Agriculture Committee on Oct. 18th, 2006

[James Bezan, Conservative, Selkirk—Interlake, MB]

I want to thank the two of you for coming before the committee today.

I also want to thank USDA for the work they did on getting the border open for the animals under thirty months. I am a cattle producer. Mr. Miller and I were in Seattle to watch the appeal at the ninth circuit court and we appreciated the argument put forward by USDA. I wish they had been that prepared the first time when it showed up in Billings. We wouldn't have had all the heartache and hardship that we faced in Canada if USDA had been more prepared at the Billings court.

You were talking about the over-thirty-month cattle and about the risk assessment ongoing for the latest cow. We have OIE standards that both countries agreed to and are adhering to. When do you expect the assessment to be finalized on this last case? Realizing that we are in the middle of mid-term elections in the U.S., how soon after the election is wrapped up do you expect the rule to be presented for comment?

[Gary C. Groves]

I don't think this is an election issue. It's not a Democrat or Republican issue.

Every time we've given timeframes we've been wrong on this issue. But the idea the secretary has been laying out is that we would try to get this out by the end of the year. That is his goal. Certainly, he has indicated that this is on track as a proposed rule. That doesn't mean cattle are coming across the border, or beef over thirty months. Again, we have to go through a public comment period, which normally lasts sixty days. I don't know what it's going to be. We have to review those comments. Assuming it goes forward, we then have to come out with a final rule. If it's a major rule, there's always that sixty-day period after it comes out.

You can do the math and get well into next year. It is going forward, though, and I believe the end is in sight.

[James Bezan, Conservative, Selkirk—Interlake, MB]

I encourage you to be vigilant with the rule-making process, because we don't need another situation where R-CALF is going to take it to court.

I would like to know your opinion. Where do you think R-CALF fits in these days? Are they becoming more relevant since they lost in that appeal court? Are they losing steam, or are they going to continue to be a pain in the side and a thorn in the backside of Canadian cattle producers?

[Gary C. Groves]

I wouldn't dare to comment on that.

I can say that we fully expect this rule to be challenged in the court system. But we learned a lot the first time around, in Billings and Seattle, and we are taking those lessons to heart. This time around we have a solid case and I think it will hold up to any challenge, frankly.

[James Bezan, Conservative, Selkirk—Interlake, MB]

I want to follow up on Mr. Roy's comments about these user fees. They are widespread and based upon border crossings by air, land, or with shipments. I see it as an irritant to the mutually beneficial relationship we have on trade, especially agrifood trade.

Is there any process that would harmonize this relationship so that these user fees don't come into play? This would make it a little more friendly. I understand that you guys are trying to do cost recovery, which could go back into investments or fixing up port facilities. I used to be a livestock exporter. I was a cattle producer before politics. Before BSE, I was a livestock exporter, predominantly into the United States, and the facilities at the border sometimes leave a lot to be desired. Often we're using only Canadian facilities because the USDA facilities weren't in existence. USDA vets were always complaining about it, because they were always run into Canada to inspect cattle rather than being able to handle them at their own office.

So, first, are those fees going to be used to improve the facilities? Second, are there better ways to harmonize this than charging it to tourists walking across the border?

[Gary C. Groves]

First of all, just to be clear, the fees would apply to airline passengers and to all commercial conveyances crossing by land. They would not apply to people going across in a personal vehicle or whatever.

We are incurring real costs. About three years ago we created the Department of Homeland Security. The border people from APHIS that had been at the border and in pre-clearance in the airports went to the Department of Homeland Security. Prior to that, APHIS's plan was to double the number of personnel, at the pre-clearance positions, for example, with the idea that they could help expedite this process, so they would have sufficient staff so there wouldn't be delays in terms of inspection and so forth. It's really to cover those costs of personnel and so forth.

For example, the Department of Homeland Security requires those inspectors to be American citizens. We used to do more with foreign nationals, with Canadians in the case of Canada, but now, with the new system, we have to bring an American inspector up to live in Toronto or wherever. The costs of stationing an expat in any foreign country, Canada or wherever, are quite high. So we are incurring some very real costs.

[James Bezan, Conservative, Selkirk—Interlake, MB]

But you've always recovered the costs, I would think fully, in the import fees that we already pay. When we send cattle across, we pay so much a head. If we ship a load of pork, there's a charge to USDA to inspect that load when it enters. These fees are all collected through the customs agent. What's happening to all those costs?

[Gary C. Groves]

Fruits and vegetables have never been inspected, but yes, cattle got inspected. Fruits and vegetables from Canada were exempt from all inspections. Now part of the new thing is that some of these products would be inspected.

There are alternatives that we are willing to look at. The last thing we want is to muck up the border, frankly. We don't want to create another trade irritant with Canada. We want this border to be there from the security and the prosperity standpoint. That is why we are willing to look at alternatives and why we are actively looking at alternatives.

