Agriculture Committee on Feb. 28th, 2007

[The Chair, Conservative, James Bezan]

I call this meeting to order.

We're continuing with our study on SRMs, on the ban that's coming into effect on July 12.

We welcome to the table today Susie Miller from the Department of Agriculture and Agri-Food, Graham Clarke from the Department of Agriculture and Agri-Food, and we have from the Government of Alberta, John Donner and Gerald Hauer. We also have from the CFIA, Freeman Libby and Brian Evans. From the Government of Saskatchewan, we have Harvey Brooks and Paul Johnson, and from the Government of Manitoba, we have Allan Preston and we are still waiting for Mr. Horner and Mr. Schellenberger who we hope will come in later to participate.

Because we have such a large number of witnesses today, we're asking everybody to keep their comments as short as possible. Your maximum time is ten minutes, and I will intervene if you're going over that time.

With that, we'll start off with the Government of Canada comments, and we'll turn it over to you, Dr. Evans.

[Dr. Brian Evans, Chief Veterinary Officer of Canada, Canadian Food Inspection Agency]

Thank you very much, Mr. Chairman. Good afternoon, honourable members and ladies and gentlemen.

I appreciate the opportunity to appear before and support the work of the committee. My name is Dr. Brian Evans. I am Canada's chief veterinary officer, and I work with the Canadian Food Inspection Agency, also known as the CFIA. As this committee will well be aware, the CFIA has regulatory responsibility for the safeguarding of food, animals, and plants for Canada.

Canada's existing mammalian-to-ruminant feed ban was introduced in 1997. Following the detection of our first domestic case of BSE in Canada in May 2003, an international panel of BSE experts recommended, among other things, the complete removal of specified risk material, SRM, from both human food and animal feed. I'm sure most of the committee members are aware that those are those tissues, based on research determinations thus far, that have demonstrated the potential to harbour BSE infectivity.

The government moved immediately to require SRM removal from the human food chain. After extensive consultations with stakeholders, the government announced in July 2004 that it would be requiring SRM removal from animal feed. The proposed regulatory amendments were formally published in the Canada Gazette part I on December 11, 2004.

In-depth government industry workshops were held in nine provinces from late 2004 to mid-2005 to help understand the practical challenges associated with SRM disposal, and the CFIA pre-assessed a range of possible disposal techniques. After further analysis and consultation, the final enhanced feed ban was gazetted on June 26, 2006, providing for a further 12-month transition period to full enforcement.

The principal enhancement requires that all SRM be removed from the entire feed, pet food, and fertilizer chains effective July 12, 2007. Small, non-federally registered abattoirs will be given an additional six months to comply with certain of the requirements.

While Canada's current feed ban can be expected to eradicate BSE over several decades, the effective implementation of the enhanced ban is expected to accelerate this to within 10 years. This will be achieved by removing over 99% of potential BSE infectivity at the top of the chain to avoid any possible cross-contamination in other processes.

While Canada's market recovery subsequent to May 2003 has been unprecedented and it is clear that the international community has respect for Canada's efforts and investments made in the disease mitigations to date, the need to eliminate cross-contamination opportunities in the feed system is fundamental to further market access opportunities. Industry has been strongly supportive of Canada's pursuit of official recognition on the part of the World Organization for Animal Health, known by its previous French acronym of OIE, as a BSE controlled-risk designated or recognized country.

In presenting its case to the OIE evaluation team of international subject matter experts in January this year, it was very clear that Canada's commitment to the introduction and enforcement of the enhanced feed ban on July 12, 2004, was critical to our achieving such a designation. Any indication of Canada changing its intent to implement an enhanced feed ban would provide OIE member countries with the basis to not adopt a controlled-risk status for Canada in the general session in May. Such a result would relegate Canada to the status of an unknown-risk country, with associated resulting domestic and international repercussions. For these reasons, the industry understands the benefits of the enhanced feed ban and stakeholders recognize the need to keep to deadlines on its implementation.

Although waste disposal is within provincial jurisdiction, it was determined that a contribution by the federal government to develop SRM waste disposal infrastructure was in keeping with other measures taken by the federal government to assist the industry to respond to BSE.

The federal government set aside $80 million to help provinces put in place programs that would assist industry to adapt to the enhanced regulations and for research on disposal methodologies. This funding commitment was predicated on a federal-provincial cost sharing of 60% federal-40% provincial funds, with an expectation that industry would also contribute to these waste management and research costs. Provinces submitted program proposals to AAFC that outlined actions they would take in the context of industry needs.

