THE STANDING SENATE COMMITTEE ON AGRICULTURE AND FORESTRY
EVIDENCE
OTTAWA, Thursday, June 4, 2026
The Standing Senate Committee on Agriculture and Forestry met with videoconference this day at 8:01 a.m. [ET] to examine and report on the role of the agriculture and agri-food sector with regard to food security in Canada; and, in camera, for consideration of a draft report.
Senator Mary Robinson (Chair) in the chair.
[English]
The Chair: Honourable senators, I call to order this meeting of the Standing Senate Committee on Agriculture and Forestry. My name is Mary Robinson, and I’m chair of this committee. Welcome to members of the committee, our witnesses and those watching this meeting online.
I would like to start by acknowledging that the land on which we gather is the unceded traditional territory of the Algonquin Anishinaabe peoples.
Before we hear from our witnesses today, I would like to ask senators around the table to introduce themselves, and I’ll start with our deputy chair.
Senator McNair: Good morning. John McNair, New Brunswick. Welcome.
Senator McBean: Good morning. Marnie McBean, Ontario.
Senator Sorensen: Karen Sorensen, Alberta, Treaty 7 territory.
[Translation]
Senator Hébert: Martine Hébert from Quebec.
[English]
Senator Black: Robert Black, Ontario.
Senator Muggli: Good morning. Tracy Muggli, Saskatoon, Treaty 6 territory.
The Chair: Today, the committee is continuing its study on the role of the agriculture and agri-food sector with regard to food security in Canada. We have the pleasure of welcoming Marilou Cyr, General Manager of Zone Agtech, and Mehmet Tulbek, President of the Saskatchewan Food Industry Development Centre. Thank you very much for joining us.
We will begin with your opening remarks before we move to questions from senators. You will both have five minutes. When you get near the end of your time, I’ll catch your eye to have you wrap up.
We’ll begin with you, Ms. Cyr. The floor is now yours.
[Translation]
Marilou Cyr, General Manger, Zone Agtech: Madam Chair, members of the committee, thank you for giving me the opportunity to contribute to this discussion on food security in Canada.
I am Marilou Cyr, general manager of Zone Agtech, an innovation ecosystem specializing in agricultural technologies, plant bioproducts and new food production models.
Every year, we support a number of innovative agritech companies and producers in collaboration with an ecosystem of researchers, investors and industry partners to develop solutions to address some of the biggest challenges in our food system, including labour shortages, climate change, rising production costs and the need to produce more with fewer resources.
Today, I would like to draw the committee’s attention to three key issues that will have a decisive impact on Canada’s food security over the coming decades. The first issue is Canada’s ability to remain competitive and invest in its future. In Quebec, many fruit and vegetable producers operate in a context where profit margins are extremely low, despite high production costs mainly related to labour and energy. In some high-volume productions, we are seeing situations where producers are selling at prices that barely cover their production costs owing to competition from imported products, which often benefit from more favourable climatic conditions. This financial pressure reduces many producers’ ability to invest in their infrastructure, modernize their operations and adapt new technologies.
The second issue concerns innovation. Agricultural technologies today make it possible to automate many tasks, reduce water and energy use, improve yields and adapt to climate change. The federal government already supports a number of major initiatives in the research, development and demonstration of agricultural innovations developed in Canada. This is particularly evident in the support provided by Agriculture and Agri-Food Canada and Farm Credit Canada.
However, we are still seeing a growing challenge in post-demonstration funding. Even when a technology has proven its value, several barriers remain to ensuring its adoption on a larger scale by producers. This situation raises a broader issue of technological sovereignty.
Canadian producers continue to purchase a significant portion of their equipment from abroad. However, supporting the growth of Canadian agritech companies creates jobs and economic wealth and, above all, develops solutions adapted to our climate, our crops, our energy constraints and our regulatory reality. In the long term, Canada’s security will depend as much on our ability to produce food as on our ability to develop the innovations that will enable us to produce it.
The third issue is probably the one that concerns us the most: funding for scaling up. Canada has effective mechanisms for developing and demonstrating innovations. However, when an innovative company or producer wants to move from a demonstrated project to a large-scale commercial deployment, there is still a significant funding gap.
