organization recognizes food as an important determinant of health, and that is because nutrition and micronutrient deficiencies continue to be a widespread problem globally, especially among women and young children.

Moreover, these deficiencies coexist with obesity and diet-related chronic diseases, including diabetes. We know that a diet high in sugar, salt and saturated fat and low in beneficial nutrients is linked to some of the most prominent chronic diseases in Canada, including type 2 diabetes, high blood pressure, cardiovascular disease and stroke, and some cancers. Therefore, diets that promote the health and well-being of Canadians are more important now than ever before.

To effectively reduce the burden of chronic disease, more research is needed to better understand how diet interacts with biological factors within the individual and in populations, and to better understand how best to shape physical and social environments to facilitate people making healthy food choices.

In this regard, CIHR plays a key role in supporting research relevant to food and agricultural innovation as it relates to human health. Nutrition and dietary patterns that contribute to health and disease, household food security, and access to food and food safety are all critical areas of research supported by the CIHR.

Since 2001, CIHR has funded more than $460 million specifically related to nutrition, food safety and agriculture as it relates to health research. Examples of CIHR-funded research projects are provided in our written submission to this committee.

I should note that Canada's other federal research funders — the Natural Sciences and Engineering Research Council; Genome Canada, from whom you will hear next; and the Social Sciences and Humanities Research Council of Canada — also support research related to food and agriculture.

In November 2010, we hosted a national workshop to identify gaps and opportunities in the area of food and health research. Building on the outcomes of this workshop, we have launched a transformative funding opportunity to support comprehensive programs of research in food and health. This innovative $10 million research investment will catalyze food and health research in Canada. I am pleased to tell you that Agriculture and Agri-Food Canada is one of multiple public as well as private funding partners on this research initiative.

The initiative is aligned with food and health research priorities of the Canadian agriculture and agri-food sector. It complements the efforts of other agricultural research funders, supporting research related to agricultural production and sustainability, and agricultural economics.

I strongly believe that CIHR's new and ongoing investments in food and health research will serve to improve the health of all Canadians and contribute to a stronger, more sustainable health care system. Thank you for your attention. After the next presentation, I would be pleased to take your questions, comments and feedback.

The Chair: Thank you, Mr. Sherman.

[Translation]

The Chair: I would now invite Mr. Meulien to kindly make his presentation.

Pierre Meulien, President and Chief Executive Officer, Genome Canada: Good afternoon, Mr. Chair. Thank you for your welcome this evening.

I will be making my presentation in English, but it will be my pleasure to answer questions in French if you would like me to.

[English]

Mr. Chair and members of the committee, I am pleased to have this opportunity to tell you how a uniquely Canadian model is leveraging and enhancing the very best approaches to research and innovation in the agriculture and agri-food sector. Genome Canada is a not-for-profit corporation dedicated to developing and applying genomics that create economic wealth and social benefit for Canadians. We work in partnership with our six regional genome centres, and with government, academia and industry. This network is the Canadian Genomics Enterprise.

We invest in and manage large-scale research and translate discoveries into commercial opportunities, new technologies, applications and solutions in key life science sectors of the economy. Those sectors include health, agriculture, environment, energy, mining, fisheries and forestry.

Since our inception, Genome Canada has received more than $1 billion of funding from the Government of Canada, which we have multiplied to more than $2 billion through co-funding agreements with provinces, universities, industries and many others.

In agriculture, this research is yielding applications in food safety, security, surveillance and improved agricultural productivity with hardier, more nutritional crops. Since 2000, Genome Canada and partners have invested over $150 million in each of the agriculture and forestry sectors.

As an example, the beef and dairy cow industry has embraced the results of the International Bovine Genome Sequencing Project, which ultimately aims to improve the health and productivity of cows. This $53-million initiative involved public and private sector partners from the U.S., Australia, New Zealand and elsewhere, and Canada played a leadership role in this project. Global demand for animal protein is expected to double by 2050, and improvements to the Canadian herd through this project and others like it are key to helping cattle producers meet that demand.

