Agriculture Committee on May 3rd, 2007

[The Chair, Conservative, James Bezan]

I call this meeting to order.

We continue to deal with the main estimates. I believe we'll have votes on the main estimates at the end of the meeting today.

We have the CFIA here for a few specific questions. They were gracious enough to spend time with us at the last meeting, and we really appreciate their being here today.

We welcome back to the table André Gravel, executive vice-president; Gordon White, vice-president of finance, administration, information and technology; Dr. Brian Evans, chief veterinarian officer; and Krista Mountjoy, the vice-president of programs.

I welcome all of you to the table.

Do you have any opening comments you want to make before we get into questioning?

Mr. Gravel.

[André Gravel, Executive Vice-President, Canadian Food Inspection Agency]

Yes, I do, Mr. Chairman.

Good afternoon, and thank you very much. I certainly appreciate the opportunity to appear before the committee.

My name is André Gravel, and I'm the executive vice-president of the Canadian Food Inspection Agency.

As you are aware, the CFIA has a regulatory responsibility at the federal level to safeguard food, animals, and plants. The CFIA recently celebrated its tenth anniversary. For a decade, the CFIA's work in safeguarding Canada's food, plants, and animals has been contributing to the health and well-being of Canada's people, environment, and economy. The regulatory and inspection regimes we oversee have had a beneficial impact on international confidence, which is the basis for trade.

Since its inception some 10 years ago, the agency's capacity and profile have grown and developed. It has become the subject of greater interest and importance. The CFIA is the largest scientific regulatory agency in Canada. In order to be objective, credible and justifiable, its decisions must be based on the best-available scientific knowledge while taking a balanced approach to other factors that are inherently linked to public interest.

A number of factors must be considered in managing risk, including social, economic and environmental concerns and possible impacts on stakeholders and consumers. The agency takes a stringent approach to risk management due to the unforeseen nature such contingencies.

We have an excellent international reputation for the quality and competency of our science. For example, the OIE--Office international des épizooties, or World Organisation for Animal Health--has designated several CFIA facilities as OIE world reference laboratories for avian influenza and BSE. In fact, the CFIA laboratory system includes 13 of Canada's 17 international reference labs.

The remarkable expertise of our staff underpins our domestic and international reputation. The CFIA has more than 6,000 employees across the country working for Canadians. Since it is our tenth anniversary, I'd like to take this opportunity to mention a few of our achievements over the past ten years.

When BSE was found in Canada in 2003, the CFIA responded quickly and effectively. We've since launched a comprehensive, multi-faceted strategy to eradicate BSE from this country's cattle population. This has resulted in sustained domestic market confidence and unprecedented international market recovery.

So far, more than 150,000 animals from the populations at risk have been tested under the national BSE monitoring program. The strengthening of the animal health feed ban, which will come into force on July 12, 2007, will help us to stem the spread of the disease and will step up the eradication of BSE within the bovine population.

Thanks to these measures, and to other means that have been implemented to control the spread of BSE, it has been recommended that Canada be officially recognized by the OIE as a country with a controlled BSE risk. This should be made official later this year. This recognition clearly demonstrates that other countries are confident in Canada's efforts to monitor BSE, as well as our commitment to protect public and animal health.

As many of you are undoubtedly aware, yesterday the CFIA announced Canada's tenth case of BSE. This finding does not pose a risk to food safety or public health, nor does it have implications for Canada's BSE status. Canadians and the national cattle herd are protected by a suite of interlocking BSE control measures. Guided by the OIE and informed by an international panel of experts, Canada has moved to strengthen its process since BSE was detected in May 2003.

Over the years, as more cases have been found, the reactions have become more moderate and the caution for industry minimized.

The CFIA is also involved in fighting avian flu. In 2004, the CFIA, along with its provincial counterparts, investigated an increase in a highly pathogenic strain of avian flu in British Columbia's Fraser Valley, and managed to confine it. Staff from across the country took part in this rapid intervention which involved a wholesale slaughter of all of the animals in the infected facilities and the preventive destruction of neighbouring birds.

