Agriculture Committee on Jan. 29th, 2008

[Brian Storseth, Conservative, Westlock—St. Paul, AB]

I'm looking through your application form for the new GROU program, and I have to say it does seem a little bit cumbersome, to a layperson anyway. One of the things that really disturbed me when I was looking through this is that we require our growers, once they use this program, to dispose of their containers through an acceptable container disposal program. Actually, they have to be part of that program before they can apply. Is that correct?

[Karen Dodds]

Yes.

[Brian Storseth, Conservative, Westlock—St. Paul, AB]

The problem with that, of course, becomes that currently CropLife Canada's Stewardshipfirst is the only program that we have identified as an acceptable program for implementation. So once again, we've introduced another monopoly to our producers. Do we regulate the prices they are allowed to set in this program, or is industry totally independent to do that?

[Karen Dodds]

It's an industry program. As far as I know, it's really the only program in Canada. Nothing prevents somebody else from working to establish their own program.

[Brian Storseth, Conservative, Westlock—St. Paul, AB]

As it is right now, our producers have only one place they can go for this?

[Karen Dodds]

Yes.

[Brian Storseth, Conservative, Westlock—St. Paul, AB]

The second thing I wanted to ask you is whether we know if these older products you were talking about, which we're not interested in looking at, are necessarily harmful to human safety.

[Karen Dodds]

Some older products, obviously, are registered in Canada. There have been pesticides registered in Canada for a long time. I think the first bill goes back to the 1920s, so there have been pesticides registered for a long time. There were a lot of older products that were available. Some are still available in the Canadian market.

[Brian Storseth, Conservative, Westlock—St. Paul, AB]

Are the older products we're talking about here--the products we said we're not interested in looking at, which growers identified as a priority--harmful if consumed by humans?

[Karen Dodds]

Under projects like 914, nobody is paying submission fees. In order to help Canadian growers--and a number of times we've been in front of this committee, and they've supported the use of taxpayers' dollars this way--we said we would do something of our initiative to look at these kinds of products. That's when we said it's very compatible with our mandate to look at newer products, when there is no question that, from a science perspective, scientists in all regulatory areas around the world agree that the newer products are better for the environment and better for human health and safety. When farmers first brought us the list of their interests, there were thousands of uses they were interested in. We said we could not use our resources in a responsible way, going back to older products that are generally thought to be more of a concern for human health and safety. If a registrant wants to make a submission of an older product, we have to look at it, and we would look at it, but they would pay.

[Brian Storseth, Conservative, Westlock—St. Paul, AB]

Thank you very much.

My concern is not only about health and human safety and the environment, which is definitely important. Many of my producers tell me that they believe these older products would be safe both for the environment and for human consumption. They're being used in the United States, and they still meet the minimum requirements that we possess for their import into this country. They are also the products that would give them the most substantial cost savings.

[Karen Dodds]

There is a program at PMRA called the user requested minor use program. Again, if users are interested they can organize and make a submission to that program. It's a different way of getting access to a product that's been in place in PMRA for a number of years.

[Brian Storseth, Conservative, Westlock—St. Paul, AB]

Thank you.

[The Chair, Conservative, James Bezan]

Thank you.

Mr. Easter, four minutes.

[Wayne Easter, Liberal, Malpeque, PE]

Thank you, Mr. Chair.

Thanks, Ms. Dodds.

I do believe PMRA has made good progress in the last number of years. On the cost recovery fee issue, maybe I should have known, but I didn't realize that the fees are going back to general revenue over and above a certain cap, I guess. One of the difficulties with cost recovery fees in any event, whether it's put on the registration costs or on the product in other ways, is that all those fees get back down to the primary producer one way or another. If it's a cost to the company it eventually gets back down to the producer, and certainly sometimes with what's considered higher registration fees and R and D fees in Canada, the company doesn't even bother trying to develop a product for a specific market here.

How did we get to the point that there are more cost recovery fees than necessary? This is what I'm getting at.

[Karen Dodds]

I don't think we can conclude that there are more cost recovery fees than necessary. The situation now across the federal government is that if we want to make changes to our cost recovery fees, under the user fee act we would have to bring something to Parliament and you'd see it.

We have had discussions with stakeholders, including grower groups and registrants, for a few years on our cost recovery initiative. We are certainly cognizant of the fact that in this area there is a strong likelihood that fees put upon the registrants are then passed on to those who are buying the products. In our opinion at PMRA, the registrants aren't the sole party getting a benefit from the sale of the pesticides, since pesticides are important in the economic sector in Canada. They are very important in the agriculture sector, the forestry sector, and the lumber sector.

