Agriculture Committee on Feb. 28th, 2007

[Wayne Easter, Liberal, Malpeque, PE]

Then I think it is clear that it is going to require federal leadership.

I understand the process, Ms. Miller. You talked about that process and how difficult it is to get there, but we find that while the process between the provincial capitals involves pushing paper and trying to come to an agreement at that level, those on the farm are in an entirely different situation, because they know they are going to be carrying the can.

So I would suggest—and this message can be carried back to the minister—that from our side.... And the deadline is really not July 12; the representative from the Animal Nutrition Association of Canada told us very clearly they are really looking at three months in advance of that date for their making very, very serious decisions. I guess from our perspective, this has been in the mill and the $80 million has been there; we've had lots of lead time on this. If we don't meet the deadline, we're certainly going to be asking for compensation for the farm community, because the farm community cannot bear these costs. So you should understand this up front.

In terms of the Schellenberger-Horner proposal, which is a very positive one, where is Western Economic Diversification? Why wouldn't that be a proposal that WED would be jumping at?

[David Horner]

We have yet to approach them, so it's partly our fault. We've been working with the province and other federal programs to date, but we actually have a meeting set up next week to start that process.

[Wayne Easter, Liberal, Malpeque, PE]

Based on what we've heard from all the witnesses--you folks--today, and in Saskatchewan's and Alberta's proposals about some of the things that are happening in their provinces, I think there are certainly ways to turn this problem into an opportunity. We look at the advances we're making, how we're dealing with specified risk material versus how the United States is doing so. There's an opportunity from a marketing point of view. There's an opportunity from an energy and waste disposal point of view. We need to seize that, and all players need to help in that regard.

Mr. Chair, I think the key is, based on what we heard from the industry, that someone has to be in charge and somebody has to be responsible. I take it that it should be the federal minister. I'd like to hear the provinces' point of view on that.

We do get into shared jurisdiction--we understand that--but there's a lot of authority in the federal minister's office, if he wants to use it, in terms of pushing these files along, and we'd expect that to be done.

[The Chair, Conservative, James Bezan]

Who wants to comment on that?

Mr. Donner.

[John Donner]

I think if you're asking who's going to be in charge of the programs, when the announcements are made, the program's authority will be very clear. As I think Suzie has talked about, there will be a very clear delivery of the specific programming and the funding, and the application process and decision-making will be abundantly clear.

I think you're asking a more general and broader question, but in terms of the dollars and the allocation of the funding, that authority will be abundantly clear, and it will rest with the provinces.

[The Chair, Conservative, James Bezan]

Dr. Evans, do you want to go?

[Dr. Brian Evans]

I would only again pick up, as the honourable member has indicated, that given the nature of this file, the regulatory lead is ours. I think it's fair to state that I have every understanding and belief that there is planning, as was indicated in our opening comments, that this is an issue in which leadership will continue to be shown through the deputies and the ADMs, right up to the ministers, over their coming agendas, and that leadership will be well demonstrated.

The only other comment I would make again is that at the end day, I believe producers and Canadians generally expect certain things from us. Although there can be leadership, it's a shared accountability. We all have a role to play, and I expect that everybody will play that role and that everybody is committed to meeting the July 12 deadline. It's in our collective best interests.

The ramifications of not meeting it will be significant economic problems for us, well beyond where we would envision ourselves being. With the successes that you've outlined, it actually could be turned into tremendous opportunities.

[The Chair, Conservative, James Bezan]

Mr. Easter pointed out that witnesses we had a couple of weeks ago stated that there is a concern because really the cut-off date isn't July 12; it's mid-April. Are we going to hit that in time to make sure the product isn't flowing down the supply system and ending up on the shelf?

[Dr. Brian Evans]

Thank you for the clarification of the point raised, Mr. Chair. I appreciate that.

I would ask if Freeman Libby, who has been involved with the discussions with industry and provinces across the country in implementing this, could speak to the issues of implementation and strategies that are being employed there.

[The Chair, Conservative, James Bezan]

Mr. Libby.

[Freeman Libby, National Director, Feed Ban Task Force, Canadian Food Inspection Agency]

Thank you very much, Mr. Chairman. I guess when you talk about the dates, we have July 12, which is what we call the regulatory date. That is when CFIA has the responsibility to ensure that there is compliance to the enhanced feed-ban regulations.

This is where the May 1 date comes in. I think it was Kathleen Sullivan of ANAC who brought that date to the committee. Basically what the feed industry has said is that for them to be in compliance on July 12, they have to stop accepting SRM as of May 1, so that they willl have SRM-free feed on the shelves, ready to go, on July 12.

We have been working with the feed industry and with ANAC to ensure that whatever they need to be in compliance with as far as the feed side of the house goes, we will work with them on that.

As far as the preparedness of the industry to meet the May 1 deadline goes, where the problems probably will occur the most will be basically in the segregation and the disposal of SRM come May 1, when the feed mills stop accepting the SRM.

For the last two months we have been trying to work with the industry and the provinces to identify where all the hurdles are. I think the three members from the three provinces here today have identified the fact that they've put a lot of commitment into trying to ensure that they will be ready. There are going to be some hurdles for the small abattoirs in some of the rural communities. That's been identified.

We are trying to identify ways that we can work with the industry so that they can meet that May 1 deadline on a voluntary basis. We're addressing some of the technical things that the CFIA can address so that we can speed up those processes, such as the issue on the rendering side of the house on the west coast, where they needed to get an answer from CFIA on whether or not we would allow certain SRM products to be processed in the same facility, so that they could get their infrastructure in place.

We're expediting all those things as much as possible. There are hurdles, but it's my role as the head of the task force to work with the industry and with the provinces to try to get answers to those hurdles as quickly as possible and to work on the solutions.

