I call the meeting back to order.
I will start about halfway through if that's okay. You know the guidelines pretty well, so I'll continue.
I would like to take this opportunity to remind all participants at this meeting that screenshots, or taking photos of your screen, are not permitted.
To ensure an orderly meeting, I would like to outline a few rules. Before speaking, please wait until I recognize you by name. If you are on the video conference, please click on the microphone icon to unmute your mike. For those in the room, your microphone will be controlled as normal by the proceedings and verification officer.
Just a reminder that all comments by members and witnesses must be addressed through the chair. When you are not speaking, your mike should be on mute.
Before we go to our witnesses, I want to remind members that the deadline for sending amendments with regard to Bill is Friday, June 11, at noon. Amendments must be sent to the clerk. If you want advice on the admissibility of an amendment, you may contact legislative clerk Jacques Maziade. If you need assistance with drafting amendments, you may contact legislative counsel Alexandra Schorah. I don't know if there will be any questions, but I wanted to remind all of you.
That being said, I will now welcome today's witnesses.
From ALUS, I believe it's Alternative Land Use Services, we have Bryan Gilvesy, chief executive officer; and from Farmers Edge Inc., we have Wade Barnes, chief executive officer, and Bruce Ringrose, head of sustainability and stakeholder relations.
Welcome to all of you. We'll go with a seven and a half minute opening statement.
Go ahead, Mr. Gilvesy.
Thank you very much for the opportunity to be here today.
I am a veteran farmer from here in Norfolk County, Ontario. I also serve as an executive in residence at the Ivey business school. Most importantly, today I come here as the CEO of ALUS.
To contextualize my position in ALUS, I was the third participant farmer in this program back in 2006. I've grown up with this program, through my community, to the point that I now run it.
ALUS stands for Alternative Land Use Services. The ALUS concept was born in 2008 in Manitoba farm country as the farmers' conservation plan. The acronym simply means a farmer shall use his land in an alternate way and produce a service—an ecosystem service—that we believe has market value.
ALUS has since grown into six provinces and more than 30 communities. ALUS is a Canadian charity that works with rural partners like counties, conservation authorities, watershed districts and other NGOs to help farmers and ranchers across Canada restore and enhance nature on their farmland, or in fact modify how the land is farmed.
It's important to realize that the biggest distinction of ALUS is a single one: In every community where we operate, we establish a partnership advisory committee made up of 50% farmers and other community leaders to adjudicate the program within their local area. This has become the secret sauce to delivering a robust environmental program that's growing rapidly across the country.
There is no doubt that Canada's farmers are on the front lines of climate change. Changing seasons and severe weather are all affecting the production of food and farmers' livelihoods. ALUS farmers and ranchers are fighting back against climate change. They are providing nature-based climate solutions that benefit all Canadians. Our wetland, grassland, sustainable grazing and tree projects all lower greenhouse gas emissions and sequester carbon, along with a host of other benefits, like creating new wildlife habitat—including for species at risk and pollinators—retaining and slowing stormwater to protect local and downstream communities, and improving air and water quality.
Our organization is lucky to work with many researchers across Canada who are helping us better understand the impacts from our farmers' projects. What our farmers see and what our researchers are now documenting is how quickly they get results. When projects are properly planned and managed, the benefits accrue quickly. After one year, our restoration projects can have the diversity and abundance of pollinators and species that eat crop pests equal to an undisturbed area. Better yet, we know from our research partners that converting land that isn't economic for farming back to nature helps farmers produce more food, even with less land, due to the extra pollination and crop protection that nature provides.
Researchers are also helping us identify the most promising areas for climate and water outcomes, which ensures that dollars go as far as possible. All evidence is pointing in one direction, which is that investing in nature through farmers is a smart strategy given the returns our communities receive. Turning the tide on climate change requires all hands on deck, or in this case, farmers who can put their hands in the dirt to make a difference.
Since 2015, our program has grown to now include 31 community partnerships in six provinces, including the participation to date of over 1,100 farmers and impacting over 125 square kilometres of land. As an organization, we have grown to deliver financial support to farmers, first from our humble beginnings under the umbrella of Delta Waterfowl foundation and then when we became independent as a Weston Family initiative. Now we are funded by over 30 partners. Of note, ALUS has taken great care to find market value for farmers' work, as evidenced by support from corporations such as Cargill, A&W, Danone, RBC and TD.