What will happen regarding those fees? Right now it's on the books for them to go into force. Whether there will be a delay or a phase-in or whatever, I have no idea. But there are certainly options. Our concern is primarily with making sure that products coming into the United States do not cause a danger to American producers. If there's a way to do that here at origin, or to do that better, we're certainly willing to look at that.

[The Vice-Chair, Liberal, Paul Steckle]

Thank you very much, Mr. Bezan, and thank you, Mr. Groves.

Now we move to Mr. Thibeault. We're going to continue with seven minutes. We have enough time here to let everyone continue with seven minutes.

[Robert Thibault, Liberal, West Nova, NS]

Thank you, Mr. Chair.

Welcome to the committee. It's most gracious of you both to appear. It's a bit unusual, so we're doubly honoured to have you here to discuss these very important issues.

We spend a lot of time in Ottawa, and around the country, talking about the irritants when there are problems, and sometimes we forget that there's a huge amount of trade that goes without problem across our border. But there is a concern, following the BSE thing and following the ramifications of 9/11, that the questions of food safety and national security, which I think are quite legitimate, will be abused or misused to become protectionist measures, and that would hurt trade between both our countries. We experienced this very closely in the BSE question, where we do have an integrated market. The market doesn't recognize the border; it's completely administrative and political. Businesses depend, and our economy depends, on this free flow of products across both nations, so I think we have to vigilant.

But that being said, I want to point to a couple of areas of success. In a previous life I had the opportunity to serve as Canada's Minister of Fisheries, and following the 9/11 crisis and your new food safety regulations, there had been some restrictions put on our shipment of fresh seafood products, with the prior notification prior to the border...and those things, which would have killed the industry, and it would have hurt your economy also. I think you'll discover if go to Florida, in Florida you eat Maine lobster, and quite often it originates in Nova Scotia. It is an integrated market.

At that time I worked with Mr. McClelland, who is now, I believe, at EPA, and he was very helpful, as was Mr. Powell, and we were able to resolve that situation, so it never got the media attention and it never got the press to the extent that BSE did. I would hope we're able to have more of those examples in the future, and I hope we will learn from BSE, enough so that we never live that type of a situation again, because we will have other incidents and other problems.

I live in eastern Canada, in Atlantic Canada, and half my family lives in Massachusetts, and the links between those two parts of the world are very close, and very cultural and very social, and it brings me to my question. In Nova Scotia, we have some exhibitions that always feature international competitions, whether they are ox hauls or whether they are heavy horse pulling. Because of the BSE thing, the unintended ramification was that our competitors couldn't make it to the U.S. and the U.S. couldn't come to ours, so both Maine and Nova Scotia suffered. I talked to some producers of alpaca, which is a very much a niche market but also an integrated market. There's no difference. You can't operate alone in Canada and you can't operate alone in the U.S.; it's one market. Because it was classified as a ruminant, it suffered the problem of being able to cross the border.

Through this BSE thing, have we learned enough to stop those unintended consequences in the future? Have we found mechanisms where we can continue the parts of the market that aren't affected or at risk?

[Gary C. Groves]

I think we are learning, and we're learning very quickly. A good example is on potatoes, what we just had with the potatoes, this nematode, something that hit our producers in Idaho last spring and then in Quebec in August. Within six weeks, or something like that, after this happened we had a protocol that lays down that if something happens in the future, here's what each of us is going to do.

For avian influenza, we now have a protocol that lays out, okay, if this happens, we're not getting into banning the whole country; we're going to look at it this way.

So we are developing those types of protocols. We don't have it for everything--we don't know what the next big problem is--but the timeframe we are getting to deal with it and to realize what we should do is narrowing a lot.

Yes, we learned something from the FDA bioterrorism experience that you talked about. We all were wondering what the heck was going to go on with that. There were little bumps, but, by and large, Canada presented itself so convincingly to U.S. officials, in terms of having mechanisms set up, so that this would not create this gigantic problem at the border.

I think we are making significant progress. When you consider two governments that have such a wide diversity of interests, I think we are.

[Robert Thibault, Liberal, West Nova, NS]

The cynics would say on the potato issue that they got results a lot quicker when the problem was found in Idaho. Before that, the action wasn't very quick.

[Gary C. Groves]

We would say the reverse, that Idaho got worked out when you had it in Quebec. I'm sure that's what our producers would say. We weren't getting anywhere...well, we were getting places, but it wasn't going as fast as we wanted on regionalization in Idaho. You wanted that in Quebec, and the minister said, “Do you realize how big the province of Quebec is?” Okay, we want the same thing in Idaho. So it goes around and comes around, and what starts it up first, or whatever....

[Robert Thibault, Liberal, West Nova, NS]

I guess it doesn't matter how thin you slice it, there are always two sides.

[Gary C. Groves]

There are always two sides to the story.

