Agriculture Committee on April 10th, 2008

[Robin Horel]

The wording came from Gilles, not from Christine. I think the wording “Prepared in Canada” is understandable and reasonable. And at the end of the day, if that is going to be substituted for what today is “Product of Canada”, maybe that makes sense. Then have another label that says “Grown in Canada”. But understanding some of the points Mr. de Valk made, what is going to be “grown”? When the baby chick was hatched in the United States but grown in Canada, is it grown in Canada?

[Guy Lauzon, Conservative, Stormont—Dundas—South Glengarry, ON]

I think every sector has the challenges, and that's what's going to make this challenging to come up with the right thing.

Do you agree that, as Mr. McDuff says, it is time we took a look at getting this clarified so that the consumers, when they go into the grocery store, know exactly what...?

[Robin Horel]

I do agree that the consumers should be able to understand, if it is important to them, where the product was grown. I don't agree—at least in my industry, which is the only expert testimony I can give—that this should carry any sort of connotation about superior quality or safety, or any of that kind of stuff. So the communication has to be very careful.

[The Chair, Conservative, James Bezan]

Thank you very much. Your time has expired.

Mr. Atamanenko.

[Alex Atamanenko, NDP, British Columbia Southern Interior, BC]

Thank you for taking time to be here.

Am I right in assuming that to do what you're proposing, Mr. McDuff, would be easier in the fruit and vegetable industry than the meat processing industry? Is that a correct assumption, given the concrete reality on the ground?

Maybe someone could answer that first.

[The Chair, Conservative, James Bezan]

Mr. de Valk.

[Robert de Valk]

Yes, I would agree that it's going to be easier in the fruit and vegetable industry, because I think the origin of the product is much easier to identify in the fruit and vegetable industry and there are fewer products there that are mixed in origin.

The meat industry, as I said, is a very integrated North American industry, and we trade cuts at the subprimal level, at the feed level. We trade them at all levels, and therefore we have inputs we need—for instance, grinding meat from New Zealand and Australia in order to make our hamburgers. So we always have mixes of products and origins. It definitely will be more difficult.

[Alex Atamanenko, NDP, British Columbia Southern Interior, BC]

The next question is to confirm that the crown does not mean it is a product of Canada then, Mr. Laws.

[James Laws]

That is correct. In fact when you started looking at this issue.... I know what it means, and we certainly also don't want consumers to be deceived in any fashion, but we are required to use this. It's probably been for maybe a hundred years, maybe a long time. I would imagine it might be as far back as a hundred years. We are required to use it, so we use it.

But as you saw in the meat samples, we don't say “Product of Canada” on them, but on the stuff we export we do.

[Alex Atamanenko, NDP, British Columbia Southern Interior, BC]

I guess as far as the meat processing industry goes, you mention the COOL regulations in the United States. Obviously they're by law going to have to do something that we are talking about here. So if they're going to be doing something, have you been in touch with your counterparts across the border that you deal with to see how it is going to be resolved if the beef goes back and forth across the border and then they make a hamburger in Minneapolis? Obviously, then, it is not going to be able to be labelled as a product of the U.S.A. So what are they doing?

If they are doing something, I would imagine we should have some kind of reciprocity that we would kind of fall in line with this in all this climate of integration and harmonization.

Are there any comments on that?

[The Chair, Conservative, James Bezan]

Mr. de Valk.

[Robert de Valk]

What they are going to do is stop buying Canadian product, because they have a difficulty in defining country of origin. That's why the Canadian government is on record as opposing country-of-origin labelling.

What you're going to see is that there are groups in the United States that are very much like our groups here in Canada, who are very much in favour and think, exactly as some of us are thinking now, that if you label it “Product of U.S.A.”, you're going to get more business in the U.S.A.

So “Born and raised in the U.S.A.” is a label that is now being talked about. I think that will have some legs. It will move, and I think we can do the same in Canada.

But you've got to understand that the complexities we spoke of in terms of the meat industry are forcing many U.S. retailers to simply say they don't want to be involved in that complexity. Also, traceability in the United States is not going over a lot, as big as it is in Canada. They don't know where some of the meat came from. It is a very costly proposition to go down this road.

We are not getting a lot of help from them in terms of how to do this.

[Alex Atamanenko, NDP, British Columbia Southern Interior, BC]

Do you have any other comments, Mr. Horel?

[Robin Horel]

No, nothing over and above what Mr. de Valk has said.

[Alex Atamanenko, NDP, British Columbia Southern Interior, BC]

Mr. Laws.

[James Laws]

I'll add that of course we do find the rules are not consistent, they're not all-encompassing, they're not targeting all the food sectors, so we're not happy with that.

We really are not proponents of “let's do what they did to us”, because we don't think that's right either. At the same time, it's my understanding that the final rules will only affect retail-level country-of-origin labelling, so there will still be hotel and restaurant applications where we can still get product in that way.

It's going to definitely have an effect on the industry. People who are already sending fully labelled stuff to the United States with “Product of Canada” on it--well, they're already compliant in that regard, but it still adds a bunch of complication, you're right, if they brought in live animals, etc. It's very complicated. It's going to definitely have an effect on the whole supply chain.

[The Chair, Conservative, James Bezan]

Mr. McDuff.

