Agriculture Committee on Oct. 7th, 2014

[Anthony Parker]

Mr. Chair, I'd be happy to take that.

The UPOV level provides a framework for minimum requirements and consistency at the international level, but it doesn't preclude sovereign states that are party to it from putting in additional measures or tweaking it to meet their needs.

On the question of heirloom or heritage varieties, I think we need to be really clear about that. When we talk about the UPOV system and plant breeders' rights, it's focal point of concern is new varieties, and in fact heritage or heirloom varieties by the very nature of their being in the public domain for a prolonged period of time would never qualify for protection as being new. There is no concern here about developers taking heritage or heirloom varieties and covering them in the scope of a PBR.

Quite the opposite, an interesting thing that happens is quite often a rights-holder will surrender their rights much earlier than the 18 years of protection—we're moving to 20 with the proposed amendments—quite often much earlier, and if it's an innovative or successful variety it falls into the public domain and becomes the heirloom or heritage variety of tomorrow. There's this idea of continuous improvement. Farmers will continue to be protected. They will continue to have choice in what they source in terms of varieties, either PBR or non-PBR protected. It's really entirely up to them.

[Mark Eyking, Liberal, Sydney—Victoria, NS]

You've alluded that even though the UPOV could be the same in Europe and in Canada, there are countries that could tweak it. That could be a little different; there could be hybrid UPOVs.

[Anthony Parker]

Absolutely.

There are mandatory, what they call compulsory, articles of UPOV, that in order to accede or ratify a certain convention you must have that in your law. Failure to even have one of those compulsory elements means you don't meet the requirements of UPOV 91. Then there are also what we call optional articles to UPOV 91. The farmer's privilege is one of them. You can have the choice of whether to implement a farmer's privilege or not in your law. In those areas, countries do have latitude in terms of how they implement.

[Mark Eyking, Liberal, Sydney—Victoria, NS]

The second question is on the pork industry. The pork industry has been through a nervous time in the last few months on the disease with the piglets and what happened in the United States. It was alluded to that some of this disease could have been spread through feed, through feed dust, through supplement feed.

Who can give us an update on whether that was true and what we do about it? What do we have do to make sure that our hog industry is protected?

[Veronica McGuire, Executive Director, Program, Regulatory and Trade Policy, Canadian Food Inspection Agency]

I'll endeavour to answer your question.

Although I'm not the expert for disease control and animal health, certainly with the outbreak of PED in Ontario and other provinces, the CFIA has worked very closely with provincial partners, with the United States authorities as well, to investigate the source of the disease, including possible linkages to feed supply.

Our work with partners is continuing. We are working with other experts in Canada and around the world to get a better understanding of the disease and how it affects livestock, and what type of remedial measures and corrective actions would be required in the future. It is a work in progress.

[The Chair, Conservative, Bev Shipley]

Thank you, Mr. Eyking.

Now we'll go to Mr. Dreeshen, for five minutes, please.

[Earl Dreeshen, Conservative, Red Deer, AB]

I would comment on what great work the CFIA has done, and the provincial partners, with respect to the control of PED. It's doing a great job in that regard.

A lot has changed since the CFIA was created back in the nineties, and a lot has changed since then as far as agriculture is concerned. Our government has made changes with Bill S-11, the Safe Food for Canadians Act. We've fixed some outdated statutes that have been administered by CFIA. Now with Bill C-18 before us, we have a bill that aims to promote a consistent approach to regulations and provide an environment for predictability with stakeholders.

I'm wondering if you could explain how Bill C-18 is comparable in terms of modernizing CFIA legislation and ensuring greater regulatory consistency within that agency while encouraging innovation and ensuring that Canadian industry has continued opportunity for international trading markets.

[Veronica McGuire]

The CFIA was created about 15 years ago, with the ambition of legislative reform and consolidation of the statutes that existed at the time. As was mentioned, the Safe Food for Canadians Act was enacted by Parliament late in 2012. That represented a major breakthrough in terms of consolidating food legislation and focusing more squarely on prevention and food safety.

Legislative renewal remains part of our overall modernization agenda at the agency. This bill and the proposed amendments to the agricultural inputs statutes build on some of the same thinking and provisions that exist under the Safe Food for Canadians Act.

We'll provide a solid platform for regulatory renewal across the various plant health and animal health programs, and we'll enable our regulatory modernization. We have a very significant and ambitious undertaking at the agency to modernize not only legislation but regulations. Combined with that particular body of work, we are pursuing a program to modernize inspection and how we deliver on the front line.