This reality affects both agritech companies seeking to manufacture their technologies in Canada and innovative agricultural producers developing new production models. Controlled-environment agriculture perfectly illustrates this situation. Against a backdrop of climate change and dependence on imports, controlled-environment production is a strategic tool for increasing our year-round production, but such infrastructure remains extremely difficult to finance.
We see companies today that have demonstrated the technical and economic viability of their innovation or their first production site and are looking to build a factory or a second production site to reach the critical size necessary for profitability.
Despite a strong commitment from the private sector, a number of projects are struggling to secure the additional financing needed to bring them to fruition. They are considered too risky by traditional lenders, but they also do not fit the model sought by venture capital, which generally favours ultra high-growth, low-capital-intensive companies. So we are not necessarily facing a lack of capital, but rather a lack of mechanisms that would allow for the sharing of risks associated with large-scale initial commercial deployments.
Finally, in Quebec, there is one last challenge: access to energy. In Quebec, a number of agricultural and agri-food projects could increase local food production, but they face a fundamental challenge: energy. Projects requiring more than 5 megawatts of energy must be selected based on their economic impact, which puts them in competition with sectors such as mining, aluminum and data centres. However, while energy is recognized as a strategic input for industrial development, it should also be considered a strategic lever for food security. The delays, costs and uncertainty associated with access to energy are currently jeopardizing the implementation of a number of projects that would directly contribute to Canada’s food sovereignty.
In light of these findings, I respectfully submit three recommendations to the committee. First, strengthen mechanisms to support the adaptation and commercialization of Canadian agricultural innovations to accelerate their deployment within agricultural businesses. Second, create risk-sharing mechanisms designed to support the scaling up of innovations, particularly by funding initial commercial infrastructure and strategic projects that sustainably increase Canada’s food production capacity. Finally, recognize access to energy as a strategic lever for food security and support the development of food infrastructure that requires significant energy capacity.
I will conclude with a look to the future: Around the world, we are seeing major investments in strategic agricultural technologies. Countries such as Israel, the Netherlands, the United Arab Emirates and Singapore are investing heavily in controlled-environment agriculture, genomics and innovative agricultural technologies in general. These countries no longer view innovation as an economic issue, but as a matter of resilience, food security and national sovereignty.
Canada currently has many strengths: world-class researchers, innovative producers, abundant natural resources and a vibrant entrepreneurial ecosystem. Our main challenge is no longer just to develop the innovations of tomorrow, but to ensure that they are deployed here, adapted to our realities, adopted by our producers and scaled up in Canada. Otherwise, we risk remaining dependent not only on food imports, but also on foreign technologies that will enable us to produce the food of tomorrow.
Thank you for your attention, and I look forward to your questions.
[English]
The Chair: Thank you, Ms. Cyr.
Next we have Mr. Tulbek. The floor is yours, Mr. Tulbek.
Mehmet Tulbek, President, Saskatchewan Food Industry Development Centre: Thank you, Madam Chair and honourable senators, for the opportunity to appear before you today on behalf of the Saskatchewan Food Industry Development Centre, known as the Food Centre.
My name is Mehmet Tulbek, President of the Food Centre. We are an industry-led, non-profit innovation organization based in Saskatoon, Saskatchewan, supporting food, ingredient and biotech companies through research, product development, pilot-scale processing, commercialization, contract manufacturing and training.
We sincerely appreciate the committee’s examination of food security and welcome the opportunity to share our perspectives.
Food security is often discussed in terms of agricultural production. Canada is privileged to be one of the world’s leading agricultural nations and a major exporter of grains, oilseeds, pulses, livestock products and food ingredients. However, food security extends far beyond production alone. Food security exists when all people have reliable access to sufficient, safe, nutritious, affordable and culturally appropriate food. It is influenced not only by what we grow but also by our ability to process, transform, distribute, store, transport and manufacture food products that meet the needs of diverse communities across Canada.
Despite Canada’s strengths as an agricultural powerhouse, many Canadians still face food insecurity. Indigenous and northern communities, remote rural regions and vulnerable urban populations often face higher food costs, reduced access to nutritious and high-nutrient-density foods, transportation challenges and limited local food-processing infrastructure.
In our view, food security is a prerequisite for food sovereignty, and we cannot sustain our national security without providing food sovereignty. Communities with greater capacity to produce, process, distribute and manage their own food systems are generally more resilient to economic disruptions, supply chain challenges, climate-related events and global market volatility.
