Thank you, Mr. Chair.

On behalf of Pulse Canada, the national industry association representing over 26,000 Canadian pulse growers and over 100 processors and exporters, I want to thank you for the opportunity to provide our sector's views on this study.

International trade is critical to the success of Canada's pulse sector. Canada represents close to one-third of the global pulse trade and relies heavily on export markets. In 2023, upwards of 90% of our production was exported, meaning that trade barriers or protectionist measures can have significant repercussions for Canadian farmers, value-added processors and exporters.

First, I would like to address the impact of reciprocal standards, particularly how the EU's direction in this area is ushering in a new era of concerning protectionism. The EU is an important market for Canadian pulse crops, and it is actively using and exploring reciprocal standards, or “mirror clauses”, as protectionist tools aimed at disadvantaging imported products over domestic ones. Their regulatory and legislative choices are increasingly turning away from international risk-based standards and rules-based trade.

One of the key reasons the EU must turn to reciprocal standards is that their regulatory and legislative choices have removed production options and tools from their farmers, undermining their competitiveness. As a result, the EU must turn to reciprocal standards to protect them. This policy creates a race to the bottom and is not the direction Canada should take. We are a trading nation whose economic security is largely dependent on free and fair trade and the elimination of barriers to trade. No government should actively choose to erode our farmers' competitiveness through regulation, and then look to protectionist measures to fix the issues created.

The EU also happens to be the most advanced jurisdiction on border carbon adjustments; their mechanism has been put in place to prevent carbon leakage and to support and protect the industries that have been rendered uncompetitive by the EU's regulated price on carbon.

The EU CBAM is a prime example of how an effort to reduce emissions has resulted in, and provided cover for, protectionist trade policies and barriers to freer and fairer trade. Putting a price on carbon, either through a regulated approach like an emissions trading system or through a carbon tax, clearly renders certain industries uncompetitive in the global trading environment, and this then leads to a tool like border carbon adjustments.

The EU approach is not a good or relevant example for Canada to emulate in this regard. It is our view that setting a price on carbon, either regulated or through a tax, is not well suited for grain production. Grain production and food supply chains more generally should not be actively rendered uncompetitive and their productive capacity diminished through a price on carbon.

Canadian farmers already produce grains with highly competitive carbon intensity scores. In the case of pulse crops, carbon intensity is often zero or positive. A price on carbon ultimately achieves very little benefit for our sector. This is not to say that grain production does not have a role to play in reducing emissions. There are clearly areas where innovation and technology adoption can have an impact to increase efficiency and lower emissions, as Canadian pulse growers continue to demonstrate year after year.

However, these changes will not be achieved through a policy like a carbon tax, which is a blunt instrument that can simply erode margin, reduce farmer profitability and suppress grain production, all with little impact on grain sector emissions. While the EU's approach to reciprocal standards and the combination of a carbon price and border carbon adjustments are clearly not the right policy choices for Canadian grain production, we must also be clear-eyed on the threat these tools pose to Canadian exports if other jurisdictions adopt them. BCAs, whether enacted here in Canada or as demonstrated in other jurisdictions, would impede our farmers' competitiveness without providing meaningful emissions reductions.

The Government of Canada should focus its efforts on industry-led sustainability priorities supported by farmers and avoid creating unnecessary red tape that would hamper Canada's ability to compete on the global stage.

Thanks.