Bill C-18 represents a very significant element in terms of our overall modernization agenda at the CFIA.

[Earl Dreeshen, Conservative, Red Deer, AB]

I want to come back to the plant breeders' rights, the discussion that has taken place. I wonder if someone can take us through and compare and contrast with what we had to do with UPOV 78 and UPOV 91, the various aspects of both of those, and how Canadian farmers can expect to access higher yielding varieties that will thrive in our agricultural environment. Also perhaps you could tie in the advantages that the organic sector will have as well when they are able to access some of the varieties.

[Anthony Parker]

Thank you for that question. Mr. Chair, it will be my pleasure to address that.

Fundamentally, if you look at the differences between UPOV 78 and UPOV 91, the advantages fall into three key categories. The first is strengthening the intellectual property protection. One of the weaknesses under the current system is that the breeders' exclusive rights only were centred around sale of propagating material or production of propagating material. The breeder is going to be afforded, under UPOV 91, additional protection in terms of exclusive rights over importing and exporting and all other activities that are really designed to prepare for the purpose of sale, so it's going to create an environment that's more attractive to invest in.

The other element is it falls under the category of facilitating access to the PBR framework, so some key provisions that will encourage users, plant breeders, to utilize the Canadian system, and those ones are really around the definition of novelty. It allows plant breeders to test the Canadian marketplace before deciding to protect. Quite often, to go through the process can be quite expensive, so they can determine the validity of the market before they make that determination of protecting the variety.

The other aspect is provisional protection. Conceptually it's very similar to patent pending. Once they file in the system, and they're accepted for filing, they're afforded all the benefits of protection until grant of right.

Those are two key ones. There's really a third one that is very important and it enshrines certain provisions around balancing interests between developer and farmer and also benefit sharing.

The three of them are mandatory UPOV requirements. There's the breeders' exemption. What that means is you can use any PBR-protected variety to breed a new PBR-protected variety, a new variety. There's a researcher exemption, which means that you can use a PBR-protected variety to conduct research. Also, there's a non-commercial exemption, which means if you are a hobbyist or an amateur gardener, you can use a PBR-protected variety without restriction.

[The Chair, Conservative, Bev Shipley]

Thank you very much.

We'll go to Mr. Atamanenko, for five minutes, please.

[Alex Atamanenko, NDP, British Columbia Southern Interior, BC]

Thank you very much, Mr. Chair. Two questions in one day is not too bad.

Thank you so much for being here, folks.

We've been reassured by the minister that there's no concern with regard to saving seed.

There has been some discussion, and I'm not quite clear on this in my own mind, between saving and stocking. For example, if I were to make the statement that Bill C-18 allows farmers to save and condition seed, but not to stock it, could you comment on that? I am not clear on what that means.

[Anthony Parker]

Mr. Chair, one of the concerns that arose out of the consultations was the delineation between the term “storing” and the term “stocking”. Of course, when we endeavoured to draft the legislation, we always considered that the act of storing was implicit. How else are you going to use farm-saved seed but by storing on farm or elsewhere for reuse in subsequent years? Of course, one of the mandatory UPOV provisions is around stocking, and stocking can have a slightly nuanced definition. When we look at stocking, to provide an example, you stock material or foodstuffs in a grocery store. The intention there really is around selling. You are accumulating material of the product to sell.

Through our consultations, as the minister indicated, he will be bringing forward amendments to provide clarity in that regard. But absolutely without question, under the farmers' privilege, a farmer is able to save, reuse, condition, store seed for use in subsequent years. It can be the next year, or it can be many years into the future. Once they have made that qualifying purchase of a PBR-protected variety, they will be able to do that.

[Alex Atamanenko, NDP, British Columbia Southern Interior, BC]

Now stocking and storing are synonymous things for the purposes of this bill.

[Anthony Parker]

Yes, there are slight nuances, and what we hope is to bring forward amendments that will provide clarity on that aspect.

[Alex Atamanenko, NDP, British Columbia Southern Interior, BC]

Thank you.

My second question obviously reflects other concerns. I know some have been addressed, but I'd like your take on this.

We talked about the differences between 78 and 91. You brought out some positive aspects of UPOV 91. There are some concerns. The National Farmers Union has some; others have some. They would say that some of the likely changes might include a higher cost per acre of production due to higher seed prices. That's the first one. Others are there will be: lower margins because end-point royalties will reduce potential gross income of sale; fewer and larger farms, because reduced profitability will drive large scales of production; and the loss of independent seed-cleaning businesses as farmers are forced to buy seed directly from PBR holders or their licensees instead of cleaning a portion of their harvest crops for use as seeds.

