Industry Committee on Feb. 19th, 2019

[Dave Carey]

Yes. I do know the product you are referring to. I think the PMRA and the Environmental Protection Agency have different mandates as far as the regulatory process goes. When anyone's using a regulated chemical, the key thing is that they follow the label. The label will indicate, for example, that if you're spraying, not to do it during windy times, or not do it during this and that. That is an issue, but a lot of that comes down to the individual stewardship on each farm or if it's an operator that's being licensed.

I have seen a presentation from the U.S. on some of the drift and things like that. In Canada, we haven't seen those same types of issues. In our organization, one of the key things is that we see a big benefit from using seed treatments, where the seed is treated with a small amount of pesticide and then planted, which reduces the need for those foliar broadcast sprays.

There can be issues if you do have something that's herbicide tolerant. For example, when a soybean is tolerant for a certain herbicide and then someone sprays something that's of a different chemistry, that could have an impact.

We don't normally see it in Canada. Farmers are typically good neighbours. For the most part they communicate with one another. There are also some initiatives, like a new pollinator app that essentially allows sprayers to communicate with beekeepers to say they're going to be spraying their field. If there are hives in the area, they can communicate anonymously through an app. It's something that could happen, but we haven't seen it happen in Canada.

Again, it's up to the individual farmers to follow the label as prescribed by PMRA.

[The Chair, Liberal, Dan Ruimy]

Thank you, sir.

We're going to move to Mr. Baylis. You have seven minutes, please.

[Frank Baylis, Liberal, Pierrefonds—Dollard, QC]

Thank you, chair.

Mr. Masswohl, I would like to start with you and follow up on some of the questions that my colleague, Lloyd Longfield, was asking about cost recovery.

It's very arbitrary. The challenge you're facing is that as they decide that it costs them more money, they just keep piling it on and piling it on.

What are the negative impacts to industry based on this mindset of forcing all costs on to the producer?

[John Masswohl]

Yes, I think you're right. It does seem arbitrary at times. There is a willingness to pay for services that add value. If I'm either a farmer or a packer and I need something done, and I need the government to do it because the government has a certain authority such as certifying that I have raised my cattle according to European standards, I'm glad to pay that cost.

When it's a cost of complying with a regulation that I have to comply with, but I now have to have somebody.... They have to come, and I now have to pay for that. I don't have any choice. I have the cost of complying with the regulation, which I may certainly agree with, but now I have to pay for that as well.

I think that's the delineation point. When a regulation is in effect, and it's a good, valid, risk-based regulation that has scientific merit and it's in place to keep animals and the public safe, then I think it's the role of the taxpayer to pay for that regulatory oversight.

[Frank Baylis, Liberal, Pierrefonds—Dollard, QC]

I can give you an example in the medical field. It has gotten so out of hand that the cost of getting some device or drug approved is so high that they just say forget about it. Then we're not keeping people safe. We're at the point of taking away valid medicines or devices that could make Canadians safer and healthier. They have made the cost recovery so onerous that people have just thrown in the towel.

Is that happening in your field too?

[John Masswohl]

Well, there's a constant balance. Are we encouraging cattle production and beef production in Canada, or are we encouraging that production to move to the United States because it's right there? I would echo some of the things that Dave was saying. I think the choice of large multinationals versus small business is a bit of a false delineation. Yes, Dave's members may be some large companies, but we are tens of thousands of small businesses raising cattle in Canada. You can't raise cattle unless you can feed them something, and that's where the seeds come in. We rely on those seed approvals.

[Frank Baylis, Liberal, Pierrefonds—Dollard, QC]

If we talk about cost recovery, it seems to me that it would be more fair if there were a value to Canadian citizens; the Canadian government should incur some of that cost, whatever it may be. Right now, the idea is you'll pay for everything all the time, no matter what.

[John Masswohl]

Absolutely.

[Frank Baylis, Liberal, Pierrefonds—Dollard, QC]

You would agree that there should be a balance. By going through this process and certifying it, or this regulation, you're benefiting Canadians by making sure they're safe. Why should strictly the producer pay for this? Society should also incur some of that cost.

