Colleagues, we'll call the meeting to order.
Thank you for everyone's patience. Obviously we need to ensure that the translators are able to understand our witnesses, certainly for our francophone colleagues on the committee. Everyone has been tested, and we should be all good to go.
We'll carry on, as time is of the essence now.
This is meeting number 31 of the House of Commons Standing Committee on Agriculture and Agri-Food.
I have a couple of quick reminders, and I'll go through these very quickly so we can get going.
This is a hybrid format. The proceedings will be available on the House of Commons website. The webcast will always show the person speaking rather than the entirety of the committee. Screenshots during the committee are prohibited, so please do not take screenshots of this meeting.
For members participating in person, please keep in mind the Board of Internal Economy's guidelines for mask use and House protocols.
I would like to make a few comments for the benefit of our witnesses.
Members and witnesses may speak in the official language of their choice. Interpretation services are available for this meeting. If interpretation is lost, please inform me immediately, and we will ensure that interpretation begins again before we resume.
Before speaking, please wait until I recognize you by name. If you are on video conference, please click on your microphone to unmute yourself. For those in the room, your microphone will be controlled by the proceedings and verification officer.
Especially for those on video, please speak slowly and clearly for the benefit of translation and make sure your microphone is on. This is a reminder to all members and witnesses that all comments should be put through the chair.
I would like to welcome our first panel of witnesses. We have Brendan Byrne, chair, from the Grain Farmers of Ontario, by video conference. From Grain Growers of Canada, we have Branden Leslie, manager, policy and government relations. From the Saskatchewan Association of Rural Municipalities, we have Mr. Raymond Orb, president.
Each of you will be given five minutes for your opening remarks, and we will proceed to the rounds of questioning following that. I will give you a signal, especially for those of you on video conference, a hand up that you have about one minute left if you're running on time.
I will welcome Mr. Byrne from the Grain Farmers of Ontario to start.
You have five minutes. Go ahead, please.
Thank you very much for inviting me to be with you today. This is an issue that remains top of mind for our farmer members, so it's much appreciated that I was invited here today.
My name is Brendan Byrne. I'm the chair of the Grain Farmers of Ontario. I farm in Essex, near the Windsor border, with my family. It's harvest time for our members, so on our farm we're harvesting soybeans, and around me the corn harvest has also started, which is similar across the province.
I want to begin my remarks by just thanking members of this committee for examining this important bill. It's something that our farmer members are looking at, checking in and asking about it, so it's important that we're here today.
An exemption from the carbon price is important to our grain farmers for five reasons.
First is to prevent spoilage. Grain needs to be dried down to be able to be stored; otherwise, it will rot and will not be available.
Second is reliable grain drying systems. A reliable supply of energy and proven grain-drying technology allow farmers to dry their grain in a short period of time under any weather conditions.
Third, there are no alternatives. There are ideas and potential alternatives that people are looking at, but none of them have been proven to work on the scale or at the level that we need them in Ontario. With these alternatives, there isn't a clear message as to whether they actually would reduce our carbon. The EU is backing away from such things as biomass dryers due to its carbon emission profile, and the CBC reported this week that wood biomass burning is worse than coal.
Fourth, our farmers are unable to reduce their carbon price. We are price-takers in the marketplace. We feel that the money would be better off in the hands of the farmers to further innovate on their farm and to try to come up with ways and solutions to better their carbon footprint.
Fifth, the rebate that's been presented to us falls far short of what's actually paid. Less than 15% of what grain farmers are paying is returned by the government rebate.
I want to quickly explain how grain drying works in Ontario. Corn, for instance, needs to be at a level of 15% to store it or ship it. In September, the corn plant stops growing. We wait for Mother Nature to drain out as much moisture as possible. Wind, sun, and the natural effects of the weather do that, but then we need to get the corn off before the weather turns to where we can't do that anymore.
Once we get into the fields, we find out exactly what the moisture level of the corn will be. Once we get in there, we are very much at the mercy of the weather, so time is of the essence to get the crop off. Typically, the corn harvest is anywhere from 20% to 28% moisture when we're taking it out of the field and trying to get it off, get it dried, and get it shipped at an acceptable level, which is very hard for our farmer members as it is.
Drying grain happens in real time. During the week of the harvest, it could be running 24 hours a day. We have to be careful not to overdry, or dry too fast, so we don't damage the corn. We want to make sure that it's useful for human consumption, for animals, and the multiple uses that the crop is used for.
The dryers right now allow us to dial it up to the energy needed, and turn it down if it gets too hot. Grain drying is an essential part of harvesting grain. If we get this wrong, we don't have a crop to sell, and we're producing less food.