Canada exports large volumes of agricultural commodities but often imports higher-value processed foods, such as pasta, from abroad. Although we grow the best durum wheat in the world, we cannot produce enough pasta to meet our nation’s needs. Strengthening regional processing capacity can increase the availability of locally produced foods, create jobs, improve supply chain resilience, create high-value export opportunities and give communities greater control over their food systems.
This is especially important for northern, Indigenous and remote communities, where transportation costs significantly affect food affordability. Investments in small- and medium-scale food processing facilities, community kitchens and local distribution networks can significantly improve food accessibility and affordability.
Food security in Indigenous communities requires a distinct, community-led approach. Indigenous food sovereignty extends beyond access to food and encompasses the right to maintain traditional food systems, harvesting practices, cultural food knowledge and local decision making.
Federal programs should continue to expand support for Indigenous-owned food businesses, Indigenous-led processing facilities, community agriculture initiatives, traditional harvesting programs and food entrepreneurship training. Long-term investments in capacity building and community ownership are essential to achieving sustainable outcomes.
The agriculture and agri-food sector can also contribute to food security through innovation.
Canada produces world-leading crops, including canola, wheat, pulses and oats, as well as other agricultural commodities that can be processed into nutritious, affordable and shelf-stable food products. Advances in food processing, ingredient innovation, fermentation, preservation technologies and value-added manufacturing offer opportunities to expand access to healthy foods, reduce waste and improve affordability.
We as Canadians believe Canada should place greater emphasis on developing value-added food products made with Canadian-grown ingredients to support domestic food security objectives and create export opportunities. In our view, several opportunities exist to improve federal measures on food security.
First, greater investment is needed in regional food-processing and manufacturing infrastructure.
Second, stronger support should be provided to Indigenous-led food sovereignty initiatives and to community-owned food enterprises.
Third, food innovation, commercialization and product development programs should be more closely aligned with national food security objectives.
Fourth, federal programs that support agriculture, food processing, Indigenous food systems, local food infrastructure, school food programs, nutrition initiatives and economic development should be more effectively coordinated to promote a more integrated approach to food systems.
Finally, we should continue investing in applied research, value-added manufacturing infrastructure, workforce development and technology adoption to ensure that food innovations can move efficiently from lab concepts to commercial reality.
The Food Centre is committed to advancing these objectives through applied research, pilot-scale processing, ingredient innovation, food manufacturing support, workforce training and commercialization services. We see tremendous opportunities to strengthen Canada’s food system, drive economic growth, support producers, advance Indigenous food sovereignty and improve food security for all Canadians.
In closing, our national food security strategy should not focus solely on whether we can produce enough food; it should focus on whether every Canadian community has the capacity to access, process, distribute and benefit from safe, nutritious, affordable and culturally appropriate food.
We have the resources, expertise and capacity for innovation to become a global leader in resilient and inclusive food systems, and we welcome the opportunity to help advance that vision.
Thank you. I look forward to your questions.
The Chair: Thank you, both.
We will now proceed to questions from senators. Senators will have five minutes in which to both ask their questions and have your answers.
Senator McNair: Mr. Tulbek, in August of last year, the Minister of Emergency Management and Community Resilience and Minister responsible for Prairies Economic Development Canada announced over $4.2 million in funding to support Saskatchewan’s leading role in Canada’s agricultural sector. As part of that federal funding package, your organization received $420,000 for an investment to purchase equipment and renovate to create co-packing capabilities and incubation space.
Can you tell us how this investment increased food processing opportunities for you and promoted value add in Saskatchewan? What further federal investments, in your view, would be needed to continue to do so, and how would that be used?
Mr. Tulbek: Thank you, senator. I really appreciate your question.
Basically, the support went to our efforts to support the companies so that we can co-manufacture products for them and they can scale up and develop their own opportunities and facilities.
The Food Centre has been working in this field for the last 30 years, and we have examples of our incubator clients moving into their own operations and building their own facilities in Canada. The funding that we’ve been receiving over the last 30 years, through Prairies Economic Development Canada and different opportunities, has helped companies grow out of the Food Centre and then move into their own commercial manufacturing. For example, by utilizing the Food Centre’s services, they used to produce about three to five metric tonnes of product in a day. Now we have examples of companies that are building their own facilities and producing several metric tonnes of product a day, and then they sell their products and run their operations in the country.
