Bill C-28 (Historical)

An Act to amend the Food and Drugs Act

This enactment would amend the Food and Drugs Act to provide the Minister of Health with the authority to issue interim marketing authorizations for foods that contain certain substances at specified levels, and to exempt the foods from the applicable requirements of that Act and its regulations relating to the sale of those foods.

Food and Drugs Act

[Nicole Demers, Bloc, Laval, QC]

Mr. Speaker, I am pleased to rise again in this House to discuss another health bill. Health is a very important subject to me. I am particularly interested in it because I know just how important and necessary health is to living with dignity.

Although Bill C-51 is very important and long overdue, although we have been calling on the government to review the whole issue of medicines, drugs and therapeutic devices for a long time, and although we have called on the government to do so a number of times, we will vote to send this bill to committee to be thoroughly examined. As my colleague said earlier, and as our other colleague who worked on the health file a long time said, this is much too important to let a few people decide the fate of thousands of human beings, Canadians and Quebeckers, who will rely on our decisions to keep them in good health.

A few things in this bill, or at least the draft we received, worry me. I am almost positive that some things worry a number of my colleagues as well. For example, the bill states that the Minister of Health would have the authority to pre-approve health products that have not yet received final approval. That worries me. It gives a lot of power to a minister, to one individual.

Bill C-28, which was passed a few years ago, had the same provisions for other products, such as pesticides. I do not know what became of that act, if the Minister of Health has had the opportunity to grant special permission to companies to put pesticides on the market before they should be. However, recently, pesticides have been found to be very hazardous to our health, to the health of our children and young people, whom we thought were safe playing outside during the summer. We thought that Health Canada had taken all the precautions to ensure the products were healthy, safe, and harmless.

If we are going to give the Minister of Health that much power, we have to make sure that we provide a strong framework for exercising that power in this bill. We have been hearing about amending the terms. These days, with so many advances in biotechnology and life sciences, we agree that we need to ensure that our health and health products legislation reflects these new realities. People with specific needs, such as those with HIV, might benefit from new experimental drugs. These drugs should be made available to them as quickly as possible, because in many cases, it is a matter of life or death.

Although we recognize the importance of reviewing the entire Food and Drugs Act, we want to be absolutely sure that the act contains provisions to ensure that the health of our fellow citizens will be taken into account responsibly.

There are some other things about this bill that bother me, and once again, I am sure that my colleagues from Québec and Verchères—Les Patriotes will see to it that these things are considered and debated by the Standing Committee on Health and that the people who have something to say about it will be invited to testify before the committee.

There is more to this than inviting experts in pharmaceuticals, doctors, parliamentarians, and departmental officials to debate this bill. The people this will affect—groups representing patients, hospitals and pharmacists—must be involved and consulted to develop the most comprehensive bill possible for health and therapeutic products.

There is something else in this bill that I am worried about. As my colleague said earlier, “therapeutic product” means

(a) a drug,

(b) a device,

(c) cells, tissues or organs that are distributed or represented for use in

(i) the diagnosis, treatment, mitigation or prevention of a disease, disorder or abnormal physical state, or its symptoms, in human beings or animals, or

(ii) restoring, correcting or modifying the body structure of human beings or animals or the functioning of parts of the bodies of human beings or animals, or

(d) a combination of two or more of the things referred to in paragraphs (a) to (c);

A few years ago, there was an epic battle over breast implants. At the time, breast implants fell into the category of specialized medical devices. Now they are in with therapeutic products. It was already very complicated and we did not have much information on the ingredients and the safety of breast implants. Now they are being put in with all therapeutic products or devices.

When they talk about cells, are they talking about stem cells? What are they talking about? When they talk about tissue, are they talking about the new grafts that can be made with one’s own tissue? There clearly need to be a lot of very apposite, very transparent rules on this.

I think that the health minister would have far too much power. The bill says that the health minister would have the power to modify the regulations. That is saying a lot because all the definitions in this bill are basically regulations. The health minister would have the ability, therefore, to change the regulations without coming before Parliament. That is very serious and we should be very worried about it.

There are also things that the minister could change not just in the regulations but also in regard to product labelling, purity standards, the way in which clinical trials are conducted, and the exemption of various products from the legislation.

I think that this means giving a tremendous amount of power to the man or woman holding the position of health minister. It means giving an awful lot of power to someone when we know we do not presently have a health minister who is very far to the left or very suited to making such decisions. After all, what is at stake here are the lives of our fellow citizens.

I am very concerned when I see a Minister of Health rise to vote against a motion asking Canada to recognize and abide by its commitment, as it has always done, to people sentenced to death in other countries. I am still very concerned about that. I thought that health ministers were supposed to be worried about the health of people and their survival.

It makes me wonder when I see that and then see a bill giving these people so much power. As a citizen, first of all, and as a user of medications and therapeutic products, I have a right and duty to wonder about these things. Do we really want to give one person the authority to approve a medication that has not been proven so that it can be marketed more quickly because it supposedly has more benefits than adverse side effects?

We saw this with Celebrex. It is still on the market because it supposedly has a greater upside than downside. However, people died of it before we knew why. We often see that. We did not use to see any advertising for drugs in Quebec and Canada. Under this legislation, though, there are some grey areas, some aspects that are incredibly hazy, and we could see more and more advertising. I am also very concerned about that.

To relax, we probably all watch television in the evening when we get home. In the course of the evening—in the space of maybe two hours—we will see at least two or three ads for Viagra or Cialis. That is what we see. To my way of thinking, these are drugs. Why is it that we see these ads when they are supposed to be prohibited? Various television stations agree to run them because Health Canada does not do any monitoring to determine whether various companies' and pharmaceutical firms' ads meet the criteria, which are, or were, clearly set out.

Now, with this new bill, the criteria would be much less clear. Pharmaceutical firms would have much more freedom and latitude to promote their products. This worries me. Many people are influenced by advertising messages. Our Conservative friends keep telling us that we are wrong, we are crazy, we are not listening, we do not understand, we will never accomplish anything, we are impotent. They know that repeating a message drives it home. In the same way, people who watch television are influenced by repeated messages: “Cialis will make you happy”, “Alesse will make you happy”, “This will make you happy”. We come to believe these statements and we ask our doctor for a prescription, even if we do not need the drug. We ask for the drug because it looks so wonderful to be able to skip down the street singing and arrive home to be greeted by our smiling wife. We want the same treatment.

We will have to be very careful about the decisions we make regarding this bill. While we agree that it should be referred to committee, I can assure the House that we will do our duty responsibly and make every effort to amend the clauses that could result in harm to the health of Quebeckers and Canadians.

[Carolyn Bennett, Liberal, St. Paul's, ON]

moved that Bill C-378, An Act to amend the Food and Drugs Act and the Food and Drug Regulations (drug export restrictions), be read the second time and referred to a committee.

Mr. Speaker, I am pleased to have the opportunity this afternoon to discuss with my colleagues from all parties Bill C-378, An Act to amend the Food and Drugs Act and the Food and Drug Regulations (drug export restrictions), although I wish that I did not have to do this bill again. It would have been very simple for the government to deal with this during the prorogation and actually make this bill unnecessary, but it still refused to act.

My bill is aimed at controlling the cross-border trade in prescription drugs and vaccines. The bill would amend the Food and Drugs Act to prohibit the export of drugs set out in schedules D and F to the Food and Drug Regulations, vaccines and prescription drugs, except as permitted under the regulations.

The bill would make it an offence under the Food and Drugs Act to export prescription drugs in prohibited circumstances. By amending the Food and Drugs Act, the legislation will protect Canadians.

My bill is constructed to protect the Canadian pharmaceutical supply from being bulk-exported south of the border. There is such a large price differential between American and Canadian pharmaceutical prices that there is great pressure on the U.S. at this time to import cheaper drugs from Canada.

With over 35 million members, AARP is the leading non-profit, non-partisan membership organization for people aged 50 and over in the United States. It wields an enormous amount of power and is at this time launching a very major communication initiative.

However, during my meeting with the organization in Washington in the spring, it was clear that its real intention was not to import pills from Canada but to import prices from Canada and to make Americans very angry that they were paying too much for brand name prescription drugs.

Let me put it plainly: Canada cannot become America's discount drug store. Canada needs to protect itself from the dramatic expansion of importation by the U.S. of drugs intended for our patients.

The prospect of the U.S. legalizing large-scale purchases from our domestic supply is real. In fact, every Democratic Party presidential candidate is in favour of importation legislation.

