Agriculture Committee on May 8th, 2008

[Paul Mayers]

On the issue of resources, the short answer is it's always possible to do more with more resources. The question, though, also goes to efficiency and effectiveness. From a Canadian Food Inspection Agency perspective, irrespective of the amount of resources available, we will always still have to address these issues in the context of priorities. Human health and safety will still always come first. We will always also have to be cognizant of our responsibilities in relation to protecting Canada's animal and plant resource bases, as part of our consideration of the overall application of the agency's resources.

As Ms. Barry mentioned, our approach currently to enforcement related to this type of labelling is more responsive than it is proactive. It is certainly possible to envision a system with additional resources that would increase proactivity. But I am not going to suggest that resources are the issue in terms of our ability to enforce the requirements, though additional resources would allow us to take a more proactive approach to their resolution.

You asked a question regarding timeliness. I'm going to ask my colleague to speak to the issue of label approvals, because the timeliness question you asked related to approving labels between Canada and the United States.

[Debra Bryanton]

In general, the Canadian Food Inspection Agency does not register or approve labels. We respond to requests from industry and consumers on what labelling requirements are, which are reflected on those labels.

We do, however, under our trade and commerce legislation, have two scenarios within which there is mandatory label registration. It was put in place at the request of industry. It's in place for meat and poultry products for both domestic and imported products, and for domestic processed fruit and vegetables. There is a label registration unit that reviews the labels that are submitted as a result of that industry-requested regulation. It is subject to cost recovery, and the cost recovery reflects the services that are provided to that particular sector.

Many of the hold-ups that relate to a label registration relate to issues that need to be corrected on a label. Quite often, a party submitting a label may not agree with some of the changes that need to be made. I think it's been pointed out earlier that label space is very valuable. It's used for marketing purposes as well as for the core labelling requirements that are in place. We need to verify that those core labelling requirements are indeed on the label correctly and then verify that the additional information on the label remains truthful and not misleading.

Quite often hold-ups on label review relate to that type of back-and-forth between the submitter of the label and the assessors.

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

Thank you.

[The Chair, Conservative, James Bezan]

Your time has expired.

I want to follow up on one of the comments Mr. Atamanenko made about our timeline and what we're looking at. For the committee's knowledge, on May 13 we're supposed to be doing draft consideration of the report. We can't have it ready in that time and have it translated, so on May 13 we're going to have Ian White here from the Canadian Wheat Board for one hour. Then we'll have a briefing on KBD in the second hour with the Wheat Board and the Canadian Grain Commission. Then with the cancellation of our travel, we're going to do committee work on the draft report on May 27 and 29. That's the way it's worked out.

With that, to kick off the five-minute rounds it's Mr. Easter.

[Wayne Easter, Liberal, Malpeque, PE]

Thank you, Mr. Chair.

I might say in the beginning, Mr. Mayers, that resources, financial and human, wouldn't be quite as much a problem if these folks hadn't blown $12 billion annually on their GST cut. It would be nice to have that money to invest in national priorities.

In any event, I want to thank you for coming. We had a very interesting hearing with, I think, a great slate of witnesses.

As others have said, many products are brought before this committee. The labelling is confusing at best. I think it's fair to say under the labelling “Product of Canada”, and you folks have mentioned it, that we continue to use for food labelling a definition that was designed for industrial products.

I believe, Debra, you said at the first hearing we held:

A product can currently be indicated as a product of Canada although the food ingredient in the product may not have been grown in Canada. That's under our current policy.

A number of you talked about your responsibility to ensure that product labelling is not false and misleading. The problem we have with this definition is that the definition in and of itself is false and misleading for food. When it says “Product of Canada”, one assumes it is defining what is in the package. The key for us is how to get to truth in labelling so that when people look at a grocery product they know they're dealing with the content.

There are three points. One, we're trying to get to truth in labelling so that consumers know what they're buying in terms of content; two, hopefully that will sway some consumers to buy more Canadian product; three, we want to ensure that our producers are not put at a disadvantage by a regulatory system in the process. What we need is your advice on how to get there.