When this government announced the enhanced feed ban, authority was also provided to proceed with the $80 million commitment. Allocations among provinces were finalized according to the proposals submitted and the needs articulated. Care was taken to ensure that the results of the programs would lead as much as possible to an equivalent outcome across the country and that they would address the needs of smaller abattoirs.

Given that this is a federal contribution to provincial programs, the provinces will be responsible for the development and implementation of the SRM waste disposal programs, including the receipt and evaluation of project proposals, the approval of individual projects, and the determination of which costs will be recovered. Although some provinces have included research as an eligible activity, most provinces will spend the bulk of the program funding for the creation of waste disposal infrastructure, such as SRM rendering facilities, incinerators, landfills and for transportation of SRM material.

As with other program transfers by the federal government to provinces, the federal contribution is specified through federal-provincial agreements, now being finalized. There is specific provision to permit the inclusion of provincial contributions since December 2004 and federal contributions to expenses incurred since December 2006. These agreements are being finalized with all jurisdictions, and we expect signatures from many of them within the next several weeks.

Prior to and since the publication of the regulations, we have worked with our provincial and territorial colleagues, as well as industry, to be well positioned to implement the enhanced feed bans. Since 2003, we have spent countless hours working on this. We have met on more than 64 occasions and held over 110 conference calls with the federal-provincial-territorial network, including the agriculture policy assistant deputy ministers, the regulatory assistant deputy ministers, deputy ministers, and the ministers committees to discuss and plan for the enhanced feed ban and the broader BSE recovery. This subject will continue to be an agenda item for future federal-provincial-territorial calls and meetings at every level. As well, the federal-provincial-territorial feed ban enhancement implementation task team has had a total of eight conference calls and five meetings. A federal-provincial-territorial meeting on November 29, 2006, included representatives from industry sectors.

In addition to this high-level dialogue, the CFIA has established a feed ban task force, with participation from Agriculture and Agri-Food Canada, to complete the federal component of implementation and to facilitate the resolution of outstanding issues involving industry and the provinces.

Over the past few weeks, Agriculture and Agri-Food Canada officials and the head of the feed ban task force, Freeman Libby—who is with us today—have been meeting individually and with provinces to accelerate the sign-off of the funding agreements; to discuss each province's state of readiness with respect to waste disposal strategies for both the short and longer terms; and to better understand the impact of the new requirement on industry sectors and explore options for bringing the various sectors into compliance with the deadlines provided.

We have met with eight provinces and we will shortly meet Ontario and Newfoundland. We are also working with industry to plan for implementation. Outreach activities include national meetings with large industry organizations, regional workshops, and pre-assessment of SRM disposal methods. CFIA has also launched a national communication campaign to target key groups. Copies are available for the committee.

The industry believes in the benefits of the enhanced feed ban, and stakeholders are adamant about the need to keep to the July 12 deadline. We also believe we need to stay the course, and we are confident that everything will be done at all levels to allow the industry to meet the deadline of the enhanced feed ban and thereby maintain public and consumer confidence within Canada and beyond.

We respect both the time and the needs of the committee and would be pleased to answer the committee's questions.

Thank you, Mr. Chair.

[The Chair, Conservative, James Bezan]

Thank you, Dr. Evans, for staying well within your time limit.

With that, I'll turn it over to Alberta and Mr. Donner. You're making the presentation, I believe, for Alberta?

[John Donner, Assistant Deputy Minister, Environment and Food Safety Sector, Department of Agriculture and Food, Government of Alberta]

I am. Thank you, Chair.

Good afternoon. With me today is my colleague Gerald Hauer, assistant chief to the provincial veterinarian of Alberta.

I believe, Mr. Chair, you are in receipt of a letter from my minister, the Honourable George Groeneveld. The letter outlines that although it's unusual for us to appear before a committee of the House of Commons, we're here through a sense of partnership to achieve the feed ban and accelerate BSE elimination. We're also here--because it is of sufficient urgency and importance--to indicate the progress we're making on this file.

Just to remind you, in case you're wondering, Alberta is beef country. We account for a significant proportion of the herd. As the picture displays, we have slaughter facilities, both federally administered and provincially administered, throughout our province.

We've heard the importance I think of the July 12 effective date, and we want to reiterate that we are committed to that date. The federal government has identified the share of funding that's available to the Province of Alberta. As the minister pointed out, we have funding identified from the Alberta Treasury Board. We have a clear plan for how we're going to implement. And based on today's meetings, we believe an agreement with the federal government is imminent to allow us to move ahead to announce and proceed with implementation.