[John Masswohl]

I think where it needs to come into that is on the point that when the regulators evaluate either these regulations or policies, they have to take the competitive aspect into consideration. I'm not sure that Health Canada or CFIA necessarily think it's part of their role to ensure the competitiveness of—

[Frank Baylis, Liberal, Pierrefonds—Dollard, QC]

They do not. Do you think we should put into their mandate that it would be a good idea to say that right now they also have to take into account the competitiveness and innovation? Right now they're strictly security—

[John Masswohl]

Any regulation, any regulator...there would need to be an examination of the cost versus the benefit—

[Frank Baylis, Liberal, Pierrefonds—Dollard, QC]

—the economic impacts to industry.... Right now they say, “That's none of my business.” If you say that you will put them out of business, they'll say, “I don't even care.”

[John Masswohl]

Or worse, when they do the analysis we think it's been very skewed to justify the outcomes they want to see.

[Frank Baylis, Liberal, Pierrefonds—Dollard, QC]

Fair enough.

I see you're ready to jump in.

[Dave Carey]

One recommendation I have is that if a regulator is going to go towards cost recovery, they should consult with the implicated sector. If you're talking about the cattle or meat sector, just speak to the Canadian Cattlemen's Association or the Canadian Meat Council. We have examples in our industry where we actually pushed.... Again, cost recovery is not always a bad thing. We have an example with the CFIA's plant breeders' rights office. This is essentially the intellectual property. They grant intellectual property protection to my companies' innovations, small to medium-sized. We actually encouraged CFIA to allow the plant breeders' rights office to go towards cost recovery, maintain their A-base funding—so to not reduce that.

We knew that once Canada adopted UPOV 91, the increased plant breeders' rights regulations, the commissioner's office was going to get flooded. We want that. Intellectual property means people are innovating, so we actually encouraged CFIA, in that case, to go towards cost recovery, to make sure there wasn't a backlog where products weren't being granted intellectual property, but that was our pushing for it. I think the implicated value chains need to be consulted.

[Frank Baylis, Liberal, Pierrefonds—Dollard, QC]

I have personal experience when they first brought in cost recovery. I'm actually in the medical field. I made arguments, and they—quote, unquote—“listened”. You can show up and talk, but do they listen? The answer is no. There's a reason for that.

To run their department, if they go to 100% cost recovery, they can build their empire without going to Treasury Board saying, “Can you give me money to run my department?” They just take that headache off and they can just get the money and keep piling it on and on the industry. That actually suits the person running that department because they can go to full cost recovery on any expense, if they photocopy everything they want, to somehow put it on industry. It saves them a battle that they have to do with Treasury Board.

In that light, where would you see our taking some constructive measure, if we made some recommendation here to put some reasonableness in cost recovery, to say, “You can recover cost up to here, but you can't go for everything”? As you pointed out, Mr. Masswohl, should we be saying that if there's a benefit to Canadian society, then Canadian society has to pay for part of that benefit?

[John Masswohl]

I think that's a big part of where the delineation point is. There are a number of things, as I say, that we would be glad to pay for to get additional service. If it's something that's a mandated requirement for the safety of Canadians, then it should be Canadians paying.

[Frank Baylis, Liberal, Pierrefonds—Dollard, QC]

I have a bit of time. Quickly, on pay for service, you've both mentioned you're not getting the service in terms of timeliness. Do they have mandated time frames they have to meet, or are there none?

[John Masswohl]

There was that one example we had. We had a question that was about accessing the European market and whether CFIA could do something for us. They said, “Well, that's a good question. We'll look at it. Our service standard is that we will get back to you in 100 business days.” Then the answer was no, they couldn't do it.

[Frank Baylis, Liberal, Pierrefonds—Dollard, QC]

For the service standards, are they meeting the 100 days, even if they say—?

[Dave Carey]

No.

[Frank Baylis, Liberal, Pierrefonds—Dollard, QC]

They're not meeting the 100 days.

[John Masswohl]

They will come up with a response.

[Frank Baylis, Liberal, Pierrefonds—Dollard, QC]

They'll come up with a response, yes, but they're not actually meeting the 100 days.