Agriculture Committee on April 8th, 2008

[The Chair, Conservative, James Bezan]

I call this meeting to order.

I want to welcome all our witnesses to our continuing study on “Product of Canada” labelling. This is an issue that is not only important to this committee, but is important to producers, consumers, and processors.

We are welcoming to the table today Grant Robertson and Nigel Smith, from the National Farmers Union. From the Fédération des producteurs de porcs du Québec, we have Robert Monty. From the Canada Pork Council, we have Mary Ann Binnie. Welcome, Mary Ann. No stranger to this committee is Canadian Federation of Agriculture president Bob Friesen. As well, from Dairy Farmers of Canada, we have Jacques Laforge and Richard Doyle. From the Union des producteurs agricoles, we have Pierre Lemieux and Alyne Savary. Welcome, all of you, to the committee.

I remind all witnesses to keep your opening comments to ten minutes or less, especially with the quantity of witnesses we have today. We want to have a good discussion with committee members following your presentations.

With that, Mr. Robertson, could you kick us off?

[Grant Robertson, Coordinator, Ontario Region, National Farmers Union]

The National Farmers Union and our members want to thank you for the opportunity to be here with the committee, for examining this issue, and for allowing us to express our concerns and recommendations. NFU has been working on these labelling issues for a very long time, and it's nice to see that we may be making some progress on this issue.

Since I'm up first, I'll take a step back and tell you two stories about consumers and why this issue is so important. Coming from the agricultural end, we understand the issues, and so will everybody around here.

First I'd like to tell you about myself. I think I'm a pretty savvy consumer when I'm buying products. A couple of weeks ago I was looking for some tomatoes and I looked very hard to find the ones labelled “Product of Canada”. I found them and started digging in the bin and putting them into my grocery cart, only to notice that the “Product of Canada” tomato had a little label on it that said “Grown in Mexico”. So what had happened is that, sure enough, about seven or eight tomatoes in this bin had a Canadian label, but everything else was grown in Mexico. It just shows it's pretty easy to be deceived if you're not on your toes.

The other thing is, from a consumer's perspective, I was invited onto a call-in show. I was scheduled to be on for five to seven minutes talking about “Product of Canada”. I ended up being on for an hour and a half because the phone lines lit up when consumers.... This was in London, Ontario, which is supposed to be the test market for all things Canadian in English Canada. People were just losing their ever-lovin' minds about this issue. There's a lot of concern out there from the average person, and I think they're looking for some leadership.

At the National Farmers Union national convention in London, Ontario, in November 2007, the following resolution was adopted:

Therefore be it resolved that the NFU undertake a campaign that raises awareness and forces federal and provincial governments to provide clarity and accuracy in food and feed labelling.

This has been a long-standing concern.

Just this past Sunday, the Ontario NFU passed the following resolution:

Therefore be it resolved that the National Farmers Union begin to promote a grown or raised in Canada label to apply to food grown or raised by Canadian farmers.

We've always had policy in this area in the NFU, but it's clear that the deceptive nature of what's been happening around food labelling is expanding to more and more products. You can get “Product of Canada” grapefruit juice, you can get “Product of Canada” coffee. Even though Bruce County is the centre of the known universe, we're not able to grow grapefruit, and I don't know of any other part of Canada where they can.

There's been a lot of talk about the basics of the “Product of Canada” issue, but I want to talk a little bit about CFIA's labelling guide for processed fruit and vegetables, because that's also clearly inadequate. I want to give you two examples from it. The CFIA guidelines force Canadian manufacturers to put on deceptive labelling. If it's a product of Canada, if it's actually grown in Canada, it's optional to list that it's from Canada. Many processors do it simply because it's a marketing tool. And that's what it comes down to. We have to ask why companies do this. Why do they put “Product of Canada” on it? It's because they know it works, because consumers will buy products if they're listed as “Product of Canada”.

So the CFIA guide says you have to use terms like “fancy grade”, “choice grade”, and “standard grade”, but they all have to have the word “Canada” in front of them, and that's if the products come from somewhere else and are repackaged or reprocessed here in Canada. The guide gives two examples, and I think these two examples are quite important when we think about where we need to go on labelling.

Number one, cherries from France, imported into Canada in bulk, repackaged and graded in a registered establishment, must be marked "Canada Choice”. They must be marked even though they are coming from somewhere else.

The second example is of apples imported from the United States and processed into applesauce in a registered establishment. The applesauce will therefore be labelled “Canada Fancy”.

So it's no wonder consumers feel they are being misled, because the rules are set up deliberately to mislead them. There are lots of reasons why that came about, but consumers now are looking for something different.