The threat to Canada's drug supply increased on January 10 of this year after some U.S. politicians stepped up their efforts to facilitate bulk imports of prescription drugs from Canada with the introduction of the pharmaceutical market access and drug safety act of 2007.

The legislation was introduced by Senators Dorgan and Snowe and Representatives Emanuel and Emerson, who are co-sponsoring the companion house legislation. The legislation, which has the backing of key U.S. Democrats and Republicans, would allow individuals to directly order medications from outside the U.S. It would allow U.S. licensed pharmacists and wholesalers to import FDA-approved medications from a number of countries, including Canada.

In May, senators both approved the measure and then voted to require U.S. health authorities to certify drug imports were safe. Since the U.S. federal drug administration already had made it clear that it would not provide certification, the bill was dead on arrival.

However, on Wednesday, the U.S. Senate adopted U.S. Senator David Vitter's drug reimportation amendment to the U.S. Senate labor, health and human services and education department appropriations bill. In addition to foot traffic, Vitter's amendments would also allow mail order and Internet importation for Canada.

Several steps remain in the U.S. Congress before such a bill is signed into law, but influential lawmakers are on the march on this issue. It is like a voodoo from a video game: it just will not be killed.

In addition, the House budget office has recently completed a budgetary impact analysis demonstrating the savings that would follow the adoption of importation legislation. The announcements will give additional incentives to pass legislation in the context of the budget negotiations.

Any of these measures pose an imminent and serious threat to the security and integrity of Canada's drug supply and a genuine threat to the health of Canadians. It may have been good short term politics, but it is terrible long term policy.

American seniors are rightfully outraged by the high prices of pharmaceuticals in their country, but outsourcing price controls is not a responsible approach. In Canada, we have addressed price control with the Patented Medicine Prices Review Board, which regulates drug prices to ensure that the prices of patent-protected brand name drugs are not excessive.

Canada has regulated drug prices for the past 15 years. The United States does not have a similar control mechanism and the problem is exacerbated by U.S. drug companies spending millions of dollars every year to defend their higher prices.

Every year U.S. drug companies spend hundreds of millions of dollars on political influence, including lobbying, campaign donations, and extensive ad campaigns to defend their high prices and fight against price control. The American drug industry employs over 600 lobbyists in Washington alone, more than one for every member of Congress. This system drives U.S. prices even higher.

Another important difference between the Canadian and American systems is the regulation of advertising.

Prescription drug advertising is one of the most controversial practices in the American pharmaceutical industry. During the first nine months of 2002, American pharmaceutical companies spent over $6 billion promoting their products to physicians and consumers. This kind of advertising drives prices up and is prohibited in nearly all other western countries.

In Canada, the therapeutic products directorate strictly regulates prescription drug advertising.

I would also like to discuss how drug importation legislation represents a threat to American patients by allowing relinquishment of necessary community-based medication monitoring and management at increasing risk for potential counterfeit drugs.

The incidence of counterfeit drugs is small, but is growing in developed nations. The recent tragic death of a British Columbia resident, determined by a coroner to have been caused by counterfeit medicine in her possession, serves as a reminder that North America is not immune from this global phenomenon.

The counterfeiting of medicines is an issue that threatens the quality and integrity of Canada's drug supply, a problem that will be greatly exacerbated if U.S. drug importation legislation is passed into law without a clear and effective Canadian prohibition on bulk drug exportation.

I was pleased to see the public safety committee's report, entitled “Counterfeit Goods in Canada--A Threat to Public Safety”, which included this recommendation:

--that the Government of Canada institute a campaign to raise awareness of counterfeit and pirated goods to make the public aware of the economic and social costs associated with this scourge, and emphasize the public health and safety hazards they represent. The campaign should also raise Canadians' awareness of the involvement of organized crime in the counterfeiting and piracy of goods.

Internationally, the WHO is very concerned about counterfeit drugs. The WHO has struck the international medical products anti-counterfeiting task force, tasked with increasing international collaboration to combat counterfeiting.

I would also like to point out that allowing bulk prescription drug imports would not significantly reduce U.S. prescription prices for very long.

Even a recent University of Texas study concluded, based on the worst case scenario, that Canada's stocks of prescription drugs would amount to about a 38-day supply for the United States, assuming all U.S. medications were Canadian sourced. Once U.S. demand depletes Canadian stocks, prices will almost certainly rise, narrowing or even possibly eliminating the difference between U.S. and Canadian pharmaceutical prices.

Some may argue that Canadians should just increase manufacturing of pharmaceuticals to meet the U.S. demand.

Canada's innovation-focused pharmaceutical industry develops, manufactures and distributes drugs designed to meet the needs of Canadian patients and the Canadian market. It bases its production on the size of the population and the incidence of the illness or condition to be treated.

Manufacturers produce sufficient prescription drugs to meet the expected national demand. Consequently, if one country imports its prescription drugs from another, it diminishes the exporting country's stock of drugs to meet the needs of patients in that country.

Labelling regulations also differ from country to country. As a result, prescription drugs produced for the American or South American markets cannot just be sent to Canada to meet an unexpected need.

Given the complexity of calculating annual estimates of the needs of Canadian patients, not to mention the management by drug companies of their inventory to respond to patients' needs, it is unrealistic to think that products manufactured for Canada could meet American demand.

Cross-border trade is not only detrimental from a public policy perspective, it is almost virtually impossible to do. I would like to underline again that Canada cannot meet the prescription drug needs of approximately 280 million Americans without putting our own supply at risk.

Take, for example, the events during the fall of 2005, when in November Roche Canada took the unprecedented step of suspending sales of Tamiflu to the Canadian market. There were reports that Internet pharmacies were busily filling foreign prescriptions at a significant profit. One B.C. pharmacy alone was reported filling 400 orders a day from the U.S. That is a significant number, when according to the Canadian Pharmacists Association only 4,000 Canadians received that drug that September. Another Internet pharmacy in Montreal issued news releases promoting to U.S. customers its Tamiflu stocks.

The Canadian Pharmacists Association reacted to the Tamiflu incident by saying that the government should have acted to protect the country's supply of the drug. Again, when supply gets siphoned off to the U.S., it is Canadians who come up short.

This situation is a perfect example of the types of scenarios Canadian patients will face if Canadian governments continue to allow drugs to be diverted to the U.S.

This is not an issue unique to North America. In April of this year the European Union passed resolution 31 stating:

Is concerned about the intention of the US Congress to authorise parallel imports of medicines from the EU Member States, that may create obstacles to the EU patients' supply and favour counterfeiting of medicines; asks the EU, therefore, to raise this issue at the forthcoming Summit;

I would also like to take the opportunity to commend my colleague, the member for Vancouver South, who in 2005, when he was health minister, anticipated this problem and put forward legislation, Bill C-28, in order to reach consensus in the House. Unfortunately, an election was called before the bill went forward.

Current Canadian policy is to use only reactive measures and seek to manage shortages once they have already occurred. This is not enough and it may well be too late.

The issue of bulk exports to other countries of medicines and vaccines destined to Canadians should be an issue of concern to all of us. It is of particular interest to the Canadian Pharmacists Association and the Ontario Pharmacists Association.

I believe the passage of Bill C-378 is essential to protect the supply and integrity of prescription drugs here in Canada and will send a strong message to our American colleagues of the futility of their shortsighted legislative initiative.

I urge all colleagues to support my private member's bill, Bill C-378, or to call upon the government to make it unnecessary.

[Carolyn Bennett, Liberal, St. Paul's, ON]

moved that Bill C-378, An Act to amend the Food and Drugs Act and the Food and Drug Regulations (drug export restrictions), be read the second time and referred to a committee.

Mr. Speaker, I am pleased to have the opportunity tonight to discuss with my colleagues from all parties Bill C-378, An Act to amend the Food and Drugs Act and the Food and Drug Regulations (drug export restrictions).

My bill is aimed at controlling the cross-border trade in prescription drugs and vaccines. The bill would amend the Food and Drugs Act to prohibit the export of drugs set out in schedules D and F to the Food and Drug Regulations, Vaccines and Prescription Drugs, except as permitted under the regulations.

The bill would make it an offence under the Food and Drugs Act to export prescription drugs in prohibited circumstances. By amending the Food and Drugs Act, the legislation will protect Canadians.

My bill is constructed to protect the Canadian pharmaceutical supply from being bulk exported south of the border. There is such a large price differential between American and Canadian pharmaceutical prices that there is great pressure on the U.S. at this time to import cheaper drugs from Canada.

