Agriculture Committee on Nov. 29th, 2012

[The Chair, Conservative, Merv Tweed]

I call the meeting to order.

Thank you, and good morning, everyone.

Welcome to meeting number 59 of the Standing Committee on Agriculture and Agri-Food. Our orders of the day, pursuant to Standing Order 81(5) are supplementary estimates (B), 2012-13, votes 1b, 5b, 10b, and 25b under Agriculture and Agri-Food, as referred to the committee on Thursday, November 8, 2012.

I'll open the meeting by calling vote 1b under Agriculture and Agri-Food, just to open up the debate.

I'll welcome Minister Ritz.

Thank you for being here today. You have been an attendee here quite often, so I'm sure you know the routine. Please begin.

[Gerry Ritz, Conservative, Minister of Agriculture and Agri-Food and Minister for the Canadian Wheat Board]

Thank you, Mr. Chair.

I have with me here today my deputy minister, Suzanne Vinet; George Da Pont, president of the Canadian Food Inspection Agency; Paul Mayers, associate vice-president of programs with the CFIA; and Greg Meredith, assistant deputy minister of strategic policy with the Department of Agriculture.

It's always good to be back at this table. I'd like to thank you for your continued hard work for the agricultural sector and the processing sector, and in particular for your thorough and timely deliberation on Bill S-11, the Safe Food for Canadians Act, which received royal assent last Thursday, and of course your recent comprehensive reports on the modernization of the Canada Grain Act on Growing Forward 2.

As you know, we continue to keep a busy agenda heading into the new year as we work to grow this core economic sector that drives jobs and growth in Canada.

Agriculture always has its challenges, but looking towards 2013 we are seeing some very positive indicators across the sectors.

While pork producers are coming off a difficult period, commodity prices overall are strong and are expected to remain well above historic levels for the next decade.

Exports are over 6% ahead of the pace from last year alone. That includes wheat exports, which are also up, as western grain farmers enjoy the freedom to market their wheat and barley in the best way that will drive their businesses forward. This also still includes the option of pooling their crop with the CWB, which is moving through the first year of its transition into the open market.

It's great to see that without the regulatory burden of the old single desk system, overall acreage in traditional wheat board grains is up, producer car usage remains strong, and farmers are moving their product in an efficient manner, as they are no longer held hostage by high demurrage and storage costs.

The Port of Thunder Bay has seen a 15% increase in wheat shipments compared to last year. The Port of Churchill has greatly diversified, attracting the business of more prairie grain companies. That is good news. Even grain elevators in Halifax say they are seeing an increase in tonnage, thanks to marketing freedom .

Suffice it to say, Mr. Chairman, that the doom and gloom scenario painted by those who opposed marketing freedom has not materialized. In fact, as I have just explained, we are seeing quite the opposite.

Another positive indicator in the farm economy is the farm balance sheet, with net worth up 5% this year over last, and a 30% increase over the past five years. Just this week we've learned that the realized net income for Canadian farmers in 2011 amounted to $5.7 billion. That's an increase of more than 50% over the year before, 2010, Mr. Chair.

Our shared challenge is to help keep this positive momentum going and to work with industry to stay ahead of emerging competition and take full advantage of growing opportunities at home and abroad.

Our government is helping to do this by continuing to drive market development with a strong trade agenda, by modernizing the legislative tools the sector needs to remain competitive, by reforming the regulatory framework to strengthen the sector's capacity to take advantage of market-based opportunities, and by shifting our focus to more transformative, proactive investments under Growing Forward 2.

Farmers continue to ask us to move beyond the status quo, and ministers certainly took that to heart with the new Growing Forward 2 agreement reached in Whitehorse early in September of this year.

By shifting the focus from reactive to more proactive investments in innovation, competitiveness, and market development, the new Growing Forward 2 agreement will give producers the tools they need to compete at home and abroad. It will also give them the tools they need to feed a growing global population that is demanding traditional and new food products as well as sustainable agricultural production practices.

Starting this coming April, Growing Forward 2 will invest more than $3 billion over the next five years, which represents an increase of 50% in cost-shared investments for strategic initiatives including innovation, competitiveness, and market development.

Governments will continue to offer generous ongoing support for a complete and effective suite of business risk management programs to ensure that farmers across Canada are protected against severe market volatility and unforeseen disasters.