Senator McNair: Thank you.
Senator Black: Ms. Cyr, I think I heard you say that there is not a shortage of capital but a system that gets projects in the pipeline or something to that effect. Is that correct? Could you expand on that a little more?
[Translation]
Ms. Cyr: Thank you, and I would be happy to do so.
In the current situation, we know that budgets are tighter, in both Quebec and Canada. However, there are still a number of programs, such as Farm Credit Canada; Quebec’s ministry of agriculture, fisheries and food, or MAPAQ; the Financière agricole du Québec and the BDC. Those are all very well-capitalized organizations that exist to fund projects.
However, we often see that projects recently set up in Canada get started with $8 million to $12 million in private capital. They then seek to maximize that investment by leveraging conventional or government loans, but they fail to do so. Controlled environment agriculture, such as year-round production of shrimp or strawberries, is still seen as too risky an investment.
Unfortunately, there have been failures in the past, but we think it’s important to continue investing in controlled environments, given that climate change is real and that Canada will be affected just as much as other countries in terms of outdoor production.
When I say “risk management mechanisms,” it’s mainly about helping conventional and traditional lenders take on more risk so that they can fund the missing portion needed to complete strategic projects.
[English]
Senator Black: Thank you.
You also mentioned that one of your recommendations was to put in place risk-sharing mechanisms. Could you expand on that, please?
[Translation]
Ms. Cyr: Yes, of course. For example, under the tax credits for scientific research and experimental development, some organizations will provide loan guarantees, which goes a long way toward funding projects. We often talk about production here; it’s agricultural production, in fact, but a new kind of modern agricultural production. Look at traditional lenders, such as the Financière agricole du Québec, which is used to more traditional models, such as funding a hog barn, a dairy and so on. When the time comes to fund mushroom production or shrimp production in a controlled environment, that becomes out of the norm. As a result, the current mechanisms don’t consider those new types of production when authorizing funding. The idea, then, is to adapt the current terms and conditions to ensure loan guarantees to help traditional lenders get the funding they need.
[English]
Senator Black: Thank you very much.
Senator Sorensen: Thank you both for being here.
Ms. Cyr, I’ll give you a break, but I’ll come back to you.
Mr. Tulbek, I’m going to ask you to repeat some of what you said in your presentation because I was trying to grasp it all. The question I have, which I know you spoke to, is this: What are some of the emerging food products or processing technologies that could improve food affordability and nutrition availability, particularly in northern, Indigenous, rural and remote communities — I don’t need to explain to you what the barriers are in those areas — and also support some of our small- and medium-sized food processors in bringing those products to market?
Mr. Tulbek: Thank you, senator.
Basically, we have to look at what Indigenous communities raise and grow in their areas. In particular, if you look at fish production, it’s supporting them immediately with the manufacturing, processing and preservation of their fish products and supporting their initiatives so they can be self-sustainable and feed their communities, as well as sell certain products accordingly. We can look at wild rice. There are mushrooms, fruits and vegetables, a lot of things Indigenous communities are interested in and are trying to produce more of. They are trying to be more self-sufficient by growing and selling products to urban areas. These products come from different warehouses thousands of miles away, so they can support local development in northern Alberta, northern Saskatchewan, northern B.C. and different parts of the country.
The other one would be, of course, what we grow. Look at cereal crops. We have really great examples on the canola side. We basically developed significant capacity in crushing and growing. Oil processing has doubled in the last couple of years. Pulses have been growing. We can do more wheat. We can look at durum wheat in pasta, and there are several examples. We need to basically identify and look at the resources for each province.
Senator Sorensen: Ms. Cyr, on the same topic of barriers, not only you but other witnesses continue to tell us that the research we do is great, but getting commercialization of that research out is problematic. I need examples because I don’t live in the agricultural world and never have.
When you talk about barriers, you just mentioned controlled production, so that was a really good example for me. I didn’t know we had controlled production over certain products.
What are some of the other barriers that you’re referring to, just to give somebody like me an example of what gets in the way and then, I guess, what policy changes could help?