Eight years from now, upwards of $2.7 billion would be paid by Ontario grain farmers for the carbon price on grain drying. All this money is coming out of our pockets. Farmers cannot pass this on to anyone else. They simply have to pay it and bear the brunt of this. As I said, the rebate that's in place now simply doesn't cover anywhere near the cost of it.
Greenhouse growers are exempt from the price on carbon for their operations, and so should grain drying. Bill would give us time to figure out viable solutions and make sure that there is potentially a road map to innovation and implementation, with the proper supply chain in place to cover that off.
This is a major undertaking. It affects food security and food supply. We have to be very careful with what we're doing there.
I do, again, thank you for your time. If you haven't seen what grain drying looks like, we could certainly submit a video, which is about three minutes. I want to thank everybody on the committee for taking time to consider this bill, and we look forward to a good discussion.
Thank you very much.
Good afternoon. My name is Ray Orb and I'm president of the Saskatchewan Association of Rural Municipalities, known as SARM. I was born and raised and I live in the small community of Cupar, northeast of Regina, with a population of 625 people.
I'd like to thank the Standing Committee on Agriculture and Agri-Food for the opportunity to share our association's thoughts as the committee studies Bill , an act to amend the Greenhouse Gas Pollution Pricing Act.
Our membership is made up of Saskatchewan's rural municipal governments. SARM has been the voice of rural Saskatchewan for over 100 years. Today I will share the perspective of those we represent by sharing our thoughts on how the bill being proposed would impact our livelihood in rural Saskatchewan.
Bill picks up where Bill left off in the last Parliament before the federal election. As you know, Bill C-206 was passed by the House of Commons but not fully approved by the Senate.
As we were supportive of Bill , we at SARM are supportive of Bill right now. This bill would provide much-needed economic relief for our members, freeing up the working capital they need to implement innovations on their farms.
Grain dryers are used to help dry wet grains so they can be properly stored. In recent years in Canada, the fall season has been particularly wet, creating a need to use the grain dryers. In 2020, grain dryers were running for a record amount of time, and farmers paid more than the federal government carbon tax estimate. Recent studies have shown that Saskatchewan farmers can expect to lose 8% of their total net income to the carbon tax. For a household managing a 5,000 acre grain farm in Saskatchewan, this will take the form of $8,000 to $10,000.
Our members have been very concerned about the impact of the federal carbon pricing system on unavoidable energy inputs like fuel to dry grain or heat livestock facilities. We have argued for years that producers cannot pass these additional costs along to our customers and that they further reduce our financial viability. The additional costs of carbon taxation do not help solve the problem of carbon emissions.
Saskatchewan has some of the greenest agriculture producers in the world. Most cropland is zero-till. This means that our producers use a low-disturbance direct seeding system. Not only does zero-till agriculture sink more carbon, but it also reduces soil erosion and the amount of fuel required on farms. The Saskatchewan Soil Conservation Association has been studying carbon sequestration for years, and through their research they found that Saskatchewan producers sequester 9.64 million new tonnes of carbon dioxide every year over 28 million acres.
Taxation on food production is short-sighted and not a solution. If we do not work together to find solutions, we will see even more decreases in the number of farmers and farms in Canada, and we will lose the food security we have.
In closing, on behalf of Saskatchewan's rural municipalities and rural Saskatchewan, we thank the standing committee for the opportunity to lend our voice to this important conversation. We look forward to continued dialogue as we all work together to further the best interests of all Canadians.
Good afternoon, Mr. Chair and honourable members. Thank you for the invitation to appear today on Bill .
My name is Branden Leslie, and I am the manager of policy and government relations for the Grain Growers of Canada. The Grain Growers of Canada represents 65,000 grain, pulse and oilseed farmers through our 14 provincial, regional and national member organizations across Canada.
Canadian farmers have a long reputation as environmental stewards, adopting the best environmental practices whenever possible.
Canada's grain sector is proud of our hard-earned reputation as one of the world's largest suppliers of safe, sustainable and high-quality grains, of which the exports of cereals, oilseed and pulses add over $30 billion to the Canadian economy every year.
Our sector is also proud of our record of sustainably intensifying our production when the world demands more food and cleaner fuels, while simultaneously working to reduce emissions and increase carbon sequestration. That sustainable intensification of production is enabled by farmers reinvesting profits back into their operations in the form of new machinery, technologies and the adoption of beneficial management practices, all of which reduce emissions and increase operational efficiencies.
This is why Bill is a critical piece of legislation, which our members strongly support.
