Evidence of meeting #28 for Agriculture and Agri-Food in the 39th Parliament, 2nd session. (The original version is on Parliament’s site, as are the minutes.) The winning word was product.
A recording is available from Parliament.
Conservative
The Chair Conservative James Bezan
I call this meeting to order.
Welcome to the table today for our ongoing study into the “Product of Canada” labelling.
From the Food Processors of Canada, we have Christopher Kyte, and from the Consumers' Association of Canada, Mel Fruitman. Thank you for joining us.
As usual, we turn it over to our witnesses.
Mr. Lauzon, on a point of order.
Conservative
Guy Lauzon Conservative Stormont—Dundas—South Glengarry, ON
Just before we get started, Mr. Easter raised concerns about the order in council appointment of Ian White not being filed. I have a copy of the Journals of February 14, which shows that it was in fact referred to committee on that date, and I'd just like to table that.
Conservative
The Chair Conservative James Bezan
Are you okay with the tabling of the order in council?
Mr. Easter and I have already talked about this. For whatever reason, the order in council didn't land on the desk of the clerk and we never got it circulated, but we will deal with getting Mr. White here, if that's the wish of the committee. My understanding is that he's been on the job since April 1 and it's working out very well.
Mr. Easter.
Liberal
Wayne Easter Liberal Malpeque, PE
On your point, yes, I would say, Mr. Chair, that we would like to have heard from Mr. White prior to his taking the job.
I'm not going to blame anybody for the fact that we didn't see the order in council; these things happen, so as far as I'm concerned, it's water under the bridge. I think the deadline for hearing him is in fact today, so we can't hear him under the regular order in council appointments, but we do want him as a witness at some point in time. I think you know what the question will be from us--whether he's taking his direction from the board or from the minister. We feel his direction should come from the minister.
These things happen. We're not going to argue about it. We thank the parliamentary secretary.
Conservative
Liberal
Lloyd St. Amand Liberal Brant, ON
Very briefly, I don't want to see our witnesses, who I suspect have come some distance, inconvenienced. I just want to confirm, Mr. Chair, that all members of the committee have received a motion from yesterday, calling on the government to implement an exit strategy for tobacco producers. I understand everybody has now received a copy of the motion.
It's not for debate today, but I would ask, Mr. Chair, that we consider this a priority item for our meeting on Tuesday, April 29, and that we debate this motion and hopefully deal with it as first order of business on Tuesday, April 29.
Conservative
The Chair Conservative James Bezan
We do have the notice. The notice of motion was sent around to all members yesterday at about 4:20. We do have our agenda already set for the coming Tuesday. We will add it at the end, rather than the beginning of the meeting, which is the normal process.
Liberal
Lloyd St. Amand Liberal Brant, ON
How much time, Mr. Chair, will you see fit to allot to the motion, then, on the 29th for a proper healthy debate, if it's not passed unanimously?
Conservative
The Chair Conservative James Bezan
I always try to leave at least 15 minutes at the end of every meeting. We'll see how it's going with witnesses. If we can move off the testimony from witnesses at even 10:40 or 10:35, then we can go to motions if you feel you need that much time.
Liberal
Lloyd St. Amand Liberal Brant, ON
I'll just indicate then that I will be, on April 29 at nine o'clock, seeking unanimous consent that we deviate to some extent from our agenda and that we deal with the motion as a priority item that day.
Conservative
The Chair Conservative James Bezan
It's on the agenda. It's on there. We'll be discussing it.
With that, I'll turn it over to Mr. Kyte from the Food Processors of Canada to bring his comments on “Product of Canada” labelling.
Christopher Kyte President, Food Processors of Canada
Thank you very much, Mr. Chairman.
The Food Processors of Canada was created in 1947 to support canners and freezers across the country. No association represents all food processing interests. There are over 210 associations in the agrifood business in this country, and we're one of them, so we represent companies that have Canadian assets. We make things in this country; we're further processors. We make high-end dinners, entrées, pizzas, french fries. We export to 80 countries in 23 different languages.