Obviously, over the years we have learned many lessons that I'd like to share with you today as the committee contemplates what the Government of Canada could implement in collaboration with producers to recognize the important role agriculture plays in this area.
First is that to be effective, programming must create value at the farm gate and not be seen as a temporary incentive program. These are not subsidies or incentives. We want to reward farmers for producing the ecosystem services that can solve the world's most pressing problems.
Second is to acknowledge that the creativity, skills and experience of the people on the land to manage nature-based solutions results in powerful grassroots solutions, the likes of which we have not seen before. The PAC process has proven that working through community collaboratives provides leverage and allows for local solutions that can help communities adapt to a changing climate.
Third, it's not only about carbon. To maximize the real value farmers can produce with their nature-based solutions, we need to recognize all the value they produce, including biodiversity, water quality and climate resilience.
Fourth, support, extension and technical advice through community contact is essential. Our farmers consistently mention this as a key to success. It's important to remember that the average age of a farmer is in my ballpark, around 56 years old, where these things are not necessarily familiar to us. Having the support of a community-based program and the technical advice is really important to bring us into this fold.
Fifth, a marketplace for ecosystem services is emerging before our eyes, and ALUS is a leader developing this space through its new acre project. Corporations will look to this marketplace for solutions for their ESG reporting and other objectives. It is essential we leverage these private dollars with public initiative for maximum effect.
Sixth, the biggest point I want to make here is that farmers need flexibility to fully engage in conservation programming, so flexible approaches towards carbon sequestration are essential. We need to develop and approve carbon offset quantification and credit issuance protocols that are very different from what we have seen to date and reflect the wishes of the farming community and the realities of farming. Putting farmers in the lead to provide environmental solutions is not only a proven analysis but highly effective.
I thank you for your time today and stand ready for your questions.
Good afternoon. Thank you very much for having me here today.
My name is Wade Barnes. I'm the CEO and co-founder of Farmers Edge. Farmers Edge is a technology company that operates in a majority of the key exporting nations in agriculture. We were founded here in Manitoba. Just in Canada alone, we operate on nine million acres. We go out and we connect farms. We help those farms move through digitalization. We provide analytics and help them make key decisions on their farms. Some of the by-product of that is carbon offsets and sustainability.
The other part of what I do is that I'm a farmer, born and raised on the family farm in Manitoba, right along the Saskatchewan border, on the right side of the border to cheer for the right and winning football team, mind you—no offence to any of the folks from Saskatchewan on the line. I'm also a trained agronomist. I've worked in the industry for close to 20 years. We have a unique perspective on how agriculture and sustainability will play out.
There are really four key initiatives we want to drive home.
The first one is collaboration. There does not need to be a difference between economic development and the environment. As most farmers know, it is good business to be environmentally sustainable. I think the majority of farms we operate within Canada—and we operate in Ontario and western Canada, not yet Quebec, but hopefully in the future—are doing the right things to essentially create sustainability. They have a natural attachment to this land, but they have a real focus around productivity.
One thing we hear from an agronomic standpoint that concerns us is the view around a reduction in nitrogen. I can tell you that a lot of the things that Farmers Edge does from a company's perspective is to enhance farmers' use of crop inputs, specifically around nitrogen. Our view is that, if government goes in and reduces the amount of nitrogen that is used on the farm, you'll essentially reduce productivity. If I use my own example as a farmer on my own farm, if we reduce nitrogen by 30%, we'll reduce my productivity by 25%, which will really end up costing me, on the canola that I grow, somewhere around $225 an acre. If you multiply that across 20 million acres of canola, it's a huge amount of revenue that will be pulled out of the farming community.
From my agronomic side, my concern is that a reduction of nitrogen may not give the reduction in nitrous oxide that people may be looking for, and that's the real concern. I think we have significant opportunity to enhance and help farmers move towards sustainable practices like the 4R program. What this really enables is not a give on productivity. You can have your cake and eat it to. You can have maximum productivity with, essentially, the most environmentally sound applications of crop input out there in the marketplace.
One way we can move toward this, from a Farmers Edge perspective, is that Canada has a unique opportunity—and you have to remember that I've worked in many markets around the world—to be a powerhouse in digital agriculture. There would be an opportunity to connect farms and utilize technology to be a world leader. That will enable farms to utilize technology, to go out and implement tools like the 4R program and to create much more sustainability on those farms, which will create significant opportunities beyond just producing grains, and have that ability to connect with that end consumer, which is, I think, really important and could be a unique opportunity.