With over 35 million members, AARP is the leading non-profit, non-partisan membership organization for people age 50 and over in the United States. It wields an enormous amount of power and is at this time launching a very major communication initiative.

However, during my meeting with the organization in Washington during the break week, it was clear that its real intention was not to import pills from Canada, but to import prices from Canada and to make Americans very angry that they were paying too much for brand name prescription drugs.

Let me put it plainly. Canada cannot become America's discount drug store. Canada needs to protect itself from dramatic expansion of importation by the U.S. of drugs intended for our patients. The prospect of the U.S. legalizing large scale purchases from our domestic supply is real.

The threat to Canada's drug supply increased on January 10, after some U.S. politicians stepped up their efforts to facilitate bulk imports of prescription drugs from Canada with the introduction of the pharmaceutical market access and drug safety act of 2007. The legislation was introduced by Senators Dorgan and Snowe and Representatives Emanuel and Emerson, who are co-sponsoring the companion house legislation.

The legislation, which has the backing of key U.S. Democrats and Republicans, would allow individuals to directly order medications from outside the U.S. It would also allow U.S. licensed pharmacists and wholesalers to import FDA approved medications from a number of countries, including Canada.

In May senators both approved the measure and then voted to require U.S. health authorities to certify drug imports were safe. Since the U.S. federal drug administration has already made it clear that it will not provide certification, the bill was dead on arrival. The House of Representatives is set to debate a similar measure soon, but few expect things to change.

However, Representative Emerson has stated that she is committed to finding a way to make this legislation happen. Because it is unlikely the legislation will get through the house and energy committee, we believe she is looking to attach drug importation to another bill. Furthermore, dozens of U.S. jurisdictions at state and local levels continue to introduce measures designed to help local citizens, government employees, retirees and others buy Canadian drugs.

Any of these measures pose an imminent and serious threat to the security and integrity of Canada's drug supply, and a genuine threat to the health of Canadians. It may have been good short-term politics, but it is terrible long term policy.

American seniors are rightfully outraged by the high prices of pharmaceuticals in their country, but outsourcing price controls is not a responsible approach.

In Canada we have addressed price control with the Patented Medicine Prices Review Board, which regulates drug prices to ensure that the prices of patent protected brand name drugs are not excessive. Canada has regulated drug prices for the past 15 years.

The United States does not have a similar control mechanism, and the problem is exacerbated by U.S. drug companies spending millions of dollars every year to defend their higher prices. Every year, U.S. drug companies spend hundreds of millions of dollars on political influence, including lobbying, campaign donations and extensive ad campaigns to defend their high prices and fight against price control. The American drug industry employs over 600 lobbyists in Washington alone, more than one for every member of congress. This system drives U.S. prices even higher.

Another important difference between the Canadian and American system is the regulation of advertising.

Prescription drug advertising is one of the most controversial practices in the American pharmaceutical industry. During the first nine months of 2002, American pharmaceutical companies spent over $16 billion promoting their products to physicians and consumers. This kind of advertising drives prices up and is prohibited in nearly all other western countries.

In Canada, the Therapeutic Products Directorate strictly regulates prescription drug advertising.

I would also like to discuss how drug importation legislation represents a threat to American patients by allowing relinquishment of necessary community based medication monitoring and management at increasing risk from potential counterfeit drugs.

The incidence of counterfeit medicines is small but is growing in developed nations. The recent tragic death of a British Columbia resident, determined by a coroner to have been caused by counterfeit medicines in her possession, serves as a reminder that North America is not immune from the global phenomenon.

The counterfeiting of medicines is an issue that threatens the quality and integrity of Canada's drug supply, a problem that will be greatly exacerbated if U.S. drug importation legislation is passed into law without a clear and effective Canadian prohibition on bulk drug exportation.

I was pleased to see the public safety committee's report entitled “Counterfeit Goods in Canada — A Threat to Public Safety” which included this recommendation:

--the Government of Canada institute a campaign to raise awareness of counterfeit and pirated goods to make the public aware of the economic and social costs associated with this scourge, and emphasize the public health and safety hazards they represent. The campaign should also raise Canadians' awareness of the involvement of organized crime in the counterfeiting and piracy of goods.

Internationally the WHO is very concerned about counterfeit drugs. The WHO has struck the International Medical Products Anti-Counterfeiting Taskforce, tasked with increasing international collaboration to combat counterfeiting.

I would also like to point out that allowing bulk prescription drug imports would not significantly reduce U.S. prescription prices for very long. Even a recent University of Texas study concluded that based on the worst case scenario, Canada's stocks of prescription drugs would amount to about a 38 day supply for the United States, assuming all U.S. medications were Canadian sourced. Once U.S. demand depletes Canadian stocks, prices will almost certainly rise, narrowing or even possibly eliminating the difference between U.S. and Canadian pharmaceutical prices.

Some may argue that Canada should just increase manufacturing of pharmaceuticals to meet U.S. demand.

However, Canada's innovation-focused pharmaceutical industry develops, manufactures and distributes drugs designed to meet the needs of Canadian patients and the Canadian market. It bases its production on the size of the population and the incidence of the illness or condition to be treated.

Manufacturers produce sufficient prescription drugs to meet the expected national demand. Consequently, if one country imports its prescription drugs from another, it diminishes the exporting country's stock of drugs to meet the expected needs of patients in that country.

Labelling regulations also differ from country to country. As a result, prescription drugs produced for the American or South American markets cannot just be sent to Canada to meet an unexpected need.

Given the complexity of calculating annual estimates of the needs of Canadian patients, together with the detailed methods used by drug companies to manage their inventory and respond to patients' needs, it is unrealistic to think that products manufactured for Canada could meet American demand.

Cross-border trade is not only detrimental from a public policy perspective, it is also virtually impossible to do.

I would like to underline again that Canada cannot meet the prescription drug needs of approximately 280 million Americans without putting our own supply at risk.

Take for example the events of the fall of 2005. In November 2005 when Roche Canada took the unprecedented step of suspending sales of Tamiflu to the Canadian market, there were reports that Internet pharmacies were busily filling foreign prescriptions at a significant profit. One B.C. pharmacy alone was reportedly filling 400 orders a day from the U.S. That is a significant number when according to the Canadian Pharmacists Association only 4,000 Canadians received the drug that September. Another Internet pharmacy in Montreal issued news releases promoting to U.S. customers its Tamiflu stocks.

The Canadian Pharmacists Association reacted to the Tamiflu incident by saying that the government should have acted to protect the country's supply of the drug. Again, when supply gets siphoned off to the U.S., it is Canadians who come up short.

This situation is a perfect example of the types of scenarios Canadian patients will face if Canadian governments continue to allow drugs to be diverted to the U.S.

This is not an issue unique to North America. In April of this year the European Union passed resolution 31 stating:

Is concerned about the intention of the US Congress to authorise parallel imports of medicines from the EU Member States, that may create obstacles to the EU patients' supply and favour counterfeiting of medicines; asks the EU, therefore, to raise this issue at the forthcoming Summit--

I would also like to take the opportunity to commend my colleague, the member for Vancouver South who in 2005 when he was health minister anticipated this problem and put forward legislation, Bill C-28 to consensus in the House. Unfortunately, an election was called before the bill went forward.

Current Canadian policy is to use only reactive measures and seek to manage shortages once they have already occurred. This is not enough and it may well be too late.

The issue of bulk exports to other countries of medicines and vaccines destined to Canadians should be an issue of concern to all of us. It is of particular interest to the Canadian Pharmacists Association and the Ontario Pharmacists Association.

I believe the passage of Bill C-378 is essential to protect the supply and integrity of prescription drugs here in Canada and will send a strong message to our American colleagues of the futility of their short-sighted legislative initiative.

I urge all colleagues to support my private member's bill, Bill C-378.

Supply

[The Deputy Speaker]

I have the honour to inform the House that a communication has been received as follows:

Rideau Hall

Ottawa

November 24, 2005

Mr. Speaker:

I have the honour to inform you that the Right Honourable Michaëlle Jean, Governor General of Canada, signified royal assent by written declaration to the bills listed in the schedule to this letter on the 24th day of November, 2005, at 3:47 p.m.

Yours sincerely,

Barbara Uteck

The Secretary to the Governor General

The schedule indicates the bills assented to were Bill S-37, An Act to amend the Criminal Code and the Cultural Property Export and Import Act--chapter 40; Bill S-3, An Act to amend the Official Languages Act (promotion of English and French)--chapter 41; and Bill C-28, An Act to amend the Food and Drugs Act--chapter 42.

