Agriculture Committee on June 8th, 2006

[Karen Dodds]

I think it was about a year ago that we initiated teleconference calls every four months with stakeholders interested in our re-evaluation program. The numbers of stakeholders interested in the status of re-evaluation, the timelines and what's happening, has grown. I think there are now over 40 participants on those regular calls.

One of the intents of those calls is to get the earliest notice of whether it is a problem if a use is withdrawn, and what we can do to help by way of a transition strategy.

Again, that's one of the benefits of the new act. It is clear that those transition strategies are very appropriate, that we need to work with different user groups, when it's a critical use, to be able to say as much as possible that we won't take a tool away from you until you have a replacement tool. It will not always be possible. I want to be clear, if a re-evaluation indicates there really is a strong health concern or an environmental concern, we may not be able to do that. But most of the time now, with newer pesticides, you are seeing that there's something in the pipeline that will be able to help smooth a transition strategy.

[Roger Valley, Liberal, Kenora, ON]

I have a couple of quick questions.

Thank you for your presentation.

I understand that the fees for minor registration, minor uses, are quite high. Do you have any suggestions? Can they be staged or can they be advanced so it's not quite such a burden?

[Karen Dodds]

The actual cost they have to supply us for looking at a minor use is very small. It's in the range of $150. It's the cost of generating the data in Canada. If there's a Canada-specific data requirement, that's more of a barrier.

That's where, again, Agriculture Canada under its Pest Management Centre program of setting national priorities and having the Pest Management Centre address a lot of that research has been very helpful. The crop groups will be helpful. The pilot will be helpful.

[Roger Valley, Liberal, Kenora, ON]

You talked about all the harmonization. You talked about common labels. Looking into the future, can you tell us how far away those labels are? You mentioned the benefit of them, so we'd like to know when we can expect the benefit and how far it would go.

[Richard Aucoin]

We met in Washington three weeks ago with our U.S. EPA colleagues and with grower organizations, both from Canada and the United States, and with some of the major CropLife representatives there. It was only three weeks ago that we really started to get some candidates to look closely at this. Certain products are probably identical on both sides of the border. There's a series of meetings planned between now and December, and I think between now and December we'll show some real progress on NAFTA labels.

[Roger Valley, Liberal, Kenora, ON]

You would expect that to happen in the coming year after that, or--

[Richard Aucoin]

Yes.

[Roger Valley, Liberal, Kenora, ON]

Okay.

There's been a lot of talk about harmonization. You comment on working on different files--Canada takes some files, the EPA takes some files. You mentioned the different acts you have to work with--I think the Species at Risk Act was the one you mentioned for Canada, and I don't remember the other one you mentioned for the United States--in working towards harmonization. How far will harmonization go? Will we end up being 75% harmonized? Is there a target, or is it simply something we strive for to reduce costs?

[Karen Dodds]

I don't think the goal of harmonization is simply reduced costs. As a regulator, I mentioned talking with scientists who were involved first-hand in the discussions with their colleagues. It builds their confidence. It builds their understanding. So from the very basic level of reviewing the pesticides, there's a benefit to working internationally and harmonized.

There is clearly a benefit to sectors such as agriculture, which is competitiveness. It's not reduced costs, it's competitiveness. It's their having access at the same time to the same products. This is a key tool. And the more we assist them in that framework, the better off we are. And as I said, it's a propitious timeframe because there is this general recognition now that newer pesticides, generally speaking, are safer for humans and/or for the environment.

I have met, for example, with the Sierra Club and with the Environmental Defence League and discussed pesticides and discussed our approach to harmonization, and they recognize that newer products are generally safer, so they also want us to increasingly see the registration and use of newer products in Canada and the elimination of some of the older more problematic products.

[The Vice-Chair, Bloc, André Bellavance]

Thank you, Mr. Valley. Your time is up.

Thank you very much, Mrs. Dodds and Mr. Aucoin, for your presentation. I thank you for having answered the members' questions again this year. We'll probably meet again next year.