[Translation]
Ms. Cyr: Is the question mainly about controlled environment production? Yes, there are a lot of issues in a controlled environment. Everyone is aware of that, because it takes energy, water and access to services that are considered to be more industrial, so it’s less common in the agricultural sectors. Even so, particularly when it comes to northern communities, controlled environment agriculture will become more and more important. In fact, we worked on a related project with the Canadian Space Agency to develop controlled environment agriculture in northern environments.
There are certainly solutions: First, the risk-sharing mechanism is an important component. There are currently projects designed to launch in a controlled environment, and companies have raised the private capital required to carry them out. These are still projects worth a few million dollars, so they’re considerable investments. With private investments, the minimum we look for when we support businesses is at least 50%. We’re looking for the mechanism to make up the other 50% to officially ensure that the project is completed.
As I said, it isn’t a lack of capital, but a lack of risk sharing. It’s still very difficult to access funding in controlled environment production, especially since there have been failures. I’m thinking of two operations in Canada where things didn’t go well. The result is that lenders are even more cautious, so it becomes very difficult to get off the ground.
The other issue in terms of a controlled environment is energy — especially for fruit and vegetable crops, plant crops — since you need electrical energy to produce 12 months of the year. In Quebec, at least, because of energy constraints, we have much less hydroelectric power now than before; the thresholds are five megawatts. To give you an example, a five-megawatt greenhouse operation covers about one hectare. It isn’t very big. In a controlled environment, that’s about 10,000 square feet, so it’s even smaller.
If you want to make controlled environment production facilities of a certain scale, it takes more energy to have profitability and volume. The 5-megawatt threshold means that projects are undersized, which makes it hard to combine efficiency and profitability, or if they’re sized properly, projects will often have 10 megawatts or 15 megawatts. For projects of that scale, businesses have to apply. It takes at least 18 months to open the file, and it can take up to three years to get the energy.
You obviously know how it is: With business projects, when it takes too long, people will choose somewhere else. Here at home, we still attract a lot of foreign businesses; we want to increase Canada’s food sovereignty and attract private investors. In the past two or three years, we have lost a great deal of potential investment to the United States. Right now, many people are interested in the United Arab Emirates, for example, where there’s a great deal of investment. The current energy and implementation constraints mean that there is much less investment in this sector than Canada could have. Does that answer your question?
[English]
Senator Sorensen: Yes. Thank you.
[Translation]
Senator Hébert: I’ll start with you, Ms. Cyr. I’d like us to come back to the concept of venture capital. I think that it’s essential given all the evolution in the industry, and it’s a fundamental issue when it comes to food security.
I’m on the Business Development Bank of Canada website. You mentioned it a bit earlier, and I see that there are funds that exist and that are specifically reserved for agricultural technologies. There’s the Growth Venture Fund, for example. However, I notice that even though agricultural technologies are among the targets for this type of fund — there’s $500 million, which is still significant — one of the conditions for accessing this venture capital funding is to have sales of $10 million or more. Do those access conditions seem appropriate for the reality of the industry or not?
Ms. Cyr: Thank you for the question, which is very relevant.
When we talk about venture capital for businesses . . . . Canada’s agtech ecosystem is still quite young. Canadians have been talking about it more seriously for about eight years, so a little before the pandemic. The pandemic has obviously sped things up enormously, but Canada still has very few agtech companies that generate more than $10 million in sales, because the adoption of this technology is slow.
We have done a lot of work raising awareness among agricultural producers to demystify the technologies and facilitate change management within farm businesses. There are smaller farms that don’t necessarily have the labour to integrate technologies properly or easily. There was work to be done on that front. While all of that is being done, companies have started to market certain products, but sales figures are more likely to be around $3 million to $7 million.
Ten million is indeed a bit high, especially for venture capital. With $10 million in sales, businesses generally find it easier to fund themselves through traditional investors.
Senator Hébert: Mr. Tulbek, do you have anything to add?
[English]
Mr. Tulbek: Thank you, senator, for your question.
Our ecosystem, the Food Centre, started in 1997. Over the last 30 years, we have been supporting the growing agri-food industry. In Saskatchewan, we have strong value-added processing, more on the primary producing side. We produce crushed products like canola oil, canola meal, oat products, oat flours, groats, different flakes, pulse proteins, starches and flours. These are the primary ingredients going to the end users.
What we are looking for is to help the products be manufactured so that they can be utilized by consumers. There is interest by venture capital. They are looking for success stories and successful projects. It is not happening.