As a result of climate change, we are seeing an increased need for grain drying. With the steadily rising price on pollution applied to propane and natural gas used to dry grain, farmers also now face incredible cost increases without an alternative fuel source available. While there are emerging potential alternative fuel sources for grain drying, the reality is that they are not commercially viable at this time. Further, it will take years to scale them up and implement necessary infrastructure upgrades as required.
Given the significant operating costs of using propane or natural gas, there currently exists a price signal to be judicious with the use of these fuels, as there is no benefit of drying grains beyond what is necessary for sale or storage. As such, most farmers have also already made significant investments to upgrade their dryers to make them as efficient as possible, leaving little room for improvement in that area.
It's fair to say that no farmer wants to be spending money on drying their grain but does so out of necessity and, certainly, hope that a more cost-efficient and lower-emission option becomes available in the not-too-distant future. However, until that happens, farmers have no choice but to use propane or natural gas to dry their grain, making the price on pollution a punitive tax and not a market-driven signal to change fuel sources. Right now, this simply means that farmers have money taken out of their pocket to undertake a necessary process to ensure their product does not spoil during storage.
The federal government has tacitly admitted the flawed nature of the price on pollution put on propane and natural gas used on farms through the rebate program offered under Bill . While we appreciate the government acknowledging that farmers currently have no choice but to use these fuels, the reality is that the rebate is a blunt tool that does not fairly reimburse farmers for the fuel they actually use. This means that depending on the crops they grow, they may receive only a small percentage of the carbon price paid through their operation.
That is why the exemption offered through Bill is superior to the rebate system. With an exemption in place, Canadian farmers will remain competitive and have additional working capital to reinvest in their operations, leading to more tangible environmental outcomes and emission reductions.
Grain drying is necessary to maintain the grains' quality. Taxing this practice will not result in emissions reductions and instead will hinder farmers' ability to invest in sustainable innovations.
A reinvestment into updated machinery or technologies has proven to make real progress in emission reductions. Canadian farmers need policy and the incentivization of innovation of best management practices and other adoption tools that put working capital back into farmers' pockets. Farmers are simultaneously facing rising input costs, rising interest rates and increased debt loads required to finance equipment and farmland. So for many, every dollar counts.
It is also important to note that the passage of this legislation would not alleviate all the carbon pricing costs and associated signals that are built into the prices of transportation and other inputs the farmers use, which are passed on to farmers. As price-takers, they are unable to pass those costs on any further.
Ultimately, the savings that would be found for farmers should Bill pass would make up just a small percentage of their overall operational costs, but would absolutely make a difference to their bottom line.
By passing Bill , Parliament would acknowledge the important sustainability efforts farmers have undertaken and will continue to undertake, and empower them to reinvest in their operations, further reduce emissions and improve on-farm environmental indicators. We urge all parties to support the swift passage of this legislation.
Thank you. I look forward to your questions.
Thank you, witnesses, for being here today to discuss this very important topic.
A common theme I've heard throughout the testimony we've just heard is the fact that the costs farmers face—especially when it comes to the carbon tax on drying their grains in this particular instance—are not able to be passed on to the consumer. That means that farmers are having a harder time making ends meet, so they are not actually getting the profits they should in their business to keep farming.
If we continue to have policies such as this, what I see happening is that it's going to price farmers out of the business of farming. We're not going to see the next generation taking over the family farms, because they simply can't afford it. If we don't have farmers, we don't have food.
Particularly in my riding, it being a very heavily agricultural riding and a riding that farms a lot corn, soy and grain as well, this is very pertinent. I was just visiting a corn farmer on the weekend. He has a state-of-the-art new drying system. Most folks don't understand that the corn must go through the dryer in order to get the moisture content down so it can be stored.
I have a question for the Grain Farmers of Ontario.
Just to go back for a second, I've been told that this farm requires six hours in a dryer to get its corn dry enough to go into storage. Then it's going to become ethanol or go into feed. Farmers are running these machines 24-7. Sometimes it's for a month; sometimes it's for three weeks, and sometimes it's for six weeks. We've had a really wet fall. Moisture content is high in Ontario right now. There's also a threat of disease setting in if they don't harvest the corn right now with the rain that keeps coming.
What will farmers get back of the carbon tax compared to what they're actually paying? To me, $800 seems like a drop in the bucket to somebody who has to run a propane or natural gas grain dryer for 24 hours a day.