We'll have a short break before welcoming our next witnesses.

[The Vice-Chair, Bloc, André Bellavance]

Our next witnesses are Bob Bartley, Director of Grain Growers of Canada, and Mrs. Christine Moran, Executive Director, as well as Mr. Hepworth, President of CropLife Canada, and Peter MacLeod, Director. Lady and gentlemen, welcome.

You have ten minutes for your statement and you can share that time as you wish. Afterwards, the members of the committee will have the opportunity to ask questions.

Mr. Hepworth, you have the floor.

[Lorne Hepworth, President, CropLife Canada]

Thank you, Mr. Chair and members of the committee.

We appreciate the opportunity to come before you today. We're the trade association that represents the developers, manufacturers, and distributors of plant science products--that is to say, pest control products, and plant biotechnology for use in agriculture, urban and public health settings. Our goal and mission is to support innovative and sustainable agriculture in Canada.

Today I would like to use my time with you just to raise six areas that we think are relevant to our industry and to you as a committee.

First, it's important that Canada achieve its goal of becoming a global leader in agriculture and agri-food innovation. The plant science industry and our partners believe that future technological innovation at the farm gate level has a pivotal role to play in addressing the challenges facing society and our farmers. We believe the future will be defined by what many call the “bio-economy”.

While crops will always be a source of food and feed, in this new agriculture of the future, plants will also serve as the platform for the production of biofuels, bio-materials, bio-plastics, industrial oils, vaccines, drugs, functional foods, and nutraceuticals, representing a true transformation of agriculture as we know it today.

By our calculation, this emerging bio-economy could have a value of roughly $700 billion by 2015. That compares, Mr. Chairman and members of the committee, to the current market of $55 billion for crop protection products and the plant biotech and seed market of today.

There is an increasing global demand for biofuels, both ethanol and biodiesel. From the plant science industry standpoint, we're working on genetically transforming wheat, corn, and canola to improve fuel yields or make them more amenable to biofuel production. These solutions for society are in addition to the work going on that is specific to the interest of our immediate customer, the farmer. If Canada's agriculture industry is to benefit from a bio-based economy, farmers will need new technologies and innovations from our industry.

Our industry's advancements and technologies are not the only answer to today's pressures on farm income, but I would submit that supporting innovation in agriculture and bio-economy is one meaningful response to the current situation.

The challenge for you and for us is to ensure that Canada attracts and sees commercialization of its fair share of this potential $700 billion bio-economy for the benefit of Canadian farmers as well as for the benefit of Canadian society.

The second area I would like to address is the technology gap that we heard about from Dr. Dodds this morning. It's accepted that pest control products are an important tool for Canadian farmers to produce abundant, affordable, high-quality crops. So that Canadian farmers are competitive, they should have access to the same array of leading-edge, competitively priced pest-control products as do farmers in other countries, especially in the U.S. Reduced-risk, minor-use, and, I would submit, micro-use products have increasing importance in the production of lower-volume, higher-value crops such as plant-made pharmaceuticals and industrial products.

The current gap in pest management technology between Canada and the U.S. is felt by many to be the result of two main issues: the size of the Canadian market, and the regulatory differences that still exist between the two countries. Canada, despite the size of our agricultural sector, is about 3% of the world market. It is recognized that only five crops drive product development in Canada: wheat, canola, barley, pulse crops, and corn. The remaining hundreds of crops are minor uses, or even micro uses.

A multi-stakeholder committee has been struck to address key areas of the technology gap between Canada and the U.S. Currently, farmers have identified the gaps, farmers have prioritized their needs, and now farmers, CropLife Canada members, and the government, Agriculture and Agri-Food Canada and PMRA, must work together to address these gaps. I can say to you, the members of the committee, we're committed to addressing this issue.

