Good afternoon, and thank you very much.
My name is Jim Laws, and I'm the executive director of the Canadian Meat Council here in Ottawa.
The Meat Council is Canada's national trade association of federally inspected meat packers and processors, established in 1919. The red meat processing and packing industry of beef, veal, pork, and lamb is the largest food processing industry in Canada, with total sales of $15 billion. Our industry employs over 45,000 people and is a major exporter of Canadian food products.
Our beef slaughter members include both large and smaller companies such as XL Foods, Cargill, Tyson, St. Helen's, Ranchers Beef, Levinoff-Colbex , Abattoires Z. Billette, Gencor, Delft Blue/Écolait, and Bellivo Transformation. They have invested millions of dollars in expanding slaughter capacity since BSE by almost 45%, from 75,000 to almost 110,000 cattle per week.
These companies, which represent almost 95% of the beef processed in Canada, are all federally inspected under the Meat Inspection Act of Canada. Veterinarians and inspectors are present in all establishments, and they follow strict rules under the meat inspection regulations and the manual procedures. Strict quality control measures are followed to provide safe and wholesome meat products to Canadians.
The Government of Canada published its proposed ruminant feed ban rules in the Gazette part I in December 2004. At that time the Canadian Meat Council and our Canadian Cattlemen's Association colleagues expressed our concerns that the proposals to amend the ruminant feed ban were not in step with those proposed by the United States. Specifically, Canada proposed the removal of all specified risk materials from animal feed, whereas the United States proposed a shorter list of risk materials to remove from older animals and from dead animals.
On June 26, 2006, Canada announced that it would indeed go forward with the full list of specified risk materials banned from all animal feed by July 12. The government also announced that it set aside $80 million to work with the provinces to assist industry's implementation of the plan. As of today, the United States of America has not yet published its final rule.
For animals less than 30 months of age, in terms of specified risk material, this can mean as little as two to three kilograms of specified risk material, the weight of a distal ileum. For animals greater than 30 months of age, the total weight of specified risk material can be as high as 40 kilograms per animal. The estimates vary widely based on factors such as the weight of the cattle and the ability of the packer to extract SRM with minimal additional tissue.
With over three and a half million head of cattle slaughtered every year in Canada and the capacity to kill over five million head, the volume of SRM that needs to be segregated and disposed of in an environmentally safe fashion is staggering. This involves a lot of commitment from the industry in terms of considerable changes in plant infrastructure, purchase of dedicated trucks, and investment in short-term and long-term disposal options for raw and rendered specified risk material.
The Canadian Meat Council members are very concerned that seven months have passed since the announcement of the new rules and only one province has announced the details of its program funding criteria. We had hoped the provinces would contribute an additional $50 million under fed-prov 60-40 funding agreements for this important animal health initiative that the meat processing sector is faced with, bringing the total funding to $130 million.
Beef and veal slaughterers and meat processors have their plans ready to segregate and stain ruminant specified risk material, but because of the considerable dollars that are required to be invested in the required plant and equipment, we have been waiting for the funding details from the provinces prior to committing to any plant improvements.
We have been working closely with the Canadian Food Inspection Agency on the specific rules and processes required to make changes to the manual procedures that will guide and direct our actions to slaughter and process in our facilities. We want to be ready and have all of our process-related questions answered to ensure a smooth transition to the new rules. We also want to clarify those processes to minimize the amount of material that is discarded along with the specified risk material, such as removing the distal ileum only, rather than the entire small intestine.
As Kathleen mentioned, we are very committed to meeting the regulatory deadline of July 12 to segregate specified risk material from the feed supply. The study we circulated to you earlier this week clearly indicates that we need to be ready to supply the feed mills. It indicates to us that we need to be ready by May 1. Our study indicated that full details of the program should have been made available to us by November 30, 2006, in order to make this deadline. Those ruminant feed ban enhancements that removed specified risk material required immediate action, as Kathleen mentioned--capital funding for plant and equipment; clarification on the rules, which have largely been clarified with the CFIA; immediate and long-term solutions for disposal facilities; and disposal operating costs.
As far as we're concerned, this is an extremely serious issue facing the industry. Many countries are expecting Canada to fully implement its ruminant feed ban enhancements by July 2007. Our BSE status at the OIE depends on it. We have already lived through the devastating impacts of closed borders and lost markets due to BSE, which cost our industry hundreds of millions of dollars.
We believe advocating for a delay in the implementation of July 12 is not an option for the Canadian beef industry. Standing back and doing nothing is not an option for the Canadian Meat Council. Most importantly, we must also fulfill the expectations of our customers.
We have sent a letter to the Minister of Agriculture expressing our concerns and requesting a two-year contingency plan that addresses the short- and medium-term disposal options for raw and rendered specified risk material. We have asked to meet with his staff as soon as possible to discuss this issue so that Canada can successfully meet its international obligations and our beef industry can comply with the July 12 deadline.
For example, we understand that some provinces currently are not fully engaged in discussions with the federal government, and claim they cannot participate in, or are not happy with, the funding they have received. We've been told that the funding must go through the provinces. The fact that there are different rules and eligibility criteria in each of the provinces causes us great concern. Ideally there should be one common set of rules applying to all companies across Canada.
Currently these slaughter byproducts are collected by renderers for meat and bone meal. After the feed ban there will be additional costs for disposal. Our options are very limited to us today, including raw SRM disposal. With funding not available through the provinces, the industry is truly in limbo.
With the United States considering opening their doors for Canadian cattle born after March 1999, and with no requirement to dispose of SRM in the United States, chances are that many cattle will go south, putting many packers at a competitive disadvantage. With the July 12 deadline fast approaching and options for SRM disposal being limited, some packers may be faced with having to reduce their slaughter rate to comply with these regulations.
We request that the Government of Canada and the provinces expedite the funding criteria for the $80 million and the $50 million provincial money, as originally allocated for this purpose, so that the industry can move ahead with implementing the regulations in time and with minimum disruption to the marketplace.
Thank you very much.