With that, if we think about it, if we can enhance farms and motivate them to move towards adoption of technology, there's a huge opportunity around the creation of offsets. Today Farmers Edge, on the nine million acres we work with, will create over $3 million to $4 million in offsets, whether it be through nitrogen management, no tillage or cover crops, and we'll be utilizing those offsets and selling them on the voluntary market.
Our view is that there's a huge opportunity here to create value beyond just growing grains as a commodity by utilizing the tools we have to create offsets and allow Canada to be a powerhouse in sustainability.
With that, as farmers implement technology, the ability to create carbon offsets on the farms creates significant opportunities downstream when you think about how the majority of food companies are now looking at their own zero-emissions goals. Many of them are looking to source low-carbon grain. Again, the Canadian farmer can be a world leader in that. We have the opportunity to capture that value and capture it now.
The other thing I wanted to touch on is that, when we utilize carbon offsets to create value for the growers so that they invest in technology, it creates a much broader ecosystem. When you think about government's role in risk management and how the government funds risk management and how it helps support lending programs, and you think about how implementing technology can allow farmers to go out and create opportunities whereby they can get better insurance products, better risk management and better lending opportunities, that starts to take some of the risk off government and puts it towards private industry. Private industry can go out and utilize the data that farmers are creating and essentially provide those better management practices.
Right now, we see in Canada, but specifically in western Canada where most of our customers are, that there's a lot of concern around government coming in with environmental restrictions. We see that as an opportunity. Again, if they do it in the right way, farmers can create significant value out of these offsets. Utilizing technology and digitalizing agriculture can then allow for better risk management, crop insurance and lending.
I want to leave you with the idea that Canada has a tremendous opportunity here if things are done in the right way, using a collaborative approach that includes industry, farmers and the government.
I'm excited to answer any questions. Thank you.
Thank you very much, Mr. Barnes.
Before we go to the question round, Mr. Gilvesy, there was an issue with your sound. The interpreters were able to translate because they had your notes, but it has been suggested that perhaps you could turn off your camera. It's not that we don't want to see you, but if you turn off your camera, all the energy will go to.... Hopefully that will improve the poor sound quality. We'll try that and hopefully it will work.
With that, we'll go to our first question round. We have six minutes and we'll start with Mr. Epp.
Go ahead, Mr. Epp, for six minutes.
Thank you, witnesses, for your excellent testimony.
Also, thank you, Mr. Chair and my colleague Richard. There are no brooms in your background right now that I can see, so I will extend congratulations for your cheering. With that we will carry on.
Let me start with you, Mr. Gilvesy, even though I can't see you. It is good to see you again. I believe I saw you just at the end of my tenure at the Agricorp board. Agricorp was the adjudication body as ALUS got off the ground. It's good to see you again.
I lifted one quote from the materials you forwarded to us. It was “Conservation will ultimately boil down to rewarding the private landowner who conserves the public interest.” That's by Aldo Leopold.
Can you comment further? Many changes have been made at the farm level. You've outlined some there. I'm familiar with many. Can you talk about how agriculture has not necessarily been credited with those? What do you mean exactly by that statement?
Aldo Leopold was a great figure to follow because he recognized the stewardship role.
The idea for our program came from Ian Wishart, who was a potato farmer in Manitoba at the time and who now sits as the environment minister of Manitoba.
His notion was that the farm can be a multi-functional place and that the farm can produce more than just food and fibre. It doesn't need to be at the exclusion of the food and fibre, but ecosystem services that are valuable to all Canadians, including those involving biodiversity and at-risk species and wetlands, are worth rewarding. If we don't look to the agricultural community and reward it for this, we will miss the biggest opportunity in Canada.
All of southern Canada where we live, work and play is managed and maintained by farmers. If we want to maximize the quality of our life and what we get from those farms, we need to look at them differently and consider rewarding them for the extra things that they produce over and above the food and fibre. I think that's where that comment comes from.
Canada's track record, as testified to us by AAFC officials, is that greenhouse gas emissions from agriculture have remained steady since 2005 despite production increases.
If carbon taxes were further exempted, as proposed under Bill , for grain drying and things like that, would you expect greenhouse gas emissions to increase all of a sudden? What would you expect to happen over time, given the adaptation of the 4Rs and things like that?
Again, this is to Farmers Edge, please.
Thank you to our witnesses for their testimony here today.
