Proceedings of the Standing Senate Committee on
Agriculture and Forestry
Issue No. 48 - Evidence - Meeting of April 17, 2018
OTTAWA, Tuesday, April 17, 2018
The Standing Senate Committee on Agriculture and Forestry met this day at 6:01 p.m. to study on how the value-added food sector can be more competitive in global markets; and to study the potential impact of the effects of climate change on the agriculture, agri-food and forestry sectors.
Senator Diane F. Griffin (Chair) in the chair.
[English]
The Chair: Honourable senators, I welcome you to this meeting of the Standing Senate Committee on Agriculture and Forestry. I’m Senator Diane Griffin from Prince Edward Island, chair of the committee. I’ll start by asking the senators to introduce themselves, starting with the deputy chair.
[Translation]
Senator Maltais: Ghislain Maltais from Quebec.
[English]
Senator Doyle: Norman Doyle from Newfoundland and Labrador.
[Translation]
Senator Dagenais: Jean-Guy Dagenais from Quebec.
Senator Petitclerc: Chantal Petitclerc from Quebec.
Senator Gagné: Raymonde Gagné from Manitoba.
[English]
Senator R. Black: Robert Black, Ontario.
The Chair: Thank you, ministers, for accepting our invitation to appear. We have with us today, from the Government of Saskatchewan, the Honourable Lyle Stewart, Minister of Agriculture, and the Honourable Dustin Duncan, Minister of Environment. The staff with them are Lin Gallagher, Deputy Minister of Environment; David Brock, Assistant Deputy Minister, Ministry of Environment; and William Greuel, Assistant Deputy Minister, Ministry of Agriculture.
I will now ask the ministers to make their presentations, beginning with Minister Duncan.
Hon. Dustin Duncan, Minister of Environment, Government of Saskatchewan: Thank you, Madam Chair, and good afternoon, senators. Thank you for the opportunity to speak today to the Standing Senate Committee on Agriculture and Forestry.
Today, I’d like to provide you with some background on our made-in-Saskatchewan climate change strategy entitled Prairie Resilience, including how agriculture and forestry will play a large role in our plan.
First, I’ll provide some information to give you some context and rationale for this strategic approach.
Saskatchewan emitted about 75 million tonnes of greenhouse gas emissions in 2015, which is about 10 per cent of Canada’s total emissions. Canada’s emissions are less than 2 per cent of global emissions, and although our province relies on emissions-intense and trade-exposed industries, Saskatchewan’s GHG emission intensity declined by 12 per cent between 2006 and 2015 while GDP grew by 24.4 per cent during that same period.
Among our three main sources of emissions, oil and gas accounts for 32 per cent of our total provincial emissions, electricity accounts for 19 per cent and agriculture accounts for 24 per cent.
In 2017, our government committed to introducing further actions to reduce these emissions. A responsible climate change strategy needs to protect our industries, keep our buildings and roads operating efficiently, and keep the lights on in our homes and businesses.
We believe a responsible climate change strategy can’t focus on a tax that will unfairly burden a province such as ours where we rely on natural resources and trade, produce food and commodities and provide technology for the rest of the world, which bolsters climate security.
We need to be ready and resilient to the effects of a changing climate, and I want to stress what we mean by “resilience” and speak to why it’s important. Resilience is the ability to cope with, adapt to and recover from stress and change. Resilience is a much stronger indicator of effective climate action than simply measuring reductions in greenhouse gas emissions, because it measures our overall ability to adapt, innovate and even thrive.
Focusing on resilience will yield a stronger approach for Saskatchewan. As such, we released a comprehensive forward-looking climate change strategy designed to make Saskatchewan more ready and more resilient to the climatic, economic and policy impacts of climate change. The strategy commits to a new sector-specific outcome-based performance standard for facilities that emit more than 25,000 tonnes of emissions per year. These facilities will have flexible options to comply, including making improvements to lower their emissions intensity, purchasing an offset credit or a best performance credit, or paying into a technology fund.
We will also prepare our communities for the effects of climate change with improved floodplain mapping, preparedness plans and municipal projects. We will develop and implement an offset system that creates additional value for actions that sequester carbon and reduce emissions, especially from our cropping systems and additional force management practices. The offset system is designed to recognize the agricultural community and other land management practices in our province that are already addressing greenhouse gas emissions.
The strategy supports the province and its people by curbing emissions and preparing for changing conditions, all without a tax. Saskatchewan’s agriculture and forestry sectors are significant pieces of this strategy. Not only will agriculture and forestry be impacted by a change in climate, but both sectors also offer significant opportunities for the province to strengthen its resilience and sequester carbon to benefit the rest of Canada and the world.
Minister Stewart will speak in greater detail on this in a few moments, but just as an overview, thanks to modern agricultural practices, including use of zero or minimum till, or reduced summer fallow, Saskatchewan’s agricultural soils sequester carbon every year. Over the past 10 years, Saskatchewan soils have sequestered an average of 9 megatonnes of carbon annually, with 11.9 megatonnes sequestered in 2015.
Saskatchewan’s forests also sequester carbon. On average, provincial commercial forests sequester 3.5 megatonnes of carbon on an annual basis.