It being 5:30 p.m., the House will now proceed to the consideration of private members' business as listed on today's order paper.

Food and Drugs Act

[The Acting Speaker (Mr. Marcel Proulx)]

It being 5:30 p.m., the House will now proceed to the taking of the deferred recorded division on the motion at third reading stage of Bill C-28.

Call in the members.

(The House divided on the motion, which was agreed to on the following division:)

[Gary Carr, Liberal, Halton, ON]

Mr. Speaker, there is an agreement, pursuant to Standing Order 45(7) to further defer the recorded division just requested on Bill C-28 until Tuesday, October 18, at the end of government orders.

[Robert Thibault, Liberal, Parliamentary Secretary to the Minister of Health]

Mr. Speaker, I feel obligated to stand and correct the member. I was listening to the question posed earlier by a member of the Bloc and the answer from the NDP.

While I cannot disagree with any of the facts that they are raising, they are completely outside the scope of Bill C-28. This bill does not discuss the adoption of new products. The bill does not circumvent or shorten the regulatory system. This is a question of how to deal with intelligent regulations, the health of Canadians, the security of our food supply, and at the same time ensure the competitiveness of our agricultural sector by our food services industry.

We say in this bill that if there are products that are added to foods that have already been approved, that it is a new use or new combination, perhaps a cereal with a vitamin, and both have already been approved, that the minister, after it has gone through the proper scientific evaluation process and while it is going through its regulatory process, may give an interim use authorization.

This procedure is already happening and is nothing new. There was a concern by the Standing Joint Committee for the Scrutiny of Regulations that the proper authorization under the act was not there for the delegation of authority by the minister to a deputy minister, or an associate deputy minister or an assistant deputy minister. It merely corrects that aspect.

The other side of this is the question of pest control products in use that have gone through the proper regulatory scientific evaluation process. For example, we currently work with the United States to have a harmonized process. Often we will have a product that will replace another pest control product on the market that is deemed by users to be often safer and a lot better for our food system.

We look at the maximum residue levels that may remain in the food. After that proper joint evaluation, while it is going through the regulatory process, and after the advice has been received that it is safe and safer than other products that we use and that the residue limit is better than what we are presently using, then the minister can give an interim marketing authorization. The product can then be used while it is going through the regulatory system, the gazetting and all those other procedures.

We are not circumventing and not shortening the process. It is an intelligent way of doing regulations. As a result safer products can come on the market more quickly and Canadian consumers can benefit from new advances while never risking the health and security of our food system.

[Roger Clavet, Bloc, Louis-Hébert, QC]

Mr. Speaker, I listened carefully to the speech by my NDP colleague from Winnipeg Centre. He is an experienced member and not one to talk through his hat. He has a great deal of experience in terms of his research.

When he spoke on Bill C-28 to amend the Food and Drugs Act, he raised various concerns that I too understand. They relate to the use of a particular pesticide. In English, he was talking about 2,4-D. If I understood correctly, this pesticide was an ingredient in the famous agent orange used at Gagetown. So we can understand his concern.

However, my concerns are also understandable. I want to know how, when it comes to herbicide use, we can reconcile the need for health and safety with the way people sometimes artificially beautify their lawns, which I find quite frivolous.

Was this the meaning of his remarks, when he said that we may be starting down a slippery slope by allowing the use of this type of product and that the legislation fails to provide adequate protection in order to prevent such risks? I would like him to expand on this.

[Pat Martin, NDP, Winnipeg Centre, MB]

Mr. Speaker, I rise on behalf of the NDP caucus to share our views on Bill C-28, entitled an act to amend the Food and Drugs Act. I note that the purpose of Bill C-28 is to provide the Minister of Health with authority to issue interim marketing authorizations for foods that contain certain substances at specified levels and to exempt the foods from the applicable requirements of that act and its regulations relating to the sale of those foods.

That sums up our reservations about the bill. The very definition of the bill gives rise to the concerns that I have, and which my caucus tried to outline in its representations made on this bill before, in that it really does put more authority into the judgments by the Minister of Health.

I note, for example, that a judgment by the Minister of Health pertaining to trans fatty acids came into question recently. It is a serious public health concern that was debated and dealt with in the House of Commons. Bill C-28 contemplates putting more authority into the hands of the minister to make these judgments without the regulatory process for products that are already in the Food and Drugs Act. The example of trans fatty acids would in fact fit into that category.

Without the regulatory oversight that exists currently for what should and should not be in our food products, the bill contemplates giving more authority, as I understand it, to the Minister of Health.

Another aspect of the bill deals with the Pest Management Regulatory Agency and the Pest Control Products Act, which deals with pesticides in an agricultural setting or in other settings. The NDP notes with some concern that recently the Pest Management Regulatory Agency sent out a press release saying that the pesticide 2,4-D could be used safely, even though the Pest Control Products Act limits the language of advertising by pesticide companies, whereas they have been fined in the past for claiming that their product is safe. It is worrisome to us within the regime of pesticide control and pest management control when a product like 2,4-D, which even a lay person like me knows is a genuine health hazard and that it should be treated in the most severe category in terms of usage, has been found that there are safe applications of the pesticide.

I would rather see the Government of Canada going the other way. I would rather see the Government of Canada making bold statements about banning the cosmetic use of pesticides altogether, not finding safe applications for chemicals that we know to be hazardous.

I am concerned that Bill C-28 takes us down a road that we do not want to be going. In fact, it takes us down a road that may be 180 degrees opposite. We opposed the bill at committee because we did not believe that the Pesticide Management Regulatory Agency was doing its job properly in its evaluation of pesticides.

Canada is littered, polluted and contaminated with pesticides. I just heard a moving presentation in the last year from a 21-year-old man from Quebec who grew up surrounded by five golf courses. I cannot remember the name of the small community in which he was raised but there were five golf courses within the specific region. The incidence of brain cancer among he and his friends has motivated him to the point where he has dedicated his life to trying to eradicate the irresponsible rampant use of pesticides for cosmetic purposes and for unnecessary purposes like keeping a golf course's grass perfect for golfing. There is no agricultural justification for this.

The young man who gave us this moving and powerful speech, told us that both he and his best friend had been diagnosed with brain cancer at the same time when they were 14 years old. Their community represented a cluster of brain cancer caused by chemical exposure that is almost unprecedented. He and his best friend made a pact that if one or both survived they would continue to inform Canadians about the dangers of the irresponsible use of these chemicals. Unfortunately, one young man succumbed to his disease.

I want to debate bills in the House that talk about getting these toxins out of our food chain and out of our agricultural system. I do not want to talk about enabling the minister to have more arbitrary direction and control over the application of these known hazards.

I will not dwell on trans fats. We won a motion in the House of Commons to study trans fats more seriously. A task force was set up, chaired jointly by the Heart and Stroke Foundation and Health Canada, to bring back recommendations but we are concerned about the interim report of that trans fat task force.

The Minister of Health is already making statements that perhaps labelling is the way to go or perhaps the government should help industry voluntarily reduce trans fats in their products but that is not the language we want to hear. It gives me no optimism whatsoever that the Minister of Health is taking concrete steps toward eliminating known health concerns within our food chain or that he will apply the type of scrutiny, direction and control that we expect in the food and drug administration in evaluating new products.

The chair of the Standing Committee on Health took on the Pest Management Regulatory Agency and asked when it would issue a press release retracting the statement that there might be a safe way to apply 2,4-D. We did not want to send the wrong impression out to the general public.

Thousands of garages at the back of homes all over the country have a container of old 2,4-D sitting on their shelves. All people need to hear is some regulatory authority changing its mind and telling people that 2,4-D is not so bad after all and that they should continue to go after the dandelions with this incredibly hazardous material. People who already possess tonnes of that product and who should be advised to take it to a hazardous waste site and have it treated properly as a health hazard, may get the false idea that there is a safe way of doing this.

I do not think I need to remind people in the House of Commons about agent orange and agent purple at CFB Gagetown which showed chemicals can remain in the environment for years. Some people may not be aware of the fact that 2,4-D is a component of both agent orange and agent purple.

At the same time as members of Parliament are seized with the issue of contamination at Gagetown by the experimental use of agent orange and agent purple in the post-war year which put our armed forces personnel at risk, it is ironic that 2,4-D, one of the main ingredients in those cancer causing agents, is being contemplated for safe application again. That is as crazy as saying there is a safe application for asbestos. Canada is full of these contradictions.