The big take-away, from what I've heard as a member of this committee, is that there's huge power in looking at the natural solutions that are offered and the work that farmers can continue in this space and, of course, augment within their existing practices.
My first question is for Farmers Edge and Mr. Barnes.
I had the opportunity to visit your website—very well indeed. One of the titles is “Enrich Soil and Your Bank Account”, and you spoke to this in some of your testimony. I assume that you're working directly with farmers to create programming to enable them to verify some of their results such that they can take advantage of some of the corporate opportunities that are out there and, of course, the offset by ECCC in the days ahead. Is that fair?
We do. Our partnership advisory committees have landed a way of pricing projects across the country, but it's through research that we will determine their true value.
We work with Dr. Wanhong Yang at the University of Guelph, who has provided some very impressive IMWEBs models on some of the watersheds where we operate. This model will generate quite specific quantities of how much water those farm sites will filter, how much more biodiversity will come, how much more resilience there is for the downstream communities and how much carbon gets sequestered.
There are ways to get at these numbers and understand the true value. We've learned over the years that some of the early adopters in our program are municipalities, because they know when they invest in farmers upstream they can save a tremendous amount of money on roads not washing out, because we've done wetland programming, for instance.
There's a marketplace for all this work. We can figure that out by comparing the work that farmers do through nature-based solutions to built infrastructure, and then the mathematics become easy.
Thank you very much, Mr. Chair.
Thank you to both of our witnesses. I find it fascinating that you're both here. I believe it was Mr. Barnes who mentioned that agriculture and sustainability go hand in hand. The work that you're both doing, the agroecology and the agrotechnology, also go hand in hand. I find it very helpful today.
I will start my questions with you, Mr. Gilvesy. First, I want to say hello from rare Charitable Research Reserve. I am down the road from you in Kitchener—Conestoga, in the Waterloo region. They were very happy to know that you were here. They spoke highly of you, and I can certainly see why.
We were talking about these nature-based climate solutions, specifically flood mitigation and how municipalities and other levels of government can work together and actually save on infrastructure in terms of flood washouts and so on. Can you give some examples from your region, which is the same area as mine, of where we can protect our infrastructure with some climate solutions?
I look forward to hearing more and keeping in touch, because as I said, I'm just down the road.
With the amount of time I have, I thought I would switch gears and talk to Mr. Barnes. Here in the Waterloo region, Kitchener—Conestoga represents the agriculture sector, but at the same time we're basically the tech sector of Canada as well. Tech and agriculture seem to naturally go hand in hand. I'm down the road from the University of Guelph, and I'm down the road from the University of Waterloo.
You mentioned encouraging the next companies, start-ups in the industry. As I mention the universities, maybe I'm thinking now of some of our youth.
How can we encourage this next generation of farmers, who naturally seem to embrace some of these ideas, and help them enter a market and work with technology in ways that can help?
I could spend a whole hour discussing this, but in brief, when Farmers Edge started up, we had a terrible time seeking out capital specifically from the Canadian market.
Our first big capital injection came from Silicon Valley. At the time, that company was focused on moving Farmers Edge out of Winnipeg and into Silicon Valley. Luckily, we had a board of directors that was strong enough to hold us in this market and we were lucky enough to become a publicly traded company this year.
Once you create this ecosystem in technology and agriculture, it feeds off itself. At Farmers Edge, we're probably the first one to do an IPO, but with that, there are more and more companies that can play into it. We've see huge benefits out of the supercluster, specifically the protein cluster in Saskatchewan. They've been a huge supporter, not only of Farmers Edge but the splinter companies that will come out of that.
It's a change of culture and I'm seeing now much more focus on supporting these types of start-ups today than what there was when we started.
Mr. Barnes, you said in your opening comments that it's good business to be environmentally sustainable. I think we've seen that backed up by ALUS saying that, by employing some of these ecosystem-saving projects on your land, it does have a material benefit in how a farm operates in its output.
I also wanted to look at the consumer demand side of things, because, in one of our previous meetings, we had Danone as a witness, and they were talking about how they were investing a considerable sum of their own private money to help farmers transition to regenerative agriculture. They said that it was primarily because consumers are looking to have a lot more information on how their food is grown, the techniques that are used and so on. That's why Danone saw that as a smart investment, because of the consumer demand.
In some of the relations with some of the companies that you do business with, are you seeing a trend in that direction? Is there anything you can tell us about that?