It's going to be different across the province with moisture levels where the corn is coming off at and with how much it's used. I've talked to grain farmers who paid an $8,000 bill just in the carbon tax to dry their grain last year. With the escalation of how that will be going from now until 2030, you're not wrong in saying that it will be putting family farms at risk. A lot of people are looking at the policy that's coming towards them, whether it be the carbon fees or fertilizer, and they're wondering how they're going to get through this time.
Input costs are at an all-time high. There's not a lot of certainty on the farm. We're at the mercy of the weather. I think that adding something like this carbon piece makes it very tough for farmers to know what their bottom line is going to be. Prices are good, but there are areas that suffered severe drought. They're probably going to have 30% to 40% less yield this year on their corn crop than they had in previous years.
I know that in an area like yours, Ms. Rood, there's a lot of great corn grown, but there are parts in there that I know suffered some drought. Now there's some wet weather, so there certainly is a risk of disease.
It's a very timely matter to try to get the crop off. At this point, to be honest, farmers are just very concerned with getting the crop off. In the back of their minds, every day is about what's coming at them, what the next cost will be that's going to escalate, and how they are simply going to weather this to maybe be able to pass it along to the family. Some are making tough decisions and saying that they're not sure they'll be able to.
Thank you, Mr. Vice-Chair. It's great to see you in that position.
It's good to see my colleagues rejoin this committee. It's been a pleasure working with you guys in the past. I look forward to working with you again in the future.
My first question is for Mr. Byrne.
It's good to see you. I know you're busy right now with harvest season. It's good to see you taking the time to appear before our committee. There have been talks through the former bill about putting in a sunset clause. I'm just trying to get your sense of it. Should this committee entertain a potential sunset clause?
Some witnesses recognize that we need time to innovate on the farm and we need time to test. We've often heard from grain dryers that there are no commercially viable technologies yet. While some have adopted those, they are not widely available.
Would you be against putting in a sunset clause, for instance by 2030, or do you see a forever exemption?
Thank you for the question, Mr. Drouin.
It's tough to predict where innovation might go. I'd love to say that in eight years we're going to have over half of Canadian dryers converted to some other fuel source. That would probably be a bit of a stretch. Maybe it would have taken that long 10 years ago, in 2006, but now that we're in 2022 on Bill , I think 10 years would be a reasonable thing.
I understand that we still want the price signal. The government's intention on the price of pollution is there for a reason. I think we understand that. The struggle with this particular nuance on the use of propane and natural gas is that it's just not applicable when there's no nudge effect. There's nothing to nudge towards.
I think it's reasonable to want to maintain that. However, I wouldn't want to go through this process again in 2032. I think it would be important to have an order in council or some sort of mechanism in place whereby the government of the day could say, okay, we were hoping to have over 50% adoption of a new fuel use for grain drying or the heating and cooling of barns, but that hasn't happened yet.
Maybe I'll bring in your second question on clean tech here. I think there is an absolute necessity to maintain that. If we want to have the sunset clause, I think it's important to make sure that we have the funding to have these new technologies embraced and enabled on-farm. I think the two-stream approach will continue to be necessary.
I think it's reasonable to have a sunset clause, as long as the government is able to not have the exemption just drop off at some point so that all of a sudden farmers are forced to have a $170 per tonne carbon tax thrown back on them. That would be a real crunch to their operating expenditures at that time.
Again, it's problematic.
Corn is a good example. There's a necessity to dry corn. It is coming off at too high of a moisture level, and you have to dry it to store it. You might bring off a cereal crop at the correct moisture of 13%, 14% or 15%. You can take it off via air drying, and you don't need to use a fossil fuel to heat it. When you get into a wet year—2019 is a good example and, in some places, this year—you need to drop four or five points.
It's inconsistent in how it's applied. Why this is problematic and why I would say the exemption is preferable is that, if you bring off all of your cereals dry and you really don't need to use your dryer that year at all, then you could still be eligible for a rebate under Bill based on your overall expenses, despite not using any of the fuels that we're trying to solve this year.
I think that's why the more flatlined option would be to exempt those who are using the fuels for that purpose rather than an unequal reimbursement based on whether or not you use the fuel at the end of the day.
Thank you for having me at the committee, Mr. Chair.
I certainly want to give a shout-out to for putting this bill forward. It's a great day when Parliament comes together and votes together, especially for an NDP proposal. I'm here on behalf of , and it's an honour to celebrate that victory today for all of us in Parliament.
I guess my question.... I apologize because some of this will be somewhat repetitive, but it will help with our theme of questioning. The committee has been hearing that the advancements in technology that would allow farmers to dry their grain without the use of propane or natural gas are likely about a decade away from being readily available and economically viable. Can you talk about your views on implementing a sunset clause for this exemption, such that after a 10-year period the statute would revert back to the language that currently exists?