Highly pathogenic avian influenza can have dramatic consequences for both animal and human health, so we do not take lightly the threat posed by possible re-infections or the re-emergence of new strains. For this reason, the CFIA is supporting and promoting improved biosecurity in commercial and backyard flocks. It is expanding surveillance measures and enhancing response activities across the country.

CFIA staff have also worked to combat invasive alien species, which have the potential to cause extensive economic hardship and environmental damage. Examples of invasive alien species that have been found in Canada include emerald ash borer, ground spruce long-horned beetle, and Asian long-horned beetle.

There is, of course, a high interest in food safety on the part of the public. A recent survey done for the CFIA indicated that a strong majority of Canadians, 82%, agree that the Canadian food safety system is among the best in the world. Also, 78% of respondents agreed that the Canadian government has done a good job of informing Canadians about relevant food safety issues, and 74% of Canadians are interested in receiving information about food recalls.

Around the world and in Canada, people have high expectations for food safety.

In the fall of 2006, we issued a number of health risk alerts related to food. These included alerts relating to salmonella in chocolate, toxins produced by clostridium botulinum in carrot juice and salmonella in spinach. The high number of recalls demonstrates that the system is indeed working. The problems are quickly identified and the agency is meeting the expectations of Canadians.

The CFIA also reacted recently to detect the golden nematode which was destroying potato crops in a region just outside Montreal. Upon close surveillance, we were able to set up a regulated region and designate four satellite sites—in other words, smaller regions that were not directly adjacent to the regulated area—covering a total of about 4,700 hectares in order to stop the spread of the nematode.

In March 2007, the Animal and Plant Health Inspection Service, of APHIS, from the USDA, imposed compulsory analyses on imported seed potatoes. Therefore, as of March 21, 2007, all seed potatoes exported to the United States must include a soil analysis and must be free of the potato cyst nematode.

With respect to the potatoes that have been shipped under this requirement, the CFIA, in conjunction with the stakeholders, reacted quickly to take the required soil samples and carry out the analyses. As this was all done very efficiently, there were very few impacts on trade.

These are but a few of our achievements over the past years. Our report on plans and priorities looks to the future and the impacts that the CFIA will continue to have.

Our five priorities, as outlined in our report on plans and priorities, are: improving regulatory compliance; continuing our high state of preparedness in response to Asian influenza and other zoonotic plant diseases and pests; supporting the agenda for innovation, competitiveness, and productivity; moving forward on key regulatory initiatives; and continued management of the CFIA corporate agenda.

In view of these priorities, we will, among other things, be improving regulatory compliance using measurable targets. We know that results-based management and accountability remain a key priority for government, so with realistic targets and performance measures now in place, we can find ways to increase compliance. We want to make inspection and enforcement more consistent across the country.

We are committed to constant improvement, and we want to work with our provincial and territorial partners to upgrade our health safety standards and ensure regulatory compliance in the food sector that is not covered by the federal program. This is a growing sector which imports large quantities of food products. We want to ensure that they take the right approach to managing risk.

With respect to zoonotic diseases, which can affect both animals and humans, we must remain vigilant and ready to act. The public and media interest can wane over time, but the CFIA is constantly on guard to protect public and animal health.

The CFIA program and services' budget has gone from $571 million in the 2006-2007 main estimates to $587 million in the 2007-2008 main estimates. This is a net increase of about $16 million. This amount will be used for new resources, including readiness to fight a possible outbreak of avian flu or a flu pandemic, and for the organic product program. This will be offset by the implementation of the expenditure review committee reductions and the sunsetting of resources related to the BSE animal health feed ban.

The 2007-08 main estimates budget of $587 million is further increased by $52 million in the report on plans and priorities to reflect 2007-08 planned spending of $639 million. This increase is due to expected funding for slaughterhouse inspection and the renewal of sunsetting BSE feed ban resources.

Global trade and international travel make it more challenging than ever to protect the food supply and safeguard human, animal, and plant health. We will continue to work to successfully protect Canada from these threats.

Thank you very much. The agency is now open for questions, Mr. Chairman.

[The Chair, Conservative, James Bezan]

Thank you very much.

I want to remind all members that immediately following the question and answer period we do have votes on the main estimates, and we also need to talk about future business and potential travel.

With that, Mr. Easter, you're first on this seven-minute round.