Yes, this is where I think technology is going to be a huge factor, and it could enhance Canada's lead. The consumer today wants to have more connectivity to who's growing their food. Historically, there have been multiple different parties between the consumer and the farmer. Technology essentially allows the consumer to have that direct relationship, understand how the food is grown, where it's grown, how it's produced and know what the carbon footprint is.
I think to be able to implement that type of digital infrastructure, create that connectivity to the consumer and create that trust, technology will enable the consumer to trust that. If Canada is the leader in that space, they're going to pull companies, whether they be General Mills, PepsiCo, Danone, McCain or Maple Leaf, to do business with those Canadian farms.
I just think it's a significant opportunity that shouldn't be overlooked right now. If we don't take advantage of it, I can guarantee you that the Brazilians are moving. We operate into that market. In the U.S.—people might find this strange—there's more openness towards some of these changes in management, as there is in Australia, so this opportunity is time limited. I would really suggest that we focus on how to take advantage.
Thank you, Mr. MacGregor.
That will conclude our first panel. I'd like to thank, from ALUS, Mr. Bryan Gilvesy, and also, from Farmers Edge, Mr. Wade Barnes and Mr. Bruce Ringrose. Thank you so much for appearing.
To the members, it will be a quick return, because we're a little bit tight on time. After two minutes, we'll be right back.
We'll just suspend for two minutes. Thank you.
We'll go on with our second hour, as we work on connecting Ms. Donnelly.
I want to welcome, from the Canadian Cattlemen's Association, Mr. Duane Thompson, chair of the environment committee. Also, we have Fawn Jackson, director of policy and international affairs.
From Terramera Inc., we have Aldyen Donnelly, special adviser, carbon markets.
Hopefully we can get your sound corrected.
In the meantime, we'll start with an opening statement from the Canadian Cattlemen's Association for up to seven and a half minutes.
The floor is yours. Thank you.
Good afternoon and thank you for the opportunity to appear before the committee to discuss the environmental contributions of Canada’s beef sector.
My name is Fawn Jackson, and I’m the director of policy and international affairs with the CCA. With me today is Duane Thompson, a beef producer from Saskatchewan and the chair of CCA's environment committee.
The CCA represents Canada's 60,000 beef producers. The beef industry contributes $22 billion to Canadian GDP while supporting 348,000 jobs, but of great importance to our conversation today is that the beef industry is also a hidden gem when it comes to the environment and green jobs. While perhaps not as well-known outside of this committee, which knows this, in fact beef production in Canada is one of the best tools we have to reach our shared conservation goals and climate change goals, while also providing good-paying jobs for Canadian families.
Canada is a leader when it comes to sustainable beef production. The Canadian Roundtable for Sustainable Beef was created to advance sustainability within the beef industry and includes a collaborative community of stakeholders. Through the CRSB, Canada was the first to create a certified sustainable beef framework, which is used today by smaller direct marketers, as well as companies such as McDonald’s and Chop Steakhouse. Since Canada’s leadership, now other jurisdictions have also replicated the CRSB model, and we're pleased to share that.
I am pleased to have Duane Thompson join me today to offer further insights into how beef production can be a key partner in achieving Canada’s environmental goals.
Please go ahead, Duane.
Our family runs a beef cattle and cropping operation near Kelliher, Saskatchewan, northeast of Regina. We take pride in caring for the environment as part of our role as ranchers. In this country, cattle producers care for 35 million acres of temperate native grasslands, and while it doesn't often make the headlines, this grassland ecosystem is disappearing faster than the Amazon rainforest. Since the 1970s we've seen a staggering loss of nearly 75% of native grasslands through land conversion.
When the grasslands are lost, so too are the species that depend on the grasslands for their habitat. There are currently over 60 species at risk in Canada's grasslands, species that only exist because of continued beef production on native grasslands. Beef farmers and ranchers work closely with conservation partners on grassland habitat and biodiversity maintenance and enhancement to protect the grassland ecosystem. Cattle grazing and the continued presence of livestock on these working landscapes support the conservation of species that depend on native grasslands, like the greater sage-grouse, the burrowing owl and many songbirds.
In the North American Bird Conservation Initiative, 2019, “The State of Canada's Birds” report, it notes that Canada's grassland birds have declined by 57% since 1970, and emphasize that “Beneficial grazing on public and private lands is critical for the creation and maintenance of grassland bird habitat.” As a conservation action, the report recommends supporting sustainable range-fed beef, including beneficial pasture and hay management. Without beef production, these threatened native grasslands are at risk of conversion and these at-risk species suffer the consequences.