The agrifood business is an interesting business. It's a very large community, with $32 billion at the farm gate and $78 billion of factory shipments; that's a $110 billion industry, which is co-dependent. There are over 5,000 plants, and 2,300 of them are registered with the Canadian Food Inspection Agency.
FPC did a study a few years ago and we found that 227,000 full-time people working in processing plants generated $18 billion worth of taxes to the provincial and federal governments--that's a fair amount--and that those 227,000 people generated enough wealth in the economy that it supported another 796,000 people, in everything from working in grocery stores to food service outlets to banks. It has a huge multiplier effect.
Is country of origin a factor for us? It certainly is. If you look at primary and processed imports into this country, it's $23 billion. If you look at exports, it's $31 billion. That's a fairly substantial amount of exports. Most of the products, which are all the products under the Canada Agricultural Products Act, have a grade designation, have a country of origin designation, the “Canada” wordmark, but our consumer research also shows that consumers don't have a high degree of interest, that it's not a big factor in their purchasing decision. It is for some of us, but not for everybody.
That's really quite interesting. I was in Farm Boy the other day, and they had two kinds of peas, snap peas and...I can't remember the other one. They came from China. There was all this other produce from the United States and from Canada, and only the peas were sold. I thought that was interesting. It was fully labelled “Product of China”.
We believe consumers want to know, when they buy a product, if it's safe. Is it the right price, and is it what I think it is? Am I buying jam or am I buying something else? Am I buying peaches or am I buying something else? They also want to know, maybe, where it comes from. Some of us, a certain segment of the consuming public, do want to know where it's come from.
Canadian food is safe. Canadian food is very safe. The system works very well. Of $110 billion worth of food produced in this country, both at the farm and in the processing industry, there were only 151 recalls last year. Imports, which represent $21 billion--what, about one-fifth?--had 95 recalls. So if imports were at the same level as what we produce domestically, we'd have 853 recalls. That says something, and I'll talk about that in a minute.
Our recommendation is this. I think you have to reward investors, both Canadian farmers and processors, the people who grow and make things in this country.
One of the things you could do is maybe improve the “Product of Canada” designation. I'm not sure, and I don't want to get into the details of percentages--what is the percentage of this, what is the percentage of that? You've got to remember that a lot of the products that are grown at farm level are also imported, such as seeds and pesticides and chemicals and things like that.
We should explore a voluntary program of “Grown in Canada”. I think that's worthwhile considering. Reward people who feel that's really important to have on their labels.
We should explore a “Canadian made” designation for things whereby you take inputs and add value to them. You import a product and add value to it. There's nothing wrong with that. A lot of those plants that buy apples or grains or whatever also use some imported inputs.
We like the country jobs and the city jobs, and a lot of my members' plants are in the rural areas as well.
I think we should level the playing field. Unregulated products right now can state “imported for” or “packed for”. What you maybe want to do in that case is add the country of origin or the country in which the product was last transformed.
When I was in Farm Boy the other day, they had crushed tomatoes. It was not a graded item and it said “made for” and some company--Cortina Foods or something like that--in Vancouver. I went to the manager of the Farm Boy store--I like Farm Boy, by the way--and said, “Where did these tomatoes come from?” “Oh, they came from Italy.” I said, “You packed them in Vancouver? You brought those tomatoes all the way from Italy to Vancouver to pack? I don't think so.” But I didn't know where they came from, so I didn't buy them.
The second area is strengthening enforcement. As I already said, there's a higher propensity for recalls of imported product. I'm not saying that all imported products are dangerous, but what I am saying is that you should increase border surveillance for finished products. We could justify our investment in inspecting Canadian plants, but we can't justify not spending at the border. The Americans got it right after 9/11.