Mr. Byrne, do you want to speak to that a little bit?
With regard to the subject of advancements in technology, I know that my colleague, , asked Agriculture and Agri-Food Canada about emerging technologies, and Natasha Kim, assistant deputy minister at AAFC, said the government has invested $1.5 billion to help farmers reduce carbon emissions through sustainable practices and technologies. However, when asked specifically about new technologies for grain drying, she referred to business risk management programs.
Mr. Leslie, you kind of alluded to this, that we don't know where we're going to be in 10 years and what supports are going to be there. Can you talk about what innovative developments are on the horizon for the grain-drying industry, how long these will take to come to market and what supports are needed?
Sure. I will say, in defence of the government, that there has been a program for grain dryers specifically. The challenge with it is that grain dryers are an expensive piece of equipment. To upgrade or to buy a new one, we're talking about hundreds of thousands of dollars. Even a $20-million fund doesn't go very far when we have to upgrade tens of thousands of grain dryers across the country or to build newer, more efficient ones. In terms of the technological advancements, as they relate to the 10-year period, it's going to be a challenge.
If we think of the need to look at what the outcomes are of using a different heat source, one of the things we've looked at would be biomass. One of the ideas has been the use of straw that is currently.... You know, after harvest, there's straw in the field. Well, what is the impact of taking a harrow over that field again? What is the diesel usage to pull that straw together to then bundle it, save it and burn it as needed? What is the impact on soil organic matter? There could be ramifications.
The forestry industry, whether it be wood products...maybe there are options there. I don't know what the impacts could be, but I think we need to look at this in a bit of a holistic manner. Okay, maybe these fuel sources are possible, but what are the impacts going to be on factor x? Then, in the context of how we convert tens of thousands of dryers to that, what are the manufacturing needs to get the proper new innovations on each of these farms, and at what scale can we actually do that?
With regard to your question about 10 years, I think that's ambitious. I think we're okay if it means getting this legislation passed, and a sunset is a good idea. That's why I go back to a mechanism, an order in council or whatever it is, to allow that if that doesn't happen in the timeline.... I think we'd all like to see...and certainly the farmer, if he could see reduced spending on this, he would more than happily make those purchases. Again, add in the environmental benefit, and he or she will happily do that, but I think we need to be realistic in how fast this could be brought up to scale to have meaningful impact in terms of overall emissions for our country.
Thank you very much, Mr. Chair.
I just want to get some numbers on the table right now for what we're talking about when it comes to emissions. First, 1.6% of all emissions in the world are Canadian. Of that 1.6% of our country's total emissions, 10% are agriculture-related emissions.
Branden, maybe you can answer this. How much of those emissions in agriculture do you think are coming from grain drying and barn heating?
Or would anyone on the panel have an estimate of the percentage of those emissions that we're talking about for this carbon tax right now? It's not a price on pollution. It's a carbon tax.
Would you have an idea of what those emissions would be?
Thank you very much, Mr. Orb.
Obviously, Saskatchewan is very large, geographically, so there's a lot of trucking going on in our agriculture sector. We also have to take that into account.
I've heard from some of my colleagues in Saskatchewan.... I'd like to have your comments on this, Mr. Orb. The fact is that, on some of the grain-drying and barn-heating bills, there's GST charged on top of the carbon tax. It's a tax on a tax, which was unheard of until this government took power.
Have you heard that from other residents of Saskatchewan? Is that a concern among some of the people you represent in the rural municipalities of our province?
Thank you very much for the question.
I have to apologize that my translation system wasn't working earlier on.
For our farmers in Saskatchewan, the grain-drying aspect is much more important than heating livestock buildings. We do have some people who have buildings that house livestock—in particular, dairy buildings and things like that—so we think it's important for them to have a rebate or an exemption, as the case may be.
In other parts of the country, like perhaps British Columbia, Ontario, Quebec and provinces like that, more livestock are housed that way in buildings. For us on the Prairies, in Saskatchewan in particular, the grain drying is the highest cost for our producers.
Colleagues, thanks for making your way back as quickly as possible as we're a little behind today due to the votes.
I want to welcome our new panel of witnesses here for the second hour. Welcome to the Standing Committee on Agriculture and Agri-Food.
I know my colleagues at the table have heard this spiel, but for the benefit of our witnesses we'll go over it.
