Agriculture Committee on Nov. 21st, 2007

[The Chair, Conservative, James Bezan]

I call this meeting to order.

I do apologize for the delay. The room had been secured earlier for whatever reason, whatever meeting was in here before, and it does take a while to get the communication devices switched back to transmitting for the purposes of Hansard recording and broadcast.

We are kicking off our study on Growing Forward, but we want to do a specific study as well on the issues facing the livestock industry right now.

We're lucky to be joined today by the Canadian Food Inspection Agency, represented by Dr. Brian Evans, who's no stranger to this committee. He's the executive vice-president and chief veterinary officer for CFIA. We have Paul Mayers, who is the executive director of the animal products directorate; and we have Cameron Prince, the vice-president of operations. Thank you for coming.

With that, you have up to 10 minutes, Dr. Evans, to make your opening remarks.

[Dr. Brian Evans, Executive Vice-President and Chief Veterinary Officer, Canadian Food Inspection Agency]

Thank you, Mr. Chairman and distinguished and honourable members of the committee, for this opportunity to appear before the committee in support of its very important work.

My name is Dr. Brian Evans. I am the executive vice-president of the Canadian Food Inspection Agency—an additional role since my last appearance before you—otherwise known as the CFIA, and the Chief Veterinary Officer of Canada.

As the committee is aware, the CFIA serves Canadians by providing protection from preventable health risks, delivering a fair and effective regulatory regime, sustaining the plant and animal health resource base, and promoting the security of Canada’s food supply and the support for domestic and international market confidence thereof.

From what I understand, the committee would be interested in five main topics today: food safety, food inspection fees, the reciprocity of US fees, tuberculosis testing in Manitoba, and specified risk material, or SRM, in particular the implementation of the enhanced feed ban.

I will say a few words about each topic and then certainly invite your questions.

Food safety is of course the Agency's top priority. For that reason, we welcomed the reaffirmation of the importance of food safety in the Speech from the Throne.

Factors affecting food safety, such as globalization and consumer demand, are constantly evolving, so we cannot afford to become complacent. For that reason, we are taking steps to adapt our inspection approaches and improve the quality assurance programs of the industry to protect Canadians from unsafe food and products, to cooperate with international partners to improve the safety of food before it arrives at our borders, and to raise awareness among Canadians about food safety.

With respect to food inspection fees, the CFIA was created, as many will know, in 1997 to be partially dependent on revenues from inspection services. Many of Canada's trading partners also charge fees for inspection programs and services. Each country sets fees in response to its own circumstances, the result of which can lead to differences in relative cost of services paid by competitors. The CFIA's user fees, of course, have been frozen since 1997.

With respect to TB testing in Manitoba, the CFIA surveillance strategy for bovine tuberculosis in the area of the Riding Mountain National Park includes regular testing of approximately 650 herds of cattle. The current testing plan was agreed to by the Manitoba Cattle Producers Association in September 2007.

Testing is done to protect the health of livestock in the area and maintain the area's status as TB-free, which is critical to maintaining market access and consumer confidence. Both of these outcomes have a direct benefit for area producers and the Canadian economy.

We know that producers are seeking additional funding to assemble the herds. The CFIA is providing technical advice to discussions between the industry, the provincial government, and federal departments to explore options.

With respect to specified risk material and the enhanced feed ban,

It is always better to deal with a problem directly than to hope it will go away. Certainly, the government has worked hard to deal with the impact of BSE in an upfront and transparent manner, and the international community has appreciated and rewarded our efforts.

Last February, the committee heard how the government ordered the removal of specified risk material, SRM, from the entire feed chain, pet food and fertilizer chains. This enhanced feed ban, which came into effect in July of 2007, is intended to remove upward of 99% of potential BSE in captivity at the top of the chain. This will help us eradicate BSE from Canada within 10 years, instead of over several decades.

The CFIA worked closely with the industry and with the provinces on the enhanced feed ban leading up to the July 12, 2007, implementation date and beyond. This has resulted in a relatively smooth transition. The CFIA has maintained regular interaction with stakeholders since the implementation. The focus of those discussions have evolved from ensuring a clear understanding of the new regulations to one of exploring alternate processes and approaches to achieve the outcome and reduce the implementation costs to the sector.

Thanks to the enhanced feed ban and other measures to control BSE, the World Organisation for Animal Health, known by its previous French acronym of OIE, recommended that Canada be recognized officially as a BSE controlled-risk country in May 2007. This designation will go--and has gone--a long way to restoring full confidence in our cattle industry.