None of this sequestration is accounted for in the national inventory report of provincial and national emissions, something we hope the federal government will begin to recognize.
In 2017, the Forest Management Planning Standard, under our environmental code, formalized the incorporation of climate change vulnerability assessments into long-term forest management. This will help to ensure that forest activities, such as harvesting, road construction and regeneration, allow for sustainably managed forests under changing climate conditions. These changes will help to mitigate and adapt to climate change so carbon emissions decrease and carbon stored in the forest is maintained and enhanced into the future.
In addition, we are considering the following measures as we develop our Saskatchewan climate resilience framework. In forestry: the frequency and distribution of forest age classes, which reflects the capacity of the forest to withstand extreme events; areas forested with future climate-suitable varieties of native tree species; percentage of reforestation using climate suitable species; percentage utilization of available forestry biomass; and the amount of forest harvest designs that incorporate landscape level fuel management considerations.
In agriculture, our government is considering the following measures: the amount of soil — organic material added as a result of changes in agricultural practices; acres in natural land tame or seeded pastures; profitability of the agricultural sectors; as well as the number of wells, dugouts and pipelines constructed to assist in on-farm water management.
Saskatchewan is thinking about resilience to climate change, not just through price signals or emission reductions, but also considering how climate change affects our natural systems, economy and communities. The agricultural and forestry sectors play an important role in the success of the province’s climate change strategy. However, a carbon tax as proposed by the federal government will result in increased costs and reduced competitiveness in provincial agriculture and forestry sectors. An effective climate change policy should achieve actual GHG reductions and environmental benefits while supporting ongoing economic growth.
The measures for the climate change strategy and resilience framework are currently in development with implementation planned for January 2019.
We feel strongly that Saskatchewan’s climate change strategy is broader and bolder than economy-wide carbon tax. We believe Saskatchewan should be recognized for its significant soil sinks and sequestration from agricultural and forestry sectors. We also feel strongly that our strategy is equivalent to or better than a federal backstop that aims to enforce a carbon tax and jeopardize the competitiveness of our industries, particularly those reliant on trade and subject to international competition.
Those are my remarks. I’ll now turn it over to Minister Stewart.
Hon. Lyle Stewart, Minister of Agriculture, Government of Saskatchewan: Thank you very much, minister, and thank you, senators, for inviting me today to talk about the effects of climate change, climate change policy on agriculture, and the efforts to increase adaptation and reduce emissions.
Around the world, soils are considered to be a major source of carbon emissions. As recently as 1990, Saskatchewan soils emitted 600,000 tonnes of carbon dioxide equivalent. That is not the case anymore. According to the federal government’s national inventory report, Saskatchewan agricultural soils sequestered more than 11.9 million tonnes of carbon dioxide in 2015. This is by far the largest of any province in Canada.
Several practices contribute to this, one being changes in tillage. Ninety-three per cent of Saskatchewan farmland was under zero- or minimum-till practices in 2016, the highest percentage in Canada. We can also attribute sequestration to a reduction in summer fallow acres, which have dropped by 13.3 million acres since 1990.
From 1990 to 2015, the number of tame forage acres in Saskatchewan increased from 2.25 million acres to 3.84 million acres. This has made a difference as well. It’s also important to note that the national inventory report does not account for soil sequestration from changes in grazing management. So we believe the estimate is low. It also underestimates carbon sequestration from zero-till. The Prairie Soil Carbon Balance Project, led by a scientist from Agriculture and Agri-Food Canada, has collected soil samples since 1996. This study suggests zero-till sequesters significantly more carbon than estimated in the National Inventory Report. Zero-till likely sequesters more than 9 million tonnes annually, which is about three times the National Inventory Report’s current estimate.
At a minimum, Saskatchewan agricultural soils are sequestering about 11.9 million tonnes every year due to good farming practices. In addition to sequestering carbon in soil, Saskatchewan farmers reduce agriculture emissions. For instance, pulse acres in Saskatchewan have increased from 400,000 acres in 1990 to 7.1 million acres in 2017. Because of reduced fertilizer use, pulse production lowers Saskatchewan’s agriculture emissions by about 2 million more tonnes of carbon dioxide equivalent annually. In 2011, wheat producers used 6 per cent less energy on a per-harvested-acre basis than they did in 1981. But overall energy use per tonne of spring wheat produced fell by 39 per cent between 1981 and 2011.
In 2011, only 71 per cent of the beef breeding herd was required to produce the same amount of slaughtered beef as in 1981. This improvement has resulted in an estimated 14 per cent decline in methane, 15 per cent decline in nitrous oxide, and 12 per cent decline in carbon dioxide emissions. From 2000 to 2013, greenhouse gas emissions from manure management fell by 18 per cent per kilogram of pork production in Saskatchewan.
Let’s be clear: Farmers made these greenhouse gas reductions without a carbon tax. They are reducing emissions because it makes good business sense and because they know how to be resilient. They have been increasing organic soil matter so they can produce more food even in a dry year like last year.