As has been recently demonstrated, Canadians want and need reassurance and confidence about the safety and security of our food supply. More than ever, our agri-food industry is under threat from micro-organisms with the potential to jeopardize the health of our people. Canadian researchers are able to develop and apply advanced means of analysis and surveillance of food products to ensure their safety.

For instance, we are working with the Canadian Food Inspection Agency and the Alberta Innovates Bio Solutions fund on a pilot project to develop new tools for detecting and monitoring the type of listeria recently implicated in issues concerning food safety and security. We are also involved in projects relating to viral diseases of pigs that can impact the security and safety of the food chain.

Several of these projects are undertaken in partnership with the Alberta Livestock and Meat Association as active co-funders, who see great value in genomics as a key enabler for their business. We have another partnership with NRC and Agriculture and Agri-Food Canada on developing new varietals of wheat for Canada and the world. As a cornerstone, this project has a $10-million wheat genomics project based in Saskatoon but, very importantly, linked into the international wheat genome project.

Canada's agriculture and agri-food system is integrating genomics technology in a proactive way in those areas that are most relevant to food safety and security. Implementing new tools for listeria, for example, and other uses, can give Canada a competitive advantage in the marketplace, providing proof of a superior appellation d'origine contrôlée, which will be of huge benefit in the traceability of food and improvements to quality standards.

We are also looking at projects in canola, improving the seed oil composition, and work in understanding honeybees, issues around colony collapse, which have a strong economic impact in terms of pollination of fruit trees and other nut trees, et cetera.

Although we are focusing today on agriculture, I must also highlight the innovation impact that genomics is having on the forestry sector, a topic for this committee as well. We have almost $100 million invested in research focused on identifying genes that help protect against pest infestation or improved ability to diagnose invading organisms and provide markets for assessing wood quality and growth rates. With this ability we can, for instance, identify tree seedlings that grow faster, produce better wood and are more resistant to insects. As we work to transform the forest sector from traditional pulp and paper to more higher-value-added products, we are working with sector leaders such as FPInnovations, and we have very much aligned agendas in this degree.

In announcing Growing Forward 2, the five-year policy framework for Canada's agriculture sector, the Government of Canada, through Agriculture Minister Gerry Ritz, has committed $3 billion in funding for innovation, competitiveness and market development.

The collaborative Canadian Genomics Enterprise is showing the way forward to new innovations in the agriculture and agri-food sector, and of course in forestry. This is part of our sector strategy and development work, and we will be mapping our agriculture sector to the objectives of Growing Forward 2 for the benefit of the sector.

We have also been in ongoing discussions with the Government of Canada seeking multi-year financial funding. Specifically, we are currently seeking an upfront federal commitment of $440 million to support four years of genomics research and development.

Because of our ability to leverage federal funding through partners and transform discovery into real benefits for Canadians, this would lead to a net investment for Canada of $1.25 billion in genomics research over the next four years. This represents a leverage of 2:1 over one federal dollar.

This funding would be distributed through our regional genome centres, and we would be supporting genomics work from coast to coast across sectors of major economic importance, including agriculture and forestry. This long- term, stable, effective, multi-year funding is essential to underscoring Canada's commitment to an emerging bioeconomy. It can show how genomics innovation can preserve and create jobs, boost productivity, and develop value-added products and markets.

The Chair: Thank you very much, gentlemen.

Senator Plett: Thank you, chair. I apologize that I had to leave for a few minutes. There was some other business calling.

I will ask just one question at this point. Mr. Sherman, you stated in your presentation that nutrient and micro- nutrient deficiencies continue to be widespread globally, especially among women and children. I had always thought that women ate much healthier than men and that we were the ones who did not do things the way we were supposed to. Could you tell me why that is the case?

Mr. Sherman: Globally, it is often access to food. Specific examples would be access to iron and vitamin A, which are important for blood levels, in the case of iron, and for eyesight, for vitamin A.

