Agriculture Committee on Feb. 17th, 2015

[Malcolm Allen, NDP, Welland, ON]

Thank you very much, Mr. Chair.

Mr. Mayers, I heard a “yes, almost, but” on the last question about the folks who do the regulatory pieces, who are basically bureaucrats, who may be feeling “yes”, but at the end of the day they have bosses they have to answer to who are their political masters, and who, at the end of the day, may not be so favourable to some things. We'll leave that for the province to decide. As Mr. Zimmer quite aptly pointed out, they do decide for their individual provinces.

Let me ask you this specific question, Mr. Mayers. I know you talked about Bill S-11, the Safe Food for Canadians Act, and the fact that you're going through a series of pilot programs and a series of regulations that are meant to help the provinces and the federal system actually be more in sync, if you will. I won't use the word “harmonization” necessarily, but at least more in sync. If you say “harmonization” it sounds as if it's the same. It's not going to be the same, but the outcome should be the same, right?

Where are we with that? I have heard that it's on pause at the moment, that it's slowed itself down. Is that true?

[Paul Mayers]

It's not on pause. We have undertaken what for us as an agency is an unprecedented amount of consultation, so we engaged with over 14,000 participants in our consultative process. We've received several hundred direct inputs and suggestions. What we said to stakeholders after our last round of consultations is that we're going to take a little bit of time to go through that extensive feedback that we've received from them. We have been delighted indeed with the amount of engagement and the strength of the participation. We have had tremendously valuable feedback from all sectors of the industry impacted by these regulations, but it is a huge volume for us. I can understand that it is not nearly as loud as it was when we were actively sitting down and holding webinars and conducting food forums with the industry. We're sitting back with the input that they've given us, and so it is a slightly quieter time, but by no means have we set it aside. The commitment to the regulations is critical because, of course, the Safe Food for Canadians Act was critical, and the regulations are necessary to bring it into force.

[Malcolm Allen, NDP, Welland, ON]

I think we agree about the essence of Bill S-11. We did support it as the opposition. We helped get it through here quicker.

I have a really quick question. Do you have any sense of a timeline, or is this mountain of stuff that you took back from the consultation making the timeline a little cloudy?

[Paul Mayers]

Our interest is in completing that process, and this year going back to engagement with stakeholders.

[Malcolm Allen, NDP, Welland, ON]

I get only five minutes, and I know the chair is lenient and would probably squeeze in an extra 30 seconds, but the bottom line is, you do a work plan. Do you have a timeline, or is it just too big and you're not sure yet?

[Paul Mayers]

It's our intent to move to implementation in 2016.

[Malcolm Allen, NDP, Welland, ON]

You have a timeline. I understand that.

[Paul Mayers]

In 2016.

[Malcolm Allen, NDP, Welland, ON]

Thank you.

Mr. Seppey, we all know about supply-managed product in this country. We'll use one example, chicken. When we talk about this interprovincial piece, at the moment in a supply-managed system with chicken, it basically ends up for the most part—there is some back and forth—that “this is what we do in this province with this number of chickens”, or it can be seamless across each province, assuming one gets their....

What do you see the impact being on a supply-managed system that basically supplies—usually, especially in chicken for the most part—a particular province? Albeit there is some nuance to that; it is not an absolute. We can move some from Ontario to here or from Quebec to here, but it tends not to move very well. It tends to be here. We hear from provinces all the time. I know Mr. Dreeshen would tell us that the folks in Alberta quite often ask why they can't get a product, a particular amount of chicken, there when they've got excess here.

Looking at that one as an example, do you see any issues with seamless borders across the country for supply-managed products?

[Frédéric Seppey]

The problem that you raise is one that's actually being discussed among the provincial authorities, especially between Quebec and New Brunswick, where the situation is quite acute. In that area and that field, the basis of the issue is aligning the production with the processing facilities. In certain provinces, such as New Brunswick, there are only one or two processing facilities. This is something where the provinces, when they discuss among themselves these types of issues, take into account how the industry is structured.

I can give you another example that shows that the supply management, the Agreement on Internal Trade, applies to all agricultural products, including supply-managed products. The production of yogourt in Canada is essentially concentrated in Quebec, and yet the consumption of yogourt is across the whole country. In that case, we have an interprovincial trade in dairy products that functions quite effectively, but in those areas, because the production is under provincial jurisdiction, the issues require the provinces to have discussions with each other.

[The Chair, Conservative, Bev Shipley]

Thank you very much, Mr. Allen.

We'll now move to Mr. Maguire, please, for five minutes.

[Larry Maguire, Conservative, Brandon—Souris, MB]

Thank you, Mr. Chair.

I appreciate the presentations today as well.

My colleague from B.C. made a comment that provinces would want to be onside with this. I would agree with him; they should be. But I appreciate your answer that there are difficulties in those areas as well. I know that the provinces have to agree on the standards before there is interprovincial trade movement.

Can any of the three of you then add to areas where you see the greatest amount...? I know you've talked already about some of the difficulties that Mr. Keddy, the parliamentary secretary, was asking about as well. Can you outline for me just where the difficulties are in some of those trade areas, and maybe which provinces are leaders in regard to making some of the changes that are required?