Since 2015, our industry has worked through Environment and Climate Change Canada's species-at-risk partnerships on agricultural lands, known as SARPAL. We work directly with beef producers to promote and enhance habitat for a multitude of species at risk. SARPAL has proven to be a great environmental program through collaboration with the beef sector and conservation organizations.
We work closely with our conservation partners, including Ducks Unlimited Canada, Nature Conservancy of Canada, Birds Canada and others to promote and deliver the beneficial management conservation solutions on the ground for our producers. Recently, Ducks Unlimited Canada launched its Beef Belongs website, highlighting the critical role beef cattle play in the health and enhancement of grasslands, wetlands and soil biodiversity in Canada. In its words, “Raising beef in Canada is good for the environment.”
Grazing by livestock is essential for the complex native grasslands to flourish. These grasslands left without grazing are essentially lost by natural progression to habitats with a lower conversion value, for example, brush and tree encroachment. By generating revenue through sustainable grazing practices, ranchers help ensure native grasslands are not converted to other uses.
With respect to climate change, rangelands and wetlands managed by beef producers in Canada are carbon sinks that store, conservatively, about 1.5 billion tonnes of carbon. The Canadian beef industry's greenhouse gas emissions account for only 2.4% of Canadian total greenhouse gas emissions and 0.4% of global greenhouse gas emissions.
Our industry's greenhouse gas footprint is less than half that of the world average and one of the lowest in the world. Today, the beef industry is producing more beef with less greenhouse gas emissions, less land and less water. The reductions in the beef industry's environmental footprint have largely come through genetics, animal health and technologies that improve production efficiencies.
We're very proud of this, but we're not sitting on our laurels. Producers across Canada continue to innovate and look for new ways to be sustainable and help the environment.
In British Columbia, cattle producers are conducting pilot studies on the use of cattle grazing to reduce fuel loads under forest canopies to mitigate the risk of wildfires. The studies are developing virtual fencing technology that will be an innovative game-changer for rotational grazing strategies, wildfire management and the enhancement of species habitat in remote grazing landscapes.
Food loss and waste continues to be a large discussion in Canada’s food system. Cattle are wonderful upcyclers. For example, the by-products of the grains we produce on our farm, such as the stems and stalks after harvesting grain, can be fed to cattle, and so can grains that are headed for food markets but perhaps don’t meet the high standards needed for the grain market because they are spoiled or have been heated.
This example goes much further than within our own farm. Cattle also eat by-products of wine and beer production, wilted produce and by-products of canola production. This last year when COVID hit, there were many potatoes that weren’t going to restaurants and they were able to be fed to cattle instead of going to the landfills.
Last, it's worth noting that in the past year, the Canadian beef industry has set ambitious 2030 goals related to greenhouse gas and carbon sequestration. Among other targets, our industry has committed to safeguarding the existing 1.5 billion tonnes of carbon stored on landscapes. We will also sequester an additional 3.4 million tonnes of carbon every year to reduce primary production greenhouse gas emission intensity by 33% in 2030.
Thank you, Mr. Chair and committee members, for the invitation to speak with you today.
My name is Aldyen Donnelly and I'm joining you remotely from my home, which is in the traditional territory of the Squamish, Musqueam and Tsleil-Waututh nations.
I am the senior adviser, carbon markets, at Terramera, a B.C.-based ag-tech company. I am also a co-founder and major shareholder of Nori, Inc., a three and a half year old blockchain-based start-up that is building a transparent, credible and farmer-accessible carbon removal marketplace in the United States. Nori's head office is in Seattle, Washington.
Also, from the mid-1990s through 2000, I was the founder of the Greenhouse Emissions Management Consortium, or GEMCo. GEMCo's membership included, over time, 14 of Canada's then 20 largest corporate greenhouse gas emitters. In that capacity, I raised the private funding that spawned the launch of Canada's prairie soil carbon balance project, a private sector and public sector partnership under the AAFC's original matching investment initiative. In October 1999, acting on behalf of the Canadian large emitters, I signed the world's first agreement to purchase emission reduction credits from farmers. I guess that means I've been around this for a while.