Proceedings today are taking place in a hybrid format. You can view the proceedings on the House of Commons website. So our witnesses know, no screenshots are allowed during the meeting. For the witnesses on video, you can speak in the language of your choice. Interpretation will be on the go. Speak slowly and clearly to ensure the easiest job for our translation team. If translation is lost, I'll try to grab your attention if I can and we'll get that back up and proceeding before we move on with your time.
Before speaking, please wait until I recognize you by name. If you are on video conference, please click on the microphone icon to unmute yourself. Those in the room, your microphone will be turned on automatically by our verification officer. I remind you that all the comments by members and witnesses should be addressed through the chair.
I would like to welcome our committee members back to the committee table and introduce you to the two witnesses we have with us this afternoon.
From the Agri-Food Innovation Council, we have Serge Buy, the chief executive officer. Mr. Buy, thank you very much for being here. From the David Suzuki Foundation, via video conference, we have Mr. Tom L. Green, who is a senior climate policy adviser.
Mr. Green and Mr. Buy, you will each have five minutes for your opening remarks. I will give you a bit of a wave with one minute left, just to give you a bit of a warning. Then we will move on to questions from our committee members.
Mr. Buy, I'll start with you for your opening comments for five minutes, please.
Thank you very much, Mr. Chair. It's nice to be back here in person after two and a half years of virtual meetings and Internet connections in rural regions.
I would like to thank the committee for inviting the Agri-Food Innovation Council to speak on this issue. We spoke earlier on previous legislation that was very similar to this one.
First, I can assure the members of this committee that no one in Canada is waking up in the morning with the idea to use more carbon and pollute our atmosphere—no one, and certainly no one in our farming communities. However, the reality is that, while major improvements have been made to limit carbon emissions by the farming community in Canada, there is still reliance on fossil fuels despite the fact that there has been a huge amount of progress made.
I heard a question from one of the MPs earlier in terms of whether Canada is responsible for 1.6% share of the pollution in the world. Farming is estimated at anywhere from 8% to 10%. That's correct, but it doesn't take into account the huge amount of work that farmers do to offset pollution in the country, and that's important to note as well.
Let me be blunt, Mr. Chair. Two options exist to deal with pollution and the use of fossil fuels. First, we can penalize the faming communities and hope that, by hitting it over their head repeatedly, they magically abandon fossil fuels or polluting sources of energy. Second, we can take measures to support the farming community as it transitions to alternative fuels and less polluting sources of energy.
Imposing a carbon tax on farmers who don't have alternatives feels like we're hitting them over the head, and that's not going over well in the farming communities in this country. Whether it's grain farmers or livestock farmers—you've heard a few questions about livestock producers—the fact is that the availability of alternative fuels and sources of energy in some regions of the country is scarce, if they even exist. To the farmers who are tied to using sources of energy tied to fossil fuels, the carbon tax feels like a punishment. They were told to produce food and play a crucial part in our food security agenda, but to do so, they will be penalized. That doesn't feel like a fair policy.
The document we shared with the clerk, which hasn't been translated, proposes some solutions that will lead us toward decreased reliance on fossil fuels and better adoption of new technologies, support increased research for proof of concept on Canadian farms, fund increased scalability and provide incentive for adoption.
I heard Ms. Valdez talk about examples in various communities. There are examples throughout the country of fantastic technologies. The scalability is simply not there. It's not something you can suddenly increase to all of Canada and all of our producers. The costs are simply prohibitive in some scenes. Yes, some large farms will be able to take advantage of some of those new technologies, but then we're going to write off the family farms, which I'm not sure is something this committee wants to do.
We therefore would advise the government to reverse the trend that has seen the disappearance of extension services, because they are key to the adoption of new technologies and provide support to farmers on that front.
I would like to commend the government on developing some programs that are going in the right direction. Indeed, the government is supporting research for new technologies and is providing limited incentives for adoption, but not enough. If we are looking at an exemption here on this carbon tax, we feel it's important to go for this.
The taxing of fossil fuels is simply penalizing farmers while they have already done so much to decrease their carbon footprint. Precision agriculture, conservation tillage, improving energy efficiency in buildings, using feed that was produced in sustainable ways, conservation cropping techniques, effective manure recycling technologies to reduce methane and nitrous oxide emissions, and grassland management are things that have been adopted on a voluntary basis, not because people were taxed to do so.
Those are only a few of the processes adopted by farmers to decrease their carbon footprint and to support their objectives towards lower GHG emissions in Canada.
To the members of this committee, there is an increasing divide in our country. Rural regions feel ostracized by urban ones. The adoption of this legislation would enable farmers to see that this Parliament recognizes their reality, values their effort and supports them.
