Royal Bank of Canada Proposes a 9-Point Plan for Climate-Smart Agriculture

October 03, 2023 | Royal Bank of Canada


The Royal Bank of Canada (RBC) collaborated with BCG's Centre for Canada’s Future and the Arrell Food Institute at the University of Guelph to explore Canada's potential "moonshot": producing 26% more food by 2050 with fewer emissions, contributing to global population growth. The findings emphasize Canada's unique position to lead in climate-smart agriculture, given its unparalleled assets, but stress the need for increased investments, accurate measurement technology for emissions, cross-sector collaboration, enhanced private sector research and development (R&D), addressing skills gaps, and rewarding early adopters of sustainable practices.

RBC then published a comprehensive plan for transforming Canada's agriculture sector into a leader in climate-smart and sustainable practices. The plan is organized into nine policy recommendations across five key areas: soil, methane, fertilizers, talent and technology, and consumers:

1. Build Standards To Support Carbon Markets: Establish a solid system for measuring and reporting soil carbon and emissions to support a viable carbon market. Proposes methodologies for creating offsets and insets, with a focus on scientific measurement and reporting.

2. Create A Climate-Smart Database To Help Farmers: Develop a national soil database to collect data critical for understanding soil health, nitrous oxide emissions, carbon sequestration, and organic carbon stock patterns. Calls for real-time, downloadable economic intel to empower farmers, experts, and decision-makers.

3. Develop A Fair System That Ensures Market Equity: Recognize and reward early adopters with measures like an expanded capital gains exemption and tax credits based on scientifically proven carbon stock. Encourage a fair system to motivate farmers without unintended consequences.

4. Promote Ways To Make Methane Cuts Profitable: Coordinates with provinces for a nationwide blend mandate, supporting digesters through nationwide blend mandate, Strategic Innovation Fund (SIF), Clean Fuel Regulations (CFR) credits, Cleantech Investment Tax Credit, and agile regulatios for methane-reducing feed additives.

5. Strengthen Canada’s Domestic Fertilizer Portfolio: Streamline approval processes for biological products, improve transportation networks, and provide funding to biological companies.

6. Nurture An Innovation-Driven Ag Sector: Create a network similar to CRIN for oil and gas projects to promote R&D in ag-tech. Hold competitions to spur innovation and allowing innovative companies to showcase solutions and finance their innovations.

7. Revive Canada’s Knowledge-Sharing Network: Proposes a collaborative approach involving public, private, and institutional actors to revive agriculture extensions and knowledge-sharing networks.

8. Boost Investment In Post-Secondary Education: Create programs welcoming students from different educational backgrounds and micro-credential programs. Eiminate arriers to foreign credentials to bridge labour gaps in the agriculture sector.

9. Influence purchasing patterns through procurement: Establish a green procurement program to purchase food produced through climate-smart agricultural practices, aligning with Net Zero commitments. Direct federal funds toward sustainable food purchases, supporting growers and reducing food waste.