Mr. Chairman, we would be pleased to respond to any questions raised by committee members.

[The Chair, Conservative, James Bezan]

Thank you, Dr. Evans.

Just to remind committee members, we will continue until bells ring for votes. This should happen at about 5:30 p.m.

We'll go to our first round, so Mr. Boshcoff, seven minutes.

[Ken Boshcoff, Liberal, Thunder Bay—Rainy River, ON]

Thank you very much.

I am going to try to present a case study scenario here about a Canadian distributor.

Do you remember Malkin's jam in Canada? It has now ceased production.

We have a small businessman who wants to essentially sell the jam into the United States. He got all the approvals from the food and drug agency, but to sell it in Canada, he still hasn't gotten there yet. It's very interesting.

Is that enough of a scenario for you to go on, Mr. Evans? I believe it should be.

So this person is a grocer who actually imports goods from the United States to Canada. When something comes into Canada, you simply put a bilingual label on it, and that's apparently enough. For small businesses who are trying to export....

He's now been at this close to 10 months, without any kind of support or approval from the CFIA.

As my first question, what is being done to rectify the barriers for small businesses who attempt to enter international markets?

The second question concerns the issue of harmonization of packaging standards. Is it on the radar for CFIA? I ask this simply because of his experience with the FDA. They seem to be quite encouraging, as opposed to restrictive.

Understanding that both governments, Canada and the United States, are trying to streamline our policy with the security and prosperity partnership, what is the status of your cooperation, integration or level with the FDA? What areas of your policy would be impacted by SPP? Are you aware of any food distributors able to sell their products with a singular integrated nutritional information label acceptable to both countries?

Basically, are non-Canadian distributors subject to the same labelling scrutiny as Canadian producers when they are attempting to launch their product in Canada? That's a topic that comes up in this committee often.

At the CFIA, what steps does a food product go through before it is registered?

[The Chair, Conservative, James Bezan]

There are a lot of questions for you there, Dr. Evans. You have about four minutes to answer them.

[Dr. Brian Evans]

We're here to serve.

If I could, Mr. Chairman, I would request if it would be possible to invite Debra Bryanton from the food safety directorate to join us at the table.

[The Chair, Conservative, James Bezan]

That's not a problem.

[Dr. Brian Evans]

She has responsibility in areas of food labelling.

In anticipation of Debra's joining us, just let me iterate at the front in response, and not take up her time, that obviously, from our perspective it is extremely important that we continue to adapt our regulatory frameworks in Canada to be outcome based, not prescriptive, and to provide the opportunities for all business, small or large, to reap the economic rewards of the safety of the Canadian food inspection system.

We feel also very much that with the work that is being done under SPP in collaboration--and I'll ask Debra to speak to that specifically--we are in fact making progress towards harmonization. But we also recognize that within Canada, as CFIA we have a shared responsibility in that Health Canada sets standards for nutritional labelling. It is our role to enforce. So it will be equally important that in our discussions with FDA this is not a single-agency discussion and is a broader government of Canada approach.

Debra, can I ask you to speak.

I don't know the product specifically, honourable member, but it's jam, made from good Canadian strawberries.

[Debra Bryanton, Executive Director, Food Safety, Canadian Food Inspection Agency]

Thank you, Mr. Chair.

All foods in Canada are subject to the Food and Drugs Act and regulations. In addition to that, we also have trade and commerce legislation that does apply to specific foods in Canada. So under the Canada Agricultural Products Act we do have a range of regulations that cover various food products, primarily oriented around those that are grown and manufactured in Canada.

The jam that you're speaking of is covered by the processed product regulations, and there are provisions in those regulations that relate to jams as well as other processed fruits and vegetables.

I'm not aware of the plant that you're referring to, but there is provision to be registered by the CFIA to be inspected for the purposes of interprovincial and international trade. Certainly, if you leave us the name of that company, we'd be happy to follow up on that.

The provisions are not overly onerous and they are equivalent to those in the FDA. The FDA does not have trade and commerce legislation, so they don't have a lot of preregistration requirements related to products going into that country. So at times it's not surprising that FDA is willing to accept a product solely on the basis of our food and drug legislation and not necessarily looking at the additional provisions of trade and commerce.

On nutrition labelling, all food safety and labelling provisions that apply to Canadian manufacturers and products also apply to imports. In the case of nutrition labelling, there are some slight differences between our nutrition panels, and this has been a point of discussion between Canada and the U.S. for a number of years and continues to be through working groups under the NAFTA.