Ladies and gentlemen, society is sufficiently divided, and we don't need to further increase the gap, especially between urban and rural regions. If you want to tax the polluting Hummer-driving urban warriors until they are forced to ride a bicycle, please fill your boots, but do recognize that farmers drive trucks because they have to. That is simply not an option. They have to heat their grains to make sure their grains are dry and can go to market. There is no choice. They heat their barns because we are in Canada, and it's cold. There is no choice, and for them to be taxed on those is of major concern for them.
My hope is that we're able to rise above partisan politics, increasingly incentivize the adoption of less polluting technologies, and avoid penalizing farmers. Let's make the decrease of reliance on fossil fuels a positive experience and create bridges between communities. Let's not divide them further.
Thank you for the opportunity to appear before you again. It's always good to be here at this committee.
Bill , like Bill before it, proposes amendments to the Greenhouse Gas Pollution Pricing Act.
First, I want to begin with reiterating some reasons why Canada's pollution pricing system is so important. I also note that since I last spoke, Bill recycles revenue from the four backstop provinces to farmers.
I'm speaking to you today from Vancouver, where we are constantly reminded of how the combustion of fossil fuels is accelerating climate change—from wildfire smoke, to a heat dome that killed over 500 people, to atmospheric rivers that destroyed critical infrastructure. Obviously, farmers are being affected by all of these trends.
We are concerned and disappointed that some politicians are spreading misinformation about pollution pricing and misrepresenting the impacts of this key climate policy, even taking advantage of price increases in world oil and gas markets caused by Russia's unjust war of aggression on Ukraine to advance misleading arguments. We have even heard statements in the House recently suggesting that the carbon price is ineffective.
When it comes to affordability concerns, let's remember that 90% of the revenue collected through the federal fuel charge is returned to households in provinces where the backstop applies. Most households actually were served more from the climate action incentive than they paid. Second, provinces have the option of designing their own pollution pricing schemes and deciding how to recycle revenue to households and businesses. They can also address competitiveness concerns.
The commissioner of the environment and sustainable development audited Canada's approach to carbon pricing, and a report was tabled last spring. It stated that there was broad consensus among expert international bodies such as the World Bank, the OECD and the IMF that carbon pricing is critical to reducing greenhouse gas emissions. They also stated that carbon pricing is broadly recognized as one of the most efficient policy approaches to reducing greenhouse gas emissions.
We note with concern that some politicians are saying that pricing pollution is not working, despite the fact that it is one of the most effective policies to reduce emissions. In B.C., we have had a price on carbon for a longer time period, and the benefits are already accruing, with a 19% reduction in transportation sector emissions.
We agree that it's important to get pollution pricing right, and there's room for improvement in both implementation and complementary measures to address disproportionate burden where these occur, but that's not what Bill proposes. Instead, it would set Canada on a slippery slope of sector-by-sector and interest-by-interest exemptions that risk fundamentally undermining the GGPPA as an economy-wide measure. Each sector can be advancing similar arguments as those being made before the committee today. If all of those arguments were heeded, pollution pricing would be eviscerated.
Furthermore, Bill ensured that proceeds from the carbon levy on fuels used on farms in backstop provinces are now returned to farmers in a manner that doesn't undermine the incentive to abate pollution. If the current bill passes, farmers will get a duplicate of pollution pricing relief.
One argument being advanced in favour of Bill is that there are no available fossil-free technologies for grain drying or heating agricultural buildings, so pollution should not be priced until such technologies are available. However, this causes a chicken-and-egg problem, because there is less incentive for firms to innovate and offer lower- or zero-carbon solutions if there is no predictable financial incentive to reduce emissions. Furthermore, such technologies are already appearing on the market, such as heat pump dryers or ways of heating buildings.
To help the agricultural sector, Agriculture and Agri-Food Canada launched the agricultural clean technology program in 2021.
I had the opportunity to testify before you a year ago, and I refer you to my remarks explaining why the exemption is fraught and a slippery slope to undermining carbon pricing. I also reiterate that, like Bill , Bill would entail a new fossil fuel subsidy at a time when Canada has committed to reduce these emissions.
The David Suzuki Foundation urges the committee to reject Bill and turn their attention to better ways in which the federal and provincial governments can support farmers in the transition to net zero. There are other solutions that merit your attention. For instance, we have recently published a major study modelling on expanding clean electricity supply across Canada and the pivotal importance of electrification so as to swap out fossil fuels across the economy. We suggest the committee could, for instance, investigate how farms can have sufficient access to a supply of affordable, zero-emissions electricity.
Thank you very much. I welcome your questions.
I'd like to thank the witnesses for being with us today.