[Wayne Easter, Liberal, Malpeque, PE]

Thank you, Mr. Chair, and welcome, folks.

I want to say at the beginning that your survey shows that Canadians can indeed take pretty good pride in the Canadian Food Inspection Agency and what it does, and I think your poll showed that. I think we would agree that you manage to protect the integrity of our system; we do have one of the safest food supply systems in the world, and you're to be congratulated for that. However, there is a problem. We've just completed two weeks of hearings with this committee, and certainly primary producers feel they're bearing too much of the cost in terms of inspections and maintaining the integrity of the food system.

You may or may not have this information, but can you produce for us any comparisons with--and it's complicated--especially our major competitors to the south in terms of what they have to pay in inspection fees and costs, really basically from field to plate, as compared with Canadian producers? We know those fees, to a great extent, are GATT green. Certainly we on this side of the table believe the government should be moving in a direction of covering those costs that are GATT green. Do you have any of those kinds of comparisons, either on the tip of your tongue or that you can table with us at a later date?

[André Gravel]

Mr. Chairman, thanks for the question, and thanks for the compliment on how well we do in protecting the Canadian public on food safety issues.

With respect to the issue of cost recovery, Mr. Chairman, the agency has been in the business of recovering part of its costs since the early nineties. At the time, the agency--it was not the agency then but the Department of Agriculture--got its budget amputated by roughly $50 million and was requested to compensate for that with cost-recovery fees. We did that at the time, and pretty well all sectors that the agency was dealing with were charged a certain amount in cost-recovery fees.

At the time, at their highest proportion, the fees came to roughly 20% of the agency's costs, but from 1993, let's say, to 2007 the agency was subject to a freeze on cost recovery; therefore, there's been no increase in fees. We feel that at this point in time they represent a little less than 10% of our regular costs. In fact, we haven't increased them, but overall, if you look at the percentage, they have actually decreased.

When we did the cost-recovery exercise and started negotiating with different industry sectors in the early nineties, we did some comparisons with the United States for some of our programs, the majority of programs that are related to exporting. I remember looking at the meat hygiene program as an example and comparing what the U.S. charged and what we charged. Even though the services we targeted were not necessarily the same as on the U.S. side, we found there was a degree of equivalence between their fees and ours overall.

We can provide the numbers. I don't have them with me today, but we can do this if you want.

[Wayne Easter, Liberal, Malpeque, PE]

Please do.

If fees from farmers are only covering 10% of your costs, could you include in that calculation you're going to give us what the administration cost is for collecting those fees? I wouldn't be surprised if the farmers are just employing people to do the administration and this is not gaining you a whole lot in terms of your overall structure.

I know that with potatoes from Prince Edward Island, for instance, the various fees from CFIA on a truckload of potatoes cost as much and sometimes more than the transportation to get the truckload of potatoes to Toronto. That makes our industry non-competitive.

There's another point I wanted to raise, and maybe this is a question for the parliamentary secretary, Jacques. The previous Parliament had introduced Bill C-27, and it was noted at the time that there was opposition to the bill from the opposition--and that's normal--but it was seen as a very important piece of legislation for streamlining the system. In fact, it would have made us more cost-competitive by increasing our ability in terms of border inspections and harmonization with the United States and other countries.

I don't know whether you're in a position to answer, because I think the direction has to come from the government, but certainly it was a piece of legislation that I still maintain and believe is necessary. I don't know whether you can answer, André, or whether the parliamentary secretary can answer on behalf of the government, but I'd like to know when we can expect to see legislation that will update all the various acts of CFIA and the animal and plant health acts and so on and get us up to modern times, because it didn't get through the last Parliament.

[The Chair, Conservative, James Bezan]

Just for your information, Mr. Easter, Monsieur Gourde is the parliamentary secretary for natural resources, not agriculture.

Monsieur Gravel.

[Wayne Easter, Liberal, Malpeque, PE]

He is in the inner circle, so he should know some answers.

[André Gravel]

I can make some comments from the agency's standpoint about Bill C-27. Bill C-27 would have allowed the agency to obtain a little bit more power for enforcement. It was about harmonizing the agency's powers for enforcement purposes, and it would have given us some more authority for imports, as an example, and other things. It was considered to be a good piece of legislation.