As far as our recommendations are concerned, this is where we think it is critically important to Canadian family farmers and consumers that we have clear and truthful labels on food products, because consumers are becoming increasingly cynical. They are looking to support Canadian farmers. That's what they want to do when they buy those products. But if they start to believe it really doesn't make any difference, then the people who will be paying the price for that will not be the processors or industry but Canada's family farmers, as people move away from that.

The National Farmers Union is recommending that “Product of Canada” labelling be mandatory for fruits and vegetables that are 100% grown and processed in Canada, and only for fruits and vegetables that are grown here, and that the word “Canada” not be used if those products come from elsewhere. We're also recommending that if a food product is processed or manufactured in Canada and is composed of ingredients that are imported, mandatory labels must specify the country of origin of the ingredients and the percentage of imported ingredients. We think it's important that consumers have a clear and present choice. We also believe that Canadian consumers are looking to know that a product is from Canada. So we think it should be displayed, so that people know. If that goes down the road of country-of-origin labelling, which is coming to the United States, then we think that's what consumers want and we think that's the kind of way to support our farmers.

I want to end with the suggestion that I think is typical coming from farmers: that it's just straightforward and there's no equivocation. That's the resolution that came out on Sunday from the Ontario NFU's annual convention. I will just read it again as I conclude:

Therefore be it resolved that the National Farmers Union begin to promote a grown or raised in Canada label to apply to food grown or raised by Canadian farmers.

It's about as straightforward and as simple as you can get. It's clear and it's unequivocal: if it's grown and raised in Canada, then it's grown and raised in Canada. I think that's what farmers and consumers are looking for.

[The Chair, Conservative, James Bezan]

Thank you, Mr. Robertson.

Monsieur Monty.

[Robert Monty, Second Vice-President, Fédération des producteurs de porcs du Québec]

Mr. Chairman, members of the standing committee, I would first like to say that I'm here on behalf of the Canadian Pork Council as well as on behalf of the Fédération des producteurs de porcs du Québec. Thank you for having me today to give me an opportunity to discuss another issue of great concern that affects the Canadian pork industry, namely labelling and import rules.

During our last visit, we talked about the world-wide crisis of the pork industry over the past few years which has worsened over the past few months. You heard a great deal about the high costs of inputs, the spiralling rise in the Canadian dollar and the lack of cashflow among producers. We also underscored that one of the problems that remains in Canada and Quebec is the lack adequate identification of Canadian products. In fact, confusion reigns about the current identification of Canadian products. We are experiencing the same phenomenon in Quebec. Together with this, imported pork products are not subject to the same regulatory standards under which we raise and produce pork here.

We want all the products that we make to be identified correctly, whoever we may be in Canada and Quebec. This is a matter of accountability toward consumers and producers. We're at the point where we're all questioning current labelling of supposedly Canadian products. We're questioning the actual proportion of Canadian content. We're wondering also about the origin of these products. This is a major problem, particularly at a time when Canadian and Quebec consumers are increasingly concerned and interested in finding out the origin of the food they buy and consume. They are interested in the conditions in which the animals are raised. We note that consumers today, particularly in Canada and Quebec, are concerned by the environment, by the safety and cleanliness of food, by the processing and health of the animals and the prohibited use of certain pesticides or veterinary products.

The economic conditions that prevail in an industrialized country such as Canada are such that the working conditions that must be provided by agricultural companies to their workforce cannot rival with those offered in emerging economies such as China and Brazil. In brief, this is a matter of protection and control over what is sold on our supermarket shelves. This is a responsibility we all have toward the consumer.

We should make no mistake in this highly thorny and political issue. Certain considerations must certainly escape us. We all understand that the rules of the import game do not favour Canadian producers right now. We can see this easily just by going to a grocery store, where Canadian and Quebec products are sold at a higher price. On the one hand, exemplary behaviour is expected in Canada; our producers are expected to be beyond reproach. Here, we wash whiter than white, whereas similar products that are imported enter into Canada without being subject to the same rules, and they are sold for less in our grocery stores. Isn't that a double standard?

Of course, we're not here to dictate production rules for other countries. However, one must understand that these rules and standards considerably harm domestic producers. We do not wish to reduce the production standards that govern us in any way, shape or form. We are proud of them. However, we're asking the federal government to protect Canadian and Quebec consumers with regard to products that are imported here. I'm convinced that if Canadian consumers were aware of all these irregularities and implausibilities, they would require some assurance about the origin of the products they buy. In doing so, they would greatly favour Canadian products, which would ensure recognition of our products and the efforts that we've invested in them.