The former head of the CFIA the other day suggested that the easiest way to do it, bar none, is just to increase the 51% to whatever. That still leaves us with the problem of not actually dealing with content, though you might have more content in it if you did it that way.

That's one approach. A second, concerning Brian's question, is to take the more extensive process of gazetting and changing the definition of content itself somehow. That's a long and rigorous process.

Could we do both? What would be the implications and the cost of doing this? Could we, one, ask the executive council to increase the 51% immediately to 80% or 85%—whatever the committee decides—and two, start the process to actually get the content? Then we'd be doing something quickly, which, I'll even admit, the government wants to do.

What would be the implications of that? What would be the cost? Or is it at all possible, from your experience?

[Paul Mayers]

You have gone to the heart of the policy review, and certainly the work of this committee will be valuable in that regard.

As we work through this process, can we make adjustments in terms of the policy as it relates to “Product of Canada”? Clearly that is possible, as it is in terms of the regulatory component. Again, it is possible in terms of the implications. We are seeking a balance among addressing consumer interest, ensuring that a level playing field exists, taking into account the producers' interests, and not putting the processing sector in Canada at a disadvantage in terms of the application of those rules as we go forward.

We believe that it is indeed possible. We believe that in that process, the policy change can happen relatively rapidly. Regulatory change would take more time.

In terms of the cost implications of those, most of the cost relates to implementation. The cost to move through the regulatory process is of course slightly higher, because it's more involved than making a policy change alone. But ultimately the real cost relates to the cost of implementation, and that cost of implementation will not be significantly different from a regulatory versus a policy perspective, because ultimately the issue will be the effective enforcement of the outcome, whether that be regulatory or policy.

Regarding the specifics, I'm going to turn to my colleague to add to what I've said regarding the application of our regulatory authorities in terms of both implementing policy and regulation.

[Debra Bryanton]

As has been indicated earlier, we do actively enforce the Consumer Packaging and Labelling Act and regulations on the basis of guidelines, so continuing to do that in this scenario is indeed possible. As Mr. Mayers has pointed out, it is also possible to move ahead with the regulatory framework associated with consumer protection issues under the Consumer Packaging and Labelling Act as well as under the Food and Drugs Act and regulations.

When we use guidelines, even though it's not a regulatory process, we still follow sound regulatory policy when we look at changing guidelines. That includes assessing whether it is indeed responding to the objective that has been identified and what the impacts will be. So we still evaluate what the impacts would be on industry, taking into account our trade obligations and the other aspects that we take into account when we do a regulatory amendment.

As with any change, there can be some additional costs for industry as they change formulations or change labelling to respond to a new labelling policy. With regard to additional costs for CFIA to enforce, there are current guidelines that we enforce. Changing those guidelines is not likely to add additional enforcement costs. What it does is change the priority, because when we introduce a new requirement, that increases the priority of our enforcement of that particular provision. With any new requirement, whether that be through the guidelines or through regulation, communication is absolutely key. Communicating those new requirements is a very core provision with any amendment.

[The Chair, Conservative, James Bezan]

Thank you.

Ms. Skelton.

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

Thank you very much for being here this morning.

It has been very interesting to look at all these aspects of food labelling. As someone who has done a lot of reading of labels because of allergies in our family, I've become quite intrigued with the whole situation.

Mr. Taylor, the Competition Bureau guidelines were set roughly three decades ago. We've heard that they've hurt Canadian consumers in some ways. Would you be willing to have these guidelines turned into regulations, and do you think that would help you or hinder you?

[Richard Taylor]

Mr. Chair, I'm not quite sure I quite understand how they've hurt Canadians in the sense of food versus non-food. I have said very clearly that if we're dealing with food, we don't do that. If we're dealing with what we call non-food items, we do that. I think it's important to look at who is being harmed, what the problem is, and who has the remedy. The Competition Bureau takes this misleading advertising and makes sure consumers are informed at all times so that they can make good choices on purchasing. We take that very seriously.