I just want to take a moment to outline the nature of our plan. Again, we have $20 million identified. That is in excess of our normal 60-40 sharing. Our plan indicates that we are going to apply some of that to some additional relief for provincial facilities, for ongoing operational expenditures, and also for research.

As for the principles under which we're operating, we want to make sure that we have an effective, timely feed ban, that we facilitate adaptation of the industry, and that we minimize any negative economic impact on industry.

What I really want to do here is provide a sense of the systemic approach we've taken to this issue. We are looking at farms, federal plants, provincial plants, and the collection of that material and its safe disposition--first in containment, then in destruction, and ultimately in value-added development that creates an effective market for SRMs in Alberta.

The black lines indicate the critical path, the key things that must be done immediately, in the short term--it is very short--and in the long term to bring this about. This also reflects on where we are committing our resources. We are committing resources focused on, first of all, those black-line elements on that critical path. These focus on developing the rendering capacity for SRMs, as well as non-SRMs, to maintain the value for the producers. We are looking at assistance to the federal red meat...to develop the separation facilities in order to take advantage of this second line of SRM. We are looking at enhanced access--first to landfills, second to cement kilns--in order to have first disposal and containment and then disposition. Finally, we are looking at addressing the tipping fees so that we reduce the costs associated with that.

In the longer term, we are looking at developing the other technologies that will create an effective market for the SRM and increase the value so that we are not only reducing the cost but perhaps creating a value proposition for the SRM.

This implementation plan has been developed in close collaboration with regional CFIA, regional Agriculture and Agri-Food Canada, and a variety of Alberta government departments. We have confidence now that we have the immediate solution, enabled by the CFIA decision two weeks ago, that allows us to be clear that we will have two tracks available for compliance as of July 12.

We have been sharing information with the industry throughout the process. We have not yet made a program announcement, pending completion of the federal–provincial agreement. We expect that will be coming, as we say, shortly.

What are the take-away messages? Although there has been delay, we're on track for on-time implementation. The capital costs are cost-shared among the governments. We've chosen to add funding for operational expenditures for transition. And we know that the federal government will treat all provinces equally in terms of the time of signature of agreements.

Respecting the committee's time, that concludes my presentation.

[The Chair, Conservative, James Bezan]

Thank you.

I will turn it over to Mr. Brooks from Saskatchewan.

[Harvey Brooks, Deputy Minister, Department of Agriculture and Agri-Food, Government of Saskatchewan]

Good afternoon.

I am pleased to be here to represent Saskatchewan Agriculture and Food. I have with me Paul Johnson, who is the manager of our policy branch.

With Canada's second-largest cattle herd, about 21.7% of the national total, the subject we are discussing today is of great importance to our producers and all stakeholders in our beef value chain. I want to provide an update to the Standing Committee on Agriculture and Agri-Food on the state of readiness for SRM segregation and feed-ban regulations in Saskatchewan. I will also speak to some of the challenges we have with the regulation and the implementation process. I am pleased that we have the opportunity to inform members of this committee about what is happening in Saskatchewan.

As you may be aware, provincial funding was approved to cost-share this program on Monday, February 26, 2007, which was two days ago. Now that the provincial funding has been approved and published, we will be able to move quickly to finalize program regulations in our province and to finalize the federal-provincial agreement. With provincial and federal funds, my department will now move to administer the Canada-Saskatchewan SRM management program. While the details have yet to be finalized, we are planning to announce full program details in the coming weeks. We are very engaged on this file.

My department, in conjunction with Agriculture and Agri-Food Canada, held the first public meeting with stakeholders in our province on June 1 and 2, 2005. Since then, we have held numerous public and private consultation sessions with our stakeholders. On many occasions, these sessions were jointly held with the Canadian Food Inspection Agency.

As our consultations continue, Minister Mark Wartman and I recently toured the Saskatoon processing rendering plant and discussed the modifications to their plant that are necessary to comply with the regulations. We have been in regular contact with XL Beef in Moose Jaw, and I have personally toured their operations to understand the infrastructure changes necessary to comply with the federal regulations and the timing of their construction schedule for the necessary renovations. We're working very closely with our industry to develop solutions and plans to properly handle and dispose of SRM.