Terramera's work centres on how to enable farmers to unlock the intelligence in nature to inform their land management decisions. We develop software and analytical tools to empower our food and fibre producers to increase soil health and nutrient productivity, mitigate climate change risk, realize more stable on-farm financial returns and build a more resilient soil layer for future generations. Building up soil organic carbon stocks is one of the very few measures that we can pursue that both mitigates the risks of climate change while building a natural system that will also be more resilient and productive in the event of climate change.
I wish to stress that it's essential for Canadian policy-makers and influencers to embrace this opportunity to show the rest of the world a new path forward to the realization of a true market for natural climate solutions. Canada led the world with the Montreal protocol. This is our next chance to lead the world to essential and workable climate risk mitigation and adaptation solutions.
According to the UN Food and Agricultural Organization, Canada ranks among the top five countries in the world, along with Russia, the U.S., China and Brazil, for potential to draw heat-trapping gases out of the atmosphere when the recovered carbon is stored in soils and root systems. Some assessments rank Canada number two.
A recently published analysis by leading Canadian scientists suggests that our croplands and grazing lands have the capacity to sequester an incremental 78 million tonnes of CO2 equivalent per year by 2030. That's 25% to 35% of the nationwide reduction we must achieve relative to actual 2019 emission levels to meet our 2030 Paris Agreement goals.
What's the reality? After 18 years of experiments, the voluntary and compliance offset credit market experiments that have been launched in other nations have failed to mobilize any significant investment in greenhouse gas reduction and sequestration. That's across all sectors, not just agriculture.
Since 2002, all existing voluntary and compliance offset initiatives have combined to issue and retire less than 2.5 billion credits. That sounds like a lot, but even if 100% of these credits had the true underlying value of one tonne carbon dioxide equivalent reduced or sequestered, those retired credits equate to only 10% to 15% of one year's worth of the greenhouse gas emissions discharged by the top 50 corporate emitters in the world, so this is a statistically insignificant experiment so far.
Canadian policy-makers and stakeholders must work together to show a new path forward. This can be Canada's next Montreal protocol moment. It is time for us to step up and show the world what getting this right looks like, as we did when it came to figuring out how to work out of our supply chains the use of substances the release of which were causing the hole in our ozone layer.
Canada is positioned to develop and demonstrate the world's first efficient and truly functional natural climate solutions voluntary and compliance markets. We are trying to foster new markets that reward ecosystem services, not more underfunded subsidy programs that dictate land management practices to farmers.
I do have in my opening remarks six specific recommendations on what we need to do, but I think I'll cut off here to save time and invite you to look at my documentation when it's available to you.
I must respond by saying no, I do not agree with the position that farmers should not get credit for early action, but I also totally empathize with the officials and understand why that's their starting place. We just have to give them the tools they need to make sure that's not where they end up.
There are a couple of things. First, in terms of solution, in the Nori marketplace any decision you make or anyone makes will be a compromise. We surveyed a bunch of very interested market buyers and secured support among that buyer community for the idea that we would issue credits, and there are two tests. For soil carbon, a stock change is arising from changes in practices that might have been implemented any time after December 31, 1999. I like Bryan Gilvesy's Kyoto 1997 start date a lot. We picked 1999 in the U.S. just because we found we had data availability issues before that and that was our binding constraint, but we also said we would only issue a maximum of five years' worth of grandfather credits to any project.
When you're doing that design, separate the question of what the “not before” date is for the investment that triggers the incremental carbon stock change versus how many years of crediting you are getting. Any decision we'll make will be arbitrary, but I think it's really important that we struggle with that and reach consensus on a decision that does give early adopters credit.
The other point I'd like to make is that in every—outside Canada, anyway—variation on cap and trade rules, any oil producer or refinery operator that has an emissions intensity that's lower than their peers gets surplus and marketable allowances in exchange for that performance, even if they have been performing in that manner for 25 years.
Why would we give credit for early action to oil refineries and not to farmers? I don't get that one.
Thanks. I'm going to take some of the questions, and then pass it over to Duane.
Certainly what we see is that, when grazing is done well, we're really able to stack the benefits that come with that. You could have a biodiversity benefit, a wetland restoration, flood mitigation, all of these different stacking benefits, and I think that's really exciting, particularly to those in the market who are certainly interested in greenhouse gases but are also interested in the rippling effects that go along with them.
Australia, for example, had a project with Microsoft where they purchased carbon offsets, but then also had these biodiversity pieces that went through it as well.