Another area is increased store checks. I think we've got to increase store checks. I understand there are major shipments of American pork, mislabelled, being shipped in the Ottawa region this weekend. I don't know how true that is, but that's what was said. There's usually some grain of truth to these kinds of rumours. The point is, we shouldn't even have to worry about it.
We should license importers to create accountability. I can't understand how we can forget to license people doing business here. If you're making something, if you've got a plant in this country, you're registered with the CFIA, and they can hold you accountable for your mistakes, but you've got importers who can import mislabelled product, illegal product, time and time again and never be held accountable. There's no mechanism.
So I would suggest that we license importers, increase store checks, and increase border surveillance.
The conclusion I would draw here is that people's comfort level with the food they're consuming is high. The food is safe and the system works. We should be rewarding investors, the people who grow things and make things here. City jobs and country jobs are both important. Level the playing field with improved enforcement levels. Focus on the country where the product is transformed.
Thank you.
Conservative
Mel Fruitman Vice-President, Consumers' Association of Canada
Thank you, Mr. Chair.
The Consumers' Association of Canada is pleased to have this opportunity to present its views to the committee. For over 60 years the CAC has represented the interests of ordinary Canadians in their role as consumers of goods and services, as provided by both the public and private sectors. Our mandate is to inform and educate consumers on marketplace issues, advocate for consumers with government and industry, and work to solve marketplace problems in beneficial ways.
Canadian consumers are being misled by inappropriate and inaccurate use of labels such as “Product of Canada” and “Made in Canada”. During the course of these deliberations I suggest that the committee consider these basic questions: What is the purpose of these markings? Why do we have such markings?
Consumers have two prime interests in knowing where the items they purchased were made and the source of the ingredients or components. One obviously is economic. When given a choice, many would prefer to purchase the product that has the greatest economic benefit to Canada, all other things being equal. However, this is not usually something that they think about right off the top of their mind, unless they've been prompted to do so by some promotional campaign. The other consumer interest relates to a feeling of security or safety, which is affected by knowing the source of their purchases, particularly with regard to foodstuffs.
There is no standard defining “Made in Canada” or “Product of Canada”. There are guidelines. Even though these terms are frequently used synonymously, they do have somewhat different meanings for most consumers. The situation is further confused by the use of grading terms such as “Canada Choice”.
Twenty or so years ago I managed to chair a committee of the Canadian General Standards Board, which was attempting to define “Made in Canada”. The formation of that committee was prompted by the introduction of a federal government campaign inducing consumers to buy Canadian-made products. At that time, while the group came to agreement on what elements could be considered Canadian content, based primarily on work being conducted and/or benefit to the Canadian economy, it became quite clear that it was impossible to achieve consensus on what percentage of the cost would be required to qualify for a “Made in Canada” designation. Some said 51%, while others felt it should be much higher, as high as 80% or 90%. As a result, that committee developed two standards--one defining Canadian content, how you would measure Canadian content, and the other called “Think Canadian”, which skirted the issue but allowed products to be so marked in support of the government efforts. If memory serves, it was out of this process that the phrase “substantial transformation” was developed.
I made a distinction between “made” and “product of”. The term “made” implies a manufacturing process where many things are brought together to form a new item, or that indeed a substantial transformation had taken place. However, even that can be problematic.
I have an example with respect to the “made in”. Even though we are dealing with agricultural products, there is considerable overlap in the two problems. For example, a man's tailored-to-measure suit made of cloth imported from Italy would probably qualify for “Made in Canada” under the guidelines because of the significant labour component. Certainly the cloth has been transformed. Should a distinction be made between that suit and one that has been crafted from cloth woven in Canada, probably from wool sheared from foreign sheep.
The term “product of” implies having been brought forth from, yielded from, grown. The affinity with the term “produce”, which is what we normally refer to as farm products, is clear and that is what is understood by consumers. When we are referring to foodstuffs, the expectation of a “Produced in Canada” or “Product of Canada” label is that the product was grown or raised in Canada. The concept of Canadian value-added is usually alien to consumers in this context.
