Agriculture Committee on May 6th, 2008

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

Yes, I understand that.

Ms. Cruikshank, we've heard before--not necessarily in this round--testimony from local business people that they often have difficulty in stocking their shelves with local produce because of the distribution system. Can you comment on that, the fact that somebody who's close to a supermarket can't actually sell to the supermarket because of a distribution system, so the big players kind of take over?

[Jeanne Cruikshank]

Sure, I can comment. I think it's not quite on track with the “Product of Canada” topic, but it is an issue that does involve my members. Primarily, it comes down to food safety requirements in this country. To do so, we have central distribution. We do so efficiently, but there needs to be a tracking mechanism in place. And while logistically, yes, a farmer closer to the distribution centre may have some advantages, it is part of the system that regrettably--given the society we live in--is required to make sure those checks and balances are in place. Absolutely, the product we deliver to consumers has to be of the utmost quality and standards. If it were not so, then we would refuse that product coming in at the distribution centre and it wouldn't get to the consumer.

[The Chair, Conservative, James Bezan]

Thank you. I'm going to switch over to five-minute rounds.

Mr. St. Amand, you'll kick us off.

[Lloyd St. Amand, Liberal, Brant, ON]

Thank you very much, Mr. Chair.

Mr. Doering, I represent the riding of Brant, and although my questions would be ruled out of order, I would dearly love to ask you about Six Nations of the Grand River, the Aaron Detlors, the Leroy Hills, etc.

[Ronald Doering]

We can talk after this.

[Lloyd St. Amand, Liberal, Brant, ON]

Yes. It might be a long talk.

Ms. Cruikshank, if I may, you said in your presentation:

In other words, country of origin claims that are developed for the Canadian market must be compatible with those of our trading partners such that the relabelling of products would not be necessary.

You know, as we all do, that Canada is a trading nation. I'd just like you to comment if you're familiar with the practices in other countries. Where do we stand with respect to labelling vis-à-vis European countries, Australia, New Zealand, and of course the United States?

[Jeanne Cruikshank]

I think Mr. Loney has pointed out some of the issues that would benefit from harmonization. I'm actually going to defer to the label expert that I brought along, Bernie Leblanc, for such issues. I believe in many cases we're a bit more complicated, and certainly with the time issues it seems we're a bit delayed.

[Bernard Leblanc, National Labelling Resource, Canadian Council of Grocery Distributors]

There's still a lot of research to be done with other countries. Some countries have similar guidelines to ours. The U.S. has proposed new legislation for country of origin that doesn't go into the depth that we're discussing here today, so what they would develop still wouldn't be compatible with ours.

What we're concerned with is.... For instance, it would be 80% Canadian content in order to say “Product of Canada”. If we're bringing in products from other countries, those other countries don't have any rules, so therefore they could be manufacturing a product--let's just say, for example, a product of China--that could have 40% Chinese ingredients and 40% ingredients from other countries, so there would be no compatibility. If we are going to venture out and change the rules, we need to make certain they are compatible, and that would be part of having a stakeholder committee that would look at all other trading partners.

[Lloyd St. Amand, Liberal, Brant, ON]

Ms. Cruikshank, you also indicated the necessity for a considerable transition time for the industry to comply with any new guidelines. Mr. Doering has suggested--quite rightly, I think--that the “Product of Canada” guideline could, as of tomorrow, move from 51% to 80% or even 90%. There is no question it could be done that quickly, but as far as the on-the-ground effect, what realistic timeframe would be required by the industry in order to comply with the new guideline?

[Jeanne Cruikshank]

The life cycle on the label is basically four to five years, but obviously there are different stages in the process.

I think one of the most important things to agree on is the definition of the label; then, as it's utilized, it will mean the same thing to consumers. So when we talk about the transition to minimize the cost, in some cases, depending on where we are in the label changes, we could do so quickly. But we really want to know that when we do so it will be a common definition, clearly communicated, with a level playing field, and industry will be able to minimize the cost of doing it so that it will not be passed on to our consumers in providing them with the correct information.

[Lloyd St. Amand, Liberal, Brant, ON]

And in terms of time...?

[Jeanne Cruikshank]

It would take four to five years if you were starting from base one. That's the life cycle, but people are at different stages in it. We very recently went through a huge transition with the nutrition facts tables and other issues, and labels are in the process all the time. I'm not saying it will take four to five years to change, but you'd like to be able to get four to five years out of the label when it's out there and not be required to do significant changes for your product.

[Lloyd St. Amand, Liberal, Brant, ON]

What are your thoughts or comments on a “Grown in Canada” label? Will that need to be regulated? As Mr. Doering has indicated, it could have been done by now by the sector itself.

[Jeanne Cruikshank]

We don't think regulation is necessary. I've been involved in pork nomenclature, beef nomenclature--issues that industry has changed very appropriately. We can move forward on that, again with a common definition. It will address some of the products in our grocery stores. We need to do it as a collective effort and include the producers and consumers.