I believe that the state of readiness in Saskatchewan is relatively advanced, given the challenges the industry is facing across Canada. There are some gaps, and we recognize that, but we are working diligently with stakeholders to bridge those gaps.

To better understand the state of readiness in Saskatchewan, the committee should know that XL Beef in Moose Jaw is Saskatchewan's largest cattle slaughter facility. They kill about 85% of all the slaughter animals in Saskatchewan. We've had numerous conversations with XL Beef and are reasonably confident that they have a plan for handling and disposing of SRM that will work. We have concerns that their slaughter plant in Moose Jaw won't be fully renovated in time to meet the July 12 implementation deadline, but we are working on contingency plans with them to ensure that proper segregation and disposal is maintained prior to them fully being completed.

Our other federally inspected slaughter facility, Natural Valley Farms, has developed and implemented an on-site waste management system that includes SRM. They're confident their facility will be fully compliant by July 12. Because of the size of the federal plants in Saskatchewan, plans will be in place that will allow the vast majority, greater than 95%, of our industry to be in compliance by July 12. We do have some issues to overcome in the short term, but our planning and industry preparedness is well advanced with our federal processors.

The situation is a little different when we talk about the non-federally inspected beef processors. In total, we have approximately 90 facilities in the province that slaughter and process beef. Two of these are federally inspected, 12 are inspected by CFIA under agreement with the province, and the remaining are licensed by the provincial health department.

The breadth of the slaughter industry in Saskatchewan is unparalleled in Canada and literally covers the whole province. The operations are spread out over hundreds of miles, and the volumes of cattle they slaughter are small in comparison to the main processors.

In some respects, solving the challenges placed on our smaller processors as a result of the federal regulations are more daunting. For those of you who are very familiar with this file, volume is a significant factor in minimizing costs of disposal. The frank reality is that other than in a few clusters in Saskatchewan, we don't have the volumes of slaughter waste materials to keep costs minimal.

Yes, the processors are relatively small and somewhat insignificant in the national picture, but as members of the committee can appreciate, those small processors are just as important to their rural community as a large processor is to its community.

I want to spend a couple of minutes discussing the development of the federal regulation. Saskatchewan has been actively involved in trying to craft this regulation, and we agree that the science behind the regulation is solid.

It is in the best interests of the industry to eradicate BSE as quickly as is practicable.

As some of you may be aware, throughout the federal–provincial consultation process, Saskatchewan raised concerns regarding the economics of the regulation. The new rules will add costs to slaughter in Canada. They are new costs, and they are permanent. They are also unique to Canada in the North American market. Processors in the U.S. will not be subject to these higher costs—at least not yet—and that will impact the economics of cattle slaughter in Canada.

We support a policy of harmonization with the U.S. feed ban. They will argue that they have a lower risk for BSE, but we believe the global marketplace has and will continue to treat our nations the same.

We can't lose sight of the fact that the U.S. is and will remain our largest and most important export market for beef and cattle. A policy of harmonization with the U.S. would have helped to keep our slaughter industry competitive. Now we are faced with the reality that perhaps more animals may be shipped south for slaughter.

Another issue of concern to Saskatchewan is federal funding and the process used to allocate federal funds to provinces. In the federal 2005 budget, it was announced that $80 million in federal funding was set aside to help the industry adjust to the enhanced feed ban. Several months later, provinces were informed that there would be a requirement to cost-share 40% on top of that, and we were informed that we would need to be a financial partner to help alleviate the costs created by that regulation.

In addition, the allocation of the $80 million is an issue with our industry and with the Government of Saskatchewan. In Saskatchewan's original proposal for SRM funding, which was submitted and accepted in November 2005, we proposed a formula to allocate funds. The formula we proposed was based on a weighting of the slaughter capacity of the various jurisdictions and the size of the relative cattle herds. It would have been a fair and transparent process to allocate federal funds.

The proposed formula was not put forward for discussion, and Canada used instead an allocation process that has not been fully disclosed to the provinces or the stakeholders. We have asked for clarification on how the money was allocated but have not received that. We have only been shown the final results for the jurisdictions.

We have significant concerns as well about how the feed ban is developing across Canada. We had called for a national program, with national rules and national criteria for eligible expenses and program funds. In this manner, all stakeholders, regardless of where they are located, would have access to similar levels of government support with identical parameters. Processors in Saskatchewan would then be confident that eligible expenses and the level of support would be equitable across all jurisdictions.