This focus on soil health pays off. The resilience of Saskatchewan’s farmers helped to inspire our made-in-Saskatchewan climate change strategy that my colleague just outlined for you. Saskatchewan recognizes that resilience is a much stronger indicator of effective climate change action than simply measuring reductions in greenhouse gas emissions. We cannot create environmental policies in isolation. There are economic impacts and goals we must consider in this process, just as we consider environmental impacts when looking at economic policy.
This is critical for Saskatchewan, where we have an opportunity to expand our value-added sector, increase production and grow our exports. We have an excellent plan that balances these economic targets with our need to reduce greenhouse gas emissions. We worry the federal climate change plan will impact our resilience, without reducing emissions. This federal backstop will impact our value-added sector. Oilseed processors in Saskatchewan will face increased costs due to the carbon levy. We anticipate processors will focus their investments elsewhere to avoid this cost. Not only would that not reduce emissions, but that would also directly impact our goal to increase value-added processing and economic growth in this province.
The backstop would also impact Saskatchewan’s fertilizer sector. We know that facilities like Yara Belle Plaine have invested to improve energy efficiency and reduce greenhouse gas emissions. The federal backstop could impose significant additional costs and impact their competitiveness.
The bottom line is that a carbon tax will impact Saskatchewan’s farmers. We think that, where possible, industries will pass along the cost of carbon levies to producers. If industry is able to fully pass costs back to producers, we estimate the additional costs could be as high as $6 per acre, depending on the crop and soil zone. This may seem insignificant when commodity prices are high, but consider the margins farmers face when commodity prices fall, as they are currently in the process of doing.
Consider the impact on their competitiveness in international markets. Consider jurisdictions, such as the European Union, that subsidize farmers’ incomes directly. Consider the United States, which is not putting an additional carbon tax on the input farmers need to grow food, or other competitors for export markets, like Australia, New Zealand, Russia, Kazakhstan, Ukraine and others, that will never have a carbon tax. We recognize that agricultural emissions make up about 24 per cent of Saskatchewan’s total emissions, including farm fuel.
In response, the Government of Saskatchewan has invested in numerous activities to reduce agriculture’s principal greenhouse gas emissions, namely methane from cattle production and nitrous oxide from fertilizer. Over the last 10 years, we have invested almost $9 million in more than 1,700 projects that benefit the environment. These beneficial management practices help producers reduce greenhouse gas emissions through actions such as precision agriculture and seeding marginal land to grass. In the last five years, we have invested $17.5 million for wells, dugouts and pipelines, helping producers become more resilient to extreme weather events, such as droughts.
However, our most important investments have been in research, development and technology transfer. Saskatchewan’s Agriculture Development Fund invested almost $14 million in more than 90 climate change mitigation research projects from 2000 to 2017. We also helped to fund the Crop Development Centre, which has developed more than 450 varieties of 14 different kinds of crops since its inception in 1971. This has helped farmers adopt more productive and resilient crops. Our ministry also funds 14 strategic research chair positions at the University of Saskatchewan, two of which focus on soil health and nutrient use efficiency.
There is also the Global Institute for Food Security, whose work on plant imaging is expected to increase sequestration through enhancements to root structure. The institute is also working with producer groups to create a new chair in carbon sequestration and management in agriculture. We’re also very proud of the work of the new Livestock and Forage Centre of Excellence, which will research improvements in livestock operations, forage productions and grazing land. It provides a place for research, teaching and extension activities, many of which will focus on increasing productivity and reducing animal agriculture’s impact on the environment.
In cooperation with Fertilizer Canada, the ministry invested $100,000 last year to demonstrate fertilizer efficiency at eight applied research management farms across Saskatchewan. These projects aim to reduce the impact of synthetic fertilizer on greenhouse gas emissions. The ministry has invested another $57,000 for demonstrations in the 2018 season. Investments in innovation and technology help the agriculture industry to actually reduce emissions and become more resilient. Saskatchewan’s agriculture sector proves this point. Carbon taxes do not.
As I stressed earlier, as other countries emit carbon from their soils, Saskatchewan farmers sequester a minimum of 11.9 million tonnes of carbon dioxide equivalent in their soils every year. This is a big deal. Our climate change plan will achieve further emission reductions in agriculture and continue to increase resilience. We need to learn more from, and emulate the success of, a sector that is leading globally in soil sequestration and resilience. Thank you for your time, and we invite any questions.
The Chair: Thank you, ministers. That was a very detailed and fact-filled presentation by both of you.
You’ll certainly get a lot of questions from this particular group. I’ll ask senators to be brief in their questions, and there are eight of us to ask questions. If the ministers could be fairly brief in their answers, I think we could get around to everyone. We’ll start out with each senator having two questions maximum. Then we will do second round for anyone who has additional questions, if there is time to do that.
We’ll start with Senator Maltais.
[Translation]
Senator Maltais: Thank you very much for your presentations. I am pleased to see that your strategic plan has been confirmed. Certain committee members went out west a few weeks ago, and the scientists and farmers we met practically repeated what you just said. I think your strategic plan has strong roots in the population, among scientists and among those working in the agriculture and forestry sectors. The universities in Saskatchewan are doing excellent research on carbon capture and water protection. The Minister of the Environment will certainly be pleased to learn that. They are doing a lot regarding water protection. We know you have floods and forest fires that are extremely devastating, but your strategic plan is very interesting. Congratulations because not everyone has created rules and a plan for the coming years.