[The Chair, Conservative, James Bezan]

Dr. Preston.

[Dr. Allan Preston]

It's a summary comment, I guess. I think you're hearing from the federal government and from the three provinces represented here that we can and we will meet the deadlines; whether we use May 1 as the functional deadline and July 12 as a regulatory deadline, we will meet those deadlines. I think it's also very clear from discussion around the table that the solutions that will be in place at that point in time will be different from the long-term solutions that will be in place two, three, or five years down the road.

I think every province that is represented here has demonstrated or indicated that they are looking at longer-term solutions. We can give you a pretty clear indication that we will have the situation in hand and we will have the containment and the segregation in hand in time for this deadline.

[The Chair, Conservative, James Bezan]

That's good to hear.

Mr. Devolin, it's your floor for five minutes.

[Barry Devolin, Conservative, Haliburton—Kawartha Lakes—Brock, ON]

Thank you, Mr. Chair.

I have a couple of quick comments. I also share the concern, and it's a shock almost, that four months before the deadline we still don't have agreements.

I have a quick question for Ms. Miller.

I'm from Ontario. Did you say you don't have an agreement with Ontario, or is it in the same situation as everyone else, which is almost ready to be signed?

[Susie Miller]

Yes, the agreement with Ontario is almost in the process of being signed. Each province is different in terms of the authorities it has. We're entering into a budget cycle over the next three to four weeks. There are going to be announcements by all jurisdictions, actually, in terms of budgets. Some of the provinces' timing is contingent upon the timing of their budget, except for the two that I identified, which are Quebec, because of the election, and Newfoundland. Because their allocation is quite small--they're an island, they don't have the same issues that others do--they haven't determined exactly what they want to do. Other than those two jurisdictions, we expect signatures with everybody, hopefully before the end of March, but a lot of it is dependent upon when they get the financial authorities.

[Barry Devolin, Conservative, Haliburton—Kawartha Lakes—Brock, ON]

Right.

I have another question for the three different provincial representatives here, and I wish there was someone here from Ontario.

Very often when food safety standards go up, it creates new costs and there need to be some economies of scale to manage those costs. It seems to push a lot of the smaller outfits out of the business. I think it was Saskatchewan that quoted the very large number of provincially regulated facilities you have, compared to one federal one.

I expect one of the consequences of this change is going to be pushing a lot of these small abattoirs over the edge. Do any of your provincial governments have any strategy on how you're going to deal with what I think is an inevitable consequence of this process?

I'm not disagreeing with the process. I'm just saying, do any of your provincial governments have a strategy as to how you're going to deal with a whole bunch of these small operations going out of business?

[The Chair, Conservative, James Bezan]

Mr. Brooks.

[Harvey Brooks]

It is a concern for us. We have two federally inspected plants and 12 provincially inspected ones and a large number of health-inspected plants in the province.

The health-inspected plants, I would suggest, are the most likely to have the lowest economies of scale, and therefore they won't have the volume to be able to achieve cost efficiencies on this.

For those that can dispose on-site, it will be a very cost-effective mechanism for them.

And then the rest of our efforts are designed to make sure that, number one, there is a viable alternative for them to make sure they can dispose of their waste material, and, number two, to make it as cost-effective as possible.

We are concerned with regard to the cost and we are trying to work with them to understand what the effects might be.

[Barry Devolin, Conservative, Haliburton—Kawartha Lakes—Brock, ON]

Anyone from Alberta or Manitoba?

[The Chair, Conservative, James Bezan]

Dr. Preston.

[Dr. Allan Preston]

We've got a number of programs in Manitoba to support the small plants. In our province, we only have the one federally inspected facility. The rest of them are small provincial plants, and we're very, very keen on keeping those folks in business as much as we can.

SRM issues aside, we have programs in place to assist with the purchase of equipment, with the purchase and development of more cooler space, and those sorts of things.

We endeavour, where possible, to provide assistance to plants that may want to move from a provincially inspected level to the federal level. Granted, very few are doing that, but we have programs in place to assist them when that does happen. A number of those elements are in place.

The other thing I would comment on--and it goes back to a number of issues that were raised awhile back--is that the cost to producers and the cost to the small abattoirs is, indeed, significant.

But in our province in particular, when we lost our rendering capacity in 2003, most of our small abattoirs at that point introduced what they referred to as an environmental levy. For every animal that was slaughtered, there was a price tag attached to it. It varied a bit from plant to plant, but on average it would be $50 or $60 per head. That levy was put in place to defray the costs of having to dispose of a product that had been worth something prior to that period at the end of May of 2003 and now was a cost item.

That's a long answer to your question, but we have a number of programs in place, and it's abundantly important to us to make sure those 24 plants stay in existence.

[The Chair, Conservative, James Bezan]

Mr. Donner.

[John Donner]

I'll try to be brief.

Like my colleagues, we have a number of programs that work with our provincial plants trying to introduce facilities approaches, processes for better meats, safety--kind of the HACCP approach for our plants. So we have a number of programs to work with them.

As I've mentioned before, we see some of our provincially focused money on the operational costs associated with provincial plants. The broad solution we're trying to bring about is to make sure they are well-served for collection of their SRMs and they have the opportunity at least to have some valued segregation.

The longer-term, as I'm sure others will add, talks about thermal hydrolysis and other opportunities.

I think it's also important to recognize that many of these facilities are operating in a slightly different market. They have a different niche and they have a different composition of what is run through those plants, so there are some other circumstances that need to be addressed as well.

[The Chair, Conservative, James Bezan]

Thank you.

Thank you, Mr. Devolin.

Mr. Gaudet.