Over the last several years, venture capital and angel investors are becoming more careful in investing in these applications.
We have to look for real winners and good projects where we can drive sales and growth opportunities.
Thank you.
Senator Hébert: That includes the Business Development Bank of Canada, or BDC?
Mr. Tulbek: Everything, yes. The BDC and Export Development Canada, or EDC.
[Translation]
Senator Hébert: Thank you.
I want to continue on this topic, because I think it’s important. A number of funds have been created precisely to enable certain strategic sectors in Canada to develop. I’m thinking of funds for climate or environmental technologies, or regarding medicine and life sciences.
Do you think that having a fund dedicated to the agricultural sector within an organization like the Business Development Bank of Canada would help break down the barriers that currently exist?
Ms. Cyr: Is the question for me or for Mr. Tulbek?
Senator Hébert: Both.
Ms. Cyr: I’ll start, if I may. Thank you, madam.
Right now, Farm Credit Canada is responsible for funding the bio-food chain, and it does that very well. The only missing piece at Farm Credit Canada is something for the start-ups that want to scale up to an industrial level, that is, build a factory, officially launch their marketing and so on.
The other missing component, which would promote the development or adoption of agricultural technologies, is funding for agricultural producers who want to modernize with new technologies.
Canada is less restrictive and is prepared to take more risk in this area. Agricultural producers are still well funded. There is still work to be done in Quebec, but I know that isn’t your mandate.
For Farm Credit Canada, it’s really the “start-up” component that could be improved.
[English]
Mr. Tulbek: Senator, thank you for your question. I agree with Ms. Cyr. Overall, in addition to Farm Credit Canada’s efforts with GrowCanada and the $7-billion investment, there is a need for more investments through EDC, BDC, all of the federal programs and the Strategic Response Fund to potentially look at new opportunities.
We have to look at the national food security objectives. If provinces, farmers and growers can collectively look at more vertically integrated operations and projects that can drive success, that will be important.
I believe we have more work to do in terms of due diligence in selecting the projects so that we can be effective in utilizing all of these funds.
Senator McBean: Thank you, both. I am going to continue in the same line as Senator Hébert.
In one of my other committees, the Standing Senate Committee on Banking, Commerce and the Economy, we have been looking at access to capital and credit for small- and medium-sized enterprises.
Ms. Cyr, you have said many times that access to capital is not the problem, but you said in your testimony that there have been challenges following the demonstration phase.
To both of you, what have you found the best sources of scale‑up patient capital to be, and do you think there are examples or opportunities for the federal government to incentivize and encourage more investment in the scale up? Starting with Mr. Tulbek, once you have done the incubation of the companies, what are some success stories of them scaling up and moving out on their own? Then the same question for you, Ms. Cyr.
Mr. Tulbek: Thank you, senator. I can share here that the companies we support work with federal organizations. One example is Prairies Economic Development Canada with their great business scale-up and commercialization projects. They also work with Farm Credit Canada, or FCC. There are several product programs that they work with, and they grow their companies. There are examples here of companies that are selling their snack products and growing their businesses all over Canada, as well as exporting to the United States and other destinations.
On a smaller scale, going to the next level, everything is related to sales and identifying the right opportunities. That is what we are trying to help them with, as well as connecting them with the right people and growing and nurturing those companies in the ecosystem.
Overall, the support programs we saw from Prairies Economic Development Canada, the Ministry of Agriculture, the Ministry of Trade and Export Development, the Government of Saskatchewan and FCC are really driving companies to the next level.
Senator McBean: Are there opportunities for private capital to come in and turn it into an investment? Would there be tax incentives on profits for investors?
Mr. Tulbek: That is happening as well. There are private investors, investment companies, angel investors and different groups who are looking at companies. We saw some examples in our province, in Western Canada and through our clients. But, again, it is a matter of business opportunities, business potential and sales opportunities.
Before COVID, these types of investments happened more. There were more deals then. Following COVID, there was a decline, but there are certain sectors that are growing well.
If you look at the food industry, especially the beverage industry and snack and pet food industries, there are certain areas that are really growing, almost double digits per year, in North America. We are seeing some opportunities. Again, it depends on the segment of the industry.
Senator McBean: Ms. Cyr, if have you felt that private investment has declined after COVID, could you suggest as to why you think that has happened?
