Evidence of meeting #37 for Agriculture and Agri-Food in the 39th Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was srm.
A recording is available from Parliament.
Conservative
Conservative
NDP
Alex Atamanenko NDP British Columbia Southern Interior, BC
Thanks very much for being here, folks. This is obviously a huge issue.
In our notes, we've touched upon on the issue of biofuels and the fact that there's going to be a demand for feed when it comes to biofuels. I've been doing some research and trying to get my head around this whole biofuel issue. The other aspect, though, is that there's apparently a plant coming up in Alberta that's to take in these SRMs and rendering products and make them into biodiesel, I believe it is. Do you see this as a way out, either in the short or long term?
In other words, ideally it would seem logical that you have this possibility. The federal government has said it wants to go forward on biofuels. There's some concern about corn, so it's looking at other things. Should we be going in this direction?
President, Rothsay, Maple Leaf Foods Inc.
If you go back to what I was talking about, it's important to note that there are two streams coming out of the rendering process. One is tallow-based, or oils. We're using some of it in our biodiesel plant in Montreal, which I believe some of you were scheduled to go to last June. Please reschedule, because you're quite welcome to come back again. But that has its own share of issues.
On the protein side, I believe there's a lot of work going on, but there's nothing commercial right now. Remember, we're talking about weeks or months, not years. Longer-term, certainly things like gasification or anaerobic digestion are all types of things that are being worked on. But we don't believe anything will be commercially viable over the next three or four months. I don't think anybody sitting here believes that is an option.
Brad, you're involved in that business too.
Vice-President, Canadian Cattlemen's Association
That's right. I'm in the biofuels business now. I have been for 15 years, and we've looked at this. We look at this as a potential on a couple of issues. It may have the potential to be biodigested to create methane and for thermal generation. It may become a feedstock, because we have a boiler for that.
The reality, though, is that there's not enough known about this product. A lot of research needs to be done. We also don't know what the value of it is, so what's going to be the input cost of that energy, and what's the output cost? That's why we're talking about this two-year transitional program for that product to get out there, for people to evaluate it, and to be able to see what sort of research occurs.
We think there are other, better uses than putting it in a landfill. We have a lot of concern about putting something in a landfill, because that's a contingent liability that goes on forever. But the reality is that it's the only option we have today, until some of these processes get researched.
NDP
Alex Atamanenko NDP British Columbia Southern Interior, BC
I'm hearing the idea that maybe we should have a two-year period. Is the consensus that we shouldn't have to meet our July 12 deadline? Is that what I'm hearing?
Executive Director, Animal Nutrition Association of Canada
We have to meet the July 12 deadline. If we don't, then we lose tremendous credibility with international markets. What we certainly said in our report, though, is that it's highly unlikely at this stage that we're going to have permanent infrastructure in place for July 12. We need to work together with the provinces and with the federal government to have what we're calling transitional measures, but we have to have some disposal mechanism for this material on July 12. Beyond that, though—and we noted this in our report—we can't stop working. Industry and government still have to work together to try to pursue some of these new technologies that are coming along.
Putting this material in landfill, as Brad and Kevin have said, is not a long-term solution to this problem. But if we just rest on our laurels after July 12, if we make it, then we're not going to see the development. We still have to continue to work together and we need a plan of action so that we stay on it.
Executive Director, Canadian Meat Council
We're also asking for these extra funds because there has been such a great delay in this capital money and because we think that all this $80 million and the provincial money is only going to pay for capital improvements, although we don't know because the rules haven't been made clear to us.
We've said that what's going to happen is that the market's going to crash and no one is going to want to take this stuff. Where are they going to put it? We figure that if we don't want this market to crash, we had better have some plan in place that's at least going to help the industry pay for the disposal of this stuff, so that the renderers will keep buying it from the packers and the packers will keep buying cattle from the cattlemen. It has to all be working together.
We're quite concerned. We saw what happened during BSE when the market crashed. This is making us nervous now that we're getting so close and nothing has been announced. We figure that if we can maybe get some federal-only program to help over the next couple of years, that will at least pay for disposal. But we know the challenges that are coming.
Executive Director, Canadian Cattlemen's Association
I just want to add that the two-year period we're talking about is a period of time for additional financial assistance. We're going to have higher volumes of product containing SRM because we're not going to have the infrastructure to segregate it, as we talked about earlier. We also have very limited places and uses for it.
We believe the technologies you mentioned are going to offer us some more choice, but commercially we're going to be lucky if they're available in 18 to 24 months. It could easily be 36 to 48 months when you take a look at where they are in terms of development and construction and at the type of environment we're seeing in parts of this country.