[Robert Thibault, Liberal, West Nova, NS]

On the question of BSE, there was frustration on the part of Canadians generally. Between our administration and your administration--Secretary Veneman and our Minister of Agriculture at the time--there was agreement between the trade departments of both countries on how to proceed, going with the science-based approach and showing proof of food safety. I think everybody agreed with that. The agricultural community was frustrated by the pace but was in agreement. The wrench came with all the challenges, and because of your constitutional and legal systems your administration seemed unable to make it move any faster. I think that created a lot of the frustration.

Has anything happened that would speed up that process should the same situation happen again, or would we be subject to all the same levels of appeals?

[Gary C. Groves]

The appeal process hasn't changed. The question is, can you better answer to the courts what action you've taken? I think we've greatly improved on that side.

Appeals like that have happened with various products coming from various countries. In each case we found that whenever we went ahead too quickly with something that maybe wasn't quite ready, the appeal was successful. I served in Argentina, and Argentine lemons are a classic example. That one got sidetracked for years because they were able to shoot some holes in what we were proposing. That is where it is absolutely essential that we have everything lined up. We can't change the legal system in the United States. It is what it is.

[The Vice-Chair, Liberal, Paul Steckle]

Mr. Miller.

[Larry Miller, Conservative, Bruce—Grey—Owen Sound, ON]

Thank you very much to both of you for coming here today.

As Mr. Bezan said earlier, I'm also a beef producer. The BSE problems we've had in Canada since 2003 are still not 100% over, although we are getting closer. So I encourage you to keep up endeavours to get the borders fully open.

There's an old saying in my part of the world that talk is cheap, but it takes money to buy whiskey. The bottom line is that we can talk about this, but unless you show the actions, it doesn't mean anything. So I really encourage you to do that.

There's also a perception, especially in the beef-producing areas and amongst the farmers, that a lot of decisions made by the USDA or the U.S. government on products moving there are based more on politics than science. When it came to beef testing in Canada, our consumers knew that our testing was right. We actually increased our consumption through that time by around 8%--somebody correct me if I'm wrong. That tells us something. Nobody got sick in either country and nobody died, because we kept it out of the food chain. So there's the perception that the decision was based more on politics.

I'd like you to comment briefly on that if you could.

[Gary C. Groves]

I really feel that if you look at our actions over the years, it's hard to come up with cases where we haven't eventually done the right thing from a science standpoint. I was thinking about that, and it's really that things take longer than maybe they should. Politics, of course, enter into the process of challenges, and so forth, and congressmen asking the administration why we're doing different things, but in my experience, the basic thrust of the direction in which we want to go, and in which we do go, is based on science, because that is the only rule that is going to kind of work in the end. That's what we want and that's the way we want other countries to treat us, and that's the way we have to treat them.

While people like to look for other reasons, at why it is that we're doing this or doing that, because they may not agree with our science or whatever, two scientists can disagree looking at the same thing, but I think it really is a sincere effort to keep the foundation of science.

[Larry Miller, Conservative, Bruce—Grey—Owen Sound, ON]

Mr. Groves, I hope you're right on that.

Another issue that has come up just recently, of course, is the E. coli in spinach and what have you. The disturbing part for me, not just as a politician in Canada but as a resident here, is that there is a history of product coming out of California that the USDA has commented on. It has kind of put up some warning signals--call them what you want--over products that are coming out of there. You could look at this E. coli outbreak in spinach as maybe something that should have been stopped or foreseen and caught. So I'd like to know what kinds of efforts and pressures you're putting on California, because it seems to be that one state or region, if I can call it that, that you're having problems with.

[Gary C. Groves]

From a U.S. government standpoint, the agency that deals with that is the Food and Drug Administration, rather than the USDA.

We have authority over meat, and so forth. It's just the way things are broken down. So it's the Food and Drug Administration that has actually made some of those indications to the industry in California that I think you're referring to.

I think they are really taking the heat on that. They have made changes. They are making changes, developing a plan for how to do so, because they obviously don't want their customers concerned about their products. When you deal with some of these buyers that they deal with, the Wal-Marts of the world, they get pretty specific on requirements, and so forth. So it's a very active thing going on in terms of what other action should be taken.

But in the meantime, they feel they've isolated the problem, that in this case U.S. spinach is safe. So there is not an immediate concern there for the product on the shelves. But you can always do things better, and that's the way the industry and the government out there are moving.

[Larry Miller, Conservative, Bruce—Grey—Owen Sound, ON]

You say you've isolated the problem, and that's fine and good, but at the same time, what new safeguards or new measures is the USDA proposing or putting the pressure on them to bring in to make sure it doesn't happen again?

It's one thing to deal with an issue when it comes, but we hope we learn something to make sure it doesn't happen again.

[Gary C. Groves]

That is something that's being actively done by the FDA. I don't know exactly what changes they are making to make sure this does not happen, but that is going to be actively done. We can't have this sort of thing with our vegetables, leafy vegetables particularly. So yes, it's something they are actively working on, and I don't know specifically what changes they are making or whatever, but I think there is a plan to go forward with this.

[Larry Miller, Conservative, Bruce—Grey—Owen Sound, ON]

Thank you.