When the agency was created, we inherited a bunch of acts that have enforcement capacities that are different according to each piece of legislation. Bill C-27 would have allowed us to harmonize them, and it would have given us a little bit more authority on biotechnology, as an example, and other things.

The agency can function without it, but it would have been an improvement.

[The Chair, Conservative, James Bezan]

You're out of time, Mr. Easter.

We'll go to Monsieur Bellavance.

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

Thank you, Mr. Chairman.

Thank you, Mr. Gravel, for your presentation and for being here today.

You are right in saying that the large number of recalls demonstrate the usefulness of the Canadian Food Inspection Agency in ensuring our safety as consumers. We agree on that. I'm wondering, though, whether or not measures of some kind could be taken at the border before our safety is put at risk.

There have been a number of examples recently, some of which you have mentioned. You didn't mention the melamine found in pork, and I understand that you can't list every product. However, these cases come on the heels of the spinach and carrot juice scares. All of these products are imported into Canada, primarily from the United States. This is a relatively new problem.

When products such as these are imported into Canada and are the subject of a recall, whether it be US pork, spinach or carrot juice, it is obvious that the recall will impact the sales of Canadian or Quebec products, because consumers will be wary.

Will it be possible to sign some type of bilateral agreement with the Americans to step up border inspections before issuing a recall? Have there been discussions with any other countries?

[André Gravel]

Thank you for your question.

It goes without saying that the agency is also concerned about imports. A significant proportion of the commodities that Canadians consume come from several countries. It is clearly the agency's responsibility to ensure that these commodities are safe and that they meet Canadian standards.

Depending on the commodities, for example fish and meat, the agency has an inspection system that allows for visiting establishments in foreign countries. Our risk-reduction measures include intervening in the countries of origin. Regardless, with respect to meat and fish, we review the inspection systems and the plants of foreign countries.

Furthermore, we inspect a significant quantity of commodities a second time when they enter the country. Just how often we do that depends on the results obtained during inspections at the time of importation. For example, if a commodity imported from the United States is re-inspected and subsequently rejected, then anything coming subsequently from that plant will clearly be subjected to more stringent inspections.

The agency does not claim to be able to check all commodities coming into Canada. We proceed statistically and on a risk basis. Our assessment is based on the risk profile of the country of origin of these commodities and on the intrinsic risk profile of the imported commodities.

For example, fresh fruit and vegetables coming from the United States, spinach in particular, were identified as being high-risk commodities. Fresh ready-to-eat salad mixes coming from the United States are also high-risk commodities. Our inspection of these products is much more stringent in terms of bacteria assessment.

Several years ago, the agency also established a re-inspection and sampling system on some commodities for the purposes of detecting chemical residues. We mentioned the case of American spinach and E. coli and salmonella contamination in chocolate, but there are also commodities that have been contaminated by chemical residues that are finding their way into Canada. The agency samples these commodities systematically and randomly but also targets certain commodities coming into Canada.

Can we check everything coming into Canada? No. No one could have foreseen that melamine-contaminated products would enter the United States and be used in cattle feed. However, to the extent that the agency is made aware of a situation quickly, then it acts very quickly to reduce the risk.

Imports are a priority for us.

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

It's quite difficult, even for you. That's why I come back to traceability. Commodities come from everywhere. Green peas come from China and they look fresh, and, for example, processed pork from the United States is imported into Canada. Cucumbers are also processed here. Once these commodities have been processed, they only have to be packaged in Canada in order to be able to write on the packaging that they're from Canada.

You stated that you go to the countries of origin to do inspections. It seems to me that I have heard testimony in this committee from agency officials to the effect that the agency lacked resources and could not go out in the field to monitor products that are used, for example, the pesticides that are used on fruit and vegetables in India but that are prohibited here, in Canada. There are even some pesticides that are allowed in the United States but that are prohibited here. Once a commodity comes into the country, the consumer buys it and sees written on the packaging that it comes from Canada. However, that's not true. During our travels we laughed, even though it wasn't particularly funny, when a producer told us that he had seen olives that came from Quebec! It's hard to believe that olives can grow in Quebec.

Do you feel that a lack of resources is to blame? I realize that you go to the countries of origin, but what can be done to improve your procedures?