[Translation]
Ms. Cyr: In fact, what we’re seeing now in terms of investment . . . . There was a tremendous amount of investment during the pandemic, yes.
At the moment, there’s a clear migration of strategic priorities toward the defence sector, which particularly affects businesses in the agtech sector. There are some venture capital funds that exist across Canada, and certain seed and pre-seed funds are still very interested in agtech, but they often choose to prioritize less capital-intensive businesses, that is, software, precision agriculture sensors and so on.
When it comes to developing an agricultural robot, for example, or controlled environment production, it’s often a matter of several million dollars, especially for controlled environment production. If we keep in mind that the BDCs of the world, which do have a lot of funds, currently have to redirect or prioritize those funds into the defence sector, we’re well aware that our agtech companies or bio-food development businesses are having a harder time attracting interest.
There’s still a lot of private capital. There are companies that are still interested.
At the beginning of your question, you asked for concrete examples. Right now, there’s an operation that we have supported up to its demonstration project, in a 20,000-square-foot facility; it’s an international company that comes from Belgium. They were sold on the idea of Canada from being told that they should come set up in Quebec and that everything would be fine.
The company does its pilot project and its demonstration, with 25,000 square feet. It already has all its clients: Taste of the North, Sobeys and so on. All the production is sold for the scaling phase. They have investors who are investing another $10 million in the new structure or infrastructure, but the company can’t raise the necessary traditional or government capital, because the criteria are currently unfavourable toward controlled environment production.
[English]
Senator McBean: Thank you.
Senator Muggli: Good morning. My question is for Mr. Tulbek. Welcome to our hearings today. I am 100% committed to coming and seeing you this summer in person. I need to see it with my own eyes.
Mr. Tulbek: Thank you.
Senator Muggli: We have spoken a lot about pasta on this committee, interestingly, and we cannot seem to get to the crux of why it’s so hard to get to the processing stage for our own pasta. What does it take? Do you have recommendations for us on how we could do that?
I am interested, as well, in what that might result in when thinking about the shelf cost of food. Would that make our pasta more or less expensive?
If we have time, I would be interested in hearing about current initiatives on high-density nutritious food if you have success stories or examples.
Mr. Tulbek: Senator, we look forward to hosting you this summer at your convenience. Thank you for your questions.
I will start with pasta. In particular, before joining the Food Centre, I spent about 16 years in the pasta industry in different capacities, both in the United States and in Canada, as well as internationally.
One of the reasons we don’t manufacture is, overall, historical. We had the Canadian Wheat Board in Canada over the years. Because we had the “single desk” and we sold durum wheat to so many destinations over the years, it was not quite incentivized, at that time, historically, to build certain facilities, grow and manufacture the product and sell it to export facilities.
During those days, on the other side, in Montana, Washington, and other states in the United States, they built facilities, and 90% of production went to Japan. There is more capacity there. They use durum wheat to make pasta and export the product overseas, in particular, to countries like Japan, Taiwan and Korea. It is primarily export driven.
When you look at North American consumption, it is increasing but it doesn’t justify another big facility that we can support. We have to look for those investments to export. We can do that. We know the technologies. It is a matter of raising the dollars and finding overseas clients, perhaps building it as a joint venture opportunity. That is why we have two facilities in the east, and we do not have any pasta facilities in the west.
Going back to the second question regarding high-density products, in particular high-protein and high-fibre products, we are seeing interesting products in mycelium and fermented mushrooms. Certain companies are coming into that space. We are looking at manufacturing high-protein and fibre-rich snacks.
There are good examples. In Saskatchewan, we have facilities that started as farm-gate enterprises, and now they are selling their products all over North America. There are examples of these types of products, primarily with pulses and oats, in the market.
Senator Muggli: Thank you.
You spoke about preservation technologies. Can you talk about how we might be able to use some of these technologies to support food access in the North?
Mr. Tulbek: Yes. For preservation technologies, we are looking at smoking, drying or canning products. In particular, that would be fish, jerky or different types of meat snacks. That is a growing area and an exploding market.
Gen Z and Gen Y are the new consumers, and younger people tend to like their protein. They are really driving market growth for northern communities. In those populations, we need to help communities to utilize their raw materials so that they can process and keep them for the longer term and then be self-sufficient. Those types of facilities, if you can help to build them and make them self-sufficient, would help them to take care of their own population, as well as create some sales opportunities in urban areas.