So no one wants to see this delayed, but we recognize that there is some potential serious financial hardship in the interim, while we try to get to a point where we can manage this more effectively.
NDP
Alex Atamanenko NDP British Columbia Southern Interior, BC
We can assume a couple of things, I think. One is that there doesn't seem to be an easy process between provinces and the federal government. I think the other thing we can assume is that the minister would like to do this as quickly as possible, to meet your demands.
If we were to start something tomorrow, what would the steps be? If you had a chance to make the rules and to put this in place, what would be the first three or four or five steps you would do, starting now?
Anybody.
Executive Director, Canadian Meat Council
I'll say a few things.
We need to make the rules known, make them clear. We need to set a bunch of rules that everybody in the industry across Canada knows. Everybody's working in a vacuum right now.
If you could influence the provincial agriculture ministries in your provinces, that would also be of great assistance, to try to tell them that this is serious business, and we need to work together as one country. This is a Canadian problem. Forget about provincial or whatever it is; we have to get this thing moving.
Executive Director, Canadian Cattlemen's Association
I chair the beef value chain round table, and we have discussed this issue. I think the first step, as Jim acknowledged, is pretty clear: we have to identify that this is a serious problem, and the current program is not going to be capable of addressing it.
The second thing we've asked for is that we convene a meeting very quickly, involving federal officials and the industry, with a commitment to work towards this transition program, not to sit there and argue for the next 12 weeks, as we did in the early part of the BSE crisis, on whether we need to do something. We need to roll up our sleeves and decide how we address this instead of whether we need to.
Once we sit down, I think among the people around this table we could come up with some pretty workable solutions fairly quickly to address this issue. But the last thing we need to do is get into another federal–provincial agreement scenario that usually takes up to 18 months to work to a conclusion.
Conservative
The Chair Conservative James Bezan
Thanks, Mr. Atamanenko.
I just want to follow up on what Mr. Laycraft was saying.
Now, there are steps to be taken. Some of the provinces have started down that path, and some haven't. Which provinces do we need to talk to? I think Mr. Laws suggested that we should go and talk to our provincial counterparts, if need be, to get them back on track, and so that they understand this urgency. Which are the provinces we're dealing with? What steps need to be taken?
It was mentioned here that we should come up with a plan fairly quickly. Have you looked at other models around the world that are facing the same situation with SRMs, particularly over in Europe? What have they done to rectify this situation?
February 15th, 2007 / 4:45 p.m.
Executive Director, Canadian Meat Council
I think you probably should be asking the agriculture ministry which provinces are farther along in discussions than others. They are the ones that are intimately involved in this, and they know the answers. We hear things, but they have the actual facts.
In terms of what's happened in the rest of the world, we saw what happened in Europe, where the governments bought up all this ruminant meat and bone meal and had it in storage for years and years. We're not advocating that, but we are advocating some type of assistance with disposal costs.
With regard to the details, as Dennis mentioned, we'd have to sit down with the government authorities and find out the best way to fund that so that the market won't collapse, the industry won't collapse, and we can keep it moving so that we can meet the July 12 deadline.
President, Rothsay, Maple Leaf Foods Inc.
From a decision-making standpoint, as I laid out here, all the provinces are important, but the three provinces that have the most volume are Alberta, Quebec, and Ontario. They are all in at least forms of dealing with whether to render the product down and find a way to dispose of it. Pretty much all of them are waiting for the decision made on capital.
As I said about Sanimax--Mr. Bellavance had asked the question—they have done the engineering. They are waiting for the final go-ahead and then they will go. But they need to know now. Decisions have to be made immediately.
So really, time is of the essence.
Executive Director, Animal Nutrition Association of Canada
The Canadian Food Inspection Agency, as I mentioned, has formed a task force to head up coordination of the ban. This is a daunting task, because it really is just coordination; in many cases, they have no authority to make the provinces do anything. Their chairman, Freeman Libby, is actually travelling across the country, even as we speak. He's meeting with the different provinces to try to overcome hurdles and challenges.
Having said that, as far as we know, no province has signed the federal-provincial funding agreement. That would suggest that every province is ripe for a conversation about moving this initiative forward.
Executive Director, Canadian Cattlemen's Association
Mr. Chairman, I certainly need to involve the provinces, because they are an important part of this solution. But we don't need a new set of federal-provincial agreements to address this.