Innovation continues to be a critical driver of market competitiveness, with payback of up to $46 for every dollar invested. That's why agricultural ministers from across Canada agreed to focus on industry-led research, building on our successful science clusters that are delivering collaborative solutions across a wide range of sectors. We want to ensure that we're investing in pertinent science, not just focusing on volume of research.

Our government was also pleased to announce the creation of the first of its kind Agri-Innovators' Committee. This dynamic committee is composed of successful innovators with a broad range of expertise and skills, representing most of the agricultural sectors from across Canada. I'm pleased to say it's holding its first meeting later today in Toronto. It will be an additional forum to help advise governments on what investments will generate the results and those needed and required by Canadian producers and processors to succeed in a global economy.

By focusing on research and innovation, we're making sure that taxpayers' dollars are producing real results that are most relevant to producers. A renewed focus on innovation will set us apart from the competition in world markets as well. Last year, Canada's agriculture, agrifood, and seafood exports reached a new record of more than $44 billion. Our farmers earn a major portion of their income from exports—up to 85% for some commodities, such as canola.

Of course, more exports mean more jobs for Canadians, more money for farmers, and stable, long-term growth for the Canadian economy. As a government we continue to open up new avenues for income across the entire sector by advancing free trade and investment agreements and working to overcome trade-restrictive measures and obstacles while promoting science-based approaches to trade.

Leading trade missions with industry to our key and emerging agrifood markets around the world is key. Our government has embarked on the most ambitious trade expansion plan in Canadian history. Some of the wins over the past year include restoring beef access to South Korea, for a potential market of $30 million by 2015; maintaining access for Canadian canola to China, a market worth on average $1.6 billion; and a successful WTO ruling against country-of-origin labelling in the United States that unfairly discriminated against our livestock producers.

If members would like more examples, I urge them to read the recently released annual market access report, which is up on the department's website. This government will continue to work closely with provinces, territories, and industry to open new export markets while continuing to strengthen and expand existing trade corridors.

Under Growing Forward 2, we're strengthening the Market Access Secretariat so that it can step up its efforts to increase industry engagement and advocacy for science-based international standards. Of course, we're continuing to advance free trade agreements as well. We've completed FTAs with nine countries over the past six years and we have a number of other FTAs in the hopper.

Key among these, of course, are the Canadian-European free trade agreement and the Trans-Pacific Partnership, which would open up a market to us of more than half a billion consumers and a GDP of nearly $18 trillion. A number of our key exporting sectors stand to benefit, including but not limited to the pork industry, which exports two-thirds of its production.

All the while, we continue to have a balanced trade position, which benefits all sectors, including supply management. This approach has served the overall Canadian economy well and will continue to do so into the future.

If our farmers and processors are to capture these new markets, they need a legislative framework that fosters innovation and growth in the agricultural sector while ensuring consumers' food safety is not compromised.

Our government is delivering this framework through a number of key pieces of legislation, including the Safe Food for Canadians Act, which, as I said at our last meeting, strengthens and modernizes our food safety system to make sure that it continues to provide safe food for Canadians, and amendments to the Canada Grain Act that will modernize and streamline our grain system while safeguarding quality and safety and removing excess costs to producers. There's no question that our government continues to ensure that Canada's farmers and food processors have the tools they need to drive new economic growth and compete in a growing global economy.

Of course, the new Growing Forward 2 envelope will include proactive investments in food safety. In fact, the estimates you have before you include more than $26 million for food safety under the current Growing Forward and the initiative for the control of diseases in the hog sector.

The CFIA has an approved budget of $315 million for food safety programs, and we will see additional investments from these supplementary estimates.

As you well know, Mr. Chair, through economic action plan 2012 our government is investing $51.2 million for the CFIA, the Public Health Agency of Canada, and Health Canada to strengthen Canada's food safety system overall. That's on top of $100 million over five years in Budget 2011 to modernize our food safety inspection.

Our record on food safety investment speaks for itself. Since we formed government, the overall budget of the CFIA has gone up by some 20%. We continue to make sure the CFIA has the ability, through our regulatory system, and the capacity, in terms of both budget and staffing, to protect the food of Canadian families.

In conclusion, Mr. Chair, our government will continue to build a strong agricultural industry in Canada by opening and expanding agricultural markets around the world, by giving industry the legislative tools it needs to compete in the 21st century, and by delivering proactive investments to help farmers and food processors meet consumers' demands for safe, innovative, high-quality foods.

