Agriculture Committee on April 29th, 2008

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

Thank you very much. I'm sorry for my absence. I had to table a private member's bill on water, of all things.

I have a question, mainly for John, but also for Lisa, for you folks. Under NAFTA, the origin of slaughter equals “Product of Canada”. Am I right? If it's slaughtered in Canada, then right now it's called “Product of Canada”. Is that correct?

[John Masswohl]

The rules of origin in NAFTA are based on tariff change. A live animal is classified in chapter 1 of the tariff; raw meat is classified in chapter 2 of the tariff. NAFTA says if you change the chapter from an imported animal into beef, then the beef has the origin of the country where that transformation took place.

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

So up until now, I guess, if Canadian beef were slaughtered somewhere in the United States, then it would bear the “Product of U.S.” label.

[John Masswohl]

And that's our argument under the U.S. COOL and why we believe U.S. COOL violates NAFTA. We say that if a Canadian animal is slaughtered in the United States, that's U.S. beef.

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

So now, of course, COOL is changing all that. They want to change all that.

[John Masswohl]

That is the proposal right now, and that's why we believe COOL violates NAFTA.

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

So what can we do if they do that? Should we be doing something similar here, or not?

[John Masswohl]

I don't think the proper response to a violation of our trade rights is for us to also violate the same agreement. We believe the Government of Canada should be challenging that U.S. law and hopefully getting a panel report that would cause the United States to bring that measure back into compliance.

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

In the area of the poultry industry, Mr. Dungate, right now 94% of our production stays in Canada and 6% is exported. Is that correct? We're the ninth-largest importer of poultry in the world, and that, obviously, has to come in under that 5% or 7.5% before you get into the over-quota tariffs.

Roughly how much of our consumption is domestic and how much is imported?

[Mike Dungate]

Roughly speaking, of our domestic consumption, about 91% to 92% is from domestic and the rest is from imports. While there have been only two supplementals in beef since 2003, there are supplemental imports every single year, all year long, in poultry.

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

Are the imports tagged? Is it the same as in the cattle industry, that if it's slaughtered in Canada...? If we import the chickens and then they're processed in Canada, does that mean they would have a “Product of Canada” label? How does that work? Or do we import live chickens?

[Mike Dungate]

We don't import live chickens. People can bring in whatever they want, so they'll bring in the highest-value product, and “live” would not be that.

They can if they want to. Yes, the meat can come in and go into a product, and that product can be labelled “Product of Canada”. That's where we're talking about that total cost and value addition. If you're just going to import that meat and put that meat right on the shelf, then in our view, that can't be labelled “Product of Canada”.

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

Is it now? If that chicken breast, for example--

[Mike Dungate]

They rarely bring it in for that. They usually bring it in to put it in another further processed product; they're going to put some value in it here. On that value part, our view is that they have to get that value up to a certain level to make it a product of Canada. I think the example was that if you just add a bit of pepper to it, that's probably not going to do it for us.

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

Do any of you other folks have any comments--Mr. Anderson, Ms. Markell, Mr. Jarvis--in regard to this?

[Lynne Markell]

Do you mean around meat? No.

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

Those are all the questions I have.

[The Chair, Conservative, James Bezan]

Ms. Thi Lac, you have five minutes.

[Ève-Mary Thaï Thi Lac, Bloc, Saint-Hyacinthe—Bagot, QC]

Good morning everyone. I would like to ask you two questions.

My first question is for Mr. Jarvis. Some witnesses who have appeared here have questions about products likes yogurt. How is the decision made to label yogurt a "Product of Canada", since yogurt is made using domestic milk and other products such as coffee or berries, that can be imported? What standards could be used to indicate that yogurt is a product of Canada?

My second question deals with the terminology to be used. The expressions mentioned include "Made in Canada", "Grown in Canada" and "Product of Canada". Several years ago, labelling on most products was quite vague and unclear. Now on the back of the packaging you can see how much sodium, trans fat and calories a product contains. That is very helpful for consumers who want to make healthy or informed choices. However, we know that in restaurants, that information is not put on the menu. People always say that healthy choices are more difficult to make in restaurants, because the standards are voluntary. Some foods in restaurants are identified using "healthy choice" or "no GMOs". That indicates that the product does not contain any, clearly, but does that mean that if nothing is indicated, the food in question contains GMOs?

Are you not afraid that voluntary standards will lead to this kind of confusion? If it says "Product of Canada", it is a product of Canada, but if it does not say anything, does that necessarily mean that it is not from here? It could even be a disadvantage for a product made here not to be identified as a product of Canada, because the standards are voluntary. I wonder if it wouldn't be fairer to indicate, for example, "Imported from Italy and packed in Canada". That may better reflect reality and enlighten consumers as to the choices and purchases they make.

[Don Jarvis]

Mr. Chairman, why don't I start the responses?

First, let's talk about yogourt for a few minutes. Yogourt has been a tremendously exciting and successful product in the dairy industry. In the last 15 years or so, it's experienced 5% to 10% growth per year, so Canadian consumers are demonstrating their interest in purchasing dairy ingredients through yogourt as the dairy product.

I must say that probably 100%--99.9%--of the yogourt sold in Canada is made in Canada. It's processed in Canada. The ingredients are somewhat complex. Yogourt will have sugar. It will have flavours. It will have fruit. It will have active bacterial cultures, and much of that is imported. Many of those ingredients, those small but very significant ingredients important to creating yogourt, are imported.

Probiotics, the active bacterial cultures that are dramatically pushing consumer demand in yogourt, are imported. So if you're trying to determine whether a product like yogourt, which is so important to the dairy industry now, is 100% Canadian because it requires 100% ingredients for a designated mandatory “Product of Canada” labelling, it just won't work.

Those are the problems we encounter when we start thinking about a specific “Product of Canada” designation, and that's why one has to be very careful about looking at a mandatory requirement versus a voluntary requirement.

[The Chair, Conservative, James Bezan]

Thank you.

There are only about five seconds left, so I'm going to move to Mr. Storseth. You're up.

[Brian Storseth, Conservative, Westlock—St. Paul, AB]

Thank you very much, Mr. Chair.

I want to thank the witnesses for coming today. I think we've been carrying on an interesting discussion with “Product of Canada”.

Mr. Masswohl and Ms. Mina, two of your organization's primary objectives are to create an atmosphere to sell more Canadian beef around the world, as well as domestically, and to raise the awareness of the quality of Canadian beef.

Within the current labelling system, do you feel it is sufficient for your organizations to enhance this? Do we need to strengthen what we have, or do you feel we need to go somewhere else with this?

[Lisa Mina]

As I mentioned before, I think the current labelling does support that voluntary approach to the use of “Product of Canada”. We're taking that voluntary approach of building a Canadian brand around Canadian beef to strengthen the communication around choice around Canadian beef. We're seeing that the labelling is there to provide the opportunity to take that voluntary approach, and we're going ahead and increasing the marketing around the product.

[John Masswohl]

We think the definition of “Product of Canada” needs some updating from its 51% value-based approach to more of a transformation-based approach, and of course the education enforcement needs to be looked at as well.

[Brian Storseth, Conservative, Westlock—St. Paul, AB]

I agree with you 100%. More than just economics comes into play here. There's the safety aspect of it for the general public. There's the fraud aspect, the truthfulness within our labelling.

But I want to be more specific, because we've heard some recommendations from other witnesses at this committee, and you think “Product of Canada”, “Grown in Canada”, “Raised in Canada”, “Made in Canada”, “Processed in Canada”. Would you not agree that the more of these labels we have out there, the more it's going to lead to confusion for the general public?