[Gilles McDuff]

In terms of how easy this may or may not be, I have to say that in the vegetable industry, there are also certain complexities, because some vegetables are whole, but mixed vegetables are also sold and may contain ingredients from outside Canada. If the vegetable mixture is made up of peas, beans and corn from Asia, as well as some small Thai corn that only represents 1 per cent of the final product, that isn't a problem. We can still sell Canadian peas, beans and corn, and that is acceptable. We also have a dynamic in the vegetable industry that needs to be looked at, but I think we have tools to do it.

In terms of the Canada—U.S. relationship, Ms. Cloutier knows more about this than I do, but when Aliments du Québec looked at what is being done in the United States, we discovered that 30 States or so, and possibly more, had local promotion campaigns.

Buy in New York, buy this and buy that--I don't think that's the way to go.

I don't think we're out in left field on this. The Canadian agricultural industry is under threat at the present time. That is what people need to realize. We are seeing this in our area. We're telling you this, because this is what we are experiencing. Three plants have closed in the last two years. And, if we look at what is happening in Ontario, there have been quite a few there, as well, in recent years.

So, what do we see on store shelves? We see products from other countries. We do not want negative measures. What we want are positive measures. We will never oppose trade. We will never support regulations that constitute a non-tariff barrier, as some countries may. What we want here in Canada is to ensure that our Canadian products are correctly identified so that consumers can make a choice. If consumers decide that the products being offered for sale by Canadian producers and processors are too expensive, and they prefer to buy different products, well, that's fine. We will get the message. At the present time, we know full well that consumers do not differentiate these products and may not be able to make an enlightened choice. What we want is to support consumers in their choices, as opposed to creating tariff barriers; we want to be proactive, rather than be on the defensive.

[The Chair, Conservative, James Bezan]

Thank you. Time has expired.

We will enter our five-minute round now, so I ask witnesses to keep their responses as brief and to the point as possible.

Mr. Easter, you have the floor.

[Wayne Easter, Liberal, Malpeque, PE]

Thank you, Mr. Chair. I want to save a bit of time here for Ken, if we can.

I think what we're trying to get at here is truth in labelling. As Mr. McDuff said at the conclusion of his remarks, we're trying to identify what is in the package. I think you'll find, regardless of political stripe around this table, we all want to get there and find a way of getting there. So we're looking at truth in labelling.

First, on the COOL, the country-of-origin labelling, that's going to be the reality. There's no question. Both the previous government and this government have fought that issue hard. I'm a member of the Canada-U.S. committee. We fought that issue hard. We've lost it, and that's going to be the reality.

I guess we have to look not only at identifying for consumers what's on the shelves, but also at what we have to do in our industry to protect our interests on this North American continent when COOL is the reality. So if you have any suggestions on that, I'd love to hear them.

A lot of questions have been asked on the labelling side itself, but on the more technical side, there's no question that when you change a label it costs you money. Part of the problem with “Product of Canada” is that the very word itself, “product”, makes you assume it's what's in the package. So that labelling is altogether wrong, and I think we have to either go to “packaged” or “prepared” or whatever, and identify what's in the product somehow as Canadian.

On your end, what is the cost of labelling in Canada? How do we compare with our major competitors? Regardless, I want to see us buying Canadian product, but if we put a cost burden on the people who package or process that product, which makes a Canadian product more expensive when it ends up on the grocery store shelves, we're kind of shooting ourselves in the foot too.

So can you give us any idea what we need to do on that end to ensure that the cost burden of changing the labelling and making it work to identify a product does not make us less competitive?

Then we'll go to Ken.

[The Chair, Conservative, James Bezan]

Okay.

Mr. de Valk.

[Robert de Valk]

There's nothing easy about this whole subject, but the easiest way to ensure that the cost impact will be minimized is to go the organic route. I think you're very familiar with how our organic label was created over the last three years. It was a long process, but it was worth while. The Standards Council of Canada championed that cause. We now have a very good Canadian organic label that we can put out there, in which the industry has confidence, and which, I think, consumers are going to recognize as a very legitimate and worthwhile label.

We can do the same thing by creating a “Grown in Canada” label. I think that's the easiest way to go, to create a new label. That's the least cost to the industry. We don't have to change existing labels. We don't have to worry about existing perceptions having to change, etc.

So if we start off by saying let's really give the Canadian consumer a label that lets them have confidence that something has been grown in Canada--and I like the 80% rule that Quebec has already worked with--I think that's workable. Then try to apply it to as many industries as we can. I think that would be a very good start, and it wouldn't make us uncompetitive.

[The Chair, Conservative, James Bezan]

Is there anybody else?

Madame Jean and then Mr. Horel.

[Christine Jean]

As regards the costs of changing labels, I think the best parallel that can be drawn here is with the new nutritional labelling that resulted in huge costs for the industry in terms of the analysis that was required, obviously, but also in terms of transitioning between labels.

Actually, we're not talking here about a complete overhaul of the label, but rather adding the “Product of Canada” or “Prepared in Canada” designation. That is something that can be accomplished quite easily.

The cost associated with changing labels arises during the transition period. So, if the industry is given enough time to use up its labels before having to order new ones, it would be much simpler for us and would allow us to avoid the costs associated with changing labels.

[The Chair, Conservative, James Bezan]

Mr. Horel, very briefly.