How can we in all good conscience say that there is a safe application for asbestos when asbestos contamination is all around us to where we have polluted the entire country with asbestos? It can be found in every school, hospital and government building. Even our own House of Commons is contaminated with it. We seem to be adopting this same cavalier, user beware approach to harmful chemicals like 2,4-D.

The Sierra Club of Canada has spearheaded a public campaign questioning why the Pest Management Regulatory Agency claimed that 2,4-D could be used safely but its questions are not being answered.

If we are dismantling or, in any way, altering or affecting the regulatory process now, which would rely on outside expertise and authorities other than our own researchers with Health Canada, et cetera, then we are really concerned and critical of it.

We should point out that Health Canada does not actually do its own original research. It only gathers up the empirical evidence. It gathers up studies that have been done by others, often by the manufacturer of the very product that it is studying, and it assesses the risk based on the research available. This was made clear at the whistleblowing hearings where three Health Canada officials were fired for blowing the whistle on health hazards associated with bovine growth hormone.

Dr. Shiv Chopra made it clear when he said, “Everybody thinks we did this research and that we are advising Canadians about the hazards of bovine growth hormone”. He went on to say that he wished Health Canada could do its own research but that it did not have the laboratory or the budget to do the original research and that it had to rely on what has been done by others, which, hopefully, was done independently and peer tested. Sometimes it is the type of study that is done by the industry because it is the only one willing to fund the research on a product and in that way that research could be tainted or biased. That is certainly the case in many known food additives and chemicals that have been later found to be hazardous.

Asbestos is not the only one. Let us face it, most of the work on asbestos in the country today was done by an institute that was funded by the Metropolitan Life Insurance Company. It was concerned that it could not underwrite asbestos workers any more because of the extraordinary incidence of occupational disease related to people handling that product, so it funded its own research laboratory, published the reports that were pro asbestos and never published the reports that were anti-asbestos.

I want to get back to Bill C-28. Some of the issues involved include the study of chlorinated dioxins. I think everyone knows dioxins are enormous cancer causing agents and no one is saying that dioxins are necessarily present in 2,4-D, but the dioxins are in fact a byproduct in the manufacture of 2,4-D. If we are adopting a more casual approach to 2,4-D and saying that there are safe applications of it, we will be stimulating the production of it and, in acknowledging the production of it, we will, inadvertently or in a secondary way, also have to acknowledge that there will be the greater production of dioxins stemming from the production of 2,4-D.

The most toxic form of 2,4-D containing DEA was excluded from the evaluation. Even though the Pest Management Regulatory Agency ruled that there may be safe applications of 2,4-D, it did not even look at the most extremely hazardous toxic form of 2,4-D which contains this dioxin DEA, although it did say that it would examine it later, which is small comfort.

We are concerned that Bill C-28 would augment the authority of the Minister of Health to regulate food products, supplements or additives to the food and drug regime. It is in keeping with a motif that we have noticed in so many pieces of legislation introduced by the Liberal government. It is a trend. It seems to be a recognizable motif to augment the arbitrary authority of the minister and to dismantle or erode the regulatory authority of independent voices and bodies. We cannot tolerate that lightly and we have to speak out about it.

When this bill was introduced into the House of Commons on November 29, 2004, it was introduced with no advanced indication as to what it was designed to accomplish. That is rare for a bill. It was featured at a technical bill, a bill that was really just a housekeeping matter. It was only upon our own investigation and examination that some of these concerns rose to the surface and came to our attention within the NDP caucus.

The debate at second reading is where some of this information started to come up. Cautionary notes were raised about preventive measures, preventive health concerns and dietary issues. Some speakers at second reading articulated their concern that we emphasized too much of our health care resources toward treating the sick and not enough of our resources toward preventing illness.

Some people say that the title of Minister of Health should really be changed to the minister of managing illness, because our Minister of Health really has very little to do with making Canadians healthier or putting forward initiatives or legislation that might actually lead to a healthier population.

We are all aware of the preventable illnesses and that we could take steps to lessen the burden on our much taxed health care system. This is certainly one area where we expect our Minister of Health to be more proactive.

We are concerned when a bill like this comes along and does not really speak to the general public health concerns that we all share, but speaks more to streamlining a regulatory process to make it easier for the Minister of Health to give the yea or the nay about a food additive or a food product that is currently within the food chain or the drug system.

I acknowledge and take the parliamentary secretary's point that the bill does not apply to new chemicals being introduced or new additives. Those will still be subject to the full process of which we are all aware, but we are talking about existing products, chemicals and additives that may be in the existing food product list or in the existing drug regime that Canadians consume with the confidence that there are safety measures put in place to ensure that their health is key and paramount.

I cannot help but think that the industry would be quite interested in this new development which takes the regulatory authority away from the regime we are used to and hands it back to the minister.

If I can use trans fats as an example again, it is a product that is fully entrenched in the food chain currently. It is generally acknowledged across the country that this stuff is bad for us. Scientists use the word “toxic” when they make reference to trans fats because it meets the scientific definition of toxins. Our bodies cannot process it; our bodies reject it.

In fact, our bodies do not acknowledge trans fat as food. They see it as some foreign substance, which it is, to be stored elsewhere, and they store it in the form of fat within our circulo-vascular system and builds our cholesterol. This is the problem with trans fatty acids. We want them out of our food supply system.

However, as more and more of this regulatory authority goes directly to the minister, I am not sure that I trust this minister, or any subsequent minister of health, to put the best interests of Canadians first with such a bold step because there is some push back from industry. It will be awkward. It will be inconvenient to reformulate the products to get trans fat out of cookies.

If it ever comes down to the shelf life of doughnuts and the shelf life of Canadians, I would hope that the Minister of Health would err on the side of promoting the shelf life of humans. All that trans fats are good for is for making oil solid at room temperature and adding to the shelf life of some of these products. Using that as an example and using 2,4-D as an example, we have some legitimate concerns about Bill C-28.

This is one of those bills that comes to us, as I say, without a lot of fanfare. It sort of flew under the radar when it was first introduced in the House of Commons.

Throughout the debate, I actually learned a great deal. I have read some of the debate at second reading in Hansard , where my own colleague, the member for Winnipeg North, and also my colleague from the Conservative Party, the hon. member for Charleswood—St. James—Assiniboia, raised serious reservations about how the Standing Joint Committee for the Scrutiny of Regulations would in fact have its work undermined somewhat, or would be surrendering and forfeiting some of the authority that it currently enjoys, in transferring that power and authority to the minister.

We should all be cautious when we enhance the arbitrary powers of a minister at the cost of the democratic authority of the House of Commons. This is giving power to the executive that we currently enjoy within Parliament and we should be very careful.

Market authorizations have been made regularly by the current regulatory process. It is not as onerous as some would have us believe, and fast-tracking it by putting that authority into the minister's hands scares me, frankly, when it comes to the public health of Canadians.

[Guy Côté, Bloc, Portneuf, QC]

Mr. Speaker, it is a pleasure for me to rise today to speak to Bill C-28. In doing so, I will try to warn members of this House, particularly those on the government side, about certain aspects of this bill which we think introduce some safety concerns in the Food and Drug Act.

First I would like to repeat the purpose of this bill to put this debate in the proper context. Bill C-28 is designed to provide the Minister of Health with the authority to issue interim marketing authorizations for foods that contain certain substances at specified levels, and to exempt the foods from the applicable requirements of the Food and Drug Act and its regulations relating to the sale of those foods.

That is already a problem for us. We are talking about exempting certain foods from the applicable requirements relating to the sale of those foods. The substances involved are agricultural chemicals or their components or derivatives, food additives, veterinary drugs, and pest control products. Our understanding is that, based on numerous scientific studies, these products are used on various crops and in the production of foods and drugs. As was mentioned earlier, we all overwhelmingly recognize that this is no problem. But it is important that these scientific studies exist, in order to ensure that there is no risk.

Admittedly, the proposed amendments, in part, are in response to concerns raised by the Standing Joint Committee for the Scrutiny of Regulations regarding an administrative process put in place by Health Canada, and I quote:

—to allow Canadians faster access to safe and nutritious food products in specific circumstances.

That has been a source of concern for the Bloc Québécois for quite some time. And one of the main questions we ask ourselves is: Why is it that, at times, Health Canada appears to be unable to resist the pressure from major pharmaceutical and food companies which are in hurry to have their new products approved? Far from alleviating this concern, Bill C-28 exacerbates it by effectively enabling the minister to issue interim authorizations.

What is worrisome to the public in this bill is that Health Canada is increasing the examples of negligence. For instance, in the late 1990s, Health Canada caused an outcry when it wanted to authorize a recombinant bovine growth hormone despite opposition from scientists. In the end, the product's use was not approved.