With regard to the security and prosperity partnership, there is a range of food-related issues that have been identified for discussion with FDA and our counterparts in Mexico as well. One of the initiatives we are currently looking at relates to fresh fruit and vegetable safety, because industries and governments in all of our countries are looking at means to enhance produce safety. So that has been a focal point of attention.

With the announcement of leaders recently in Montebello, we are also looking at initiatives relating to import product safety. So there's a great deal of close cooperation between CFIA and the Food and Drug Administration in the U.S. We do a lot of work together, a lot of food safety investigations together, and we cooperate on food recalls as well.

[The Chair, Conservative, James Bezan]

Thank you, Ms. Bryanton.

Monsieur Bellavance, sept minutes, s'il vous plaît.

[André Bellavance, Bloc, Richmond—Arthabaska, QC]

Thank you, Mr. Chairman.

I thank you for your statement.

There have been many changes at the borders since our last meeting. The Americans, in particular, have just implemented much more rigorous inspection standards for the E. coli bacteria. There was a case in Alberta and, as usual, Americans have been quick on the trigger and have imposed some standards.

This makes me think—and I would like us to talk about that—of the whole matter of non-reciprocity between Canada and the US as far as various safety standards are concerned for our animals and our food products.

For example, I would like someone from CFIA to speak about those inspection standards for the E. coli bacteria. As far as I am concerned, the reaction of our Minister of Agriculture has been very lukewarm. He said he was very disappointed by the implementation of those new safety standards by the Americans, but his disappointment does not do anything for our producers.

Why do we not implement standards as rigorous as theirs in order to make US producers angry with their government so that they will begin to ask why they are having problems at the border where it would be more difficult for them to get their products through? We never react in this manner. It is always the same thing: Americans impose their standards and we accept the consequences. I have strong reservations about this, just like our producers.

This brings me to the issue of the specified risk materials, or SRMs. I have heard it said that it costs about $40 per head to our producers to dispose of these materials. We have nothing against improving our safety standards in Canada, we understand there have been problems with BSE and we certainly do not want to hide our heads in the sand. However, from what I understand, when Americans send us their cattle, they do not have to meet the same standards relating to specified risk materials. There is a double standard there. Once again, we do not ask of the Americans what we ask of our own producers. We force our producers to bear an additional cost with those new standards but what is being done with those SRMs? I have heard talk about producing biodiesel with them but there is still nothing concrete. So, they have to be buried. Something will have to be done with that.

Mr. Evans, are SRMs dangerous for public health and safety? If so, why do we accept what is coming from the US? If not, why do we impose those standards to our producers?

[The Chair, Conservative, James Bezan]

Dr. Evans.

[Dr. Brian Evans]

Thank you, honourable member and Mr. Chair.

Let me begin by addressing the fact that we very much believe and support the reality of the SPP initiative. In fact, our desired outcome is an integrated border that provides for benefits for both countries.The imposition of measures at the border--measures that thicken the border or that increase costs and reduce competitiveness--I don't believe is consistent with the approach we are trying to take to the Americans to ensure that our industry has access to U.S. markets and to ensure that the safety and quality of Canadian foods, in Canada and the United States or any other market, is recognized as ranking as good as, if not better than, food produced anywhere else in the world.

Let me start on the E. coli circumstance and the introduction of measures on testing at the Canadian border. Coming out of the three leaders' summit in Montebello, there was a clear commitment made by all countries to look at enhancements to food safety. Within the North American context, this was further iterated in the Speech from the Throne, which we strongly welcome.

In that regard, in dealing with E. coli specifically, it is important to note that measures being introduced for testing of Canadian product entering the United States are also being followed by measures by the United States to test beef products, beef trim used in hamburger, from all countries that export to the United States. That will be phased in, as we understand it from our U.S. colleagues, starting in January.

So in fact they perceive the measure that's specific on E. coli as being one that's not targeting Canada but is part of a broader strategy and one that we ourselves have been investing time and analyzing in terms of a comparable approach, again, because we want to secure the North American marketplace. We do not want this to be an opportunity for the United States to impose additional restrictions on Canadian packers and processors, or food retailers in fact who would be importing beef products from other countries, and use this as another reason to segregate or differentiate product. Our view is that the product is safe. It has a market, and that market should respect the safety of that product.