In your opinion, Mr. Chairman, is it normal to see "Product of Canada" on cartons of orange juice?

We all know full well that no oranges are grown in Canada. So how can you know? How can you explain to consumers the reasons behind such labelling? Because it's packaged here? So let's say that adequately, so that the consumer can make enlightened choices. In the mind of a consumer, when he sees the label "Product of Canada", can we blame him if he believes that this is an agricultural product of Canadian origin? This is a question of credibility and responsibility.

In Quebec, we hope to come up with clear identification of the origin of our products, in pork production. We want to see pork products bought at retailers labelled "Quebec". With all the efforts that we've made in promoting that product, it would be logical if the labelling was consistent. Consumers are more and more demanding in this regard, and we encourage them to find out about the origin of the pork products that they buy at the butcher.

You've undoubtedly noticed the importance that we attach to the products we sell and the way we produce them and sell them. Therefore, the federation is recommending tight controls over trade rules in order to allow domestic producers to succeed in this increasingly competitive international market. Let's all be on an equal footing.

Lastly, in order to ensure that consumers can recognize products produced here, that come from here and that are truly produced here, we recommend clear identification of Canada and Quebec products through adequate labelling.

Thank you for having given me the opportunity to present our position on this issue.

[The Chair, Conservative, James Bezan]

Ms. Binnie, the floor is yours.

[Mary Ann Binnie, Nutrition Analyst, Canadian Pork Council]

Good morning, Mr. Chairman and members of the committee.

I'm pleased to be here today to speak on behalf of Canadian pork producers on the subject of “Product of Canada” labelling.

First, let me speak about our group. The Canadian Pork Council serves as the voice of hog producers in Canada. Its membership includes nine provincial industry associations, which represent over 12,000 hog producers. The council serves them through national and international policy advocacy efforts, as well as the development and implementation of initiatives dealing with food safety, animal care, traceability, animal health, environmental management, international trade, and nutrition.

Our leadership has played a key role in allowing the Canadian pork industry to reach and maintain its position among the best in the world. People are increasingly looking at labels when making purchasing decisions. We believe this is due in part to nutritional awareness, interest in buying local products, and the negative reports involving food recalls. Canadians are seeking more information to make decisions that match their personal interests and needs. We should be providing the necessary information so they can make informed choices.

We believe there are two questions the committee should address: first, what is the appropriate definition of “Product of Canada”, and second, to what extent should its use be required?

Looking first at the definition, we know that “Product of Canada” statements can be used on goods containing imported ingredients where there is substantial transformation of the goods, or where at least 51% of the total direct cost of the product or manufacturing process is Canadian. The current guidelines for the “Product of Canada” definition recognize the complexity of manufacturing.

Improved storage, transportation, production equipment, packaging, and availability of labour have permitted the globalization of the food supply. It is a global supply chain where distance to market is no longer an issue.

The current “Product of Canada” approach allows for the presence of some imported ingredients or production steps, which are critical in a globalized world—and the Canadian pork sector operates in this very globalized world. Nearly two out of three pigs born in Canada are exported, either as live hogs or as pork products. Exports of pigs and pork were valued in excess of $3 billion in 2007.

A study by the George Morris Centre, an independent economic research organization, found that those exports alone accounted for 42,000 jobs and $7.7 billion in economic activity in Canada. But we are also becoming an importer of pork. In 2007 pork imports increased nearly 10% from 2006 levels, and over 30% since 2004, in volume terms. Few consumers are aware of this shift, as most fresh pork at the retail case is not labelled by country of origin.

This brings me to the second point, the extent to which the use of country-of-origin labelling is required. The question here is whether or not a country-of-origin label should be required on all products. We have insights into this issue, with our experience with mandatory country-of-origin labelling in the U.S. That initiative from the 2002 farm bill is set to be implemented in September of this year. The U.S. approach is fundamentally flawed and unworkable, placing onerous and unreasonable demands on the industries in both our countries. As it currently reads, for pork to be considered of U.S. origin, it must be born, raised, and slaughtered in the U.S. So if a weanling pig leaves Canada at three weeks of age and is raised on a U.S. farm, is fed U.S. grains, and is slaughtered in a U.S. facility, it will not be called U.S. pork. Producers, processors, and retailers would need to segregate these animals to track their origin of birth. This is tremendously costly and has already started to impact the Canadian market for weanling pigs.

We are now receiving reports that U.S. purchasers of Canadian weanling pigs are ripping up contracts, and we understand they are citing the upcoming COOL regulations--country-of-origin laws--as their reason for doing so. This is causing a further fall in prices for these animals, and it results in lost markets at a time when our industry can least afford it.