Senator Muggli: Can you tell me, then, what constitutes a good project for investment?
Mr. Tulbek: It is about having a good sales opportunity. If we have a good sales program with that product, we have buyers lined up from overseas or in Canada, and consumers have an interest. That is a really good investment opportunity. That’s true whether it is an ingredient, a consumer packaged good, or CPG, product or a different type of product.
We investigate and look at the trends. What is selling in North America now, in Canada in particular, is beverages. Beverages, in particular non-alcoholic beverages, are growing. There is a lot of interest in that.
Snack food with high protein and high fibre is also selling well. We have seen the impact of GLP-1 agonists, and that is driving more interest in protein-, fibre- and nutrient-dense products. If you have the sales, we can support the investment.
Senator Muggli: Thank you.
Senator Burey: Thank you for being here.
I have two questions. There are different questions for each witness.
Mr. Tulbek, thank you for your expertise and for sharing it with us this morning. I am looking at your comments on strengthening local food systems, which I think is the backbone of what you spoke about in terms of being culturally relevant, having food security and increasing vertical integration, which will lead to food sovereignty. Can you talk about what it would take for us to strengthen local food systems?
Ms. Cyr, you mentioned investments in the Netherlands, Singapore and the U.A.E. Could you expand on what that looks like for us?
Mr. Tulbek: Thank you, senator, for your question.
First, we need to start talking to our communities and understand their questions, needs and problems. In particular, when we talk to farm-gate farmers and different communities, they are always telling us, “We grow all of this product. How can we turn it into something more valuable? How can we create and help to produce, process and preserve these products, potentially to sell or utilize them?”
It is a matter of identification of the raw materials and the resources and, after that, looking at the capacity and how much they can grow, talking about their projects, explaining them, creating feasibility and, in particular, finding the right leadership, training the workforce, having young people get engaged in those projects and then teaching them how to produce these products.
In these types of projects, in particular, the easy part is sourcing the technology and finding the facilities. The difficult part is the organization: finding people and bringing them in, raising the workforce, getting them engaged and creating sales opportunities.
It has to be a collective, working with the tribal councils, the bands, the communities and different colonies or groups, whoever is interested. We start with the conversation, communication and answering their questions, and, from there, we help them.
Overall, the government has to be communicating with them through the regional, provincial or different economic development agencies. They must be there to talk to them, understand their needs and support these projects.
Thank you.
[Translation]
Ms. Cyr: Thank you, senator.
Part of our activities focus on international attraction to fill the technological gaps observed in Canada. By working closely with agricultural producers to identify the technologies they want to implement in their operations to improve their performance, we identify the best technologies abroad and try to attract them here, unless they’re already available on the Canadian market.
As a result of these efforts, we can see that it’s precisely the companies we’re trying to attract to Canada that are highlighting best practices observed abroad, particularly in Europe. France has developed certain practices. The Netherlands — and this is historic — is currently the second or third largest pantry in the world thanks to its modernized production.
Increasingly, the companies we’re trying to attract to Canada are telling us that things are now happening in the United Arab Emirates. Canada’s market is too small for them to sell their technologies and establish themselves. That means they will focus on another sector in the world. The same seems to be true for Africa, due to population growth.
In general, the North American continent is starting to lose its splendour because of the Trump administration’s new policies, including the imposition of tariffs. That doesn’t help our situation. The United States is still a very large market in terms of clients, but it’s clear that there’s a certain shift toward the other side of the Atlantic. As I said earlier, these countries put a huge amount of money into developing technologies. For example, Israel is focused on developing technologies. The United Arab Emirates is also investing a huge amount of money in building strategic food infrastructure, because of the very well-known climate. It wants to reduce its imports, and it obviously has to invest heavily in controlled environments to meet the needs of its growing population.
[English]
The Chair: Thank you. Senator Hébert, we have two minutes.
Senator Hébert: It’s okay. It has already been covered. Thank you.
The Chair: Fantastic. Thank you very much. I know we had a few people with questions that were asked and answered before they got to ask them.
I want to take a moment to thank you both for being with us. We know it takes a lot of time to prepare for this, and it takes time out of your busy schedules. We do appreciate it.
(The committee continued in camera.)