Thank you, and thanks very much for this opportunity.
I would like to relay to you that there's a lot of interest and debate within the Canadian poultry processing sector about this issue. In fact, I received two e-mails this morning as I was sitting in the chair behind me, one from a chicken processor in Newfoundland and one from an egg grader in Nova Scotia. I guess they are first up, so I'll probably get some more during the day.
I just relay this so that you understand there's a lot of interest within our group, and also to let you know that as of now I don't have consensus as to where we should actually go. I understand the position you're in, but we will need more discussion. We will need more debate. We will need to stay engaged.
Briefly, I'll describe who the Canadian Poultry and Egg Processors Council is. We're the national trade organization that represents the interests of more than 170 Canadian poultry processors, egg processors, and hatcheries. In addition, our membership includes over 60 national and international industry partners who have joined us as associate members.
Representing some of the largest agrifood corporations in Canada, our member companies process over 90% of Canada's chicken, turkey, eggs, and hatching eggs. This economic activity generates approximately $5 billion in retail sales. To accomplish this, our members have invested over $1.5 billion in plant and equipment and directly employ more than 17,000 Canadians.
Our poultry and egg processing members purchase the majority of their agricultural raw inputs, the live chicken, the live turkey, the eggs, from Canadian farmers who operate in a supply-managed industry. In addition, though, our members supplement these inputs with imported chicken, turkey, and egg products in amounts that are limited by Canada's WTO and/or NAFTA commitments.
Now I want to quickly discuss the current “Product of Canada” labelling, at least as we understand it. And it will be very much a high overview, because I don't want to just repeat what my friends here who have preceded me have said.
Canadian poultry and egg processing companies understand that the basic requirements for the current “Product of Canada” label are really twofold: one, at least 51% of the total direct manufacturing or processing costs must be Canadian; and two, a final significant processing must have been done in Canada.
For example, in our egg sector, if one of my members brings in ungraded eggs from the United States, washes, candles, grades them, sizes them and packages them and puts them into retail, although that's covered the 51% hurdle, it has not covered the final significant processing cost issue, and therefore it cannot be labelled “Product of Canada”; it must be labelled “Product of the United States”.
If he takes those same eggs, brings them in, breaks them, further processes them somehow into mélange or dried product or whatever, that now can become a product of Canada. That's our understanding.
There are varying levels of support for the current “Product of Canada” labelling from within my group--from the definition of significant processing is too strict, some people believe; to support for the current regulations the way they are, because they are understood and they make sense; to a belief that there should actually be a requirement for the chicken, turkey, or eggs to have been grown or produced in Canada. That's where I am.
However, it is important that the current labelling rules be strictly enforced. Mr. Laws explained that. We would like to reinforce that. Whatever is there has to have integrity and it has to be enforced.
Supporting arguments from among CPEPC members for the current “Product of Canada” labelling requirements include the argument that our imported chicken, turkey, or egg raw material is subject to equivalent standards for food safety. When we import from countries that are allowed to send product to us, that is equivalent product for food safety--not equal, but equivalent.
The ability to import additional product to augment our domestic production within the supply management environment is critical. Putting it through our processing and further processing systems with our HACCP, our own company QA systems, CFI federal inspection, etc., and then labelling it as product of Canada is consistent with Canadian and company food safety and quality goals. It dovetails with company and private label branding programs.
Our members have a big investment in their brands. That means a commitment to quality and food safety, and that's what it says when you've got a “Product of Canada” label. It is valuable for the protection of investment and jobs in Canada, particularly for the production of non-ICL products that are allowed to enter Canada without tariff in the poultry business.
Those are supporting arguments for continuing with the current “Product of Canada” labelling as we understand it, as I explained earlier.
Supporting arguments from among CPEPC members for a revision to the “Product of Canada” or alternative wording label regime based on the origin of the primary agricultural ingredient or the product--i.e., the chicken, turkey, or eggs must be grown in Canada--include that it gives an advantage to products produced with Canadian ingredients, which is the vast majority of what my members use. The vast majority of what my members buy are Canadian ingredients. This could become even more important, depending on the results of the current Doha round of negotiations at the WTO, future bilateral trade agreements that are always ongoing, fluctuations of the Canadian dollar, etc. So I've got both sides of the coin.
I'll turn briefly to the concept of a “country of origin” type of label. It appears that consumers place value on knowing where products are raised or grown. That's fine. An alternative that has been promoted by various organizations--as Mr. de Valk has mentioned--such as a “Grown in Canada” label could get industry support. The big question in my mind is, should it replace the current “Product of Canada” label rules, or should it be in addition to? Either way--just to stress this again--the importance of standards and label integrity must be preserved.
Mr. de Valk's idea of using a third party to establish this is a good idea as far as I'm concerned. It should be audited. It must be enforced. When Mr. Laws finds an example of a situation that is not enforced, that's not right. No matter how we use this label--over and above, or as a substitute for what we've got today--it has to be enforced. If it is to be in addition to the current “Product of Canada” label and rules, then it could be modelled after some existing provincial programs: Foodland Ontario, Taste of Manitoba, etc. We have models that we could use. It would certainly be voluntary.
We must be careful that it does not undermine the current “Product of Canada” label for poultry and egg products. We cannot allow it to make marketing claims regarding superior food safety or quality, because that's just not the case. It cannot either mislead or confuse customers. You cannot say it's superior food quality or food safety. As I explained before, our members put their brands on these products. The raw material coming in is equivalent. The product that is being produced today is safe, wholesome, and is of good quality.
It cannot add additional cost to Canadian food processing companies--the whole idea of segregation, etc., that's already been mentioned.
It can't confuse consumers either. The issue is if we have two labels--the “Product of Canada” label today and then a new “Grown in Canada” label--and they're side by side, is that going to be confusing? That's going to be a challenge. Therefore, another comment Mr. de Valk made that I would also like to support is that we're going to need a well-thought-out communication plan as we go forward on this.
At the end of the day, we appreciate the opportunity to engage in the discussions concerning this topic. We'd like to continue to be involved as the issue progresses. As I noted at the outset, there's a lot of interest and engagement by my members. We plan to fully debate this over the course of the next coming months, try to arrive at a consensus, and if we do, we'll certainly be back to let you know about that. Either way, we'd like to stay engaged.
Thank you very much.