[Lloyd St. Amand, Liberal, Brant, ON]

You can do it, I understand that, but is there a groundswell to do it without big brother coercing you into it?

[Jeanne Cruikshank]

We're increasingly looking for something that indicates a product is totally Canadian, and “Grown in Canada” seems to have many of the elements that would capture that. It's a matter of working it through the system with the right players.

[The Chair, Conservative, James Bezan]

Thank you. Your time has expired.

We'll move on to Madame Thi Lac.

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

Good day and thank you to all of the witnesses for joining us today.

The committee is in the process of reviewing labelling regulations. I would like all of the witnesses to answer a question for me. Should new regulatory standards for product labelling be mandatory or voluntary?

We agree that the “Product of Canada” designation should be reserved for products grown and produced in Canada. Mr. Doering, you spoke at length about increasing the percentage in the case of the 51% rule. Currently, the 51% does not apply to the content, but to the cost. You recommend the status quo in so far as the cost percentage is concerned, but what about the percentage of content?

[Ronald Doering]

That's simply because the 51% rule is based on cost, not content. It was never designed for food. It was presumably for something like importing T-shirts from Asia and then putting on some crests or doing some embroidery. If 51% of the costs are incurred here, you can call it “Product of Canada”--rather than the basic T-shirt or the cotton. If you want to have a direct impact, change that. If it was more than 80% or 90%, you'd probably cut out most of these things where people think that people have been misled.

As far as “Grown in Canada” goes, people use that now. There's absolutely no prohibition against using “Grown in Canada” now. In fact, it surprises me that people don't use it more. It's partly because of the integrated nature of our food system and partly because of our climate. But if someone had “Grown in Canada” on their label today and it wasn't grown in Canada, a single competitor complaint, a single consumer complaint, would go to the Food Inspection Agency. They have 6,000 or 7,000 people there. I am sure that somebody would be sent out to do one of their thousands of investigations. If it was clear that the product was not grown in Canada, they would take one of their many very significant enforcement powers to stop that. It happens every day.

I don't see any reason why you would have any mandatory rules about using “Grown in Canada”. If it's not grown in Canada, it's misleading; therefore under subsection 5(1) of the Food and Drugs Act you could stop its importation. You could seize and detain the product. You couldn't require a recall, but increasingly these days—and I spend a lot of time doing this—they end up talking to the big retailers and they have a product withdrawal, even though it isn't a public health problem.

So we have all the law we need to deal with somebody calling something “Grown in Canada” if it wasn't grown in Canada. There's absolutely no need for any regulatory change to deal with that.

[Jeanne Cruikshank]

We feel that labelling can be voluntary. Enforcement is possible under subsection 5(1). I think a voluntary approach is the way to do this going forward. It would take much longer and be more complicated and costly to do a regulatory change. We can do it, but we need some common definition so that we go forward with something consistently to consumers.

Does “Grown in Canada” include livestock, or only fresh fruit and vegetables? We need to make sure and be cognizant. Some provinces also have provincial rules around this. New Brunswick, for example, has “Grown in New Brunswick”.

As we go forward, I think there needs to be consultation with some of the parties involved to make sure we get it right. When we have a common definition, we should go forward with that. Once we have a sign-off on that common understanding, then it can appear.

It is often of equal value to consumers to know what the marketing and the definitions mean. There's cost in the label and there's also the promotion of it. That's a partnership with government once we have some common understanding of what this means. We need to work together through all the mediums possible to explain what it means. Then we're truly communicating something to consumers, so that they know what they're buying.

[Mark Loney]

I agree 100%. We in Canada are not the only ones who have problems. I have a jar of orange marmalade and it has “Product of the U.K.” on it, which is interesting. They have the same rules we do, I guess.

Voluntary is much easier than mandatory, and I think it could be covered.

[Jeanne Cruikshank]

I'd like to comment on the frustration of what Mr. Loney shared about time delays. It is not exclusive to small business. Within our membership we have considerable frustration on the time delays as well as in getting labels registered. Sometimes it relates to the complexity of labels. Sometimes we're not sure what it relates to. This is not unique to small business. In fact, it is an issue in Canada that, as Mr. Doering says, in some cases impedes the innovation necessary to get products out there.

[The Chair, Conservative, James Bezan]

Ms. Skelton.

[Carol Skelton, Conservative, Saskatoon—Rosetown—Biggar, SK]

Thank you.

It's been interesting this morning listening to your comments. I heard Mr. Loney say he would like to harmonize with the U.S. That's your labelling section. Am I correct?

[Mark Loney]

Yes, it would save me a lot of money. I think it would save the consumers a lot of money. Like I said, I also import. I sell jam in the United States and I bring things like ketchup back. I can buy this in the United States at close to half the price I can in Canada. Where do you think this is made? It's in Canada.

If you had the labels harmonized, I don't think Heinz would price-segregate the two markets. You have the same problem with fertilizer. You have the same problem with everything. A minor regulation brings a lot of cost to Canadians.