On the issue of specified risk materials, I would point out that, yes, the challenge in terms of the measures that were adopted in Canada in advance of measures by the United States...we are fully cognizant there were costs associated with that. We have worked, not only in terms of our previous presentations, on ensuring that regulations were not prescriptive but rather were outcome-based, and subsequently, to their implementation, are working forward with an industry advisory group that has looked at alternative approaches that could be followed to achieve those same outcomes as provided for in regulation. That group will be presenting to the Beef Industry Value Chain Roundtable in December for consideration of adjustments in those measures that would reduce some of those additional costs.

Furthermore, we were made aware earlier this week that the Food and Drug Administration has moved forward to submitting their proposed new rules on SRM for animal feed to OMB in the United States. So we look forward, at the point that it is posted by OMB, to have a full understanding of the scope of those measures, as they would be applied in the United States.

Having said that, with respect to the safety aspects, no animal feed, obviously, can enter Canada unless it meets our domestic standards. Imported animal feed from the United States has to meet the requirements of Canadian standards for feed. Similarly, on the issue of live animals, U.S. animals that would enter Canada would be subjected to the slaughter and inspection requirements in Canada, including the removal of all SRM from the human food chain, and parallel to that applied to Canadian animals. So the SRM, as it relates to the feed issue, is not a direct human health consequence because they are managed through processes of removing SRM at slaughter of animals.

On the handling of the SRM in Canada, there are multiple pathways currently in place that deal with incineration and with deep burial of the product. As you've indicated, industry is continuing to invest in innovation and technology approaches that would find alternate uses for the product, including biofuels and other types of products. I think these are areas that merit us ensuring that the material that is being taken out of the food system is disposed of in a way that prevents it from coming back into the food system in any inappropriate way.

The lessons that have been learned internationally around control of this material were a large part of our regulatory approach in managing SRM removal from animal feed to ensure it could be done in a way that was environmentally sound, had the support of industry to ensure there was a high degree of compliance, and that the measures could be verified and enforced.

[The Chair, Conservative, James Bezan]

Dr. Evans, your time has expired.

Mr. Miller.

[Larry Miller, Conservative, Bruce—Grey—Owen Sound, ON]

Thank you, Mr. Chairman.

To Mr. Evans, Mr. Prince, and everyone, thank you very much for coming.

Our record on food safety around the world is second to none. I know that the CFIA has had a big part in that. We thank you for that.

It doesn't matter whether it's government, one of our agents, or whatever, there's always room for improvement. You're probably aware that we passed a motion unanimously here on Monday to ask the minister to review all inspection fees charged by the CFIA. I think that's something we should do from time to time.

Basically, my goal when I suggested this motion was to try to address the real competitiveness deficit our producers here have, especially in the livestock industry, compared to their U.S. counterparts. For example, a Canadian exporter pays for inspections and certifications to get his animals to the U.S. Then the American importer faces basically the same fees.

Now, this really throws it out of whack, especially when I find out that the fees paid in the United States actually go to the American cattlemen's beef board, which I presume is equivalent to our Canadian Cattlemen's Association. So the producer groups are able to collect in the States to help fund it.

I'd like you to comment on that issue alone. I have some other examples, but I'd like your initial comments on review of the fees.

[Dr. Brian Evans]

Thank you.

We are cognizant of the motion the committee has brought forward. We have already commenced an analysis of the inspection fees in circumstances, as applied by CFIA, in order to allow the minister to be informed and respond to the committee in the most responsible way. So that work has been initiated, and we thank you for providing direction in that area.

As I've tried to stress, we are very cognizant of the significant economic challenges that are being faced by the livestock sector at this time. On the competitiveness elements of that, we have an enormous sense of respect and pride that in spite of these economic challenges, the vast majority of producers in this country remain at the forefront of stewardship in food safety, animal care, and producing livestock of top quality. In spite of these challenges across all the various sectors, whether it be pork, beef, poultry, or others, the reality is that producers in Canada are stewards of animal health and animal care in this country. We applaud them for their continued devotion to that. I think it speaks well of them and helps us in our efforts to continue to give them an advantage in domestic and international markets.

As I indicated at the outset, when the CFIA was created in 1997 there was an expectation on the part of Parliament that we would derive a percentage of our operating revenues from the recovery of inspection fees. It is my understanding that is still the expectation.