Instead we are developing a system of ten different agreements, with potentially different eligibility parameters and different funding support levels. I am encouraged today to hear that we will all have access to the same rules at the end of the day.

To conclude, I am confident that Saskatchewan is in good shape with respect to our ability to be compliant on July 12, 2007. There are still gaps, but we are working with industry and stakeholders to bridge them. As you now understand, Saskatchewan has raised issues with the federal–provincial program funding that is part of this process. As it has evolved, we now will have a very fragmented system of the programs across Canada that will be more difficult to explain to stakeholders.

That said, we recognize the importance of supporting our livestock and processing industries to address the increased costs of complying with this federal regulation. It's important to remember that this is not an issue of food safety or quality. It's an animal health measure that will place restrictions on feed, not the food produced by the processors.

Because of the federal regulation, additional handling and segregation of cattle slaughter waste and dead cattle are now necessary components of livestock production processing in Canada. As we continue efforts to expand the livestock industry in Saskatchewan, it's important that all elements of the value chain continue to function properly, from the producer right through slaughter, processing, and waste disposal. The investments we will make with this funding will help our industry to remain competitive.

Thank you for the opportunity to be here today and to clarify our readiness and the readiness of the Saskatchewan industry to meet the regulatory requirements on July 12, 2007.

[The Chair, Conservative, James Bezan]

Thank you.

I'm saving the great province of Manitoba for the end—and I'm not biased at all.

Dr. Preston.

[Dr. Allan Preston, Assistant Deputy Minister, Department of Agriculture, Food and Rural Initiatives, Government of Manitoba]

Thank you, Mr. Chairman. It's a pleasure to be here to speak to the committee on behalf of Minister Wowchuk and Agriculture, Food and Rural Initiatives.

I'll try not to be repetitive, but I will echo some of the comments that have been made. I think some of the comments are worthy of repetition.

First of all, let me state that Manitoba is fully supportive of the enhanced feed-ban regulations that will minimize the risk of potentially infected feed or fertilizer entering the ruminant feed chain. Going back to the beginning of the BSE situation in 2003, the international scientific panel, in its report, laid out some key points for Canada. One of them was the recommendation to enhance the existing mammalian-to-ruminant feed ban by moving to a full SRM ban. My province has lobbied vigorously for an introduction of this enhanced feed ban and has pressured the federal government to move more rapidly than it has.

Canada is in a position to have its BSE country status assigned to the controlled risk category, a categorization that will assist us in accessing more international markets for live cattle and beef products. A significant factor in moving into this controlled risk category is the presence of a full SRM feed ban. Without the implementation of the feed ban on July 12, Canada could be at risk of falling back into the uncontrolled risk category.

There will always be issues around the mechanics of the feed ban; issues of containment and disposal and destruction of SRM; and, most significantly, as has been pointed out by others, issues of the cost of the feed ban to the cattle and meat industry. However, the simple fact remains that the cost of not proceeding with full implementation far exceeds the aggregate cost of failing to meet the recommendations of the international community.

From the Manitoba perspective, as most of you will be aware, we have limited federal slaughter capacity. We have one federally licensed establishment in Manitoba, but we have 24 provincially licensed abattoirs. The province produces approximately 8,000 tonnes of inedible slaughter waste per year, and there's no segregation of SRM from the rest of the inedible waste at the present time.

We also produce something in the range of 12,000 tonnes of dead stock per year. We have no provincial capacity to render this material. In June 2003, our only provincial renderer elected to move to a dedicated line to render non-ruminant material only. Therefore, since that time, all ruminant inedible offal has had to be disposed of using alternative methods, primarily deep burial in landfills and composting.

Rothsay, the rendering company, continues to play a significant role in the movement of SRM and inedible offal from our provincial plants to landfill sites. Their service, with dedicated vehicles, accommodates our one federal plant and approximately nineteen of our provincial plants in the southern part of the province. The remaining plants that are outside of Rothsay's coverage area either use composting or deliver their SRM and offal directly to a local landfill. These are the plants that will be most impacted by the new regulations if indeed existing landfills are unable to meet the criteria as outlined by the CFIA.

For those plants that are currently using composting as their major means of SRM and offal containment and reduction, they will continue to use this methodology and will work with CFIA to procure the necessary permits to move the compost off-site as required.

With regard to dead stock, the other very major component of SRM, producers have had to resort to their own disposal systems since 2003, when the dead stock pick-up service for rendering was terminated. Apart from two provincial programs in the springs of 2004 and 2005, set up to assist with removal of dead stock from the landscape, as well as to provide the necessary BSE surveillance samples, the province's cattle producers have had to deal with dead stock disposal completely on their own, utilizing the approved methods under the Environment Act, mainly deep burial, composting, and incineration.