I'm wondering if you could comment on those points, please.

[Anthony Parker]

Mr. Chair, it would be my pleasure to respond to that question.

I think the empirical evidence suggests a different story when we look at other countries that have implemented UPOV 91. Even if we look at our own history, the difference between having no internationally based intellectual property regime and introducing UPOV 78.... In fact, many of you might be aware that back in 2002, a 10-year impact study was tabled in Parliament showing some of the benefits of introducing an intellectual property framework. What we saw in Canada was that the actual number of breeding entities increased, both in the public sector and in the private sector. The levels of investment in plant breeding increased, creating a competitive environment. The net result was that actually seed prices, comparatively, went down during that decade of introducing plant breeders' rights than the previous decade before that. That competitive environment really stimulated businesses driving at trying to provide farmers with the lowest costs.

When we look at other countries, too, when they've introduced...the same things have happened. We expect no different with UPOV 91. We don't expect dramatic increases in seed prices. What we expect is a very competitive environment where businesses are vying for farmers' dollars to provide the best varieties they can.

On the point of end-point royalties, I would simply like to add to what the minister said. There's nothing precluding a farmer today or tomorrow from entering into some sort of bilateral contractual arrangement with a seed developer to say they'd like to pay at the back end of the process as opposed to the front end of the process. I think we've been very clear, government has, from the beginning, to say that if we were to ever implement a system that might place conditions upon this practice of farm-safe seed, something that would be an end-point royalty, it would have to go through a very regimented process and that would be, first of all, on a crop-by-crop basis, identifying what the needs of producers are when it comes to long-term investment.

Also, on examining other practices in UPOV 91 countries, there are different royalty collection regimes. In Australia they have an end-point royalty. In the U.K. they have a farm-safe seed royalty, and they are in fact very strongly supported by the farmer community because they understand that if they make those investments, from that they derive better varieties.

[The Chair, Conservative, Bev Shipley]

Thank you, Mr. Parker. We are going to have to move on.

Mr. Payne, four minutes.

[LaVar Payne, Conservative, Medicine Hat, AB]

Thank you to the witnesses for coming today.

It's important to hear the comments that you're making. Certainly, I know the minister talked about how things are changing in agriculture and even talked about drones. My colleague, Mr. Dreeshen, talked about the changes in CFIA, and that's another piece I want to touch on. I want to get some conversation going around incorporation by reference.

As you know, the term, “incorporation by reference” describes mechanisms which allow for third party documents or lists that are not in the text of the regulations be made part of the regulations. I understand this bill will make some changes to incorporation by reference, to the Feeds Act, Fertilizers Act, Seeds Act, Health of Animals Act, and the Plant Protection Act.

I'm wondering if you could explain to the committee the purpose of incorporation by reference. Maybe you could give us three practical examples of how this would benefit farmers and the agricultural industry.

[Veronica McGuire]

Incorporation by reference is a regulatory tool or approach that is being used more and more at the federal level, but also by other jurisdictions. It is a tool that can be used by regulators, including the CFIA, to expedite regulatory decisions. It is an authority that exists under the Safe Food for Canadians Act. As was mentioned, the proposal is to include a similar authority across the other statutes that are addressed in the context of this bill.

There are benefits associated with the use of the tool, mainly, as I mentioned, around expediting regulatory decisions, which should be advantageous not only for the CFIA from a science-base perspective, but for industry as well. Certainly, we do have regulations on fertilizers as well as animal feed that have comprehensive and fairly lengthy lists of products and supplements and the like that are covered by the regulation. Currently to update those lists of products is a very time-consuming and slow process. This would provide an opportunity for us to move more swiftly, but in a judicious way, to ensure that product lists and other elements are up to date and remain in tune with evolving science as well as business practice.

[The Chair, Conservative, Bev Shipley]

A short question, please. We only have one minute.

[LaVar Payne, Conservative, Medicine Hat, AB]

It's more of a comment than a suggestion. We managed to sign a couple of new free trade agreements which I think are going to be very beneficial to the agriculture industry right across this country. The farmers and ranchers in my riding are absolutely delighted, as am I. I think it's really good that we've been able to get those agreements. I know folks have worked really hard to make sure that the text has been put in place, and that there are protections for our country and for our farmers and organizations.

[The Chair, Conservative, Bev Shipley]

Thank you very much, Mr. Payne.

Thank you sincerely to all the witnesses for taking the time to come out. Thank you to committee members.

The meeting is adjourned.