As members of this committee are aware, the Canadian hog and pork industry is facing a great deal of uncertainty right now in the wake of a strong Canadian dollar, increased feed prices, and low commodity prices. U.S. mandatory country-of-origin labelling is yet another barrier for our sector. Mandatory country-of-origin laws interfere with the growing integration of the North American pork and hog industry, to the detriment of producers in both countries.

How is it best to get information to consumers without adding tremendous cost to the system? The answer, for now, is voluntary labelling to promote Canadian products. Pork Marketing Canada, a new organization set up to promote domestic consumption of pork, is launching a Canadian pork retail label that will be applied to packages of pork from hogs that originated on Canadian farms. The Canadian Federation of Agriculture is looking for funding for an extensive grown-in-Canada program that would see Canadian agricultural products promoted.

This identification of Canadian food products is needed in order to provide consumers with information for making their own choices. These are voluntary approaches, with definitions and oversight mechanisms that promote Canadian grown and raised products. These approaches, if properly funded and aggressively implemented, will provide Canadian consumers with the information they want and yet will not place unnecessary burdens on the agricultural sector. It's the carrot versus the stick approach.

We should note that we do not consider the discussion of “Product of Canada” claims to be a food safety issue. We look to the regulatory agencies of Health Canada and the Canadian Food Inspection Agency to set policies and implement them to safeguard the safety of the Canadian food supply. These regulatory approaches are complemented by strong industry programs. For example, the Canadian Pork Council's Canadian quality assurance and HACCP programs for Canadian pork producers and processors set a standard and strengthen our reputation as the leader in food inspection and safety. In fact, I'm happy to say that the CPC's Canadian quality assurance program's tenth anniversary is today. It was launched ten years ago, on April 8, 1998.

Should a decision be made to go further and implement a stronger made-in-Canada label, it would be expected that the rules will be transparent; will not have restricting, distorting, or disruptive effects on international trade; and will be administered in a consistent, uniform, impartial, and reasonable manner.

To conclude, on behalf of Canadian pork producers, I would like to thank the committee for giving us the opportunity to comment on this very important issue. We look forward to the initiatives that are brought forward by the government in light of its consultations.

[The Chair, Conservative, James Bezan]

Thank you very much.

We'll have Mr. Friesen, please.

[Bob Friesen, President, Canadian Federation of Agriculture]

Thank you very much, Mr. Chair. Thank you for the invitation to be here.

I had the opportunity to attend this committee meeting last week when you had the CFIA and the Competition Bureau in. I was gratified by the discussion around the table and by the indignation expressed by committee members, and I probably can't add much to that.

I would like to just point out the comment that Mr. Miller made at this committee meeting with regard to grapefruit, and the further commentary he posted on the Internet that grapefruit can be labelled “Product of Canada”. That makes our regulation a joke.

Mr. Miller further went on to talk about garlic and how garlic that actually has been imported from China is labelled as a product of Canada because of the labour used in chopping it up and because of the container. That makes our regulation deceitful.

We believe it's past due that we look at the “Product of Canada” definition, and the list goes on.

I don't think there's anybody in this room who doesn't think that the consumer's being deceived. You could include apple juice. When we had Wendy Mesley at our annual meeting this last February, she talked about fish travelling 24,000 kilometres. I don't remember what waters the fish were fished in, but they travelled 24,000 kilometres to get to High Liner in Nova Scotia, stopping in China on the way here for processing, and again being labelled “Product of Canada”.

I spoke to the Alberta beekeepers a few months ago, and they've been trying very hard for years to change the Canada No. 1 designation on honey. That's a grading standard, but again, it gives the consumer the feeling that this is Canadian honey. They told me that at least half of that honey is from China as well.

What's just as important is we believe that the consumers really would like to be able to make an informed choice, and we know that farmers would like to compete, but it's very difficult to meet those twin objectives when imports are allowed to masquerade as Canadian products. Again, we feel it's important to do something about it.

We've talked before at this committee about the consumer research we did on whether consumers would like to buy Canadian products. You will recall that between 90% and 95% of the consumers polled said that Canadian products should always be clearly defined on the shelf. Between 90% and 95% said they would like to buy Canadian products, would always buy Canadian products if they were competitively priced, and we know that “competitively priced” does not always mean the lowest price. Eighty percent supported an initiative such as “grown in Canada”. Fifty percent said that they would be willing to pay a premium for Canadian products, and in fact 73% of that 50% said they would be willing to pay a higher premium if part of that premium would go back to the farm gate.