Thus, it is completely inappropriate, and we submit should be illegal, to label as “Product of Canada” a can of, say, apple juice that is full of a liquid comprised of a concentrate from China to which has been added Canadian water, I guess, and that is placed in a can in Canada. The situation becomes significantly more complicated when we're dealing with a multi-ingredient product such as ice cream or indeed just about any processed food product. With a product of this type, we are starting to see a blurring of the two interests I mentioned at the start. Is there a safety or security factor, an economic issue, or neither or both?
In the interests of providing to consumers truthful, useful, and non-misleading information with respect to food products, we make the following general recommendations, recognizing that they would need more work to provide detail.
With respect to canned or packaged items containing only one or two major ingredients, if those ingredients were grown or raised in Canada and the processing and packing were done here, then the item could be labelled “Product of Canada”. If an item contains multiple ingredients that can be uniquely identified by the consumer, such as a bag of mixed vegetables, the label could state “Product of Canada” if, say, 75% or more of the weight or volume is grown or raised in Canada. Ideally, the source of the remaining percentage should also be shown.
In a blended product, such as ice cream, if the source of the major or most significant ingredient is known to be Canadian, then it could be labelled “Product of Canada”. Conversely, if the major ingredient is known to come from a specific source, consideration should be given to marking that source, and if the major ingredients come from mixed sources or if the blend varies over time, then perhaps there should be no source designation at all.
In order to avoid confusion, the terms “Canada Choice” or other similar grade designations should be replaced by a term that does not include Canada as part of that designation.
Those are my comments for the moment. I'd be pleased to try to answer any of your questions.
Conservative
The Chair Conservative James Bezan
Thank you very much.
We're going to kick it off with seven-minute rounds, and we're going to start with Mr. Easter.
Liberal
Wayne Easter Liberal Malpeque, PE
Thank you, Mr. Chair.
Thank you for the presentations, gentlemen, and the directness to the issue that we're talking about, which is “Product of Canada” designation.
Mr. Kyte, you mentioned in your remarks that there has to be a strengthening of enforcement and increased store checks. I guess I'd put it this way. We did some checking over the last few days, and there is definitely an advertising blitz on pork tenderloin at the moment in this city. It's advertised in one establishment as fresh pork tenderloin for $2.99 a pound and there's no “Product of the United States” declaration on it.
I have samples here that I'm willing to send around to the committee members, and you can have a look at them as well, but it's clearly a grade of the United States product. I have three packages of pork tenderloin here. Two are marked “Pork tenderloin U.S.”, the other isn't marked at all.
It's a blatant violation of our Meat Inspection Act, and I'd ask the parliamentary secretary to serve notice on CFIA that they should be doing those store checks, because consumers do need to be able to make a choice. I think consumers recognize we have a Canadian hog industry in disarray.
They stuck with us when we were in trouble in the meat sector in the beef industry and in fact increased consumption when we had BSE. I think consumers need to be given the opportunity to buy Canadian product and be assured they're buying Canadian product, and that labelling by quite a number of stores is, I think, hurting producers.
So I'll send these around, Mr. Chair, and you can have a look at them. You can see the difference.
Mr. Kyte, in terms of store checks, in your experience, is it a lack of human resources at CFIA, or where's the problem? I will come to “Product of Canada”, but there's no sense of having “Product of Canada” on a label if the enforcement measures by the Government of Canada are not there.
President, Food Processors of Canada
We've had a lot of discussions for many years with the Food Inspection Agency, and I think they recognize they would like to put more controls at the border, because that's really where you should be stopping illegal and mislabelled imports. Unfortunately, they just don't have the resources, but we should be looking at new tools.
Most imported meat and poultry products have a system set up whereby you can control these through a label registration process tied to import control. On this one, I don't know if there was a breach of law or if they were within the law and nothing could be done.
So you need the right rules and you need the right tools.