We could easily have been in the same situation this morning had Bill C-28 passed, which begs the question: if it had passed, would the minister have authorized this product or would he have waited? We do not have the answer to that question, but Bill C-28 would have allowed him to do so. Who knows what the consequences would have been?

Preferring to take risks rather than precautions, the government is agreeing to approve drugs or food products without obtaining all the scientific data required by law. As a result, it is running great risks to the public. This is very important. In order to ensure human food safety, all the scientific data must be obtained. We know that far too often, when it comes to food and drugs, there are unanticipated long-term effects. We have seen this happen. That is why it is important to conduct a thorough scientific assessment of the products put on the market.

Accordingly, the Bloc Québécois has long wanted Canada to follow the European example of taking precaution on food products, drugs and pesticides. If such a principle were in place, GMOs would be labelled and the use of products with unknown consequences would be eliminated.

In our opinion, this bill gives the minister a lot of power. It is as if we were playing Russian roulette with products that could have extremely harmful effects on human health not only in the short and medium terms, but also in the long term.

Understandably, we have two major objections with Bill C-28. As I mentioned a couple of times since the beginning of my presentation, our first objection relates to the power given to the minister which is, as I understand it, a discretionary power to some extent. While this legislation does indeed give to the minister the power to issue interim marketing authorizations, the minister must base his decisions on scientific criteria. He cannot make such a decision merely because of the pressure put on him by a given industry or marketing sector.

The criterion to the effect that the food must not be harmful to the health of the purchaser or consumer, as stated in clause 30.2(1) of the bill, leaves a lot of room for interpretation, and we feel it would be important to set limits in this regard.

Of course, we are talking here about public confidence, not only in the government's regulations on food and drugs, but also in the food that ends up on the table. Indeed, the public must have total confidence in the food that it consumes on a regular basis, but also in drugs and pharmaceutical products. The latter are supposed to be beneficial to people who need them for the relief of various symptoms, or to deal with various diseases. Should these products worsen these people's condition, this would result in a loss of confidence that would be very hard to regain.

This is why it is important to reassure Quebeckers and Canadians on the safety and quality of the food that they consume. The minister should be required to inform the public of the reasons why he agrees to issue an interim marketing authorization. As I mentioned earlier, Bill C-28 would allow the minister to issue such authorizations by relying on criteria that leave a lot of room for interpretation.

Not only would it be absolutely essential that the minister base his decision on sound scientific studies, as I was saying earlier, but should he not do so, he should be required to explain the reasons for issuing these interim marketing authorizations and to specify which lobbies approached him regarding a particular product. This is necessary to ensure public confidence in food safety. That is why it is so important.

People's perceptions weigh very heavily in matters where safety and confidence are an issue. I would certainly not want to presume—and I certainly do not want to give that impression—that the minister would make decisions without proper consideration. I would never imply such a thing. We can only presume that an individual who is responsible for making such decisions will act in good faith.

However, we know full well that some people can be very convincing for all sorts of reasons. Before becoming a member of Parliament, I worked as a sales representative, as some of my colleagues may have done also. I would have never dared lie to one of my clients, but I certainly did my best to point out the positive aspects of the products I was selling.

This discretionary power granted to the minister needs to be properly framed. Unfortunately, Bill C-28 does not give any assurances in that regard.

While it is indeed unfortunate, it is also very typical of this government. It often offers us half-measures or expeditious measures. Surprisingly, on a certain number of issues, it does not seem to be able to take all the necessary precautions or make the necessary decisions, but in other cases, it is overzealous.

I must take a minute here to remind members briefly of a speech I made yesterday.

Yesterday, in my speech about tax havens, I clearly demonstrated how, over the years, the concerted action of the government has brought us to a point where a number of businesses are not paying their fair share of taxes. This situation was brought about by a number of very specific measures.

Unfortunately, in some ways, Bill C-28 is only a half measure and of no reassurance to the Canadian public. It opens the door to certain almost arbitrary decisions which might—though we hope not—endanger the health of our fellow citizens.

That is why, having analyzed the proposed mechanism and heard what civil society organizations have had to say, we will be opposing Bill C-28. We in the Bloc Québécois—and this is a deep-seated conviction—are of the opinion that consumer confidence is an essential component of food marketing. The advantages of an interim marketing authorization process like the one proposed in Bill C-28 are likely to be outweighed by the concerns it raises.

In an area like this one, where the safety of our fellow citizens is concerned, it seems to me that prudence must be the watchword, not speed. Any error could have very unfortunate consequences, and the health of those we purport to serve could suffer seriously as a result.

Extreme precaution is in order. Unfortunately, Health Canada has not addressed all the concerns relating to new product approvals. A mechanism such as this, which involves risk management rather than the principle of precaution, is liable to make consumers more wary. That is the situation. Instead of taking precautions to ensure all the necessary scientific studies have been done, it is a matter of risk management.

I will not, thank the Lord, ever be health minister. I would never want to have to manage that risk. As I said earlier, we can only assume the right decisions will be reached. What we need to do is to ensure they are, based on all necessary scientific studies. The opinion of one individual cannot be relied on, no matter how well-intentioned that individual may be.

The first objective of the Food and Drug Act is to ensure the quality of food and that it does not represent health risks. The health of Quebeckers and Canadians is paramount. Any authorization of new products should be done under the precautionary principle. Unfortunately, Bill C-28 does not include this principle.

This week, the government made a number of announcements. To be indulgent, I would say that these are an election ploy. Today, third reading of Bill C-28 raises deep concerns among us. Let us simply imagine what the reaction would be if the minister did not have all the data at his disposal and made a mistake that would put the health of our citizens at risk. I would not want to carry this burden on my shoulders. I would not want to have to make such a decision.

It is incredible—I was mentioning this earlier during question and comment period—to see that our colleagues from the Conservative Party support this bill, when they regularly defend good citizenship and safety. Yet, in Bill C-28, we find exactly the opposite of many principles that they normally support. I have to tell you that I was a little astounded earlier to hear them say they would support Bill C-28. I still have hope, since our NDP colleagues will certainly speak soon on this bill.

I hope that they will see the risks associated with the bill. If they do not, I invite them to talk to us. That goes for my Liberal and Conservative colleagues as well. I invite them to meet with me or with my colleague from Hochelaga who, I must say, knows the bill a lot better than I do, having spent many hours studying it in detail.

I was saying that the bill does not meet many of our concerns and that it seemed to be an amalgamation of half measures. That is unfortunate but not really surprising since the government is an expert in half measures. That is too often how it responds to situations.

The government has just introduced a federal assistance plan to alleviate the effects of high oil prices. We were very happy since it borrowed large parts of the package we proposed only a few weeks ago when the Minister of Transport was saying the government could not do anything. Only two weeks later, we see him using major parts of what we proposed. Unfortunately, the plan is full of half measures because it does not reach the right persons. There is nothing in it for taxi drivers, farmers and truckers. I know that this is not the object of our debate, but I thought it was important to give it as an example of half measures too often introduced by this government.

So Bill C-28, far from improving our fellow citizens' security, gives rise to concerns. How can we guarantee that a new product is perfectly safe for consumers? In the end, people will have to trust the good judgment of the Minister of Health. But I do not think that that is enough even though that minister does his best and acts in good faith. We think that Bill C-28 should be defeated. Let us say that the status quo would be better than the new regime proposed in Bill C-28.

[Guy Côté, Bloc, Portneuf, QC]

Mr. Speaker, I am somewhat disappointed to hear our Conservative colleagues say that they will be supporting Bill C-28. There has been a lot of talk this morning about the importance of food safety.

Is there not some concern that, under pressure, the government may be tempted to expedite the process in some cases so that certain products can be marketed more quickly? I understand that the need to ensure the health and safety of consumers is mentioned in the bill, but scientific studies are sort of being put aside. Is that not cause for concern?

[Gordon O'Connor, Conservative, Carleton—Lanark, ON]

Mr. Speaker, I am pleased to speak to Bill C-28, an act to amend the Food and Drugs Act.

Regulations that have no basis in legislation are a constant problem that only recently have been addressed in any significant way. Often when legislation is made, the regulations that allow for the implementation and enforcement of the law are made after the fact by the relevant department or ministry.

Essentially, Parliament confers upon the minister the power to create regulations, provided they do not exceed the parameters of the legislation. What often happens, however, is that the lengthy and convoluted process required in creating regulations results in regulations that are technically not legal. Powers that have not been confirmed by law are given through regulation to the minister. Not only does this situation violate the supremacy of Parliament, it effectively allows law to be made without any accountability or oversight.

