Good afternoon. My name is Kevin Golding. I'm president of the Canadian Renderers Association and president of Rothsay Recycling, one of the member companies.
The Canadian Renderers Association represents Canada's independent renderers. By way of background, the committee needs to draw a distinction between a packer renderer and an independent renderer.
Packer renderers render their own slaughterhouse waste material. These are ruminant-based packer renderers--for example, the two in Alberta: Cargill and Tyson.
Independent renderers service the rendering requirements of the entire protein chain. This includes packers that do not possess rendering capabilities as well as butcher shops, small slaughterhouses, grocery stores, etc. This environmental service is provided for a fee.
Packer renderers do not render dead cattle. The pick-up and disposal of dead cattle from farms, feedlots, and slaughterhouses varies from province to province. Generally speaking, dead cattle remain on the farm, or they are removed and rendered for a fee. Fees charged by independent renderers are offset by the value of finished product produced from rendered raw material and the value of rendered hides in the case of dead stock.
The rendering process works as follows. It reduces and recycles animal waste tissue by high-temperature cooking and evaporation. This process reduces the raw volume by about 50%, and it yields useful finished products. Products produced from ruminant-derived raw material are tallow, and meat and bone meal. These finished products are traded as commodities, with the prices for them changing weekly. Tallow is used for a multitude of industrial purposes, and meat and bone meal is used as a high-protein ingredient in non-ruminant animal feed.
The enhanced feed ban due to come into effect on July 12 requires separation of SRM from other ruminant waste material. The enhanced regulation requires that the meat and bone meal derived from SRM be destroyed by incineration or containment. Similarly, SRM that has not been rendered must also be destroyed, contained, or composted.
The federal government has announced the availability of funds to facilitate the separation of SRM from all other ruminant material. It is understood that these funds will be allocated among the packers, renderers, truckers, and others involved in dealing with the separation, collection, rendering, and disposal or destruction of the SRM. However, as we've heard, the allocation of funds has yet to be determined. Industry plans to separate SRM are generally on hold until the amount of funds available to each participant in the SRM chain is announced.
At present, members of the Canadian Renderers Association render most of the ruminant waste material generated in Canada, unless it's rendered by one of the packer renderers that I mentioned. Until proper separation can be achieved, most ruminant material rendered by independent renderers will be treated as SRM. The value of meat and bone meal derived from the SRM-free material that is co-mingled with SRM material will be lost. This will result in substantial rendering fee increases, which will not be mitigated until new separate rendering lines are in place to facilitate the separation and value retention.
The problem of SRM varies by region and province. Plans for separation have been communicated to federal and provincial government officials by members of the Canadian Renderers Association and individual company representatives. However, implementation of separation plans, other than interim compliance, will not proceed until individual companies receive funding commitments from provincial governments responsible for administering the federal assistance program.
Unless and until separation plans are implemented, most ruminant raw material currently handled by independent renderers will be treated as SRM in compliance with the enhanced feed ban regulation on July 12, 2007. As Kathleen said, it actually will be earlier than that, as soon as her members stop buying our product.
Loss of meat and bone meal revenue, increased trucking costs, and additional handling fees and land tipping fees will result in substantial rendering fee increases, which will not be mitigated until separate rendering lines can be built to process SRM-free ruminant material. Economic considerations do not support the building of additional lines if the promised capital funding support is not forthcoming.
Although CRA members expect to implement interim solutions for compliance with the enhanced feed regulation on July 12, delays in making federal government funds available to the renderers for necessary capital improvements will increase disposal and destruction costs more than originally contemplated. These costs will not come down until improvements can be completed. In addition, even interim compliance may be impossible in some provinces unless permitting decisions related to landfills are resolved.
I'm going to give you a short status report on each of the provinces or regions in which Canadian Renderers Association members operate.
With respect to Alberta, B.C., and Saskatchewan, interim plans are in place to deal with SRM in these three provinces. The independent rendering company that is currently processing ruminant material in these three provinces will treat this ruminant material as SRM until such time as it's able to separate and add a separate processing line to facilitate the production of meal and bone meal derived from the SRM-free material. The separation and construction of a separate processing line remains dependent on capital funding assistance being given to this company. The independent renderer operating in these three provinces also expects to receive and process SRM material from the two packer-renderer companies based in Alberta.
In Ontario, Atwood Pet Food will be in a position shortly to render the 250 to 300 metric tonnes per week of dead stock, which is in balance with the dead stock currently collected today in Ontario.
Because the government funding has not yet been released, Atwood has not begun construction to accommodate the approximately 160 metric tonnes per week of slaughterhouse SRM material. This material will have to go to landfill in the interim. In the long term, the slaughterhouse SRM material will be disposed of based on the most economical solution: rendered, to landfill, or some other form. As of yet, no equipment, containers, trucks, or trailers have been ordered or purchased to collect or transport any of this material, and no landfills have been approved to receive either the rendered finished or the raw SRMs.
The meat processing plants are in various stages of design and implementation of the changes required to meet the SRM regulation, and it's uncertain whether all the plants can be ready by July 12.
In the Maritimes, despite our company's efforts, there's been very little discussion between government and industry, and we're unaware, at this time, of plans in those three provinces to deal with SRMs.
In Manitoba, since BSE in 2003, ruminant material has been collected from the small abattoirs in the province and taken to landfill. The province has occasionally sponsored a ruminant dead-stock cleanup program, and that material has also been taken to landfill. It's expected that the ruminant material will continue to go to the dump as a long-term solution for Manitoba.
In Quebec, on July 12, SRM could be processed with non-SRM mixed material at a cost of approximately $286,000 a week, or more than $50 million a year. The non-SRM raw material provider will not bear this cost. This company, Sanimax, has gone through the engineering, planning, permitting, and price quotes phases for a dedicated SRM processing line at the Lévis, Quebec, plant. If the provincial-federal agreement with Quebec giving the go-ahead to Sanimax is not finalized within two weeks, a dedicated SRM processing line will not be ready by July 12, let alone by May 1. Sanimax does not believe that all the ruminant slaughterhouses will be ready for July 12.
Thank you.