In terms of the Manitoba solutions, again in keeping with the disposal methods approved under our Environment Act, the province has been seeking SRM disposal options that concentrate on these methods of incineration, deep burial, and composting. We recognize that deep burial and composting provide containment only and do not address the issue of destruction of prions.

Municipalities must provide waste disposal services for waste produced in their municipalities, including dead stock. However, many municipal landfills refuse to accept dead stock. In addition, apart from the few class 1 landfills in the province, most municipal landfills do not have a leachate collection system, as required under the revised regulations.

Manitoba plans to utilize the funds from the program that we're now talking about to support regional solutions for the disposal of SRM and slaughterhouse waste. As I've indicated, these solutions will initially concentrate on incineration and composting. Other methodologies, including gasification, alkaline hydrolysis, and thermal hydrolysis will also be investigated. We are also already doing some research on various methods of gasification and larger composting sites.

An interesting twist in our province is that we are working side by side with Manitoba Health to look at some common sites for incineration, to dispose not only of SRMs and the inedible offal from our slaughterhouses but also medical waste. There's a synergy to be had by having one incinerator serving many purposes.

While the funding that's available is never sufficient, the combined $10.3 million from the federal government along with $7 million from the province will move us a long way towards a solution to the SRM issue. While we have not yet signed our federal-provincial contribution agreement, it has been thoroughly reviewed and is nearing completion.

The one area of concern that is left to be reviewed is the environmental assessment requirements under the Canadian Environmental Assessment Act. We anticipate that those will be resolved very shortly.

Again, I just want to reiterate our full support for the enhanced feed ban and the removal of all SRM, but I do want to point out a couple of areas of concern. One of them is the concept of risk. Regulations, when fully implemented, as Dr. Evans indicated, will reduce the risk of infectivity through the feed chain by 99%. What is not clearly communicated is the fact that the risk factor right now is essentially negligible. SRM is not a hazardous material given that the vast majority of the product is prion-free.

The focus of our regulatory environment should be on segregation and containment and less on the destruction of the prion. As one example, composting is a method we are using extensively in Manitoba, and I think it's a very useful method for reducing the volume of SRM. But at the end of the day the issue of what to use the compost for becomes a bit of a challenge given the regulatory environment we now work in.

The good communications Dr. Evans spoke of as well with regard to this whole program are essential. I think if we can take away some of the aura of a hazardous material regarding the SRM, we will have more success in dealing with our municipal partners, in particular with regard to accepting SRM into their landfills and other methods of disposal.

The main priority, again, must be to reduce the size of the SRM pile. Biosegregation is essential.There are some developments that have taken place in the last little while to reduce the size of that pile, including such mundane things as removing the distal ileum from dead cattle in the feed lot and not having to use the rest of the carcass as an SRM. I think a number of these rather simple measures will help us reduce the volume considerably.

Again, I want to recognize that these measures we are putting in place are adding costs. They're making our Canadian industry somewhat uncompetitive with the U.S. But I repeat, we have no option but to introduce and implement these stringent feed controls on time. The failure to achieve the control risk country classification carries a much higher potential price tag.

From Manitoba's perspective, we are well positioned to move forward prior to July 12 with implementation that will put us in control of something in the range of 90% to 95% of the SRM produced by the slaughter plants in our province.

With that, Mr. Chairman, I will terminate my comments.

[The Chair, Conservative, James Bezan]

Thank you, Dr. Preston, and thanks to all of you for your presentations.

I was just informed that Mr. Horner and Mr. Schellenberger are on their way. They'll be a few minutes late. We'll receive their presentations when they get here or at the end of the meeting, whatever the committee desires.

Also, just to bring it to your attention, we did receive a letter from the Ontario Minister of Agriculture stating their position on SRMs. That is at translation, as is a letter from Minister Groeneveld. They have to be in both official languages before we circulate them.

So with that, I'll turn it over to Mr. Steckle for seven minutes.

[Paul Steckle, Liberal, Huron—Bruce, ON]

Thank you very much.

Thank you for appearing. This is a file that is relatively well-known.

And might I just say at the outset, Dr. Evans, that your work has not gone unnoticed by the committee members, and certainly by the people in this country, as well as our neighbours to the south.

