Thank you.
My name is Penelope Marrett. I am the President and Chief Executive Officer of the Canadian Health Food Association, the CHFA.
The CHFA is Canada's largest trade association representing the natural and organic products industry.
The Canadian Health Food Association, also known as CHFA, is Canada's largest trade association, representing the whole supply chain--growers, manufacturers, retailers, importers, distributors, consultants, and other associations involved in a variety of sub-sectors in the industry, including supplements, vitamins, herbals, homeopathic medicines, sports nutrition and organic foods, health and beauty aids, and other organic products.
Natural health products have become increasingly popular as Canadians look for better ways to manage their health. In fact, over 75% of Canadians purchased natural health products in 2005 according to an Ipsos Reid survey. This industry is currently valued at over $2.5 billion, and it is growing. The Canadian organic food industry for its part is one of the fastest-growing sectors in Canadian agriculture, growing at the rate of 20% last year, and boasting sales of $1 billion in 2006. We are very excited about the prospects of our industry as more and more Canadians are seeing the benefits associated with the usage of natural health products and organic foods.
Our industry, though, currently faces important challenges. As the demand continues to expand for these types of products, CHFA believes the government needs to take specific steps to address industry and consumer needs. We ask that the government enable a tax framework that promotes citizens' health while stimulating industry growth.
But first, we'd like to commend the government on its recent announcement to reduce the corporate tax rate for small businesses. This is, we believe, an important step in reducing the tax burden on our members, most of whom are small and medium-sized businesses. We ask that the government continue to support our entrepreneurs to allow them to prosper in the Canadian economy and beyond.
We have a number of tax-related recommendations in our brief. We believe these incentives would provide for a stronger framework for our industry. I would like to recommend, on behalf of CHFA and its members, to the committee that these tax-related steps be taken: first, allow for support to farmers for transition from conventional to organic agriculture, and second, allow natural health products to be recognized as medical expense deductions.
Aside from these tax measures, we are also very concerned with the regulation of natural health products and organics in Canada. We would like to see the committee members consider the importance of providing adequate funding for federal government-regulated bodies. CHFA recommends that A-base funding be provided to the natural health products directorate to ensure it has the necessary resources to implement and enforce regulations that affect the more than 40,000 natural health products currently in the Canadian marketplace.
As a result of the new natural health product regulations that came into force in 2004, the NHPD has had to deal with a serious backlog of licence applications. We recommend that additional funding be provided to the directorate to ensure that the backlog is dealt with quickly and sufficiently. Specifically, a greater number of resources are required for a limited amount of time of two to three years to ensure the backlog of some 20,000 applications are reviewed and processed.
CHFA also recommends A-base funding to the Canadian Food Inspection Agency to ensure implementation, compliance, and enforcement of the new organic regulations. These regulations will give Canada a competitive edge in food exports and will enable Canada to join more than 40 other countries worldwide that already have regulatory frameworks in place. As Canada moves forward on these initiatives, long-term sustainable funding models must be in place to ensure that regulations have meaning. Funding models that provide certainty to regulatory work should be adopted.
Thank you, members of the committee, for giving us the opportunity to be heard. We hope you will recommend tax measures in the next budget that will help our growing industry. We also hope you will recommend that A-base funding be provided to the regulatory bodies in the federal government responsible for the monitoring of regulations pertaining to natural health products and organic products.
Thank you for your attention.