While some irregularities are due to simple mistakes, others are deliberate attempts to ignore the intent and alter the outcome of legislation. Thanks to the rare passage of a private member's bill, Bill C-205 in 2003, which I might add was the result of much hard work by its sponsor, the Conservative member for Newton—North Delta, Parliament now has greater powers to ensure that law by regulation is curtailed.

This bill is a direct result of five years of pressure by the Standing Joint Committee on Scrutiny of Regulations on Health Canada. The irregularity of the regulation was first pointed out in 1999 and it is only now, after years of resistance, that the department has finally brought this bill forward.

The bill is an amendment to the Food and Drugs Act. Currently, a regulation allows the director, in this case the deputy minister of health responsible for health products, to issue notices of interim market authorizations. This regulation gives the director administrative discretion that exceeds the legislative authority granted by Parliament to the governor in council. In other words, the regulation contradicts the authority of the original legislation. This bill seeks to correct this discrepancy.

The regulation was created in 1997. Since that time, 82 interim market authorizations have been made, but because the regulation violates the legislation to which it applies, all of these authorizations have technically been illegal. The amendment seeks to fix this irregularity by giving the minister the authority to make interim market authorizations.

The bill also seeks to exempt any food that contains an agricultural chemical at or below a limit specified under the new Pest Control Products Act. Those foods containing these safe levels of substances can be sold because their sale poses no harm to consumers.

The bill applies to the immediate sale of food products that contain pesticides, veterinary pharmaceuticals, added vitamins, minerals and amino acids at or below the specified maximum limit. The bill is not creating from scratch a new practice, but simply is making legal or enshrining in law a practice that has been taking place for years.

The Conservative Party supports this amendment because regulations that violate the letter and/or intent of the law should not be tolerated. Any action that eliminates irregularities should be encouraged. We also support writing into law the interim market authorizations. As long as the safety of Canadians is accounted for, there is no reason that food and other products should not be allowed for sale if the substances they contain do not exceed a specified safe level.

These measures allow Canadian food producers and manufacturers to quickly bring their products to market, increasing their availability to compete. Canadian consumers also benefit by gaining quicker access to new and modified products.

Like other smart regulations, interim market authorization creates a level playing field for Canadian businesses, especially within the U.S. market. Currently, the U.S. government allows food products in the approval stage to be marketed, given that they are not harmful or restricted by other laws.

That being said, caution is needed. Although interim market authorizations have been common practice since 1997 supposedly without incident, that is not to say that unsafe food products have not been prematurely authorized for sale. Not only might their sale pose a health risk, but the government may be liable for damages in the event of unsafe food, causing problems.

Interim marketing authorizations are necessary and welcome, but must be used only when it is known beyond doubt that whatever substance is in a food product is at or below the approved safe level.

In summary, Bill C-28 is a corrective measure to bring an existing regulation in line with the legislation to which it applies. We want to reduce the number of regulations that contradict the authority of legislation. This will take years, but it is a necessary undertaking and is worth the effort. We support this change as a small step toward making better law and law making.

[Robert Thibault, Liberal, Parliamentary Secretary to the Minister of Health]

Mr. Speaker, following the report of the Standing Committee on Health on its review of Bill C-28, I am pleased to speak on the bill, which proposes two amendments to the Food and Drugs Act. The amendments would provide the Minister of Health with the authority to allow Canadians faster access to a wider variety of safe and nutritious food products.

I would like to take the opportunity to reiterate the reasons why this bill was introduced. The proposed amendments are in part in response to the concerns raised by the Standing Joint Committee for the Scrutiny of Regulations regarding an administrative process put in place by Health Canada to allow Canadians faster access to safe and nutritious food products in specific circumstances.

This administrative process permitted the issuance of notices of interim marketing authorizations under the Food and Drugs Act regulations. These notices allowed the director, defined as the assistant deputy minister of the Health Products and Food Branch of Health Canada, to exempt certain foods from application of the regulations after a thorough safety assessment had concluded their consumption would not harm human health. By doing so, the director was able to allow the sale of certain foods by manufacturers and producers while the regulations were amended to formalize the authorization.

Essentially, the Joint Standing Committee on the Scrutiny of Regulations maintains that the regulations authorizing the issuance of notices of interim marketing authorizations go beyond the scope of the Food and Drugs Act.

This bill ensures that the scope of these regulations authorizing the issuance of notices of interim marketing authorizations can continue to be used by Health Canada in order to allow Canadians faster access to a wider variety of safe and nutritious food products.

Since these regulations on interim marketing authorizations have been in place, consumers have had quicker access to new and safe food products. For example, foods to which vitamins or mineral nutrients were added to increase their nutritional value were offered more quickly on the market. Moreover, the notices of interim marketing authorizations allowed for the quicker sale of foods from cultures that were treated with agricultural chemicals, including safe and effective pest control products.

As I have noted, the bill addresses the concerns of the Standing Joint Committee for the Scrutiny of Regulations, but it also ensures that we maintain this useful smart regulation approach.

The first proposed amendment would address the concerns of the standing joint committee by providing the Minister of Health with the authority to exempt some food products from the application, in whole or in part, of the Food and Drugs Act and the applicable requirements of the food and drug regulations.

The minister would do this by issuing an interim marketing authorization, which would allow the immediate sale of some food products for which scientific assessment has established that there is a reasonable certainty no harm would result from their consumption, pending completion of the full regulatory process to amend the regulations.

In other words, the products would not pose undue risks to human health. The science would have been completed, just not the lengthy regulatory amendment process, which would continue to be applied.

To underscore this latter point, I repeat that the issuance of the interim marketing authorization would not affect or circumvent the conduct of a thorough safety assessment prior to the availability of these food products on the market. Interim marketing authorizations could only be issued for food additives, veterinary drugs and agricultural chemicals that have already been subject to a thorough safety assessment before being listed in the regulations.

Health Canada would only give consideration to issuing an interim marketing authorization if it has concluded that the sale of the food products containing the substance in question would not pose a hazard to the health of the consumer.

This limited scope of application of the interim marketing authorization mechanism in the bill is exactly the same as the current regulatory mechanism that was reviewed by the standing joint committee. The only significant difference introduced by this bill is that it clearly specifies that the authority in the Food and Drugs Act is in the hands of the Minister of Health.

The second part of Bill C-28 deals with pest control products and their regulation pursuant to the provisions of the new Pest Control Products Act and the Food and Drug Regulations. The new Pest Control Products Act, which was given royal assent in December of 2002, empowers the minister to specify maximum residue limits for the product or for its components or derivatives in food. When specifying maximum residue limits, the minister must evaluate the health risks of the product or its components or derivatives and determine if they are acceptable.

To that end, he must determine with reasonable certainty that no harm to human health will result from consuming a food item containing a residue level of a specific pest control product no greater that the specified maximum limit.

However, the adulteration provisions in the Food and Drugs Act and its regulations state that foods are adulterated if they contain residues of pest control products above levels set out in the regulations. Therefore, foods containing residues of pest control products at or below the maximum residue limit specified by the minister under the Pest Control Products Act cannot be sold until the specified maximum residue limit is established in the food and drug regulations.

Currently it can take up to two years from the time that the regulatory evaluation has been completed to the time when the food potentially containing the residues is permitted for sale under the Food and Drugs Act.

The proposed amendment to the Food and Drugs Act to recognize maximum residue limits specified under the new Pest Control Products Act for Food and Drugs Act purposes would result in administrative efficiencies and would also benefit consumers, by providing timely access to safe foods, and the agricultural industry, by allowing faster access to improved pest control products for use on food crops.

Bill C-28 builds on the October 2004 Speech from the Throne objective of providing a “predictable regulatory system that accomplishes public policy objectives efficiently while eliminating unintended impacts”.

The proposed amendments are also in line with the ongoing intent of the Government of Canada's smart regulation initiative and the recommendations from the external advisory committee on smart regulation, which aim, in part, to provide access to safe products in a more timely fashion and remove possible restrictions on international trade.

In addition, the proposed amendments will support ongoing work under the North American Free Trade Agreement technical working group on pesticides, through which Health Canada and the United States Environmental Protection Agency have accelerated bilateral harmonization in the registration of pest control products in order to provide faster and simultaneous access to a wider range of newer, safer pest control tools in both countries.