Given that we have taken the lead.... Since the genesis of this issue really had its beginnings--May 2003 is when this really became an issue--we immediately took some measures. Of course, going back to 1997, there were some feed bans initiated both here and in the United States. To give indication that we would be removing--as we had in 2003--all of the SRMs from the human food chain, we moved for complete SRM removal in the animal feed, and we had those regulatory amendments put before the Canadian people in December 2004.

We have now, in 2006, put $80 million to the industry to see this come to fruition. We set a deadline of July 12, 2007. Given that the provinces are partners in this arrangement and given that we have a 64-year arrangement for general purposes in this country, for funding, why is it that we find ourselves running behind on this file? With $80 million and the deadlines clearly defined, why is it that we haven't moved more quickly? There comes a time when consultations must end. Why are we at this juggernaut at this stage of time?

[The Chair, Conservative, James Bezan]

Go ahead, Dr. Evans.

[Dr. Brian Evans]

Thank you, honourable member, for the question. I'll maybe ask my colleague from AAFC to add perspective as well.

I think if people reflect back, those with some longer history would recall that the 1997 feed ban was not an exercise in simplicity in itself. Reference has been made to the desire at that time, because of market integration, to move in synch with the United States; again, it's important to point out that even though there were comparable feed bans, the Canadian and U.S. feed bans have not been identical since 1997. In fact, the Canadian feed ban in 1997 was more stringent than the U.S. feed ban, and the U.S. made exemptions for products that we felt would have problems in cross-contamination.

I share with you the reality, as you say, that this has been a three-year process. I think there have been clear signals on all sides, reinforced by objective third parties, as to where we felt we should go and what should be achieved. Certainly the balance has been the desire for reintegration of the North American market and not to create an economic disadvantage that could not be overcome with other benefits. That is against the backdrop of industry also saying that diversification of markets in the long term is the best strategy for Canada and that we should not put ourselves into the circumstance of being dependent on a single market in the long term.

All those factors have played, I believe, in the background of people hoping that we could move in parallel with the United States. In fairness, the United States did announce in 2005 a proposed interim rule for enhancements to their feed ban; to this point in time, they have not moved to finalization.

One can speculate as to what plays in that scenario. I believe the recent announcements and determinations of Canada and the United States in terms of their categorization internationally will bring refocus to that issue. I don't preclude that there won't be adjustments made on the U.S. side at some point in the future.

As has been indicated by all the goodwill around this table, the work of the provinces, the complexity of the file, and the jurisdictional issues around environmental management, the desire to ensure that we had an implementable feed ban was very important. We saw the failures of other countries that responded to findings of BSE, and findings of BSE after their initial feed bans and the introduction of measures that on paper would have stopped the problem, but in reality industry did not give support, others did not support, and it just exacerbated the problem even further.

I think part of it is wanting to ensure that we have done all that was feasible to have an implementable, environmentally sustainable, collaborative feed ban that all the players could support, so that at the end of the day it would be an effective feed ban. That has been very critical, I believe, in how the rest of the world has seen it.

That would be my perspective, honourable member.

Susan, would you like to speak on the funding side of it?

[Susie Miller, Director General, Operations, Market and Industry Services Branch, Department of Agriculture and Agri-Food]

I will follow up what Dr. Evans has indicated on the regulatory side.

The $80 million of the federal contribution to provincial programs was announced originally in, I believe, Budget 2005, but in order to be certain as to the best utilization of this funding, one needed to be certain of the type of infrastructure that was needed. To proceed with a program before having the regulatory infrastructure finalized didn't make any sense.

When the regulations were finalized, published...I don't know the technical terms.

[Dr. Brian Evans]

It's “promulgated”.

[Susie Miller]

When they were promulgated in June 2006 and the current government confirmed the $80 million commitment originally made in Budget 2005, we proceeded to work with the provinces to finalize their plans according to the regulations. We sought both cabinet and Treasury Board authority, and we are currently working through the process we use to transfer money from federal governments to provincial governments.

The process never runs as smoothly as we would like it to. The agreements between two jurisdictions always take some time, but there were several provisions put into the federal government contribution that would assist in not delaying the program--the funding to industry, as it were.

The first was that the funding by provinces to address SRM disposal could be counted as their contribution going back to December 2004. This was to ensure that any province that wanted to proceed immediately to put in measures in anticipation of changes in regulations would not be disadvantaged when it came to receiving federal funding.

The second was that federal government contributions could go back to the date when we had our authorities, which was December.