The third area I would like to speak to is harmonization. Given the global market for food crops, having common regulatory approaches with our NAFTA trading partners makes sense. Many regulatory differences exist between Canada and the U.S, which are impacting agriculture industry's access to new technologies. As Canadians we cannot afford to have regulatory policy create a lag behind our major trading partners in innovation and technology.

It must be noted that the PMRA has made significant progress in moving forward on harmonized data requirements and regulatory procedures for pest control products. However, more needs to be done, and there needs to be a commitment to immediate implementation. Harmonization can be interpreted in many ways, but on behalf of Canadian farmers we have one simple goal. The goal is one data package, one data evaluation, and synchronous registration decisions between Canada and the U.S. This will allow both a reduced time requirement for registration and unnecessary duplicate evaluations for the same products.

I have a few words on efficacy, a long-standing issue. I can say we're pleased to be working closely with the PMRA on the issue of efficacy data requirements. Value and efficacy assessment help ensure that only those products that make a positive contribution to pest management are registered. However, the issue of data requirements has been seen as an added cost in time to the regulatory process and ultimately to the pesticide product itself.

Both farmers and CropLife Canada have expressed this concern to further examine and deal with this issue. A working group with PMRA and CropLife has been struck, and we're encouraged by the progress to date through this working group, with a better understanding of what is needed, especially from the safety standpoint. After that, we believe farmers are in a very good position to make judgments about which products work and which do not work.

A fifth area, own-use import, was touched on by Dr. Dodds. I would just say the multi-stakeholder task force addressing this issue has been very diligent in its work. We're very close to consensus. As the final report has the finishing touches put to it, I think it will be a win, win, win for all the stakeholders at the table, in that there will continue to be an own-use import program, but as well, as part of that package, a modernization of the generic registration system in Canada and further headway—fast tracking, if you like—of the NAFTA harmonization. You put all this together and we look at this not just as an own-use import issue, but as part of a larger pesticide competitiveness package. Once that report is issued, we will be seeking the support of members of Parliament for those recommendations.

Finally, a few words to acknowledge progress by the PMRA on a number of other important fronts. CropLife Canada believes it's important to recognize the progress made over the last few years. It is clear the leadership of Dr. Dodds, executive director, has had a positive impact on the agency and its efforts. A key advancement is evident upon examination of the PMRA performance timelines. This year over 90% of the major submissions made to the PMRA met the applicable review performance timelines. This positive move forward, along with the continued improvement and commitment by PMRA, is essential in ensuring our companies are able to provide farmers timely access to a wide array of products.

I can say, Mr. Chairman, and to the others on the committee here, over the past years I think this is the first time I have appeared before the Standing Committee on Agriculture when we didn't have the issue of timelines in our brief.

The second area I would want to acknowledge improvement on is in the area of the PMRA being more proactive in its communications. We've heard Dr. Dodds' take about stakeholder relations, and we applaud that initiative as well. With the new act and these new regulations, we feel it's important not only for the industry, our immediate stakeholders, and our farmer customers to know about all these new, important safeguards for public health and the environment, but that it's important for all society to know about the first-class regulatory system we have here in Canada, especially given the changes represented by the new act and the new regulations. We encourage the PMRA to continue these communication efforts that will continue to build the public's confidence in their federal regulatory system.

Finally, Mr. Chairman, I would just close by saying we supported the new act. We are working with them diligently on putting together the regulations so this act can be brought fully into force, and we're committed to the speedy implementation of this new act.

Thank you, Mr. Chairman and members of the committee.

[The Vice-Chair, Bloc, André Bellavance]

Thank you, Mr. Hepworth.

We will now hear the representatives of Grain Growers of Canada. Gentlemen, you also have ten minutes for your statement.

[Bob Bartley, Director, Grain Growers of Canada]

Thank you, Mr. Chair.

Good morning, members, and thank you for the opportunity to speak to you this morning on an issue that is critical to Canadian agriculture, and in particular to Canada's grain and oilseed producers.