There must be ways to deliver healthy foods, but also to provide micronutrients to the most vulnerable, such as pregnant women and the very young, newborn babies and children in the first year or two of life. Special fortifications of specific micronutrients, like iron and vitamin A, have been developed by Canadian researchers and have spread around the world as a way to deliver micronutrients to vast numbers of people at very low cost. It is possible to deliver these to people in real need in places like Sub-Saharan Africa, Asia and South Asia. There is a need and we can make a difference. Canadians do make a difference now.

The program that I am thinking about in particular is called the Sprinkles program — you might have heard about it — funded by Canadian government dollars.

Senator Mercer: Gentlemen, we appreciate your presentations. I want to talk about honeybees for a moment. You raised the issue of honeybees. I have a question that comes out of a visit that we made to a very large greenhouse operation south of Shawinigan, which was, I think, about the size of five Canadian football fields. It was quite an operation, very interesting and very innovative because of the use of methane gas from an adjacent municipal dump, et cetera.

It is the honeybees I want to ask about. They used honeybees, of course, for pollination, and they told us at the time that every two weeks they had to import bees from the Netherlands, I believe it was. Is there a shortage of bees in Canada? If so, is there a market for us to produce more bees for operations such as the one we saw in Quebec?

Mr. Meulien: There is a shortage of honeybees and, for reasons that we do not totally understand, honeybee populations in general are decreasing at an alarming rate, up to 90 per cent in some areas.

For example, in California, just taking a North American example for the moment, they produce about 50 per cent of the world's almonds in California. The price of these nuts has now really increased because the pollination rates are just not there. The Californian farmers and tree growers have to import bees from Minnesota, from other areas of the United States, at huge expense because there are just not enough bees to pollinate the almond tree at the right time. We are seeing problems as well in Canada, in the West of Canada.

However, luckily for us, we have some of the best researchers in honeybee biology in the world in Canada, and we fund several of them through our programs. They are looking to understand what is going on with colony collapse, as we call it. Is it because of a mite infestation, a fungus, a virus or climate change? All of these probably contribute to the issue. Can we find populations of bees that are resistant to these attacks? If so, we should build bee-breeding programs around those.

You say this group is importing bees from the Netherlands. This is true. Now people are importing bees from New Zealand, from other countries, and there is a big exchange of queen bee populations. It is a global business.

In answer to the questions, yes, it is hugely economically important, much more pollination than just creating a honey pot, and really important to the agriculture industry.

Senator Mercer: Those of us who visited some of these operations recognize the value of the bees, and it was interesting. The place was so big there were bees at one level of the greenhouse and wasps at the higher level. The wasps took care of the other insects, while the honey bees went and did their thing. It was fascinating for those of us who had not seen it before.

You also mentioned that, since its inception, Genome Canada has received more than $1 billion from the Government of Canada, and then you said that you manipulated that to more than $2 billion. Is this all through co- funding and partnerships? Did you do any of what I, as a professional fundraiser, would call fundraising to get this other $1 billion? You should be congratulated for doing that. That is a great way for government to participate.

Mr. Meulien: In our model we have six genome centres across the country, and one of their main goals is to fundraise. They fundraise through the provinces, provincial governments, they fundraise through the university sector and they fundraise through industry.

The way we work is that Genome Canada does nothing alone. Last year we partnered with our colleagues in CIHR to build a huge personalized health competition: $40 million from us, $20 million from CIHR. It is through these mechanisms that we leverage the federal government dollar, dollar for dollar. We actually do not count the CIHR dollar as dollar for dollar because that is also federally funded.

When we talk about $1 billion raised, it is $1 billion of non-federal monies that we raise. We have several hundred partners in this enterprise.

Senator Mercer: Thank you.

I started my morning today at a meeting where there was a presentation from another individual from CIHR, so I am ending the day with someone from the medical side where we talked about clinic trials.

I am interested in your $461 million specifically related to nutrition and food safety, agriculture and health research that you mentioned. Are there some specific outcomes that you can point to, successes that we may not recognize specifically but the effects of which we may have seen or may see in the future?

Mr. Meulien: Thank you, senator. It is very important to know the results coming out of the research.

We are funding basic biomedical discovery research as well as patient-based interventions, like clinic trials that you mentioned, as well as health services policy and population health interventions research. CIHR funds across the gamut of health research.