You would rather not have a carbon tax, of course, but what if it is imposed on you? You never know because governments make legislation and often do not consider the innovative components. It is sad, but that is reality. The specific characteristics of your province should, of course, be considered if a carbon tax is imposed, as you pointed out so well. For instance, you do not have major industries concentrated in a specific region that produce a lot of greenhouse gases, or GHG, as it is the case with the industrial regions of Ontario and Quebec. The carbon in your province is largely from the soils. Your strategic plan includes a very specific plan, for forestry as well. If a carbon tax were imposed on you, how would Saskatchewan respond?
[English]
Mr. Duncan: Thank you very much, senator, for your comments and your question. I appreciate the information that you and your colleagues have been able to gather from your visits to Western Canada. I would say a couple of things. We certainly have indicated publicly that the Government of Saskatchewan is preparing a legal challenge in the event the federal government continues down the path of imposing a carbon tax on provinces that don’t reach the benchmark. But at the same time, we’re going to continue to develop regulations and performance standards and additional plans under our Prairie Resilience plan, specifically moving to 25,000 tonnes per year in terms of heavy emitters in the province, as well as creating the offset systems that I spoke about earlier.
There are two reasons. First and foremost, industry in Saskatchewan have indicated that they understand they’re going to be regulated. They want to be regulated by the provincial government. We’re closest to them. We have an ongoing established relationship with industry in the province through our work in environmental assessments and general regulations as part of our environmental code and other regulatory instruments.
The other part to that, though, is we’ve already indicated to the federal government that in a number of areas where we are emitting emissions, for instance, electricity, the federal government has implemented the Coal-fired Generation of Electricity Regulations. We’ve also implemented provincial regulations and we’re working towards an equivalency agreement. We’re going to see a 40 per cent reduction by 2030 through our Crown-owned power utility, SaskPower. We’re on track for a 40 per cent reduction by 2030 through those regulations and moving to 50 per cent capacity for renewables, as well as oil and gas. The oil industry is a major contributor to our economy, but also on emissions.
We’ve stated a goal of 40 to 45 per cent reduction in methane emissions through provincial regulations. What we’re trying to demonstrate in Saskatchewan is that we are serious about emissions reductions. We have a great story to tell when it comes to agriculture and forestry, in terms of the natural soil sinks that we present not only for Saskatchewan but for all of Canada, and that’s why our plan is broader and bolder than the national plan of just a carbon tax.
[Translation]
Senator Maltais: Of course, you are pioneers in agriculture. Your university researchers confirmed that to us when we were there. You are doing outstanding work on this issue. You have a lot of agricultural land. Agriculture and forestry are a fundamental part of your economy, along with the related industries, of course.
Now for a final specific question about an adapted tax because it is really not possible to impose a standard tax from Prince Edward Island to Victoria, B.C. I do not think the government can come up with a standard tax. If the tax is adapted on the basis of the work you are doing and the results you have obtained, would that be an acceptable option for your province?
[English]
Mr. Duncan: Thank you for the question. You’ve mentioned agriculture and I’ll see if Minister Stewart wants to comment on that. I would make two points. What we’re attempting to demonstrate with our plan, and I think what the past practices in the examples from Saskatchewan has demonstrated, is that we’ve actually been successful in not only regulating industry but also reducing emissions in Saskatchewan without a carbon tax.
Our point has been that we think we can make gains in not only ensuring that our economy continues to grow but also doing what we should be doing in terms of the environment without a carbon tax. We’ve tried to demonstrate through this plan — and what we will demonstrate through this plan — is that we can be most effective without a tax. Perhaps Minister Stewart wants to speak further to this, but with the innovations we’re seeing in technology when it comes to agriculture, we’re exporting those technologies, those innovations, those new plant crop varieties all around the world and through a carbon tax, we get no credit for that. One of the issues we have with the carbon tax is that through all the work we’ve already done in Saskatchewan and will continue to do, under a carbon tax system, there is no credit granted to Saskatchewan.
Mr. Stewart: A carbon tax at any level is still ineffective. We have achieved these results without one, and by reinvesting some of the money that our economy would lose through a carbon tax in the technology that allows us to continue to get better results. A carbon tax at any level is counterproductive to the reduction of actual carbon emissions in Saskatchewan, and I would maintain in any place, but certainly in Saskatchewan, with what we’ve been able to do by reinvesting in our industries. To make our industries less profitable reduces the ability, capacity, to reinvest into reducing carbon emissions.
Senator Doyle: Thank you for your presentation today. I have a couple of short questions on your response and what your plans are for the future with respect to climate change.
Has a warming climate changed the nature or variety of crops you grow, or are there other factors that would dictate that? Do you have a plan for the future with respect to climate change and how you would respond to it vis-à-vis farming and that kind of thing?
Mr. Stewart: I think it is fair to say that climate change has not greatly affected the crop mix, but it has encouraged us, through the University of Saskatchewan, the Crop Development Centre and other agencies, to strive for better varieties that are more adaptable. I would say that’s where our research has excelled over the last couple of decades, for sure.