My name is Bob Bartley. I am a director of the Grain Growers of Canada. I farm at Roland, Manitoba.

The Grain Growers is an umbrella organization that serves as the national voice of grains and oilseeds producers, devoted solely to representing grain producers' interests on policy issues, including domestic support, regulatory issues, market access, and trade policy, as well as on practical issues such as investment in the sector and transportation.

We have member associations in every region of Canada and represent 90,000 grains and oilseeds producers. As an organization, we have been very active on issues related to pesticide regulation and approvals, given the importance of having timely and affordable access to crop inputs.

I would like to state for the record that Canadian grain and oilseed producers recognize the utility of a sound, science-based regulatory system to protect Canadians, including farmers who use these products on their land and in close proximity to our families, from potential hazards associated with chemicals such as pesticides and herbicides. We will continue to support a science-based regulatory system as a means to manage potential environmental and human health risks and we would also go on record as promoting the responsible use of these products.

Canadian grain and oilseed farmers use these products in a responsible manner, recognizing that there are risks associated with them, and we actively take steps to reduce or to mitigate those risks. This is not only part of sound and sustainable agriculture practice but is also a sound business practice, for these products represent major costs in our operations.

I would like to speak for one moment about the types of business risk, as a means to describe the backdrop against which Canadian farmers are operating.

It is no secret that Canadian producers are facing difficult circumstances. This committee has heard in recent weeks about the income crisis in Canadian agriculture, where producers are facing rising costs and receiving declining prices for their products. Key reasons for the decline, and indeed the reasons for the rise in costs, are beyond the control of producers.

Grain Growers considers that one of the key factors in the decline in our reference margins is the use of subsidies by our trading partners and competitors. These have the effect of overstimulating production and depressing prices. We are pleased that the Prime Minister and the Minister of Agriculture recognize the income problem by honouring the commitment to the grains and oilseeds sector made by the last government and by committing new funding to agriculture, but we note that it is also important to turn to policy solutions to alleviate the problem too.

One of the practical problems facing grain and oilseed producers is the issue of timely access to affordable inputs such as pesticides. The Grain Growers of Canada is committed to eliminating disparities in access to pesticides between Canadian and American producers, as well as between producers in different parts of Canada.

Members of this committee may know that the Grain Growers was an active participant in the work on the own use import task force. Through access to own use Imports, producers were able to save $2 per litre for one particular product when it was imported from the United States through OUI. This may seem like a small amount, but when you consider an average use pattern of approximately 1.5 litres an acre of that product and calculate the savings per acre against an average farm, say one that would be just under 3,000 acres, a producer could save more than $9,000.

When you consider this in light of the crunch producers face from declining prices, you begin to understand the reason producers turned to such a program in record numbers in 2005. However, the Grain Growers recognize that this is a complex issue and that our producers need a reliable supply of product and access to new products.

We recognize there are problems with the own use import program, no matter how much cost saving there is on an individual farm basis. Among other things, from a producer's perspective the program is not easily accessed by individual producers. Obtaining an equivalency declaration can be a complicated, time-consuming, and costly endeavour.

As a solutions-based organization, the Grain Growers strive to find constructive policy solutions to challenges facing grains and oilseed producers. For this reason, we welcomed the smart regulation initiative and we are pleased that the government has decided to enhance cooperation with our American and Mexican neighbours under the security and prosperity partnership.

We see these as important and concrete steps to improve the situation for producers in the long term. In fact, regulatory cooperation with a view to working towards real harmonization and a single North American market for pesticide products is, as far as we can see, the real solution to some of the problems related to pesticides facing Canadian agriculture producers.

Regulatory harmonization through cooperation and mutual recognition is the key to closing the technological gap for many producers. It is puzzling that Canadian regulators would establish a maximum residue limit for chemicals on imported products that will be consumed by Canadians but not approve these same chemicals for use by Canadian farmers on the same Canadian-grown products.