It would be interesting to see consumer research of that sort after the recent episodes we have seen on W-FIVE and Marketplace.

Having said that, we certainly support the minister charging CFIA with revisiting the “Product of Canada” definition. We think it's an excellent first step. In that process, we would like to see the elimination of the confusion between “Product of Canada” and “Made in Canada”. We would certainly support raising the content level when the definition is changed, increasing it from the 51% that it currently is at. If that standard is raised, then also, if a product is substantially changed within our very high food-safety standards, there could be another designation that could be “Processed in Canada”. But the “Made in Canada” label we would like to keep for TVs, or widgets, or whatever.

Of course, we do not think that the containers should ever be included in a “Product of Canada” definition. Let's face it: when consumers go to buy food, regardless of the container that it's in, they're not going to eat the container. We believe the consumer thinks that “Product of Canada” talks about the ingredient in the container.

We certainly support the minister's mandate to the CFIA, but CFA members, including UPA and DFC and the Canadian Pork Council, which have been very instrumental in working on this initiative, we believe should go even further than whatever changes might be made by the CFIA to the “Product of Canada” designation.

We would like to see something that talks about 100% Canadian, something that's outside of regulation--because we know that could take quite some time, and it might not go far enough. So the CFA members decided to go to an initiative that we have called “Grown in Canada”.

We know the consumers would like to be able to make an informed choice. We know farmers would like to brand Canadian products. Look, we spend a lot of time, energy, and money bragging about Canadian products internationally. Why don't we brag about Canadian products in Canada as well? We know that imports create a challenge when it comes to competing with imports that haven't been produced within the same food safety standards and haven't had the same costs that are imposed by higher environmental standards and higher labour standards.

We're suggesting a two-pronged approach. One is to have a very clear definition of a “Grown in Canada” product—we're suggesting calling the label “Grown in Canada”. It would be a 100%-Canadian product if it's a single product such as meat or fruit. Also, if you have a combination of different ingredients, the major ingredient must be 100% Canadian.

Then, of course, having an initiative such as “Grown in Canada” would also dovetail easily with the provincial-specific initiatives that are already ongoing, or local initiatives that are already ongoing, or even commodity-specific initiatives that are ongoing, such as the blue cow label that Dairy Farmers of Canada have. We envision that these could all work together and complement each other and make sure the consumers have enough information to make an informed choice.

Then, tied to that, we believe it's extremely important that we have a positive campaign to market that “Grown in Canada” label and to let the consumers know what it's about. What does it mean if they see that “Grown in Canada” label? It could tell the good-news story about agriculture in Canada, it could talk about the high environmental and food safety standards that we have, and it could really market that Canadian product.

That marketing campaign could also explain to the consumer how it's tied in with buying locally, or produced or processed in Manitoba, or whatever provincial-specific initiative we might be able to add onto it. That way, we don't have to spend any time doing a negative campaign against imports coming from other countries. Let's be positive about it, and let's positively market our Canadian products.

CFA members have already worked with other farm organizations to talk about this initiative. We've worked with downstream industry. Food Processors of Canada are supportive of this; Canadian grocery distributors are supportive of this. We envision a non-profit organization that would administrate an initiative such as this. Yes, we would need some funding to start it, to do this marketing campaign until it could be self-sustaining.

On behalf of that envisioned organization, CFA has already submitted a trademark application for “Grown in Canada”. Again, we believe this can be a really, really good news story if we market it right and we show the consumers, who we know want to buy Canadian products and who are very supportive of Canadian agriculture, and make sure we do that positive marketing campaign, together with very clear information.

To close, let me say, this should not be confused with mandatory country-of-origin labelling such as the U.S. is proposing. We are against it, and in fact have already suggested to the government that if at all possible they should initiate a non-tariff trade challenge, either within NAFTA or within the WTO, because we think the voluntary labelling of our own Canadian products is a much more positive and better way to go.

Thank you, Mr. Chair.

[The Chair, Conservative, James Bezan]

Thank you.

Monsieur Laforge.

[Jacques Laforge, President, Dairy Farmers of Canada]

Thank you very much, Mr. Chairman.

A lot of the examples we use in our presentation have been used, so I'd like to focus on four key points in our presentation. For the record, we support the CFA grown-in-Canada approach very highly.

We have a system here in Canada that's been working in a certain fashion that we feel is misleading. In dairy we go back quite a ways about labelling. It's not just about products of Canada. We have a lot of other industry players in the food production area that have been using dairy terms on their packaging when there is no dairy content. We've been struggling. We've received support from a lot of the political parties here on labelling. This is an add-on for us, like when you talk about products of Canada, and so on.