I see more of that in the future. I see us being able to develop varieties of corn and soybeans, for instance, which in the past were not viable in Saskatchewan because of our short growing season. We are doing work on those crops to make them more viable here to continue the process of growing crops year after year that will actually sequester carbon into the soil through the roots.
Senator Doyle: Thank you. If we assume climate change is real and if we feel we have to do our part, can you suggest a better way to obtain, say, a national consensus and a national policy on what is a very complex matter? Is that a fair question?
Anyway, give it your best shot.
Mr. Duncan: Thank you for the question. Minister Stewart and I have had the opportunity to serve in the provincial cabinet for the Province of Saskatchewan for a number of years in several different roles, and the ability for Canadians to find consensus on a lot of topics is challenging from time to time.
I would say this: The consensus should be to revisit and go back to where we were at the Vancouver Declaration. The Vancouver Declaration noted that every province is different, our economies are different and we’re all starting from different starting points.
For example, we have not been blessed with an abundance of hydro power for decades, as some other provinces have, so we’re all at different starting points.
The Vancouver Declaration really spoke to ensuring provinces and jurisdictions had the ability to develop plans that were fair and flexible to their own provinces and to their own jurisdictions.
That would be my advice for consensus. The consensus would be to allow provinces the fairness and flexibility to develop their own plans without imposing a blanket policy across the entire country that doesn’t take into account the differences in the economies.
In Saskatchewan, we export 90 per cent plus of the products we produce. We are 1.16 million people over a large land base, so transportation is important. The things we produce in Saskatchewan are agricultural products, which we’re competing against the rest of the world.
We produce oil, with which we’re competing against a number of jurisdictions around the world that will have different policies.
We produce potash, we produce uranium and we have forestry products. Those are our large, major parts of our economy. That would not be the same story in other jurisdictions in Canada.
Give us the flexibility to produce our own plans that we think will be tailored to each province and our ability to achieve the objectives, rather than just a blanket tax policy. In Saskatchewan, we don’t see how that is going to actually achieve the intended results.
Senator Doyle: That is a great answer. I support it completely. Thank you.
Senator R. Black: Thank you, ministers, for your presentation. When we were out west, we did hear from your producers and your academics. They talked about having done many good things already, so they weren’t getting the credit — and I’m not talking about tax credits — for the work that they’ve done to date to bring down the emissions, which they have done through best practices and other means.
In general terms, what are you doing to acknowledge, as a government, the good work that has been done within the agriculture and agri-food sector to lower emissions? We heard about it today, but what else are you doing to tout that good work that’s been done to date?
Mr. Duncan: In terms of the Prairie Resilience plan and putting in place performance standards for the heavy industries in Saskatchewan, in our existing act that was passed in 2010 we look at 50,000 tonnes per year of emissions and over. What we’re proposing under this new plan is to move that down to 25,000 tonnes and over.
As a part of the compliance mechanisms, companies will have options. Part of that will be the ability to pay into a technology fund that could then be used to lever the purchase of technology to reduce their emissions, and companies will have the option of just lowering their emissions. But companies will also have the ability to purchase offsets, largely from the agricultural community.
That’s one area where we will provide that recognition and a value for the work that’s been done by communities such as the agricultural community.
As Minister Stewart indicated, in early 1990s our soils were emitting 600,000 tonnes per year just in cropland. We’ve now gone from a position of being a net emitter in agriculture land and cropland to now sequestering nearly 12 million tonnes per year. In our system, we want to provide recognition and a value for the work that good land and farm stewards have already been doing for a number of years.
Mr. Stewart: I think that answers the question pretty well. But there are areas, particularly grassland and forages, in which we do not have what we believe are solid numbers as far as sequestration goes. We and our scientists believe that there have been false assumptions as to the limits of sequestration in grassland and that as time goes on we will be able to prove that we have been sequestering far more emissions into grasslands and forage crops than we can show at this time.
We are doing a pretty good job, I think, of making these facts known in Saskatchewan and Western Canada. Ottawa seems to be the place where we’re running into a bit of a roadblock.
Senator R. Black: Thanks very much. Maybe we could do something about that.
Senator Petitclerc: Thank you very much for being here with us. I would like for you to expand on something that you mentioned in your comments but only briefly. At one point, you talked about how important it was to prepare the communities. This is something we’ve heard from many different witnesses on how it can be a challenge, because you have many stakeholders and you have your provincial government’s goals and, in industry, the technology and the data. Yet, at the centre of the solution are the communities.
Can you give me more detail on how you intend to prepare those communities and, if you have some, examples of what they need or would want you to do?
Mr. Duncan: Thank you for the question. As a part of the Prairie Resilience plan, one of the things we committed to the people of Saskatchewan is we want to be able to demonstrate where and how governments, in working with other stakeholders, including communities, are preparing for what a changing climate will bring.
Saskatchewan emits 75 million tonnes per year. We’re 10 per cent of Canada’s less than 2 per cent of global emissions. Even if we reduce our emissions down to zero, which we are not claiming is going to happen or is possible, that’s 10 per cent of Canada’s 2 per cent global emissions. It really isn’t going to change the global picture when it comes to climate change. We need to be resilient to the ongoing changes to climate change.
