Thank you, Mr. Chairman.
Thank you for the opportunity to present our views on this important subject. We certainly agree it's worthy of a look at this whole issue, and I agree with what my colleague has already given you in terms of some of the issues surrounding it.
I don't think I need to remind committee members of the importance of the food industry to Canada, but given what's happened to the dollar recently, I just want to remind you that this is our second-largest industry in Canada. It has tremendous opportunities. We're in a golden age of agriculture right now, and certainly we're as nervous as anyone about making any wholesale changes to labelling regulations that could add costs while we're in this opportunity around the world and with Canadian consumers as well. The landscape is definitely changing, but we always have to keep our eye on the cost side when we're doing things.
Current Canadian labelling regulations support a variety of widely accepted practices, which for the most part are well understood by consumers. The labelling regulations that we have in Canada today are based very much on international practices, and often Canadian labelling regulations are copied in other countries. So Canada is a bit of a leader when it comes to labelling, and that's good.
These labelling practices are not unique to agriculture and food. Another important fact to understand here is that a lot of the things we're talking about when it comes to labelling, the principles that underline our labelling legislation, are very much founded somewhat in our tax laws and in our tariff codes and those kinds of things. So what you find in food, you would also find in furniture, for example, and automobiles. So this 51% business really didn't come from the food industry; it really came from the automobile industry and the furniture industry and some of the other industries where foreign content was a big issue and became a policy issue.
For example, if you look at “Made in Canada”, the general perception is that at least 51% or more of the content by value or material is Canadian, and that's widely understood. Just because you say “Made in Canada” or “Made in China”--all the gifts that we get at Christmas-time made in China--doesn't necessarily mean that all the ingredients came from China. I can understand consumers wanting to know where the ingredients come from, but that's not exactly what we're talking about here.
The “Made in Canada” label or statement on the label, the claim on the label, is simply saying that it's manufactured in Canada, and I think most people understand that. Tariff rules are based on this concept. And similarly, if a food--and I think Jim's already talked to you about that--has 51% foreign content, it's usually labelled that way, and it should be labelled that way. If it isn't, it's an enforcement issue.
Then you look at that grade A inspection stamp that appears on a lot of products, or Canada grade of some kind, and the Canada inspection legend, which all of you have seen on these packages that Jim's been passing around--that indicates there's been some Canadian oversight to that particular product. That Canadian oversight means the product met the Canadian rules or there was a Canadian inspector in the plant where the product was produced. So that gives consumers confidence that there's Canadian oversight, but it doesn't convey the idea that it's Canadian content in terms of 100% Canadian content. It may very well be, but that isn't what this is trying to say.
Imports can become Canadian. You've recognized that, and certainly that happens in our plants all the time. This again is a very well-established international kind of approach where we, in the food industry at least, have some kind of understanding internationally now that when you have a chapter change in the harmonized code, so you bring in your meat in a fresh form, uncut, maybe in big chunks, and you then put it in a Canadian plant and you cook it, you wind up cutting it, you wind up processing it, you wind up putting it in pieces and bags and all those wonderful products that you've just seen, that becomes Canadian in the sense that it now can bear the Canadian inspection legend and it can be called a product of Canada, but in most cases we don't bother with that claim. It is simply produced with the inspection legend on it and as a result imported product can appear to be Canadian, at least to some people.
“Product of Canada”, the just-revised chapter 7 of the manual of procedures--and I mean “just”, like last week, so I encourage you to take a look at it, because that chapter is the labelling chapter--encourages federal plants to show the words “Product of Canada”. So CFIA is now telling us to please start using these words “Product of Canada” because a lot of importing countries are demanding that you do this, and of course it's up to the exporting country to meet the importing country's rules. And of course our plants will start to do that, because you don't want to have one label with “Product of Canada” on it and the other label not with the “Product of Canada”.
One of the most expensive things we can do in our industry is to segregate, so if you're forced to make two labels for two markets that's a huge cost for a plant. Segregation means big problems. So we definitely want to avoid that.
You've been recently hearing a lot, certainly from the Canadian Federation of Agriculture and grassroot agricultural organizations, that maybe we need something called “Grown in Canada”, and certainly the U.S. is now looking at “raised” and “born” in the U.S. We're going to see more and more countries start to work in that area, and we certainly have no difficulty if you want to look at a new label, a new claim that says “Grown in Canada” or something to that effect, communicating 100% Canadian.
We would urge you to use the organic labelling exercise, which took three years to get to. This organic label that Canada now has and is now being used is an excellent example of how you can go. What it means is that we have a voluntary organic label and we've got a third-party verification backing it up so that you know as a consumer that the word “organic”, when it comes on the label like that, has something backing it up.
It's the same thing here. If we want a 100% or 95% or 80% Canadian label, we need something to back that up, especially if you want to start saying this is a good quality product, it's a safe product. You can't make those kinds of claims on there if you don't have something backing it up. So you need that third-party verification, and we would think that's a good way to go, but it will take certainly some good thinking to get there.
I think the other thing that is very clear from you having to have hearings on this subject and the kind of input that you're getting from various organizations is that no matter what we have as labelling right now, and what we're going to try to do in the future, it needs an effective communication strategy along with it, because we need to let the consumers know what we're doing and what the labels mean. I don't think we've done a good job in that area.
I'd leave it there, Mr. Chairman.