So our board sat down to look at it and basically came up with four key areas. Depending on the approach you use, at least develop regulations for “Product of Canada” claims on food goods, and be very clear about those regulations.

We need to consider more strict requirements for “Product of Canada” labelling than those currently dictated in the guidelines. We have a few examples here. If that's the approach you're going to take, instead of saying it has to be 51% minimum content, we say it should be 70% minimum content, and 70% of the costs of production must be incurred in Canada. Strengthen those criteria, so if most of the product in that package is from Canada, you put the onus on that if you're going to use the “Product of Canada” labelling.

Also make the regulations voluntary, with a less onerous option on minimum Canadian content where you use “Processed in Canada”, with the incorporation of a country of origin and a listing of primary ingredients. So if you have a product that's been processed here but most of the ingredients come from outside Canada, you list the primary ingredients on that package and then you can say it was processed in Canada. That's the approach we'd like to see.

When it comes to using “Made in Canada”, that should apply only to non-food items. “Product of Canada” is for food, and “Made in Canada” is for non-food items. Be very clear on that so it's not misleading.

I think if you achieve those criteria, the less you stir up what we have and the more you clearly define in a better form what that terminology means. Then have a public campaign to promote that kind of approach to the consumers so they clearly know what's being talked about.

In a nutshell, that's basically what we have in our presentation. I'd like to make a final few comments and read through different presentations. I'll do this in French.

We must be very careful in what we do, because the terminology varies from one agricultural product to another; for example, "Product of Canada" versus "Product Grown in Canada". We produce milk, but we grow cereal. We have to adopt French and English terminology that means the same thing. From my experience in agriculture, it's often complicated to use the words "cultivé" and "produit". I don't want to get too technical, but if we develop logos or other similar things, the French and the English versions have to send out the same message.

Thank you very much, Mr. Chairman.

[The Chair, Conservative, James Bezan]

Thank you very much.

Mr. Lemieux.

[Pierre Lemieux, First Vice-President, Union des producteurs agricoles]

Good morning, Mr. Chairman, members of the committee.

Our presentation will be in two parts. I will do the first part, and Ms. Savary who is accompanying me will talk to you in greater detail about the technical part.

The Union des producteurs agricoles is very pleased with the government's position that favours regulations regarding labelling and the use of the term "Product of Canada".

Our brief will deal primarily with the designation of origins, reciprocity of standards, categories of classification and certification of organic products. Producers in Quebec and Canada adopted very strict quality standards with which the industry or the producers go a little further than provincial and federal regulations require. Moreover, environmental standards have also been imposed on us with regard to respecting growing methods.

This business has evolved enormously and we're faced with regulations that go back many years and that have not been amended. Agricultural producers have lost contact with consumers. Historically, when you saw the word "Canada" on a label, it meant that Canadian consumers were in contact with the producers. We hope that this regulation will foster greater contact again, which is what we want, and that producers can be in contact with consumers again thanks to the use of the word "Canada".

After that, producers will be in a position to adopt communication, information and value-added strategies for our products in our contacts with consumers which will mean, we hope, that we will be supported by adequate regulations in order to have an agricultural sector that will be prosperous in the future.

We are working with that perspective in mind. We hope that there will be regulations and we will participate in a fast-track movement to obtain results quite quickly in order to kick-start the agricultural sector.

I would now ask Alyne to continue.

[Alyne Savary, Director of Marketing, Union des producteurs agricoles]

Thank you.

Good morning. It will not come as news to you that there is an income crisis in farming. We have a situation in which prices are dropping, regulatory requirements are becoming more stringent and there is a great deal of competition from imports. Our products have to compete with products from countries around the world, not all of which have the same standards. Consequently, there is sometimes unfair competition. This situation is further aggravated by confusion regarding labelling rules—the subject of today's meeting—which prevent consumers from having clarity when they try to select Canadian products.

However, the Canadian legislation on the rules of origin of products states that no one may in any way mislead consumers or cause confusion as a result of false or misleading representations or allegations regarding the nature, value, origin, composition, benefits, quality or safety of a product. We think that some things could be done to correct the situation and that they could be implemented in a way that would cost less. We think consumers are entitled to be able to make enlightened decisions about the origin or quality of the products they buy.

As regards reciprocal standards, the reliability of the Canadian inspection system and its procedures for monitoring domestic products enjoys international recognition. The same cannot be said regarding all the countries whose products appear on our store shelves. In recent years, Canada has established environmental standards, and a safety and traceability program. In addition Canada's labour conditions are among the most demanding in the world. All of these measures involve additional investments and costs for farmers. And these can rarely be passed on to the market, and for a good reason: it is impossible to determine exactly whether or not a product is from Canada. It is impossible to distinguish clearly which products are Canadian. We think it is essential that the Canadian government take a position and ensure that requirements regarding Canadian products are enforced just as stringently as those that apply to imported products.