There are a series of examples, but one that I might provide to you is in the setting of diabetes and obesity. A big problem, as you know, particularly in our youth, is type 2 diabetes related to obesity. That did not exist when I trained as a medical doctor. Now it is more common than type 1 juvenile diabetes.

The question is whether little interventions make a big difference, and the answer is yes. Providing access to healthier foods in the school, removing sugared beverages from schools, limiting portion size, swapping a sugar- containing beverage for a sugar-free beverage, does that make a difference? There is current evidence published in the highest impact journals that this can make a difference.

They have not cured the obesity and diabetes problem, but there are interventions to show how to decrease accelerated weight gain, particularly in young people, and how to promote and maintain weight loss in people who have already put on too much weight. We are funding all those areas, as one example.

Senator Mercer: I am concerned. Senator Robichaud looked at me when you talked about obesity and type 2 diabetes.

Mr. Meulien: There was nothing personal in my comments.

Senator Mercer: I knew you had done your research and knew I am the former executive director of the Canadian Diabetes Association in Toronto. That is why that was mentioned.

Senator Demers: I will give you four different choices of words, and maybe you can answer this. You talked about research, safety, security and innovation. Where does Canada stand versus North America and the rest of the world? Have we progressed to the point where we compete with them? Where do we stand right now? Are we making tremendous progress, especially in safety and security?

Mr. Sherman: Thank you for that important question. I am pleased to say with confidence that Canadian researchers punch way above their weight for the amount of dollar invested and the amount of output provided. When people look around the world, Canadian researchers are world-class, and that includes on all fronts that you mentioned, including innovation.

The food safety one, which is front and centre in our minds — I will do a little bragging on behalf of our country — Canada was responsible for the discovery that E. Coli 0157, the bacteria associated with hamburger disease, was linked with kidney failure, particularly in children. That link was a Canadian discovery made in 1983. We will be celebrating the thirtieth anniversary of that discovery in March 2013 with the Canadian researcher whose name is listed in the package I provided.

People around the world look to Canadians for research output. That E. Coli research, knowing the organism that causes the disease, has resulted in the development of a vaccine that is now being trialed for use. It is not for people but for cows to reduce the colonization with this organism so that people do not get inadvertently colonized. That is an example of trying to make practical improvements in the health of Canadians.

Mr. Meulien: I will be a little more nuanced in the sense that I think researchers, by all measures, punch above their weight, as Mr. Sherman said.

The issue for Canada, I think, is on the innovation piece, of which there are many reviews about our relative inability to pass from research to commercialization in many areas. There are a few little gaps that we need to address where the environment or the ecosystem around innovation is much more mature, for example, south of the border, where our venture capital pieces in Canada are much too risk-averse so we have difficulty creating sustainable SMEs at the level that we will need to ensure economic growth in all of our sectors.

I think the examples that Mr. Sherman gave are superb and demonstrate the fantastic things that are going on, but on the research to commercialization side, we have issues that we need to address.

Senator Demers: Thank you both for your quality answers.

Senator Callbeck: Thank you all for coming. Mr. Meulien, I have a couple of questions on Genome. Is 2000 the year that Genome was founded?

Mr. Meulien: Yes.

Senator Callbeck: In 2011, there were 165 projects and $2 billion, roughly $1 billion from the federal government and $1 billion from partners. I understand that is divided between six centres, and there is one in Atlantic Canada.

Could we have any idea of the breakdown of that $2 billion? In other words, I am extremely interested in Atlantic Canada. What percentage of that $2 billion would they get?

Mr. Meulien: I cannot tell you the exact breakdown, but it is true that what has emerged are three large groups of research located in British Columbia, Ontario and Quebec and three smaller groups of research projects located in Alberta, in the Prairies and in the Atlantic. We have not done the breakdown by geographic distribution at all; we have done it only on the basis of scientific excellence as judged by international peer review.

In Atlantic Canada, it is true that we have a lot fewer of our big projects. However, there have been some specific, excellent projects in Atlantic Canada, two in particular on rare diseases, which are both at the $10 million mark — which is already a $20 million package in Atlantic Canada — and one very important project on cod genomics, which has been developed and integrated into broodstock programs in Atlantic Canada.