There has been a moratorium in place since 1997. The fees at that time were introduced to try to recover approximately 30% of our cost of delivery of inspection programs to industry. That recovery is still being done at the level of 1997 dollars, although our salary and overhead costs are no longer in that ballpark. So the overall percentage aspect of that has certainly challenged us in order to continue those services. In all honesty, in spite of the economic challenges of the industry I don't think we've been increasingly contributing to a non-competitive circumstance through our fee structures.

It does merit a review to ensure that where fees are being charged, if there are opportunities to find alternate levels of service delivery and alternate mechanisms to deliver that service by a third party in a more cost-effective or less costly way than it can be delivered by government, then we are certainly advocates to move in that direction.

[Larry Miller, Conservative, Bruce—Grey—Owen Sound, ON]

I'm looking forward to the results, recommendations, or whatever that come out of that review.

In the March 2007 performance report, there was mention of discriminatory practices and unnecessary barriers to Canadian farmers. They're mentioned as being a key risk. I think it was worded “strategic outcomes”, but basically I take that to read there's a feeling that they are impeding CFIA's work in some way. I would like you to comment a bit and maybe give us a specific example of what you see there and what you're doing to overcome that.

Also, I was interested in your comments on initiatives that standardize food safety standards. You seem to be in favour of that, and maybe you could comment on how we achieve that.

[Dr. Brian Evans]

Again, thank you for the question.

Let me address the latter part in terms of standardization. I think it's absolutely essential in the world today. We are in fact trying to manage as best we can a real global food supply in terms of shelf-ready product, in-time delivery, perishable product, as well as expanded supply chains on the part of various industry sectors, to provide consumers the types of products they are seeking. Obviously that is a constantly changing dynamic. It forces us to adjust and, as part of continuous improvement, to review and revise our inspection approaches both within Canada, before it gets to our border, and at our border.

On the aspect of trying to move to common food safety standards through science-based standard setting at the level of Codex Alimentarius under the FAO in the United Nations, Canada is a significant contributor along with Health Canada. We think this is a very important element, because with this globalization of food supply we will never fully inspect and test our way to food safety. It will be incumbent on all countries to embrace common scientific-based standards in their production systems that are auditable and verifiable in order for them to be eligible to get into our market. We have an obligation to make sure these science-based standards are sound, that they are commonly agreed and adopted, and more importantly that they are commonly implemented and verified.

Could you refresh me on the first part of your question, honourable member?

[Larry Miller, Conservative, Bruce—Grey—Owen Sound, ON]

I talked--

[The Chair, Conservative, James Bezan]

Your time has expired, Mr. Miller.

If you don't mind, Dr. Evans, we'll move on.

[Dr. Brian Evans]

We will come back to the resource issue.

[The Chair, Conservative, James Bezan]

Mr. Atamanenko, please clean up our seven-minute round.

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

Thank you very much for being here, and thanks for all your hard work.

I want to follow up on what Larry asked with regard to the inspection fees. The pork and cattle producers I talked to this week are in a real crunch; that's something we all know. They're telling me there's going to be people in two months who may not be able to continue their operation. Is there not a way to get a short-term fix to waive these inspection fees at the abattoirs and the borders to at least give our folks a level playing field at this point in time?

It's my understanding and their understanding that the Americans don't have these fees. They're being hammered by the dollar and other aspects. Is there no way we can at least waive these fees to make it a little easier for them?

[Dr. Brian Evans]

Thank you, honourable member, for the question.

Certainly there are processes arising, both from the motion of this committee and in advance of that the directions received from the federal, provincial, and territorial ministers to address this issue in concert with Agriculture and Agri-Food Canada. In fact we are looking at the mechanisms that could try to minimize costs associated with our current activities at the same time as CFIA continues to provide sustainable services.

Again, currently the revenue generation component constitutes about 10% of our operating budget. I've tried to describe the evolution to try and adapt our inspection systems as we continue to provide the support to our industry that will allow them to succeed internationally, whether it's the investments in surveillance, in disease control programs, or the investments in the registering and approval of slaughter houses and the effects there.

We are looking as earnestly as we can at opportunities with the department to try to figure out programming that would offset those direct costs to the producer and industry sectors in this country. We hope to be able to elucidate recommendations in that regard in the shortest time possible for consideration of this committee and at the same time ensure that we can continue to deliver the full range of services necessary to sustain public confidence in the inspection systems we are delivering.

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

Do you have a timeline as far as specifically the inspection fees at the abattoirs and border are concerned, a timeline so these folks can know maybe when this will be resolved in the short term?