What we are proposing to the people of Saskatchewan is we will have a way to measure how we are working with stakeholders in ensuring we are resilient to the ongoing effects of climate change. So we’re going to present essentially a score card. How are we doing on things like floodplain mapping? What percentage of Saskatchewan communities have up-to-date floodplain mapping? What percentage of Saskatchewan communities have emergency preparedness plans already produced in the event of flooding, forest fire, extreme weather events, and maintaining partnerships when it comes to Indigenous, traditional knowledge and how we’re incorporating that.
We’ll be working to encourage municipalities to consider disaster mitigation projects as a priority. How do we score when it comes to infrastructure requests we receive from municipalities? And what priority do we put on and what priority do they put on in terms of encouraging disaster mitigation as a part of their applications and the projects that they move forward on a performance basis?
The upgrading of municipal waste and sewage management services so that we reduce and capture and use GHG emissions and biogases that would otherwise be vented and released into the atmosphere.
What we’re proposing is we would develop a score card that would rate how we’re doing and provide timely, regular updates, say every couple of years on whether we’re getting better on those measures or whether or not we’re making progress so we can be accountable to the people of Saskatchewan of how resilient we are as the years go on.
Senator Petitclerc: I read here that there is a consultation that was meant to begin at the start of the year. I’m just curious to know if that’s the case and when you are expecting results of those consultations.
Mr. Duncan: Absolutely. Consultations have already begun with a number of stakeholders including different industries across the province and individual businesses in those different industries. There have been a number of plenary sessions that have already taken place, a variety of stakeholder meetings have already taken place and are already planned for future dates.
From that we will develop regulations as it relates to performance standards for each of the different heavy-emitting industries we will be regulating under our plan. That will be rolling out over the coming months. Our intent is that the bulk of our plan will be ready to be implemented for January 1, 2019.
[Translation]
Senator Dagenais: I want to thank the witnesses. Relatively speaking, has your government invested more or less than the other provinces in fighting greenhouse gases?
[English]
Mr. Duncan: Saskatchewan, on a per capita basis, has invested more in greenhouse gas emission initiatives than any other jurisdiction in Canada. The first example of that is the Boundary Dam #3 Carbon Capture at sequestration unit that is located in southeast Saskatchewan in Estevan. This is a carbon capture sequestration unit that is capturing and sequestering from a 50-year-old coal-fired power unit, and just recently SaskPower, the Crown utility, announced it has successfully captured 2 million tonnes of carbon dioxide and safely stored it under the ground.
So that’s been a major initiative for the province of Saskatchewan and our Crown corporation. It’s well over $1.3 billion project that I’ve indicated has already captured 2 million tonnes. It’s really the largest of its kind.
It’s an important technology not just for Saskatchewan but globally because as of now there’s roughly 1600 coal-fired power plants either in construction or in development around the world. As we’re moving away from coal, that’s not happening certainly immediately, so the world is going to continue to rely on coal-fired electrical generation.
This is important technology that we’re certainly pioneering here in Saskatchewan.
Between 2008 and 2015, through the Go Green Fund we invested $60 million through the Ministry of Environment on a number of largely public-private partnerships to reduce greenhouse gas emissions, increased biodiversity and educate the public about climate change.
We’re trying hard to change. There’s the view of some that Saskatchewan has not done its part. We certainly would argue we have done more than many jurisdictions in the country and certainly are leading when it comes to some groundbreaking technology. It’s important not just for Canada but really important for the global picture when it comes to greenhouse gas emission reductions.
Mr. Stewart: Besides all of that, we’ve also developed the technology that allows farmers around the world to achieve the kind of results we have achieved in Saskatchewan. We do export and sell equipment and technology around the world, so that has come with a very substantial private sector investment over the years, both from manufacturers and developers of technology and farmers in Saskatchewan who have pioneered technology and made it export ready.
[Translation]
Senator Dagenais: If you want your plan to serve as an example to the other provinces, what kind of recommendation would you make to our committee or to the government in connection with our report?
[English]
Mr. Duncan: Again, going back to one of my previous answers, what we would urge is allow the provinces to develop their own plans that really provide for that flexibility that will take into account the different needs and the different realities of each of our individual jurisdictions with respect to our people, with respect to our economies, with respect to where we all are at this particular time.
As I’ve indicated before, neighbour jurisdictions to Saskatchewan have been blessed with a lot of hydro power, and certainly we purchase some of that hydro power. That has not been the example of Saskatchewan. We’ve relied on a cheap, available supply of coal for the bulk of our electricity. We’re moving in a different direction in terms of adding more renewables and implementing technology like carbon capture and sequestration, but we’ve spent significantly in developing that technology that isn’t just for Saskatchewan; it is applicable for around the world if we actually want to see those reductions. We shouldn’t penalize a province like Saskatchewan for developing our own plan that we think will be more successful than if we just have a carbon tax imposed on Saskatchewan.
Back to the Vancouver Declaration, we need fairness and flexibility from the federal government to achieve what we’re all trying to achieve.