I would need to verify these numbers, but I would say that of the $2 billion, you are looking at probably $40 million to $50 million in Atlantic Canada over that period.

Senator Callbeck: That was from 2000 to 2011. This is now 2012. What is going on right now?

Mr. Meulien: Currently we are developing programs in personalized health, and the review is actually ongoing as we speak. That is a $130-million program, and we have no idea of the distribution going forward.

We also received $60 million from the Government of Canada this year, and we are working on two programs around that. One is very much a technology program. Genomics technology is moving quickly, and we need to ensure that Canada remains at the cutting edge. There is another one on applications. This is a partnership program with industry. We are doing this across several sectors. In Atlantic Canada there is much discussion ongoing in the biofuel industry, in the aquaculture industry and in the forestry industry, and we hope that Atlantic Canada will be represented in some of those projects coming out of that program.

Senator Callbeck: You talked about the funding you are seeking for the next four years, $441 million, which will mean $1.25 billion in research.

Mr. Meulien: Yes.

Senator Callbeck: It must be distributed by a body through the region. Is that right?

Mr. Meulien: What happens in the model is that groups of people together develop programs in each of the regions, and they work with the centres so that those proposals are of the highest quality possible. Those proposals come from the centres into Genome Canada. That is why it is a distributed model. Our funds, when successful, go to the centres, and they distribute the monies that way.

It is a very interesting model because it allows the regional actors and stakeholders to work very closely. Once again, these are large projects, $10 million each. There are many actors and stakeholders involving industry, and so a lot of preparation needs to be put forward by the centres.

They are also responsible for monitoring the projects once awarded and, of course, as I said at the beginning, they are responsible for finding the co-funding for each project.

Senator Callbeck: Is there a board at Genome Canada?

Mr. Meulien: Yes.

Senator Callbeck: Are all six centres represented on it?

Mr. Meulien: Each one is an independent entity, and each has a board of directors.

Senator Callbeck: Is there an overall umbrella?

Mr. Meulien: Yes.

Senator Callbeck: Who is that group composed of?

Mr. Meulien: The Genome Canada umbrella?

Senator Callbeck: Yes.

Mr. Meulien: We have our board. The chairman of our board is Lorne Hepworth, who is head of CropLife, so he is a very agriculturally focused individual. We also have 14 board members who are from different walks of life. Some are internationally known genome scientists; others are business people; others come from the VC community to guide us in terms of programmatic pieces. We have Robert Orr from Atlantic Canada on that board.

Senator Callbeck: You talked about the huge benefit and traceability of food and improvements in quality standards. Where are we using traceability of food right now?

Mr. Meulien: One of our projects is an interesting one called the Barcode of Life. Many groups are now using DNA bar codes to determine speciation of, for example, fish. You may be aware of a New York study published in the New York Times where people in sushi restaurants were selling white tuna as tilapia. Tilapia is the cheapest fish whereas white tuna is the most expensive. With DNA bar-coding, you can improve the quality control of what people are buying and selling. You can trace fish that are in your fish market, going across borders very easily and quickly using DNA bar-coding. This traceability, I believe, will add to Canadian appellation control because you could bar-code meats going across borders to prove that this comes from this farm in Alberta or wherever, or a fish that is caught off the coast of the Atlantic coast. I think that this is added value for the Canadian food industry.

Senator Callbeck: Are we using this in Canada now?

Mr. Meulien: It is being used more in the U.S. than in Canada. Bar-coding, which is a Canadian invention, is used by the FDA in some of these controls. It will come quickly to Canada, and I think we will be using it very quickly.

Senator Callbeck: Someone told me in a supermarket that if you have this traceability the retailer has to cooperate, and there is a problem there.

Mr. Meulien: Well, of course, retailers will have to cooperate. The technology is moving so fast; it is a very fast moving field. I know of a company in my own home country, Ireland, called IdentiGEN, which has food identity tags that they are using, and most of the retailers have bought into this. In the end, they will not have a choice because I think the market pressures for food traceability will only be increasing as we go forward, and recent history can show you that very clearly.

