Agriculture and agri-food is a key economic sector in Canada, employing 2.1 million people in 2020 and generating $139.3 billion in revenue (approximately 7.4%) of Canada’s gross domestic product (GDP). But it faces particular challenges from both climatic and non-climatic stressors. Producers across Canada are already experiencing the effects of climate change with more frequent and severe droughts, floods, and severe storms, and the sector faces global geopolitical challenges including market disruptions and high costs. Moreover, with the global demand for food expected to grow 60% by 2050, ensuring Canadian agriculture is well positioned to meet these challenges in an environmentally sustainable fashion must be a collective priority.
Canada’s larger farms and agri-businesses exert a massive influence on the landscape, yet they appear to under-participate in current Beneficial Management Practices (BMP) programming and, in some cases, may not even be eligible for some of the BMP-targeted programs. It is vital for the Sustainable Canadian Agricultural Partnership (SCAP) and other programming to engage large-scale farms. Of course, to encourage full-spectrum participation, government programming aimed at promoting BMPs will need to be fiscally sound and financially attractive for large farms and ranches and smaller operations alike.
Agricultural producers in Canada have been leaders in adopting cost-effective and readily available beneficial management practices that reduce emissions and provide additional benefits. Alternative farming practices represent a mitigation potential of 37.4 Mt of CO2e/yr in 2030. Practices including cover cropping, nutrient management, diverse crop rotation, and avoided conversion achieve mitigation, adaptation, and resilience through water retention, improved drainage, and erosion avoidance. They also increase producers’ revenues and are critical to meeting Canada’s commitments to reduce emissions from methane and nitrogen fertilizers. Transitioning to more sustainable agricultural practices is increasingly important in maintaining Canadian producers’ competitiveness amid changing consumer preferences and varying jurisdictional policy frameworks.
While the uptake of regenerative agricultural practices is accelerating, there remain opportunities for increasing the scale of their adoption. Canadian producers need financial incentives and information on the potential return on investment (ROI) associated with new practices. These investments will help Canada’s agriculture sector and producers successfully meet ambitious goals identified in recent federal announcements, including the Minister of Agriculture and Agri-Food Canada’s mandate letter, the Guelph Statement, the Emissions Reduction Plan, and the developing Green Agriculture Plan. With just eight growing seasons to bring greenhouse gas emissions in line with levels agreed in the Paris Agreement, Budget 2023 and the new SCAP will be critical.
The Green Budget Coalition envisions a future in which Canada is viewed as a leader in sustainable and innovative agriculture with a resilient and diversified food system. To achieve this, collaboration at all levels of government and with the private sector is essential. Outlined below are key recommendations for investments that are aimed at helping producers diversify their income by advancing or incentivizing stewardship activities that produce enhanced environmental benefits.
Total Recommended Investment:
$3.46 billion over five years, followed by $209 million per year, ongoing, as follows:
A. National Land Use Strategy
Develop and implement a comprehensive National Land Use Strategy in collaboration with provinces, territories, and Indigenous peoples that would take an “everyone wins” approach to limit conversion of prime agricultural lands, grasslands, wetlands, and forested areas by engaging farmers on strategies that discourage loss of agricultural land and habitat while encouraging smart urban growth, sustainable agriculture, and carbon storage. This strategy should include an analysis and comprehensive review of land use change drivers.
$25 million over three years, with option for renewal [AAFC, NRCan, ECCC]
B. Agricultural Habitat Incentive Programs
Inappropriate land conversion continues to be a challenge, thus investments need to be made for agricultural habitat incentive programs:
Reinstate funding for a National Perennial Forage Conversion Program, similar to the former GreenCover Canada, but more targeted and aimed at actual field-scale conversion by enhancing cropped land with interspersed productive cropland and perennial cover.
$500 million over five years [AAFC]
Maximize the economic and environmental return of marginal land by implementing strategic investments and financial incentives for producers to convert marginal areas from annual crop production to natural features providing soil carbon storage and other ecosystem services. Precision/smart agriculture technology can be used as a tool to differentiate productive and profitable land from marginal land with little to no return on investment.
$500 million over five years [AAFC]
Provide incentives for the avoided conversion of native and tame grasslands, which sequester carbon and provide biodiversity and other ecosystem services.
$1 billion over five years [AAFC]
Pollinators provide a key service for native plant communities and global food production. Permanent stations are needed to monitor pollinator trends in relation to land use practices. This will help determine where funding is most needed (e.g., marginal areas on which to restore pollinator strips).
$25 million over five years [AAFC, ECCC]
C. Data/Carbon Accounting
Improve systems for measuring, reporting, verification of greenhouse gas (GHG) emissions across agricultural landscapes to better inform the National Inventory Report, agricultural policy-making and programs, and decisions across agriculture and agri-food value chains. Data harmonization across government agencies (StatCan, ECCC, AAFC) is needed. This initiative should have the following three objectives over the next three years:
- Conduct a national scan of public and private data to identify opportunities and address gaps.
- Develop a centralized platform to build coherence across datasets.
- Invest in measurement tools, technologies, and reporting processes that can improve and streamline data collection.