Agriculture plays an important role in driving jobs and economic growth in Canada. With the ongoing support of our government, we remain confident that it will continue to do so.

Thank you. I look forward to your questions.

[The Chair, Conservative, Merv Tweed]

Thank you, Minister.

Mr. Allen, you may have five minutes.

[Malcolm Allen, NDP, Welland, ON]

Thank you, Mr. Chair.

Thank you, Minister, for being here.

Minister, you wrapped up your comments by talking about safe food and the safe food act, the CFIA, your major investments, and your number one priority, but clearly what we saw last evening was a memo that has come to light that talks about almost the exact opposite.

Let me quote from the memo: Our number 1 priority is to ensure this standard is met with Japan eligible carcasses. When stationed at this position ensure that non Japan eligible carcasses are not inspected for spinal cord/dura-mater...and minor ingesta (Ignore them).

Based on what you just told this committee about the investments, about the people, about your attempt to tell us that our number one priority is safe food for Canadians and the world, how does this memo end up being reissued year after year, from 2008 until just two weeks ago? How can that happen?

[Gerry Ritz, Conservative, Battlefords—Lloydminster, SK]

In your question, Mr. Allen, are the two words “this position”. Japan has a rigorous food safety program, as has Canada. They recognize the efficacy of our program. By specifying “this position”, what it speaks to is that the procedures and protocols that are carried out, whether for domestic or for export consumption in Japan or other countries, are done with the same rigour.

What it speaks to is the fact that Japan asks for processes that are done in different stages, as opposed.... If there's a checklist of 20 items, they're all done, regardless of where the product is going, whether to a domestic location or outside the country. With Japan, they may want to move step seven to step three. That's at their discretion.

That's what CFIA is speaking to in that memo, in saying “this position”. I think the memo is self-explanatory.

To clarify, a secondary memo was sent out on November 16. Mr. Kingston, as he stated last night in his interview as well, said that he met with me early in November, which he did. He talked about this memo and the confusion it was causing. We took that seriously. He sent me a copy of the memo—I think it was on November 18, by the records at the department—and on November 16, I understand, CFIA sent out a clarification on that exact situation, as to what “this position” means.

[Malcolm Allen, NDP, Welland, ON]

I beg to differ, Minister—

[Gerry Ritz, Conservative, Battlefords—Lloydminster, SK]

I'm shocked.

[Malcolm Allen, NDP, Welland, ON]

—because I don't think the memo needed to be clarified at all. Quite frankly, it's abundantly clear. The first one is abundantly clear, and if it needed to be clarified, it should have been clarified in 2008, not in 2012. That's four years afterward.

We had a listeriosis outbreak in 2008; the memo was reissued in 2009. Sheila Weatherill writes a report in 2009; this is reissued in 2010. We have one crisis after another and we keep reissuing the same memo, without a clarification.

Then, finally, when the union brings it forward to the minister and says “Minister, look at this”, why weren't your senior officers in CFIA aware of this memo? If they were aware of this memo, why didn't they act on it, if not after the listeriosis crisis in 2008, then at least after Sheila Weatherill's report in 2009? Surely to goodness, after the subcommittee on listeriosis that met in 2009, of which I was part, they would have said, “This is not on for Canadian food safety.”

If CFIA's number one priority is Canadian food safety, how can inspectors be told to ignore food safety? How can that be, Minister?

[Gerry Ritz, Conservative, Battlefords—Lloydminster, SK]

Let me clarify again, Mr. Allen.

As you well know, my job as minister is to make sure that CFIA has the capacity to do its job. The memo was sent to me November 8 by Mr. Kingston. We had the first meeting with Mr. Kingston early in November, and that's the first time in four years that he'd actually raised this issue. We'd had a number of face-to-face meetings and a number of meetings over the phone, and he has met with my staff a number of times. It's the first time it was raised.

I'll have Mr. Da Pont speak to the memo itself.

[George Da Pont, President, Canadian Food Inspection Agency]

Thank you very much, Minister.

The first thing I want to clarify and emphasize is that food safety is the number one priority in the Canadian Food Inspection Agency. Every piece of communication I've sent out and that the agency has sent out has consistently reinforced that point.