I am confident in saying that we're in a position of finalizing wording in the agreement with eight of the provinces. The other two will take a little bit longer, first because during an election period it is not common to have federal-provincial agreements pursued, and second because we're still working with Newfoundland on the details of their program.

[The Chair, Conservative, James Bezan]

Thank you.

Your time has expired, unfortunately, Mr. Steckle.

Please keep your comments as brief as possible, because there are a lot of witnesses at the table, and they're probably going to want to participate as well.

We'll go to Monsieur Bellavance.

[André Bellavance, Bloc, Richmond—Arthabaska, QC]

Thank you.

Mr. Donner, the document you submitted seemed interesting. Do you have a French version? As you know, the committee rules are clear. All documents must be submitted to us in both official languages. I would therefore like you to assure us that you will provide us with a French version as well.

[John Donner]

Yes, I apologize. I did not submit the document in time for translation.

[André Bellavance, Bloc, Richmond—Arthabaska, QC]

It is very important that we have a French copy to read. Thank you.

Mr. Donner, according to the testimony we have heard, Alberta appears to be further ahead than the other provinces when it comes to the elimination of specified risk material, or SRM. You have a program that is practically in operation, one that is quite advanced, yet you still do not have an agreement signed with the federal government.

What is missing? What still needs to be negotiated? Exactly where are you in the process? Most importantly, do you think you can meet the July 12 deadline? Do you really believe that it can be met?

[John Donner]

Yes, we believe we can meet the deadline. As we indicated, we have a program ready to go. Based on our most recent discussions today, we believe we're in a position to finalize, and the remaining step is really for ministers to sign. So we believe we're very close to signature.

[André Bellavance, Bloc, Richmond—Arthabaska, QC]

What is preventing an agreement from actually being reached? Could you please elaborate on what you have done to ensure that you can meet the July 12 deadline? This could serve as an example.

[John Donner]

In terms of the agreement itself, it is simply, in my view, a matter of going through the steps for approval in our two governments, submitting the document, and having the decisions taken.

I am not aware of anything outstanding in the document that needs to be changed, except that it has to be finalized and sent up for approvals.

In terms of what has been successful in having our plan ready to go, we've had strong cooperation with the regional CFIA and Agriculture Canada offices in developing our strategy. We've engaged in extensive consultation with industry about what their investment requirements are. We've looked at it from a systems point of view in terms of how we address the total SRM in the province and by trying to address system approaches. And we have been very specific in identifying resources for elements of that system, as opposed to having one pot for everything.

Those I think are some of the attributes that have made us successful, or that will, we hope, make us successful.

[André Bellavance, Bloc, Richmond—Arthabaska, QC]

Mr. Evans, I have a question for you. As I am sure you are aware, we recently heard testimony from the industry. I am not sure whether you had a chance to read the evidence. Representatives appeared before the Standing Committee on Agriculture and Agri-Food. Naturally, there were some concerns about that deadline. We just heard the representative from Alberta say that the July 12 deadline will undoubtedly be met, however, we do not know what will happen with the other provinces. Thus, the industry has considerable concerns about this and is saying that federal money was handed over to the provinces, and that that money must now be passed on to the industry.

In your presentation and in your document, you say that you are still in discussion with the provinces. I would therefore like to know if you can allay the industry's concerns or, conversely, indicate to us whether the July 12 deadline should be extended?

Where is the department in terms of its negotiations with the provinces? Without necessarily referring to each province individually, can you reassure the industry on that score?

[Dr. Brian Evans]

Certainly. I would ask if you would lend me the opportunity to ask Susie Miller, from the department, who has been managing the funding arrangements with the provinces, because the funding is through AAFC; it's not through CFIA.

Susie, would you be prepared to speak to that?

[Susie Miller]

You have heard three provinces here speak about their readiness. If you ask the other seven provinces, you will get seven more statements as to whether their waste disposal infrastructure will be ready.

There is no doubt that some of the larger projects, for example, the construction of a rendering facility or an incinerator, may not be complete by July. But my understanding is that each of the jurisdictions—and the ones that are here can respond for themselves—is working very closely with its industry, as is CFIA, to make sure it can utilize the existing infrastructure during the interim period until the optimum solution is developed over time.

The discussions among CFIA , Agriculture Canada, and the provinces have been extended to the industry as well, so that there is ongoing discussion at both the provincial level and the federal level to find solutions under the current regulations to ensure that the feed ban can be put in place by July 12.