In conclusion, I wish to express my gratitude for the hard work of the Standing Committee on Health in its consideration of this bill. Bill C-28 contributes to maintaining the safety of the food supply and offers advantages to the consumer and to the food and agricultural industries. I urge my colleagues to support the passage of this bill.

[Bill Graham, Liberal, for the Minister of Health]

moved that Bill C-28, An Act to amend the Food and Drugs Act, be read the third time and passed.

Amendment to Income Tax Act Regulations

[Guy Côté, Bloc, Portneuf, QC]

moved:

That, in the opinion of the House, the government should amend the Income Tax Act regulations so that they do not override certain provisions of the tax agreement between Canada and Barbados allowing Canadian businesses to use their subsidiary in Barbados to avoid paying taxes in Canada.

Madam Speaker, it is an honour to have the opportunity to speak to this issue that is so important to the integrity our country's tax base. It must be shown how the current Prime Minister, sometimes through his inaction but mostly through very specific measures he took when he was finance minister, managed to arrange things so a good number of businesses, particularly in the shipping industry, avoid paying taxes.

First I will read the motion, which is as follows:

That, in the opinion of the House, the government should amend the Income Tax Act regulations so that they do not override certain provisions of the tax agreement between Canada and Barbados allowing Canadian businesses to use their subsidiary in Barbados to avoid paying taxes in Canada.

The purpose of this motion is to amend the income tax regulations so that they do not override certain provisions of the tax agreement between Canada and Barbados. These regulations currently allow Canadian businesses to repatriate income without paying taxes in Canada, which is a serious threat to our country's tax base. Moreover, this violates the spirit of these tax agreements, the purpose of which is to avoid double taxation. It so happens that in tax havens like Barbados, where the tax rate applied to foreign businesses is ridiculously low, not only do these businesses avoid double taxation, but they avoid taxation altogether.

As members of the House, we cannot turn a blind eye and ignore this reality when our constituents pay taxes and some businesses avoid doing so by using tax havens.

The necessity to look into this issue right now has to be put into perspective. Various measures taken by the current Prime Minister, especially when he was finance minister, are now allowing a number of businesses in the shipping industry, among others, not to pay their fair share, whereas the vast majority of taxpayers do pay their fair share of taxes.

The Office of the Auditor General has provided various opinions on this matter over the past 10 years or more. Since then, instead of getting better, things have gotten worse in many regards.

As early as 1992, the Auditor General brought to the attention of the public the problem posed by tax havens. In chapter 2 of his report, he wrote, and I quote:

Tax arrangements for foreign affiliates are costing Canada hundreds of millions of dollars in lost tax revenues

Avoidance mechanisms also have a negative effect on the equity and integrity of the tax system and on public attitudes toward voluntary compliance. Access to such mechanisms is usually limited to those who can afford expensive advice. Those who cannot, therefore, may be denied equitable or even-handed treatment.

In 1993, when the Standing Committee on Public Accounts presented its 12th report to the House, it reiterated a number of the recommendations originally made by the Office of the Auditor General. The committee said, among other things, that:

—care must also be taken to keep the tax system fair and equitable, and that there is no reason, in our tax regime, why income earned in a tax haven should be given preferential treatment over income earned in Canada and subject to Canadian tax.

What happened in the 13 intervening years? The current Prime Minister has not simply been remiss in implementing the recommendations the Auditor General has repeatedly made to him over more than a decade, but we have seen carried out a long-planned measure to foster the use of Barbados as a tax haven.

Backtracking a bit, we have found a great example to illustrate what we mean: a shipping company by the name of CSL. In 1992, CSL created CSL International, which was at that time nothing but a shell company incorporated in Liberia and responsible on paper for all of CSL's international activities. CSL International is involved in very little actual shipping. It is a holding company that owns other companies, and it is those companies that are involved in shipping. It is important to make it clear that, at that time, it was possible to bring back to Canada, tax-free, the profits generated by a Liberian subsidiary of a Canadian company.

As I have said, in 1992 the Auditor General brought the problem of tax havens to public attention for the first time.

What was the Finance Minister's reaction in 1994? To bring down his first budget and to state in it that he intended to put an end to the use of those havens. Such a noble intention.

However, the budget implementation bill and the regulations that came into effect in 1995 left one loophole available, and it is easy to guess where it was: Barbados.

That bill, in clause 5907 of section 11.2, renders inoperable the section of the tax convention which excluded “international business companies”, by setting out a series of criteria by which a company could be considered non-resident in Canada and thus not subject to taxation by Canada.

So that was in 1994, and the legislation was enacted in 1995. Just by pure chance, 1995 was the year CSL moved to Barbados. What an odd coincidence. The Auditor General's office did not let this go unnoticed. In 1996 he again sounded the alarm on tax havens, for a second time.

This is what he said:

The results of Revenue Canada's program to combat it indicate that avoidance continues to pose a serious threat to the tax base.

So the Minister of Finance of the day responded to the report by stating the government's intent to implement these recommendations promptly and in their entirety.

But far from trying to counter the exodus of capital to Barbados by terminating its convention with this tax haven, Canada encouraged it by signing an agreement to promote and protect foreign investment with Barbados in 1996.

What I am trying to present today is a series of events that will help us understand what we are talking about.

In 1998, the Minister of Finance introduced Bill C-28, the Budget Implementation Bill. One of the clauses in the bill concerned shipping. Henceforth, holding companies incorporated abroad and owning companies involved in international shipping would be considered as involved themselves in international shipping. In this way, they would be exempt from Canadian taxes, even when their profits were repatriated. This clause applied retroactively to 1995, the year when, as if by chance of course, CSL International set up shop in Barbados.

This bill affected only a small number of taxpayers. At the time, the Canadian Shipowners Association had only 11 members, of whom at most eight were involved in international shipping, including CSL. By the way, when he appeared before the Finance Committee on February 10, 1998, the director general of the Tax Legislation Division of the Department of Finance suggested that Bill C-28 could once again apply to a company like CSL International.

Still in 1998, the Auditor General was concerned for a third time. He said:

—the increasing use of tax havens and the growing number of bilateral income tax conventions mean that ... failure to take urgent action on these matters will severely limit Revenue Canada's ability to manage the risks to Canada's tax base that international transactions represent.

It is apparent, therefore, that between 1992 and 1998, the Office of the Auditor General was already paying the necessary attention to this matter, something that the Minister of Finance at the time was not doing.

Let us advance a little in time to 2001. The Auditor General raised the issue for the fourth time in his report in February 2001, saying that:

One of the biggest threats to the tax base lies in the international activities of Canadian taxpayers, particularly the use of tax havens.

How did the Minister of Finance respond? In 2002, the government introduced Bill S-2, the Tax Conventions Implementation Act. Far from terminating the 1980 tax convention between Canada and Barbados, Bill S-2 simply renewed it by amending its schedules in 2002.

The Office of the Auditor General took up the issue for the fifth time.

Although Canada amended its rules in 1995, little has changed. Tax havens continue to attract Canadian money. For example, Statistics Canada reports that Canadian direct investment in Barbados has increased from $628 million in 1998 to $23.3 billion in 2001—over a 3,600 percent increase—

In 2001, investment reached the modest amount of $23.3 billion.

Barbados must be an extraordinary place to invest in. I am sure that economic activity there is rolling along at breakneck speed.

According to data from the Canada Customs and Revenue Agency, in 2000, Canadian corporations received $1.5 billion in dividends from corporations in Barbados.

As you can see, Barbados is of great concern to the government. The question is whether the then finance minister and current Prime Minister is concerned for the right reasons.

Barbados is not a tax haven as such. Both citizens and companies pay 40% in income tax.

Tax laws in Barbados include a special section for International Business Corporations, or IBC. An IBC is a company registered in Barbados that conducts most of its business activities abroad. There are very few conditions to meet: the company must be registered in Barbados, have its headquarters there, hold its board of directors meetings there—a conference call will suffice—keep its board meeting minutes there and make a Barbadian one of its directors. This director may, however, by unanimous decision of the shareholders, have no powers. Registration fees are U.S $390, plus $250 annually.

These companies are then subject to a regressive tax, from 2.5% down to 1%, depending on revenues. They are exempted from tax on capital, from exchange controls, and from tax on transactions.

Fifteen minutes to discuss this issue is excessively short. Therefore, I will conclude quickly by saying that the government must not only review the terms of the Canada-Barbados tax convention but also prevent companies from using dummy companies abroad to avoid paying taxes here.

CSL, for example, must pay its taxes to Quebec and Canada. It must pay its fair share; it must not jeopardize Canada's fiscal balance; and it must not use the power of the government to favour certain specific businesses.