$50 million over three years, starting in 2023-24, then $2 million per year, ongoing [AAFC, ECCC, StatCan]
D. Research to Quantify Economic, Environmental, and Social Benefits
Increase investments in research that quantifies the economic, environmental, and social benefits of agricultural practices to refine BMP information. This should include:
- Integrating monitoring and evaluation of agri-environmental indicators and return on investments from government programs (e.g., Agricultural Climate Solutions program), and share the findings from program evaluations with producers and policymakers.
- Continuing to expand and strengthen the Living Labs program network with a heightened emphasis on improving on-farm research and data collection to inform regional adoption and national reporting. Collaborating with universities and researchers, especially next generation researchers, to develop and deploy sustainable agriculture education and research programs.
- Improving the transparency of public data to identify and eliminate counter- productive incentives or subsidies for activities that directly or indirectly cause unnecessary environmental harm.
See also Aligning federal investments and policies, including subsidies, with Canada’s Nature commitments, later in this document.
$100 million over five years, starting in 2023-24, and $20 million per year, ongoing [AAFC]
E. Tools, Tech Transfer, and Technical Assistance
Increase investment in Tools, Technology Transfer, and Technical Assistance for Producers to accelerate the adoption of BMPs that will improve productivity, generate new income streams, and improve on-farm climate resilience. Technical assistance for producers should take a flexible and regionally adapted systems approach where programs are tailored to local realities and can help build local capacity in nature-based climate solutions. This should include:
- Expanding extension programs (e.g., Environmental Farm Plan) to introduce practices, tools and technologies (e.g., HOLOs model) that assist and incentivize producers. Access to these resources should be complemented by efforts to incorporate feedback from producers.
- Improving and expanding access to resources, training and education for technical assistance providers on natural-climate solutions (NbS) adoption as Quebec announced in its Plan d’agriculture durable.
- Developing a training and certification program for technical assistance providers to better link producers to incentives for natural-climate solutions adoption and advise on the associated opportunities and risks (e.g., supply chain interventions).
- Enhancing farmer-to-farmer learning opportunities. Farmers learn about new practices and technologies in many ways, yet learning from other farmers often has the most powerful impact. Many farmer-to-farmer learning systems exist throughout Canada but they often rely on the volunteer work of champions of sustainable practices. Such programs need to be supported and expanded.
- Funding 1,000 new extension service agents to support sustainable practices, in particular soil health.
$500 million over five years and then $100 million per year, ongoing, to pay for one thousand new extension service agents to support agri environmental practices, in particular soil health. [AAFC]
F. Soil Health
Soils are important for their resilience, productivity, and carbon storage capacity. The protection and regeneration of soils has been identified as a key action in a suite of recent announcements including the Guelph Statement, On Farm Climate Action Fund, Agricultural Climate Solutions, the Emissions Reduction Plan, and the developing Green Agricultural Plan. This should include:
- Developing a regionally adapted pan-Canadian Soil Strategy that will help thousands more producers to access the information and financial resources needed to improve soil practices.
- Ensuring support is available for producers who want to test, adopt and measure other BMPs such as organic amendments, diverse crop rotations, conservation buffers, soil compaction prevention and integrated pest management.
$6 million over three years to develop a Soil Health Strategy, to grow over time ($1 million in 2023-24, $2 million in 2024-25, and $3 million in 2025-26). [AAFC]
G. Market-based Systems for Ecological Services
Canada is rich in ecological goods and services, which is advantageous in marketing sustainable products. Consumers are motivated to buy products that are perceived to provide improved environmental performance. However, no marketplace exists that provides security to Canadian companies to make such investments with an assured outcome. AAFC should allocate startup funding to facilitate the development of the on-farm-based EG&S market that would allow Canadians to make credible claims and investments to improve overall biodiversity.
$25 million over three years [AAFC]
H. Updating Business Risk Management (BRM) programs to integrate climate risk management, environmental practices, and climate readiness.
The costs of BRM programs are increasing due to the significant risks climate change poses to farm operations. In contrast to similar programs elsewhere, business risk management programs in Canada do not yet compensate for measures taken by producers to mitigate these risks through adaptive practices such as environmental BMPs. While BRM programmes have been primarily aimed at income stabilization, they also offer a means to reward new practices that enhance medium and long-term climate resilience and produce positive agri-environmental outcomes. We recommend that all the changes to federally-funded BRM programs be additive and incentive-based. This should include:
- Creating a specialized Climate Risk Reduction Fund to provide voluntary incentives like premium discounts or enhanced payouts for producers that adopt BMPs.
$435 million over five years, then $87 million per year, ongoing [AAFC]
- Developing a program to pilot innovations in BRM design including encouraging adoption of specific BMPs.
$10 million over 3 years [AAFC]
- Enhancing the transparency and accessibility of data on the effectiveness of BRM programs, including performance measures and reporting, working towards a quantification of the risk reduction benefits of BMP adoption and preventive measures.
$5 million over five years [AAFC, StatCan]
- Collaborating with provinces to establish early warning systems (e.g., drought, floods) and related recommendations for regionally appropriate BMPs.
$280 million over three years [AAFC]