Senator Woo: Thank you, ministers, for your testimony. As I listen, it strikes me there are three major sets of concerns you have about the carbon tax framework that the federal government is proposing.
The first is for your trade-exposed globally competitive sectors, the disadvantage that they might encounter because of a carbon tax.
The second is the issue of investment in new technologies, for example, the sequestration project that you have putting emissions from a coal plant into the deep underground, how to finance those kinds of projects and how to, in fact, just take those initiatives.
The third concern you have — I think it’s a major concern; I heard it over and over again — is how to get credit for things you’ve already done and for things that are happening in Saskatchewan that are part of your identity. You know the farmlands, the grasslands, the sinks that are in place and which obviously do reduce carbon from the atmosphere.
We’ve been talking to lots of people about this issue. My sense of what I’m hearing from federal officials is that all three of these issues are very much within the framework for climate change mitigation that the federal government is putting forward. There is a plan. There is a way to do carbon pricing that takes into account trade-exposed globally competitive sectors, globally accepted and recognizes best practices. There is a way to invest in new technologies, innovation of the sort you described, precisely because it can be funded by a carbon tax. Then there is work going on again specifically to look at offsets.
We just spoke to colleagues in Environment Canada and Natural Resources Canada, and they provided a written brief on the work they’re doing to try to come up with proper measures of offsets. First of all, coming up with a good methodology but then, more importantly, measuring the incremental benefit. I think we all agree we have to measure the increase, not the absolute amount, because that wouldn’t be fair otherwise.
What I’m trying to get at is an understanding of whether there is some common ground here, because all of the concerns you’ve expressed seem to me to be similar concerns we’ve heard from other stakeholders and which federal officials seem to recognize.
When I listen to your description of the heavy-emitting industries reduction strategy, it sounds a lot to me like cap and trade. Maybe can you correct me if I am wrong, but you’ve set a limit, and you allow industries to either reduce or not go over that limit by buying credits from somewhere else, or perhaps paying a fine. Maybe you can clarify that.
The bottom line is this: A carbon tax, or whatever you call this mechanism, is a way of creating a market-based, price-based mechanism to discourage emissions and to encourage innovation, in which Saskatchewan is absolutely a leader. Is that, in fact, your shared objectives as well, to create incentives for reducing emissions among heavy emitters, and on the other hand, to create disincentives for organizations and individuals and consumers to continue using highly emitting sources of energy?
Mr. Duncan: Thank you for the question, senator. I would first start by saying we want to provide certainty for industries in Saskatchewan, that they will know that Saskatchewan is a place they can not only maintain their operations but grow their operations.
We’re looking at, for heavy emitters, performance standards by which they would have to be in compliance. I would say there’s a difference between cap and trade. We want to allow for growth in industry in the province, so we’re allowing for flexibility in how they achieve that compliance.
I would say, in part, that could be done through technology, either reducing their emissions through the use of new technology. They would have the ability, if they’re over that performance standard, to pay into a technology fund, to reinvest in technology that would help them reduce other emissions. Our plan is looking at how we provide as much flexibility for industry to remain competitive while at the same time reducing their emissions in the province.
The other part is that, as Minister Stewart has indicated, under a carbon tax plan there is no way that there is credit given for the early action that’s already been taken by industry, whether it’s agriculture, forestry or others. As the minister has indicated, we are producing, manufacturing and exporting around the world agriculture technology that is increasing the amount of zero till that’s taking place in places like Russia, Ukraine, the United States, et cetera. Yet, under the federal carbon tax plan there’s no way that Saskatchewan can get benefit from that.
I would say, to the credit of the federal minister, ITMOs — internationally transferable mitigation outcomes — that’s an important part for us and that is in our plan. We think that that’s great for Saskatchewan once those agreements are developed on a nation-to-nation basis, because we think we have, frankly, more credit produced in Saskatchewan than we can use, so we’re looking for an ability to take advantage of those ITMOs.
Our concern with the carbon tax, I’ll just give you an illustration. We have a major steel manufacturer in the city of Regina that employs nearly 1,000 people, EVRAZ steel. They produce a lot of products including pipeline. I won’t get into, today, the debate on pipeline, but just as an example, their main competition is in places like China. The way EVRAZ produces steel products, they are in a jurisdiction that is using carbon capture and sequestration and moving to 50 per cent renewables by 2030.
As a country, we need to be cognizant of the fact that we will export 35 million tonnes of coal this year to places like China, India and other countries. Half of that is going to be used to create electricity. The other half of that is going to be used to create products such as steel.
I can tell you that the way that EVRAZ in Regina makes their steel product, their footprint for how they make it, because there’s a difference between blast furnace and arc furnace, is 80 per cent lower than China.
We don’t understand how imposing a carbon tax on a company like EVRAZ is going to do anything to their competitiveness. It’s only going to further erode their competitive position. We’re not only potentially going to export investment, we’re actually going to export the emissions to another country that certainly will not be putting in place, we don’t believe, a carbon tax and will be producing steel at a much higher GHG footprint.
That’s just one example of where we’re very concerned about our trade-exposed and emission-intense industries in Saskatchewan.