My question is for Mr. Buy.
Mr. Buy, I really liked the point you made before you concluded on the dynamic between rural and urban areas. That is a very important element that should not be overlooked in the whole issue of taxation.
Yes, the exemption is important for drying grain, but it's also important for heating buildings.
Do you think there are any technologies that are realistically viable for both small and very large companies?
The witness Mr. Green was talking about heat pumps, but heat pumps aren't going to be used to heat the grain in the silos or anything like that.
Different technologies are starting to be introduced, the technology is improving, but it's not going to be applied across the country. Canada is often compared to the Netherlands. I often remind people that the Netherlands is a very small country with a high population density. In Canada, you sometimes have to travel several kilometres to get from one farm to another. In short, the solutions to offer the market aren't there.
I understand Mr. Green when he says that if nothing is done, nothing will ever change. However, more research should be done and financial assistance should be given to farmers to adopt new technologies, instead of penalizing them.
We need programs that match our ambitions. Earlier, Ms. Valdez talked about small pilot projects that are being put in place. These pilot projects could be extended to other farms and other regions, but they would require a lot more money than what is being proposed right now.
First of all, more research is needed on certain technologies that exist elsewhere, but that haven't necessarily been proven feasible in a country as cold and as big as Canada. So more research is needed to get to proof of concept.
There also needs to be more support for farmers who want to implement these types of technologies. In other words, we need to support not only bit corporate farms, but also small farmers and family farms.
Finally, we must ensure that farmers have the capacity to understand these new technologies. That means giving them the support and training they need. Let's take the example of a 70‑ or 75‑year‑old farmer who gets a big bill because of the price of carbon. If someone comes along and tells him that he'll have to install solar panels on his farm to improve things, he may laugh a little and send the person home. Having someone explain and train would be a better way to go.
I've done a bit of research. Twelve years ago, Canadian Biomass had 16 examples of grain-drying technology that were all scalable. You could argue they're not commercially viable if you wanted, but I don't hear anyone mentioning any of these. There are also several examples in Canada of companies—and my colleague mentioned one of them—that are providing commercially viable solutions here in Canada.
Is it not true that there's actually grain-drying technology that's been around for at least 12 years and yet it hasn't been adopted by the industry?
Mr. Buy, do you want to comment on that? Why is the industry not adopting the grain-drying technology that was here and documented 12 years ago?
Mr. Green, I'll turn to you before I run out of time.
I understand your point of view that we need to accelerate change with an incentive. Everybody talks about a rebate. However, all the witnesses from the agricultural sector that we hear from here tell us that they get a 13% to 20% rebate.
Couldn't we have a middle ground, where we would grant a time‑limited exemption, while at the same time providing adequate support and investing heavily in research and development to find alternatives in that same time frame?
What do you think about that?
Thank you to our witnesses for their important testimony.
It's nice to see you again, Mr. Buy. I've worked with you on various issues, as well. I appreciate your hard work.
The committee has been hearing that the advancements in technology that would allow farmers to dry their grain without the use of propane and natural gases are likely about a decade away from being readily available and economically viable.
Mr. Buy, can you talk about your views on the implementation of the sunset clause for this exemption? For instance, after a 10-year period, the statute would revert back to the language that currently exists.
I'd love to reply on that.
It's nice to say that with electrification everything will be fine, but the fact of the matter.... Let's take Nova Scotia. I know the regular chair, , is from Nova Scotia. In Nova Scotia, electricity is produced through coal plants, so that's already an issue. After that, the network is not sufficient to ensure that you can suddenly have big grain dryers attached to that—not that there's a huge amount of grain drying in Nova Scotia, but there are certain things on that.
To throw out blanket statements about creating an incentive.... An incentive to me is not a tax; a tax is a punishment. It is a penalty. If you want to create incentives, pay farmers to adopt new technologies, enable them, support them, fund them. That's the view that I'm trying to say. Let's try to approach this in a positive manner, rather than a negative manner by taxing.
Thanks, Mr. Johns. Thanks to our witnesses as well.
We are out of time. We have about a minute.
Mr. Buy, I wanted to ask you one quick question, if I may take some prerogative as the chair. There was lots of discussion today from all of our different witnesses on what technology is available. I don't think there's an argument that there aren't some exciting things on the horizon, but a lot of questions were around scalability. I'd like to maybe get a quick answer from you on the difference, when we're talking about scalability, between a 200-acre farm and a 10,000-acre farm, from something the size of a house to a barn that houses 10,000 chicks in January.
When we're talking about scalability, what does that look like to you and how far away are we from that?