I would say that it's been really exciting over the last number of years, where conservation organizations and the farmer and rancher community have really hit our stride in how we work together. Bringing the expertise of the producer, who knows that land, and the expertise of biologists and riparian specialists together has just really resulted in some amazing results. I think we need to keep on replicating that.
The most important one is the opportunity. The necessity here is to develop carbon offset quantification and credit issuance protocols that are in fact very different, but reflect the lessons learned from the experiences in other jurisdictions. Those existing offset markets have failed. They've taught us a lot. Now it's time for us to build the system that's really going to work.
Of the six, the second really important thing is that, back in the 1990s, the experts, the community and AAFC agreed that critical to making this market work is building and sustaining a network of experimental sites across the country where we're doing robust soil and plant nutrient testing and publishing the data so that the whole agriculture community can see what's been proved in those soils. In fact, Canada committed to building and maintaining that network back in the 1990s. The funding for it fell apart in the mid-2000s.
The USDA did the same thing. They got funding in place in 2002. They agreed that it was a key backbone. They got all the funding in place to do what was required in the United States in funding submissions that said that Canada's doing it right so the U.S. needs to do it right too. By 2009, their funding was cut.
From those lessons, I think we've learned we need to build that backbone—that network of experimental sites. We need to build it in such a way that it's seen as key infrastructure and will attract private financing, so that we don't yet again go down a path of depending on government revenues that'll be cut in five to seven years and have it fall apart again.
I'll start with the Canadian Cattlemen's Association. Maybe I'll just make a couple of quick comments.
Mr. Thompson, in a former life I worked as a tree planter for eight years. One of my big contracts was at the Douglas Lake Ranch in British Columbia, so I've certainly seen how cattle keep the forest fire danger down through that rotational grazing through their lands.
One other thing is that the B.C. Cattlemen's Association were very kind to invite me out to the Okanagan in September of last year. I visited two ranches that had previously won the Ranch Sustainability Award. I went to the Clifton Ranch in Keremeos and the Casorso Ranch in Oliver. It was very educational to actually speak to the ranchers themselves, to actually go and visit the grasslands and to see the relationship between cattle and grass, because of course, this relationship is thousands of years old. Before we had cattle, we had bison there. We have to remember that the best farming practices mimic what's already going on in nature, so you need to have that relationship between plant and animal and mimic what has been going on for thousands of years.
Ms. Jackson, you've already given the committee a lot of information, but in one minute or so, is there anything else that you want to cover maybe in the context of the recommendations you'd like to see in this kind of report to the federal government specifically?
Thank you very much, Mr. Chair.
Thank you to the witnesses for being here.
Ms. Jackson, you said something that really stuck with me when you said government policies have “unintended consequences”. We just did a study on MP 's bill about exempting some fuels from the carbon tax.
Would you say that's one of the unintended consequences, a catch-all policy? There aren't, for example, alternatives to barn heating or irrigation pump running or grain dryers. Could you talk about some of that from a producer standpoint? Maybe Mr. Thompson could as well.
It's nice to have some more Saskatchewan common sense here at the committee. Perhaps you guys could just expand on some of those unintended consequences that government policies sometimes lead producers to have to undergo?
I appreciate that very much. Thank you.
On behalf of my caucus colleague, , he would like to say hi, as you're a constituent of his out in Kelliher.
Mr. Ellis asked about EFPs, environmental farm plans. He said something about farmers not having a follow-through. I have a personal relationship with EFPs. My cousin did about 10,000 environmental farm plans in southwest Saskatchewan, and he said there was substantial farmer follow-through, because the ranchers and producers knew that making these changes and investments in the environmental farm plan and doing these policies were better for the soil and, in the long run, what's better for your soil is better for your grasslands. It's better for your farm's bottom line.
I'd just like your comments on some of the follow-through you've seen from environmental policies and some of the plans by producers from the Canadian Cattlemen's Association. Maybe I'll hear from Ms. Donnelly as well, because I believe that Canadian ranchers and producers are doing more than is known with environmental practices. I'd just like to have your comments on that.
I'm sorry, we are out of time. Thank you, Mr. Steinley.
We have to work with a hard stop. They need the room for other committees, so we'll have to stop it here.
I'd like to thank, from the Canadian Cattlemen's Association, Mr. Duane Thompson and Ms. Fawn Jackson. Thank you also to Aldyen Donnelly from Terramera Inc. Thank you all for participating. That will conclude our study for today.
We shall see the rest of the committee on Thursday. Thank you, and have a good day.
The meeting is adjourned.