This issue speaks to the increasingly globalized nature of our market. Canadians eat food from many parts of the world every day, just as Canadian food is consumed the world over. As such, Canadian producers are well aware of the perils of regulatory measures used as non-tariff barriers to trade. We take measures to ensure that our producers meet the requirements of our customers and we rely on Canadian rights under the WTO's agreement on sanitary and phytosanitary measures to defend Canadian products from unfair measures. The SPS agreement, along with requiring that measures be based on science, encourages harmonization between countries as a means to reduce non-tariff trade barriers. For this reason, we see the natural progression of the own-use import task force, which has examined the problem from a number of angles, should lead to regulatory harmonization in North America.

The PMRA has taken several steps towards this through the NAFTA working group on pesticide harmonization, but we would encourage the agency to move towards mutual recognition of regulatory decisions as a means to improve the business environment for agricultural producers, while ensuring the protection of Canadians and the environment. We considered that reducing the regulatory burden would ultimately improve access for Canadian producers by ensuring access to new products at the same time as our American counterparts, and this should ultimately reduce the cost to producers. Regulatory fees would be recuperated by passing them on to the users and consumers of the products, namely farmers.

I'm sorry that Mr. Easter has gone. I wanted to talk about Wayne's wild oats.

Prince Edward Island and Quebec are areas that lack wild oat herbicides in wheat. I'm a farmer from Manitoba. We have access to several wild oat herbicides that will take the wild oats out of the wheat; Quebec and Prince Edward Island lack that. So we need some harmonization between provinces and among the regions across Canada too.

In short, as we have stated before, grains and oilseed producers do not believe that the government owes farmers a living, though we do believe that government owes us the industry policies that will allow us to make a living. These policies are within our grasp. One of these policies is the improvement of the regulatory system for agricultural crop inputs.

Thank you, Mr. Chair.

[The Vice-Chair, Bloc, André Bellavance]

Thank you very much, Mr. Bartley.

We will start the first round of questions with Mr. Valley, for seven minutes.

[Roger Valley, Liberal, Kenora, ON]

Thank you.

Thank you for the presentation.

My first question is for Mr. Hepworth.

We talked a bit before about minor use. Micro use, I wasn't familiar with that term. I don't normally sit on this committee, so could you take one minute and explain that to me?

My main question to you is this. We've talked an awful lot about harmonization. We know there are benefits, and there are always concerns, but I think it was the first time I heard the word “synchronization”. My question was how long is it going to take us to get there? How fast are we going to do this? What I take out of your comments is that “synchronization” means automatic in one country or the other--when they do, it's the same in the next country. So could you explain just exactly what you meant by synchronization, if I have that right? And could you give me a very brief explanation of the micro use? I'm not familiar with it.

[Lorne Hepworth]

Thank you.

As I said in my remarks, the pesticide manufacturers and developers, the process market base, typically look upon Canada as having big acres of wheat, oats, barley, and canola. Ergo, with the $200 million or $300 million that it takes to develop a molecule from the beginning to the end, you can economically advance into those marketplaces. However, other crops that are termed as minor use are very important. They have emerged over the last 10 to 15 years to the point where you and I might view them as major crops, yet they're still viewed as minor crops. I'm thinking of chick peas, lentils, the pulse sector, canary seeds, and all those crops that have become very important, especially in the prairie basin.

As we go forward with this new agriculture of the future, where you start to grow crops not only for food and feed but for some of these very specific uses, we see emerging low transfat canola, functional food crops, and nutraceuticals. Some of these very precise crops may be from very small acres but are of very high value.

Those that would fall into that category are what I would call a micro crop. The term by which they are identified in our industry is “micro crops of the future”. All the challenges that we have for minor use will be just as big or greater for the micro crop. We think that is very important for the future of agriculture.