This memo, as the minister indicated, was clarification to one inspector whose job it was to look at and certify specific export requirements for Japan. That individual was required to assure that the carcasses were less than 20 months old, which is one of the conditions in Japan, and that certain—

[Malcolm Allen, NDP, Welland, ON]

Mr. Da Pont, with the greatest of respect, sir, we're not talking about 20-month-old carcasses; we're talking about fecal contamination of a carcass, sir.

I understand that Japan has different standards after BSE. I know all about that. We're now talking about fecal material. Please don't have me say the other word that begins with “s”. We're talking about that on a carcass, sir. It's not about all the other parts of Japan.

Explain to me how it is that this memo said to ignore it—ignore fecal material going past that point. Help me to understand that.

[George Da Pont]

Well, I am trying—

[The Chair, Conservative, Merv Tweed]

I have to stop there.

Mr. Da Pont, I am sorry. I am going to go to Mr. Lemieux.

[Pierre Lemieux, Conservative, Glengarry—Prescott—Russell, ON]

Thank you very much, Chair.

To follow up on this, I would like to ask Mr. Da Pont whether CFIA has issued a statement to the media and the public clarifying the CTV story. If you have, would you mind reading that into the record?

[George Da Pont]

I would be happy to do that. Thank you.

The statement we issued was as follows:

[Last night] , CTV reported on a four-year-old memo sent to inspectors at the Canadian Food Inspection Agency (CFIA). The union, which represents inspectors, has recently alleged that the memo directed inspection staff at XL Foods Inc. to perform certain tasks for meat destined for export to Japan, while ignoring food safety controls for domestic meat. This is categorically false.

CFIA ensures that the same stringent food safety standards are applied to domestic and exported products. This was the case four years ago and it remains true today. Within meat plants, there are specific inspection tasks conducted at various stations and production points in production. The memo referenced simply emphasized this division of labour.

This information was clarified with the union and front line inspection staff over three weeks ago when the union first brought their allegations to CFIA's attention. It was also explained in detail on two occasions to CTV.

What the union and CTV fail to mention is that every carcass processed in Canada must meet Canada's high food safety standards. This is required by law. There is zero tolerance for any form of contamination, and critical control points to detect problems are in place at multiple points throughout the inspection process. If at any time during inspection a potential risk to food safety is detected—regardless of the product's destination—the line is stopped and product is held until the concern is resolved and product is in compliance.

CFIA's first priority is safety. We are fully committed to providing Canadian consumers the protection they expect and deserve.

[Pierre Lemieux, Conservative, Glengarry—Prescott—Russell, ON]

Thank you.

I want to follow up on a few things. You were talking about the division of labour.

I want to see if I understand this correctly. There are stringent food safety processes in place. There is a station for meat products going to Japan, but all the other stringent food safety stations, mechanisms, and processes are in place.

[George Da Pont]

That's absolutely correct.

As I think the committee knows, we have 46 staff in that plant who are doing that work. As I was trying to explain, this memo was instruction to one individual, who was doing a very specific task related to certifying exports for Japan. That in no way detracts from the emphasis on food safety, all of the controls that are in place, and all of the work the other people from CFIA in that plant are doing to verify the safety of the product and deal with any contamination.

[Pierre Lemieux, Conservative, Glengarry—Prescott—Russell, ON]

Any product that would have gone through that station would have gone through other stations and processes afterwards. Just to confirm for my friend Malcolm Allen, all SRM material, for example, would be removed, whether that product was destined for Canada or elsewhere.

[George Da Pont]

That is absolutely correct.

[Pierre Lemieux, Conservative, Glengarry—Prescott—Russell, ON]

All fecal matter would be removed throughout that entire process, whether it's destined for Canada or for international markets?

[George Da Pont]

That's absolutely correct.

In fact, the plant's critical control points for fecal matter were after that particular inspection station.

[Pierre Lemieux, Conservative, Glengarry—Prescott—Russell, ON]

Right.

I think that answers most of the questions I have on this matter.

You have clarified that there is a stringent food safety process in place at a plant such as XL Foods, and that these processes ensure the safety of all product, and that this one station that was set up does not in any way undermine the food safety processes at XL Foods.

[George Da Pont]

That is correct.

[Pierre Lemieux, Conservative, Glengarry—Prescott—Russell, ON]

Okay.

In the few moments I have left, I want to ask....

Oh, I have five seconds? I'll stop there, then.

[The Chair, Conservative, Merv Tweed]

Thank you.

Mr. Valeriote is next.