The amount of our total budget that we get from cost recovery fees—I don't have it in my head as a percentage, but I believe our spending envelope total last year was about $47 million, of which about $7 million we were bringing in by cost recovery. Again, what government does through the estimates is set a cap, which is the amount of cost recovery fees that we keep in our budget. Last fiscal year and this fiscal year are the first times in our history we've gone above that, and it's primarily due to more submissions coming in.

[Wayne Easter, Liberal, Malpeque, PE]

In reality, those cost recovery fees—I've been informed by CFIA about some of their on-farm cost recovery fees—are almost at breakeven. Forgetting about the cost recovery fees and dropping the administration.... The administration cost for some of this cost recovery is fairly extensive as well.

Mr. Chair, we need to consider whether to make a recommendation that the money, at least if it's there, go back to where it would lower the costs to industry in some fashion, rather than go into general revenue. This is money that's one way or another coming directly out of farmers' pockets.

This leads me to my second question. One key area of concern, which we constantly hear about from the farm community, is that our regulatory systems—CFIA, PMRA, cost recovery for other programs, environmental programs, and so on—add a burden to Canadian farmers' costs and put them at quite a substantial disadvantage in the marketplace compared with their competitors.

It was mentioned here earlier by someone that we're not allowed to use a certain product, but that our competitors in Mexico, China, or wherever are. The theory is we're not allowed to use that product because it shouldn't end up on the grocery store shelf; however, our competitors' product ends up on the grocery store shelves.

We have to either get to a system where we're on a level playing field or not allow our competitors' products in. We have to get there, because farmers are getting more and more peeved about this situation.

I think you've recognized that. But has PMRA done any analysis, or do you know of any that's been done, which in a chart form or whatever compares our cost recovery in Canada from producers and other costs in our system that Canadian farmers face, either directly or indirectly, that American farmers, say, don't face—or do?

I'm told consistently that our cost regime is much higher than others' and puts Canadian farmers at a disadvantage. We have to level that playing field, because farmers in Canada have had enough of being disadvantaged by regulatory regimes and seeing competitors' products come in here when they don't have advantage.

I'll give you an example from the hog industry, and not related to you. A hog producer went broke two weeks before Christmas—and there are lots of them going broke. One feed additive that he couldn't get for five years in Canada would have made a difference over that five-year period, in his 800-sow operation, of some $470,000—just that one feed additive. This doesn't relate directly to you; it's another regulatory authority. But that's what it means on the ground, on the farm. We have to level this.

The question is, do you have any analysis, and if you have, can we get it?

[The Chair, Conservative, James Bezan]

Let's have a quick response, please.

[Karen Dodds]

I have two points in response.

Under NAFTA, we've been encouraging our grower groups to identify priorities to deal with border irritants. Our growers are working on that kind of thing. What are the pesticides that are causing the most consternation for them at the border?

How they do it is up to them. If they want to do it based on cost differential, or on a flood of American products coming in, they can do that.

Second, the only thing we could possibly have any impact on is, obviously, pesticide prices. What we've tried to do there is harmonize our requirements to the extent possible with the United States' requirements. We are at the point where they can literally send the same submission—and they do—for joint reviews. The exact same package that goes to the United States comes to us. We receive it all electronically. There's so much data. It's not quite in the flash of an eye, but it's consumed in say ten minutes rather than a few weeks, as with the old paper format. We've worked to decrease the costs that are Canadian-specific.

[The Chair, Conservative, James Bezan]

Mr. Miller.

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

Thank you, Mr. Chair.

Just to carry on a little bit further, is there any consideration by PMRA on what the cost is to farmers when you're making your analysis, at the end of the day?

[Karen Dodds]

Under our new act, the definition of value is broader than in the old act. It has always been that within the realm of pesticide regulation in Canada we were looking at human health effects, environmental risks, and what was previously called “efficacy”, now called “value”.

Value gives us a tool to look at some of the economic issues. To date, we've used it mostly under re-evaluation. So if there is a sector and an old product is critical in the economic viability of the sector, a pesticide product, we take that into consideration when we're looking at what uses the product could have.

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

The last time you were before the committee you announced that the first NAFTA label had just been registered. From the report, I think you have two more that have been approved since then. Are there any more? How many more can we expect, or should we expect, in the near future?

[Karen Dodds]

Seven more are under review right now. We're hoping that the trend continues in an upward way into the future.

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

Do you have any kind of timeframe on those seven, or any of those seven?