That task force that is moving around the country is starting to look at transition measures. The reality is that we're going to have to make some decisions fairly quickly to put the type of assistance in place that's necessary to address this. We can sit down within industry, and with this group, and work out details fairly quickly, but more often than not, what we hear is that there's nothing available.
Conservative
Liberal
Paul Steckle Liberal Huron—Bruce, ON
Very quickly, we're approaching five years since we started this process with the animal found in Alberta. I think we were aware then that we would be coming to the point where we would ban SRM products from animal feed.
We have a government that has committed $80 million; we have provinces that have not committed any part of that money. We're not coming together on it. I think both feds and provinces are totally responsible.
But I also have a problem. Who got us into this situation where we're now committed to July 12? We're committing ourselves to something the Americans are not.
I understand that for us, consumers around the world, and our markets--which we have now or are proposing to get--there's a benefit there. Are we going to benefit in the Taiwan market, the Japanese market, the Indian market because we've taken the extraordinary step that Americans have not? Are we going to follow behind in the footsteps of the Americans and take whatever spoils are left? I find it's always that they call the tune and we pay for it. I'm frustrated.
What has made it a requirement for us to do this when the Americans are not doing it? We did it on the feed ban. We had a joint date, I believe, in 1997, when we agreed to stop using the feed. Why are we not together on this one?
Vice-President, Canadian Cattlemen's Association
I would say this, Mr. Steckle. Of all the countries in the world that have had a BSE occurrence, to date there are only two countries that have not implemented a full feed and food ban, and that's Canada and the United States. We're going to--certainly that's expected--and the U.S. hasn't.
My second point would be that if you look at the international review committees that looked at our BSE and appropriate structures, the last of their recommendations is that we should have this feed enhancement in place. So we've done that.
Third, it's a very critical component of our submission to OIE for controlled risk status, which will start to open up some of these markets. We hear from CFIA--and I don't like to speak for them because I don't want to misinterpret this--that many of these markets that are closed to us are waiting for us to have a meaningful and full feed ban in place. That's why we support it.
We have the same concerns as you've echoed, and I think you've articulated them very well. We have this problem of wanting a full food and feed ban enhancement because we need international markets, yet we still need to be competitive with a country we live beside and compete against every day for meat and cattle that isn't going to do that. Perhaps they don't feel they need to because of their market power and dependence on international foreign trade. Perhaps they think they don't need to go there. Perhaps there's some sort of naiveté, I would say, on their part, that they're not convinced they really have BSE. I think you hear some of those things.
The reality for us is that we have to go there. We've all bitten the tough bullet to say yes, we have to get this done. If we said the implementation date is July 12, 2010, I think we'd be here in February 2010 telling you how imminent this issue is. It seems that this deadline is finally starting to drive some movement. We're the industry that has to get it done.
We're here to say we're ready to go, but tell us what the rules are. Tell us whether we can start while you get some of this done and not disqualify ourselves. Once we have that, then how much of the $80 million is left for some of these other issues? We simply don't know any of those things, because we don't know how much is going to spent on capital or how much will be ready for operational and transitional programs.
Here we are. We are waiting to move, anxious to move, committed to move, but we are unable to move.
Executive Director, Canadian Cattlemen's Association
I want to add that as we analyze this from the round table, one of the issues is that we export close to half of our production, and the U.S. exports about 10% of theirs. We're far more vulnerable than they are.
We recognize, through the work we've done, that the current feed bans in North America will eventually lead to eradication. It's not that we don't have effective feed bans. That's the first point I want to make sure, since this is recorded.
Secondly, this has the potential to shorten that timeframe by about 50%. Obviously the faster we can get to negligible risk, we believe long-term that will have benefits for the industry. But we have to make sure in the meantime that we don't push our processing industry out of the country again. That's what really drove the greatest part of the crisis in 2003-04. We just had more cattle than we had the ability to process. We watch that very carefully.
Liberal
Paul Steckle Liberal Huron—Bruce, ON
Yes, that takes me to my other point. It's probably the last point I'll have, but it's a concern. You've raised it, and I think Mr. Laws raised it. It's the fact that so much of our beef already, in the last year, has been going south. We're at about 75,000, and we have a capacity of 100,000 plus. As government, we put some money into the industry to build capacity, and we see the beef flowing south. I see a greater incentive to move south when they don't have to rid themselves of the SRM. There's a value there that they can capitalize on--send the beef back up into Canada.
Now, we invest government money into capital. How much of that capital is going to be put into plants that are going to be redundant five years from now because the industry has moved south? I don't want to leave us on that note, but it is a concern and I think all of us need to be thinking about it.
