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.