Senator Callbeck: Do you see that pressure there in five years?

Mr. Meulien: Yes, over a five-year period, I think that is a good chunk of time for us to implement a lot of this new technology.

Senator Callbeck: Thank you.

[Translation]

Senator Verner: Thank you, Mr. Chair. Thank you, gentlemen. I am going to speak to you in French. I am not a member of the committee and so my comment will be a more general one on the various sources of funding.

I believe I understand from the notes I was provided that several witnesses expressed their dismay at the lack of coordination among the various levels of government, industry representatives, researchers and consumers. In the same vein, Agriculture and Agri-Food Canada produced a report in June 2011 showing that there was some confusion regarding the roles of the various stakeholders. I would like to hear your comments on that.

What factors explain the lack of cooperation among the federal government, the provinces, industry stakeholders, researchers and consumers?

Mr. Meulien: There is certainly the perception of a silo mentality among the various government departments, the research granting councils and so on. Far more than in the past, we need to create a climate of cooperation. We work with the Canadian Institutes of Health Research, the Canada Foundation for Innovation, and the National Research Council of Canada. We work much more closely today in our research and cooperation than we did two years ago.

As for the interface amongst academia, granting councils and industry, there is certainly room for improvement and greater cooperation in that whole environment. It is up to us, those who fund research, to create programs that will affect these interfaces. We can do so, but much work remains to be done. Your questions are very pertinent. We need to create a much more productive interface than the one that exists today.

[English]

Mr. Sherman: I would follow up on the idea that different funders come with different perspectives and backgrounds, and that can be a benefit rather than a negative. What we try to avoid are the silos that Mr. Meulien mentioned. We do not want to be off doing separate things when we can work better. We know we could be more powerful working synergistically.

A good example I can share is on sodium reduction. We know that Canadians love salt in their diet. Too much salt is not a good thing in your diet, and there are ways to reduce it. However, there is salt in foods for a certain reason, so when you have people in agriculture and partners in industry, they bring very valuable perspectives to the table. There is not a right and a wrong way; it is thinking about the problem from different perspectives.

The way we often set the stage for initiating research is to have workshops where we bring together people from very different backgrounds, including the agriculture sector, private industry sector and food processing sector, in a meeting of the minds, to see where are the gaps in knowledge that would be improved by having targeted research in that area. In the sodium field, I think we have been successful in that regard. That is one small example of where we cooperate to make things better.

[Translation]

Senator Verner: We know that in Canada there are shared jurisdictions when it comes to agriculture, but is this situation — this tendency to forget about partners and work in isolation — unique to Canada, or does it exist elsewhere?

Mr. Meulien: It does indeed. Canada is not unique in that regard. I work a great deal with the national research agency in France, l'Agence nationale de la recherche. They have the same issues. They have trouble creating a productive interface. That does not mean that everything is bad. It means that we need to work more closely and foster greater cooperation.

Canada has a very collegial mentality. We will be able to create this greater cooperation without any trouble. The example I quoted in my statement concerned the Canadian Food Inspection Agency and the food processing industry and Genome Canada, as well as some universities and a granting agency in Alberta. That cooperation will certainly be productive, not only with regard to scientific results, but also in creating a habit of cooperation between academia, the government and industry.

Senator Robichaud: Mr. Sherman, in your presentation you say that in November 2010, a workshop was organized to identify gaps and opportunities in the area of food and health research.

You also say that there are transformative funding opportunities and that this innovative $10.24 million investment will have a catalytic effect on food and health research.

That is rather vague. Can you be more specific?

[English]

Mr. Sherman: Yes. Thank you, senator. It follows the model I was describing before where we bring people from around the country from different backgrounds. We have strong researchers in academics, in the private sector. We brought Health Canada and Agriculture Canada together and said, okay, those are the strengths. If we are to invest in the future, where are there gaps? Where can we do better so that we do not do two researches, that we get the best value for the money that is spent?