Liberal
Wayne Easter Liberal Malpeque, PE
The second point you made is an extremely important one that maybe, I will admit, I should have been aware of. I don't know whether anybody else is here, but the importers should be accountable as well. Can you explain that a little further?
You said the importers don't follow the same rules. They definitely should. No matter what our various definitions are, they should have to follow the same rules, and if they're caught several times importing a product, either labelled improperly or whatever, then they should pay a price.
President, Food Processors of Canada
Under Bill C-27 there was a proposal to license importers, and unfortunately it wasn't prominent. It wasn't a big thing and didn't stand out there.
It's time to have these kinds of tools. In most other countries you have some accountability over your importers. Each plant is registered, and if you have recall problems or unsanitary conditions, you lose your licence. But if you're bringing product into the country and there's no control over your behaviour....
In the United States sometimes when they have price wars or there's product that's getting close to the due date, they want to divert that product out of their own market. So if they can get it into the Canadian market, then that brings the price levels up in the United States. We've seen that with ketchup and a whole bunch of farm products.
Liberal
Wayne Easter Liberal Malpeque, PE
Thank you to both of you.
Bill C-27 was a pretty comprehensive bill. In fact, I spent a lot of time on that. I wonder if there are ways of getting to this licensing of importers without the government having to go to the full measure of very extensive legislation. If either of you have any thoughts on that, I'd like to hear them.
The hearings of this committee are really on the “Product of Canada” definition, and you folks understand the definition is that it is only 51% of the cost. I take it from both your comments that neither of your organizations has a problem with changing the “Product of Canada” designation. I don't know where we'll end up, whether 80% or 70% or somewhere in between, but the definition should actually define the product itself--what's in the package. As long as the guidelines and rules are clear on what that definition is and that it targets the product in the package, would your organizations generally not have a problem with that definition?
Vice-President, Consumers' Association of Canada
Yes, generally we would not have a problem, again, as long as it is quite clear. I understand there have been some other possible terms thrown out for use. No matter what conclusion is come to, those terms have to be clear. They have to be well defined. What they actually mean has to be able to be understood by consumers.
Certainly if the “Product of Canada” designation continues to be used, then that would suggest to consumers that the product itself was grown or raised in Canada, independent of any value-added that may have come after the fact.
President, Food Processors of Canada
Yes, I agree. When we looked at the Dairy Farmers of Canada's submission, we thought that was a very reasonable approach.
Bloc
André Bellavance Bloc Richmond—Arthabaska, QC
Thank you.
Mr. Kyte, you testified that in your opinion, consumers are not the least bit interested in product origin. You even alluded to a study that had been done. I agree with you. Just drive by any Wal-Mart store and you will see a full parking lot. Unfortunately, many people are still willing to buy products made in China or some other country, when here at home, furniture and textile workers, and perhaps even members of their own family, have lost their jobs. These shoppers do not necessarily see the importance of buying products made in Canada which although often more expensive, are also no doubt of a higher quality. But we can come back to that subject later. Some families, understandably, are also on a very tight budget and make every effort to buy goods at the lowest price possible, regardless of where they come from. People need to be educated about this issue.
I am not arguing with you about the fact that not everyone is concerned about product origin. However, because I am interested, I have noticed that quite often, when I return home after an outing, I note that the label on a product might read “Canada No. 1”, not “Product of Canada”. Basically, I realize that I have been duped. In the final analysis, marketing trumps the truth.
You mentioned a study that had been done. Do you have a copy of that study? Could it be of some use to the committee?
President, Food Processors of Canada
No, I don't have a study. Individual board members had conducted studies on their own products to determine how consumers would react under different situations. Also, as you said, Wal-Mart is very happy to have a product of Canada in a Wal-Mart store. It's a big change from what they normally sell.
I quite agree with you that there's nothing wrong with the Government of Canada doing a “Buy Canada” promotion. There's nothing wrong with that; we do it in the United States all the time.