[Frédéric Seppey]

First of all, I would like to perhaps mention that since the entry into force of the Agreement on Internal Trade in 1995, a number of initiatives among subgroups of provinces took place and really created, in sub-regions of Canada, a momentum and greater integration. The first one that comes to mind is the New West Partnership that groups British Columbia, Alberta, and Saskatchewan together, and where they largely liberalize completely the interprovincial trade among actually the four western provinces, including Manitoba as well. Another example is an increase in cooperation and integration between Quebec and Ontario. That is a system that is a bit less rigid, less formally defined, but it is also liberalizing trade and addressing interprovincial trade issues between Quebec and Ontario. These are initiatives that move in that direction.

In a certain number of sectors there are more challenges than in others. We spoke about the red meat sector because of the challenges associated with meeting the federal standards. Another area is dairy and poultry; there are challenges there, because setting the production levels and the prices would be especially important. It's an element that intersects with the supply management system. In that regard, if you want to manage these elements, well, you might have some requirements in terms of the movement. That being said, to again use the example of yogourt, you have the western provinces pulling together their resources to facilitate the movement of fluid milk, to bring the milk from the producer, the farmer, to the right processing plant. You have the same thing in eastern Canada.

These are illustrations that despite the challenges, efforts are being made, but we can always do better and more.

[Larry Maguire, Conservative, Brandon—Souris, MB]

Thank you. Those are good examples with regard to some of the processed products that we can use, but we're talking about red meats and horticulture here and the processed product. I'm looking for some of the detail. Being from Manitoba, I know that Manitoba and Saskatchewan have really only just done some work together on some of the weights and measures and back and forth between their provinces, which is large in terms of moving product across our country. We'd like to find a way to standardize some of those and get them onside as well.

What details can you provide to us that would be the quickest solution to helping interprovincial trade? If we go back to the 1980s, there was a study done by Art Morrow in Winnipeg at that time. Across Canada I think there were 144 interprovincial trades in agriculture then, and we still have a lot. Given the fact that you're saying 95% of the cattle kill is being done in federally inspected plants, is there something else we can do there to facilitate some of the smaller processing operations, to have them come up to standards without tremendous costs and that sort of thing? I know that they're standards we have to have, but I just wonder if you have any help for us with regard to expanding that.

[Paul Mayers]

We've already taken the first steps, because we've modified the federal regulations. Our provincial counterparts therefore have an opportunity to consider greater alignment in that regard.

For many small businesses their driver is where their market is, but there are many businesses that operate close to a provincial boundary, where that opportunity to trade just across the border is still viewed as very local. We want to enable those opportunities. I think there are definitely opportunities. Even though it's not a large amount of the total red meat supply, it can still be very beneficial in terms of the opportunity for a business to grow if they can access that market that's near to hand.

We do see that as definitely an opportunity area. It is highly dependent on regulatory alignment, because we do still need to maintain that demonstration of meeting a common set of standards in order for product to move anywhere in the country.

[The Chair, Conservative, Bev Shipley]

Thank you very much, Mr. Maguire.

Now we'll go to you, Madam Raynault, for five minutes, please.

[Francine Raynault, NDP, Joliette, QC]

Thank you, Mr. Chair.

I want to thank the witnesses for joining us today. I'm pleased to be hearing from them this afternoon.

My question is for any one of you.

A number of studies have estimated that the losses caused by interprovincial trade barriers were between $1 billion and $60 billion. That's a fairly significant discrepancy.

Can you explain why there's such a large difference in the estimated costs?

[Frédéric Seppey]

I am not aware of any studies that have provided such estimates, but the situation is definitely evolving rapidly. As has been mentioned, since the Agreement on Internal Trade was implemented in 1995, interprovincial barriers have been trending downward. When we consult stakeholders, they talk about the barriers we have mentioned—those that apply to alcohol, spirits, red meat, fruits and vegetables, and processed products.

I cannot really speak to the size of those estimates. However, I can tell you that the industry stakeholders we are talking to—especially those involved in processing—are telling us that the regulatory measures, which are added on to processing costs, are often among their main concerns.

In addition, federal, provincial and sometimes even municipal regulations are not always aligned. The administrative cost of complying with the rules can be very high, especially for small and medium-sized companies.

That's why I suspect that regulatory complexity plays an important part in estimating the cost of interprovincial trade barriers.

[Francine Raynault, NDP, Joliette, QC]

The difference between $1 billion and $60 billion is still fairly significant.

You just talked about alignment issues among federal, provincial and municipal governments. Do you think an agreement might eventually be reached or could at least a way be found for producers and processors to avoid all those costs? I am fully aware that this could be something that may well happen only over the long term because it's not easy to bring everyone to the same table.

[Frédéric Seppey]

I can tell you about what we are doing at the Department of Agriculture and Agri-Food. My colleague from the agency could add some concrete examples. Since agricultural matters are under shared jurisdiction, we have established an entire system of close cooperation and coordination with the provinces.

For instance, Mr. Meredith regularly co-chairs the federal-provincial-territorial committee of assistant deputy ministers that is responsible for policies and regulatory issues. As for forums, we hold discussions and working sessions that culminate in annual meetings of agriculture ministers. The purpose of those meetings is to coordinate our efforts so as to ensure that we are moving in the right direction.

When it comes to food safety, it's essential to cooperate not only with federal organizations such as the Canadian Food Inspection Agency, the Department of Health and the Public Health Agency of Canada, but also with counterpart provincial agencies.

Mr. Mayers may have some other examples.

[Paul Mayers]

No.

[Francine Raynault, NDP, Joliette, QC]

You don't have any other examples?

[Paul Mayers]

No, I don't have any.

[Francine Raynault, NDP, Joliette, QC]

You don't want to add anything to what Mr. Seppey just said?

[Paul Mayers]

No.