We think too much flexibility is shown as regards the identification of products. As was mentioned earlier, the label "Product of Canada" refers to a product for which 51% of the manufacturing costs occurred in Canada and whose final processing was done in Canada. That means that a "Product of Canada" offers no guarantee about the origin of the substances used in the manufacturing process. This can cause confusion for consumers. Even if consumers are prepared to buy a Canadian product, they cannot, on the basis of the label, determine whether or not the product actually is Canadian.

Let us take the example of honey. A great deal of honey imported from Argentina is packed here and may be labelled "Product of Canada".

Our intention is not to prohibit imported products, but rather to ensure that consumers can make enlightened choices, real choices.

The same problem exists for private brands and the brands of major distributors. Some of them obtain their products abroad. For consumers who want more clarity about the origin of their food, this nevertheless means that the origin is unknown. We think the information must be simple and credible so as to help consumers choose Canadian products. This in turn will be beneficial to consumers and to the entire agri-food chain. We also realize that the label "Product of Canada" applies not only to food but also to all other products. We think food should receive special treatment because Canadian consumers are very concerned about agri-food products.

As regards the classification standards, the labels "Canada A", "Canada Choice", "Canada No. 1" and "Canada Fancy" simply add to the confusion. They may lead consumers to think that they are Canadian products, but, as we know, these standards refer only to the classification system administered by the CFIA, and they imply nothing regarding the origin of the products. We think this is misleading to consumers.

I would like to make a brief comment about organic certification. In order to meet European standards, at the end of 2006, Canada passed the Organic Products Regulations under the Canadian Agricultural Products Act. The regulations come under the responsibility of the CFIA. This is essential if we are to continue exporting our products to Europe, and to other places. Something rather disconcerting came out of a round table on organic farming and its regulations; a round table that was held last week. At the moment, the regulations are being studied, but they still allow the "Canada Organic" label to be placed on imported products. However, consumers and producers have long been asking to have this label placed only on organic products from Canada.

Earlier, we talked about the idea of establishing a brand image for Canada. The Canadian Federation of Agriculture is working on the "Grown in Canada" project. Of course we are involved in that. Quebec uses a label "Grown in Quebec" for purposes of identification. We think it would be a good idea to use that as a model. The Quebec government, which has just implemented a strategy to promote Quebec products, will use the label "Grown in Quebec" to identify products.

I will repeat the UPA's proposals: to introduce labelling rules that eliminate any ambiguity regarding the origin of products so that consumers can make enlightened choices, and, in this respect, to restrict the use of the term "Canada" so that it refers only to the origin of a product; to amend the regulations so that the label "Product of Canada" and its derivatives such as "Made in Canada" are reserved only for agricultural products raised and grown in Canada and food made from them; to review the terminology used in the classification standards regarding product quality (Canada No.1, Canada Fancy), to make it impossible to have the word "Canada" appear on imported products; to explain to consumers the definitions of these vocabularies; to require that imported products meet the same production and processing standards as those in Canada; to tighten up the import standards and to give the CFIA effective tools and increased power and the resources required to guarantee reciprocity; to strengthen the certification system for organic products.

The Union des producteurs agricoles is of the opinion that this public discussion will result in approaches that will allow consumers to make enlightened choices and producers to be in a fair position as regards foreign products. Decision-makers have available to them some realistic options that would meet the expectations of international trade. It is up to us to choose the right label.

[The Chair, Conservative, James Bezan]

Merci.

I want to thank all the witnesses for their input. I think those were great opening presentations.

With that, I will turn it over to Mr. Steckle to kick us off on our seven-minute rounds.

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

Thank you, Mr. Chair.

I want to commend all of the witnesses this morning. I think you presented well. You've given us a lot to think about, and I think there's a lot that I certainly totally agree with.

I think it was mentioned by Mr. Laforge, who we had earlier at committee meetings, a number of years ago. He talked about truth in advertising. I think this is what this is all about. We don't have truth in advertising, even at the level we're talking about this morning. You are referring specifically to dairy terms, and that is something we still haven't come to grips with, and we need to. That's just one area. I certainly agree with you.

I do want to make a few brief comments. There are some things I have taken from this discussion. What I've been hearing through forums we've done throughout the country is that “Product of Canada” should no longer be used. That needs to be abandoned. It doesn't give a clear understanding of what we mean when we say “Product of Canada”.