On the term “synchronous registration”, I'm trying to come to the same point that I think Dr. Dodds was at. We recognize that Canada will probably never be in a position, and rightly so, to abrogate the final decision to another jurisdiction or another sovereign country. If we can take the same data, evaluate it in the same way, and ultimately come up with the same decision at the same time--i.e., synchronicity or whatever—that would be a pretty good end point for us.

That would be a simple way of describing our goals on harmonization. I don't know if my colleague, Peter MacLeod, has further comments on that.

[Roger Valley, Liberal, Kenora, ON]

Before Peter answers, if I could take it to the step of synchronization, do you ever see the day when we don't have two agencies, we have one agency that is staffed by both countries, and it's done in that way? I know there is different legislation in different countries, but there has to be a lot of work that we could do together.

Peter, do you want to comment on that?

[Peter MacLeod, Executive Director, CropLife Canada]

There is a lot of activity. I guess the vision for the future, which we've articulated in the brief but not spoken about, is that there will be one package of data, whether it is Canada-U.S. or from a global perspective. There will be one evaluation that can then be shared through various science-based organizations, whether it's in the European Union, the United States, or Canada. The decision will be up to the individual country, based on specific requirements.

We have a cold climate here. It helps us eliminate some pests that they don't have in the U.S., but the use patterns are sometimes different. If there is a good reason for a difference, it's certainly very valid. But 99% or 95% of the time, there should be no reason that a synchronous or simultaneous decision can't be made in each country in the future.

[Roger Valley, Liberal, Kenora, ON]

Thank you.

Mr. Bartley, we heard from the PMRA this morning. First, we heard comments from both groups that things have improved. We were under the impression there was an awful backlog, but that impression was cleared up this morning.

As somebody who is on the ground, have you seen that things are improving as fast as we would like, or is there more we can do in getting new products to markets?

I have another short question after that.

[Bob Bartley]

My understanding is there are 135 active ingredients registered in the States that we do not have access to. That number is probably a couple of years old now, and I haven't heard the latest one. It is for all sectors of horticultural production in Canada.

[Roger Valley, Liberal, Kenora, ON]

Who would be able to get us that information? Who do we specifically ask about the 135 products that are available there, which we don't have access to for whatever reason? How do we find that out?

Peter is offering to answer that one.

[Peter MacLeod]

The list that I think Mr. Bartley is referring to was created through the Canadian Horticultural Council, which coordinated with other grower groups across Canada to come up with this list. I have seen the list, and we can make sure it's provided to the clerk for distribution. I don't have it with me today.

I know that list of 135 has been prioritized down to a group of 70 and then further prioritized down to a group of 30 really critical needs for Canadian growers. I would be happy to provide it to the committee and the clerk when I get it. I don't have it with me today.

[Roger Valley, Liberal, Kenora, ON]

I think it's important for us to understand just how big this gap is. If you can provide that information, we'd appreciate it.

I'll come back to Mr. Bartley. You talked about something we're well aware of at the federal level: there are many instances in which there is no harmonization between provinces. We like to point outside our federal borders and talk about who's not doing what and who's not cooperating and why it hurts our producers, but it seems almost absurd that we still have those issues between the borders of the provinces. We have them in health care; we have them all over the place.

You mentioned Quebec and P.E.I. Are there any other instances you could identify for us, just to show us how much work we have to do inside our own borders here first?

[Bob Bartley]

Yes, there are. I'm involved in that, too; with my wheat, I have lots of wild-oat herbicides. I'm a corn producer, also.

When corn herbicides come for registration, they always get registered for the area of large acreage--Ontario, Quebec, eastern Canada. The label will read “eastern Canada only”.

Because corn is a minor crop in Manitoba--maybe 150,000 acres--the focus of the company is not to get registration for such a small number of acres. I have lots of wild-oat herbicide for my wheat, my cereal, but I lack the products or tools that eastern Canada has for corn. Any herbicides that we have for corn production in Manitoba have all come through the minor-use registration process. In respect to corn, it is the Manitoba Corn Growers Association that has to go out and pursue those registrations.