We do not decide by ourselves where the research dollars are best spent. We listen to the advice of people from around the country, from coast to coast, from the far North and from rural and remote communities. One of the great but complicated things about Canada is that it is very diverse, so you get different perspectives.

We then come to a consensus, which the workshop does. The workshop report is available for everyone to see. It is on our website and we can certainly share it with you. Then we launch based on the priorities that have been advised of research in the area. One of the things we heard from the research community, what you just heard mentioned, is that this being siloed is not a good thing, that people work better in teams. You get more value-added when people work in groups. We heard not to leave the young people out. The next generation of researchers needs to be brought along in that pool.

We created these programmatic grants where we will launch groups across the country. None of the research is done internally at CIHR. It is all done outside by researchers. We are the funder. We put out those calls for proposals, and they are ranked only on excellence. Peer reviewers from around the world come, look at the grants and say, if you have so much money, which are the top ones that should be funded. Then we provide the money. It is for a period of five years. At the end there is an expectation: What did you do with that money? What new results happened? How does it impact on the health of Canadians?

It takes some time with the strategizing, the planning, the launching. We are just in the stage where we reviewed the first call for proposals. We had a huge number of applications, which is good, because it means that there are many strong Canadian researchers out there. It is bad that we are not going to be able to fund them all. We will fund only the best. We are in the middle of waiting for the full proposals to come forward to be vetted to choose the best of the best. That will happen over the next six months, and then we will fund for the next five years.

Senator Robichaud: That will fill the gaps that have been identified?

Mr. Sherman: Yes, that is the intent. I need to come back to you in five years or so to tell you for sure, but that is the intent, that they will fill the gaps that were identified.

Senator Mercer: We will be here.

Senator Robichaud: Not I; I will be gone by then.

[Translation]

Mr. Meulien, you were talking about cooperation. You are involved in several areas of research. This committee has heard several presentations on nanotechnology. Can you tell us about your work in that area?

Mr. Meulien: I think that new technologies are converging. You have the physical sciences technologies, nanotechnology, nano-liquids technologies, genomic technologies and computer technologies. All of these technologies are in the process of converging, and I think that that interface, in terms of cooperation, is going to be fantastic to see in the coming years. I think it is very important for Canada to have some cutting-edge tools in all of these areas and for us to create productive interfaces in all of them.

Senator Robichaud: According to what we have heard, there are promising developments in agriculture and all of this will have a direct effect on the environment.

Mr. Meulien: Indeed.

Senator Robichaud: I read that this will also be the case in the medical field; we heard about the cell-specific delivery of medication to specific areas. This is very promising also.

Mr. Meulien: Of course.

Senator Robichaud: You also talked about research, and you mentioned something that we heard about before when we were doing our study on forests, that is to say the ``valley of death'' between research and marketing.

I come back to what Mr. Sherman was saying, which is that you have a five-year research program. But we were told that after those five years, you come to the ``valley of death.'' How can you bridge that gap and make it to the marketing phase?

Mr. Meulien: As Mr. Sherman described very well, in Canada, in general, we have cutting-edge research going on that is among the best in the world.

Senator Robichaud: I have no doubt.

Mr. Meulien: The problem comes after the research phase and somewhere between research and commercialization. There we need funding to develop a prototype and proof of the concept, et cetera. And we still do not have sufficient funds to make those links. We need to work together with tools such as the Industrial Research Assistance Program of the National Research Council of Canada, for instance, and other tools like the Canada Development Bank, which makes investments. We have a tentative culture of risk in Canada. We have to work together in order to change that and take more risks so as to create more small and medium businesses to bridge the ``valley of death''.

Senator Robichaud: I think that we are missing a lot of opportunities. One witness who testified before the committee told us after the meeting that he had to turn to American interests in order to develop what could have been done here; we could have derived the benefits from that research.

Would it be appropriate for you to do some research to see how we could bridge that gap?

Mr. Meulien: That is part of my work.

Senator Robichaud: Excellent. Thank you.

[English]

The Chair: To the witnesses, thank you very much for sharing your thoughts with us. Honourable senators, I now declare the meeting adjourned.

(The committee adjourned.)