Canada is the best country to feed and fuel the world…Part One

Earlier this spring the Bank of Canada sounded the alarm that Canada is having a “productivity emergency.”

Sluggish economic growth and stagnant productivity are leading to the weakest GDP growth we’ve seen in decades. Per capita GDP growth is languishing at 2014 levels. 

This was a hot topic of conversation at a recent meeting I attended of the Business Council of Canada. Despite the productivity emergency, our economy’s natural resources sector is thriving. Canada has what the world wants – safe and plentiful agri-food and products, sustainable and reliable oil and gas and a vast supply of rare minerals.

But, we haven’t yet been able to unleash the full potential of these sectors. While there is optimism and opportunity, there is also a shared frustration over industrial policies that are thwarting future growth. 

Mining, forestry, oil and gas and agriculture leaders shared stories of crippling government bureaucracy, extreme delays in environmental permitting, interprovincial fighting on wind and solar power markets, complex climate change policies and misguided incentives that pale in comparison to those offered by the US Inflation Reduction Act causing investment to go south of the border. 

I could go on.

From an agricultural perspective, I have similar concerns. 

Emission reduction strategies

Western Canadian farmers invented zero-till, a method of no or minimal tillage that protects soil moisture and erosion. Yet our government fails to give Canadian farmers credit for this practice, while the rest of the world is still trying to catch up with us. Under the federal Greenhouse Gas Offset Credit System, early adopters of no-till farming are prohibited from participating in the carbon market. Only projects that started after 2017 will qualify. There seems to be no acknowledgment that agriculture holds significant potential as a carbon sink.

Canadian farmers produce the most sustainable crops compared to 7 other countries, including the US, Australia, France and Germany – we never hear our federal government celebrating these results. Yet, we are criticized for our emissions and for not doing enough. The goalposts on GHG emissions for Canadian producers keep moving, yet not for other countries.

We need to be careful when deciding on policies designed to reduce agriculture-related emissions. Yes, our industry can do better, but blanket strategies, particularly from fertilizer and farm practices, could be disastrous if not done properly. Fertilizer is to plants what calories are to humans.

Taxes

Don’t get me wrong, farmers need to pay their fair share of taxes just like the rest of Canadians. But when there are no viable or economically feasible alternatives available for grain drying and barn heating, the carbon tax is punitive. 

Then, there’s the recent increase in taxes on capital gains, which will ultimately drive away investment in Canada. The average age of the Canadian farmer is between 58-61 and many will be retiring and possibly selling land over the next few years – this change will negatively impact them. On the whole, it’s frustrating as it will hurt our industry and prevent future growth. It’s interesting to note the capital gains tax in the US is considerably lower than in Canada. I never plan on selling my land, so I’m hoping to dodge the bullet on this one.  The real frustration is any capital gains tax above 0% is questionable, this is taxing already tax-paid monies that individuals or companies have decided to invest.

Gene editing and glyphosate 

These are two important regulatory issues that our industry must continue to keep a close eye on. Gene editing allows us to use disease-resistant crops, which means we need to use less chemicals. And, glyphosate is an herbicide that allows farmers to use reduced tillage or no-till. Both of these tools are wildly misunderstood by the public. 

To date, glyphosate is legal in Canada and, after divisive debate, it has been reauthorized in the EU for another 10 years, with conditions. Recently, the Canadian federal government cleared the path for more gene-edited crops to be developed, which is a huge win for agriculture. However, I am concerned that public pressure and politics could change these policies on a whim. We need to ensure that sound regulatory decisions are made based on science and not by people looking for election votes. 

In part two of this blog, we’ll explore the labour crisis, infrastructure issues and advocacy challenges the agriculture industry faces. And, pose the question…can we get farther in Ottawa by working together with other natural resources industries?