Senator Woo: Thank you for that. I’m sure you’ve had discussions with experts about what they call output-based carbon pricing for industries such as the one you mentioned, which can provide the sort of protection for globally exposed competitive sectors. We don’t need to go into a debate on that now, but there are ways through which a price-based mechanism for reducing emissions can be put in place without damaging the competitiveness through a special pricing mechanism. I’m sure you’re aware of that.
Mr. Duncan: Senator, I would say that’s what we are proposing in Saskatchewan, that we would have performance standards for all of our heavy emitter industries, including industries such as steel manufacturers like EVRAZ. I know the federal minister has indicated they will review all plans by, I believe, September to evaluate them against the backstop, but the initial review was that our plan wouldn’t reach that backstop.
What I’m saying is look at the plan in its entirety. We think this is a very bold plan. It’s a broad plan. It’s one that isn’t just based on applying a tax, but we certainly would be regulating those industries here in the province under this plan.
The Chair: My question is regarding the use of wood in construction. We visited a couple of sites where very large buildings were constructed entirely of wood, including one on the campus at UBC.
Five provinces have adopted a charter to increase the use of wood in their province in construction. Do you anticipate Saskatchewan taking similar measures?
Mr. Duncan: It certainly could be something that will fall under our plan. We have a number of issues that we’re still working through. In terms of the National Building Code, we want to ensure we’re up to date in terms of applying the National Building Code here in Saskatchewan. We are aware of what other jurisdictions have done in terms of wood construction and plans that they’re implementing. It certainly is something that is under consideration as we develop this plan throughout 2018.
The Chair: Thank you. Senator Maltais has a question on second round.
[Translation]
Senator Maltais: There is something very interesting in your strategic plan that came up often during our visit to Western Canada: you reinvest in farm machinery and in water conservation. How do you fund that program? How do you cover the cost for farmers or users of the forest? What arrangements do you make with them? They did not provide any details about that. I am fortunate to have both ministers before me today. How do you fund that program?
[English]
Mr. Stewart: Thank you very much for the question. Our farmers fund that themselves. That’s self-funded by our farmers. It’s to their advantage, for production reasons, to upgrade their equipment from time to time. Being early adopters of new technology that they are, they try to have the best technology they can afford and justify in their operations. Bear in mind our grain farms are very large. I think an average-size commercial farm might be 3,000 acres and that would be on the small side. There is some capacity there for them to invest in equipment that is more functional for them, particularly when there’s the benefit of sustainability being attached to it.
This is how the technology has been developed. Our farmers have just wanted better equipment and better technology. We have great research at our universities and other institutions. We have equipment manufacturers that are cutting edge as far as building technology, and, luckily for us — and this makes the whole thing work — we have farmers who are very early adopters of new technology and always demanding new technology. They fund it out of self-interest, with an eye to doing the right thing.
[Translation]
Senator Maltais: You sell new farming machinery all around the world. You are a pioneer in the field. I am surprised and very pleased to learn that farmers have decided to get on board with your project. There does not seem to be a lot of reluctance on their part. I am pleasantly surprised. We learned this from the people we met, not from you. Forestry workers seem to be pulling together to reduce greenhouse gases as much as possible. Your strategic plan encourages them to do that, but they have decided to get on board. There does not seem to be any reluctance. Have you noticed any reluctance with regard to these improvements?
[English]
Mr. Stewart: No, we don’t. In fact, our producers, like I said, are always hungry for new technology. It’s a happy coincidence that in a semi-arid climate like ours particularly, the equipment that makes farmers more productive and makes better use of soil nutrients and moisture, which is sometimes in limited supply, is also the same equipment that helps us sequester carbon.
Mr. Duncan: In addition, senator, when we announced our plan late last year we had overwhelming support from a broad range of stakeholders, including not just the agriculture sector but the oil and gas industry and the mining industry. Essentially, we’ve been ministers for a number of years now and I can’t think of an initiative our government has introduced that has had such broad support from all across the province, I think in part because a number of our stakeholders are concerned about what a carbon tax would mean for their industry and for their individual operations, but in part because they believe, and we believe, that they are good stewards and that they are already taking action to be good stewards of the environment. I think they agree with us that an imposed carbon tax does not recognize any of the work that they’ve already done. We were very grateful for the overwhelming support we’ve had from industry in the province since we made the announcement and, frankly, by the population at large of the direction the government is taking on this important file.
[Translation]
Senator Maltais: Thank you, ministers. It was very interesting and once again I am pleasantly surprised by your strategic plan.
[English]
The Chair: I’d like to thank both ministers. Your staff got off really easily there, though. You know your files very well, I must say. We greatly appreciate your input. It’s great to get a provincial viewpoint. We’ve heard from a lot of other stakeholders, but we really appreciate hearing a provincial government’s standpoint.
Before we leave, I’d like to take a moment to let you know that this afternoon in the Senate there were many speeches and expressions of condolences and tributes for the Humboldt, Saskatchewan, area and the tragedy that occurred there — in fact, for the people of all of Saskatchewan. I think the feeling of sorrow has spread far beyond your borders. We’re with you in the tragedy in terms of the sorrow that is felt across the country.
Thank you for being with us here today.
(The committee adjourned.)