[André Gravel]

Mr. Chairman, with your permission, I would like to ask Ms. Mountjoy to elaborate in answering that question. I will make some additional comments afterwards.

[Krista Mountjoy, Vice-President, Programs, Canadian Food Inspection Agency]

Merci, monsieur Gravel.

What I can do at this time is give you a sense of the rules that govern the labelling of products that can be described as products of Canada and the rules about describing the country of origin.

Statements such as “made in Canada” and “product of Canada” can be applied when the food is manufactured in this country. But as we recognize, these statements do not necessarily mean that all the ingredients used in the production of that food are domestic.

The Canadian Food Inspection Agency applies standards, and they come from Industry Canada, in assessing a declaration that claims Canada to be the country of origin of the goods that have incorporated foreign raw materials or components. And these rules are that the last substantial transformation of the goods must have occurred here in Canada and that at least 51% of the total direct cost of producing or manufacturing the goods is Canadian.

For example, peanuts that have had their shells removed and have been roasted, oiled, salted, and packaged here in Canada could qualify to be labelled as a product of Canada. And I think you used the example of olives.

Some Canadian-produced foods are not required to indicate that they are Canadian. However, we do have a requirement for some imported agricultural products to indicate the country of origin. For example, imported dairy, fresh fruit and vegetables, and meat and fish, if not from Canada, must indicate the country of origin.

[The Chair, Conservative, James Bezan]

Thank you.

We'll go to Mr. Miller.

[Larry Miller, Conservative, Bruce—Grey—Owen Sound, ON]

Thank you, Mr. Chairman, and thank you to our witnesses today for coming. I appreciate that.

There's just something, Mr. Chairman, I feel I should note. Bill C-27, I think it's very fair to say, probably would have passed in the last Parliament if there had been a little more protection in there for grassroots producers. I think that was one of the main stumbling blocks in opposition, and I think that needs to be noted.

There is a question I need to have answered. Going back to the contaminated feed out west, that rendering plant, obviously, wasn't complying with the 1997 feed ban. How long do you think that practice was going on? I mean, did they ever comply? You know, it opens up some questions. I hope they were complying at one time. Have we any idea of just how long they obviously weren't? I don't know who wants to answer that.

[André Gravel]

I can provide the preliminary answer, maybe.

The issue of compliance with the feed ban of 1997 is a key factor in the elimination of BSE. The agency never had any illusion, when it implemented its feed ban in 1997, that it would take care of all infectivity in all females in all rendering plants and all that. That's why we've introduced a second part to the feed ban, which is the removal of SRM material from the feed chain so you actually remove it from the source. Then you don't have to worry about cross-contamination within the system.

Now the cases of BSE that Canada has in fact demonstrate that there was, at the time the feed ban was implemented, some infectivity in the system, which has probably been distributed to some farms. We think it's low infectivity, given the age of the cows we've noticed so far. The latest one is 66 months old, so for us it means a low-infectivity dose. Hopefully, with the new measures, the agency predicts that in 10 years' time, within a decade, we shouldn't be seeing any more cases of BSE.

Now, having a surveillance system that works, we will find some BSE cases. In any country that has a system of surveillance that is based on risk we will find cases of BSE.

[Larry Miller, Conservative, Bruce—Grey—Owen Sound, ON]

And I don't dispute that at all, Mr. Gravel. In fact, as a beef farmer, I don't like to hear of cases, but as a consumer, I also know that the process is working and that we're keeping these animals out of the food system—and that's the way it's meant to work.

Going back to this other issue, though, are you implying that the rendering company wasn't in the wrong at all here?

[André Gravel]

I didn't say that. For the record, that's not what I said.

[Larry Miller, Conservative, Bruce—Grey—Owen Sound, ON]

No, I'm glad you didn't.

[André Gravel]

What I said is that there is infectivity in the system and that there are many opportunities for cross-contamination at a feed mill.

[Larry Miller, Conservative, Bruce—Grey—Owen Sound, ON]

Would you not agree, though, that this wasn't cross-contamination, or it certainly doesn't appear to be?

[André Gravel]

Brian, do you want to make comments on this?

[The Chair, Conservative, James Bezan]

Dr. Evans.