I've been thinking and talking about this for a long time and asking a lot of questions. It needs to be clear. We need to keep it simple: “Grown in Canada”, not “Raised in Canada”. We don't “raise” cherries, we “grow” cherries. We also grow hogs, we grow beef, we grow oats, barley, and wheat, and all of these commodities. We grow dairy products. We don't “raise” milk, we “grow” milk. I happen to be a farmer, so I know these terms.

I think it's important that we keep it very simple--“Grown in Canada”--and then do the advertising and promotion around that concept so that Canadians come to understand when they see “Grown in Canada” on a label that it is a Canadian product.

Whether it's Quebec, B.C., Nova Scotia, Ontario, with rutabagas, or apples in Nova Scotia, or your veal from Quebec, it doesn't really matter. You can put your own label along with that, but that doesn't take away or denote anything less than what the meaning really means when it says “Grown in Canada”.

We know Canadians understand CFIA, PMRA, Health Canada. All of these agencies have done their great work in promoting safety and efficacy in food production. Canadians understand that, but we are misled by this whole area of difficulty in understanding our advertising.

I would like to have your comments on whether “Grown in Canada” is something we can take forward, on whether we can further recommend that these be changed in our regulations so that we can go on, and then promote it from there.

[Jacques Laforge]

I'm not sure of the exact process here. If we mean that we do away with “Product of Canada” and you can't put it on the label any more....

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

The reason I said that is it's been misleading. We can't have two or three. If we put “Product of Canada”, then it is not “Grown in Canada”. It doesn't give that absolution that this product was grown in Canada.

When we buy a “Grown in Canada” product, we know that product was grown in Canada--also processed, perhaps, but grown in Canada.

[Jacques Laforge]

In our submission we talk about still using “Product of Canada”, but putting regulations in place and not confusing it. If it gets too onerous, then they can go and say “Processed in Canada”.

I think the issue for me is more like if we go with “Grown in Canada”, I wouldn't want to see the usage of “Product of Canada”. If you have the two going on at the same time, you might create more confusion. I look at what UPA just said a while ago about “Canada Fancy”. It's the word “Canada” that they want to hitchhike on, I guess, and that's what we need to address.

Which is the best way, that's up for debate. I think that's why we're here.

[Bob Friesen]

That is an interesting point. The reason that CFIA members decided to leave “Product of Canada” alone and go another step and have a “Grown in Canada” label is because we thought the downstream industry had grown to rely on the “Product of Canada” labelling.

Given that the minister has mandated the CFIA to revisit the definition of “Product of Canada”, we support that process, but to get support from the Food Processors of Canada, we wanted to make sure we left what they had grown to rely on intact, but to create an extra designation and to do a strong marketing campaign on it.

But you're right, to prevent confusion it would have to be very clear in that marketing campaign what they stood for.

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

I'd like to hear a few others comment, particularly from Quebec, and Mr. Robertson, on how they arrived at the consensus on “Grown in Canada”. I have no connection with Mr. Robertson's recommendation. I didn't realize you were coming forward with that. He happens to come from my riding and is a great friend of mine, but great friends sometimes think alike.

[The Chair, Conservative, James Bezan]

Mr. Robertson or Mr. Lemieux, do you have a comment?

[Grant Robertson]

I think you're on the right track, Mr. Steckle.

The problem with “Product of Canada” is it's now become so discredited that it's difficult for a lot of consumers--even with a really strong promotional aspect--to get their minds back around the fact. Now people are so skeptical about that term.

We change labelling requirements quite frequently. We add and delete on what is required on nutritional labelling on our food. Obviously there would have to be some kind of lead-in process. But if we're going to keep the “Product of Canada” label, we have to do an awful lot of work to overcome the cynicism. The best way to deal with this whole problem might be to move forward in another way.

[The Chair, Conservative, James Bezan]

Monsieur Lemieux, go ahead.

[Pierre Lemieux]

Our position is almost the same as that of the CFA. As regards the use of the word "Canada" and what is grown or produced here, we want the raw material to be produced in Canada or to be of Canadian origin. If there has been some processing, we have no objection to the use of this terminology. In this context, we must find the right words and the right translation so that people understand what is what.

Our objective is to place more emphasis on the word "Canada", so that the production and processing industries in Canada are given new vitality and so that there is a link between consumers and producers. Ultimately, this will allow producers to develop strategies to reach consumers. In this context, we need regulations that protect this activity.

[The Chair, Conservative, James Bezan]

Monsieur Monty, Mr. Steckle's time has expired, so if you can, make a quick response.