We get 25,000 complaints a year, and it's the largest part of our business. About a third of our operation is devoted to misleading advertising; we have multiple cases and multiple convictions. We can go criminally and we can go civilly, so if you have an issue outside of food, please let us know what that issue is, and we'll address it. If it's relating to food, I would urge you to deal with the Canadian Food Inspection Agency.

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

Okay. Thank you. It was just a comment that was made during testimony from one of our people who was testifying.

With regard to the Canadian Food Inspection Agency, Bill C-51 is before the House right now. When you look at that bill and look at what it's doing, it's going to have effects on labelling, I'm assuming, because in one area it says, “...regarding its character, value, quantity, composition, merit, safety or origin”.

If we apply that to what we're dealing with nowadays, and we have a jar of pickles, for example, that is imported from China or India, it can be labelled “Product of Canada” with the 51% rule. Does the word “origin”, if it goes through, apply to the finished product, namely the pickles, or to the imported ingredients, the cucumbers? That's another thing.

Are you watching Bill C-51? Can you talk to us about that?

[Paul Mayers]

Thank you.

We're absolutely paying very close attention to this. It doesn't address “Product of Canada” explicitly, but the issue you have noted as it relates to the word “origin” really creates consistency with the Consumer Packaging and Labelling Act, which already includes that reference to “origin”.

I'm going to turn to my colleague, Ms. Barry, to perhaps elaborate in terms of how that issue of “origin” in the Consumer Packaging and Labelling Act has already been included in our considerations.

[Carla Barry]

Thank you.

Section 7 of the Consumer Packaging and Labelling Act has the general prohibition against false and misleading labelling advertising, but further on in that particular section what is misleading is also described. Several words in there are used to clarify what the intent of “misleading” applies to, and “origin” is one of those.

With regard to Bill C-51, it was felt that it was important that the two false and misleading prohibitions be the same in both pieces of legislation, as the CFIA is responsible for the administration in relation to non-health and safety for both pieces of legislation with respect to food.

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

Good. Thank you. I appreciate that.

[The Chair, Conservative, James Bezan]

Your time is pretty much up. Thank you.

Go ahead, Madame Thi Lac.

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

You earlier spoke at length of product markings. Wouldn't it be simpler to subdivide these identifications so as to create the categories "Grown in Canada" and "Processed in Canada"? This would better reflect the present situation. By doing so, things would be clear for consumers and there would be no disadvantage for producers and processors. Can you comment on this?

[Paul Mayers]

Thank you very much.

Again, you have offered a possible way forward that we would certainly be pleased to take into account in the policy review. Certainly it is our expectation that the ultimate outcome here is going to reflect the interests of all the stakeholders, and the approach you have proposed, like many others, is certainly possible in this context. I am not yet at a point where I can indicate what the Canadian Food Inspection Agency's perspective on the various mechanisms by which we might improve the current policy would be, but certainly what you have highlighted is another very reasonable consideration for us to take.

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

There is something else I would like to know. I am originally from Vietnam and I can assure you I am not taking my lawyer along when I go shopping. I sometimes buy products imported from my old country. However my first concern is to read the label to make sure the information in French meets the requirements of Bill 101. This is important to me. I guess someone else would not want to buy food imported from my country of origin if it is only labelled in Vietnamese since they would not be able to read the information.

I am trying to compare this to the situation of someone who buys a product with information that may not be truthful…

I cannot agree with Mr. Storseth when he says you have to take your lawyer along. Presently, I can easily determine the origin of things I buy. I find it easy to identify these products.

How long would it take to implement new standards? If we were to adopt new standards tomorrow morning, what would be a reasonable timeline for your organizations to implement them?

[Paul Mayers]

Two things are important in that regard. One of those is that we provide sufficient time for those who have an interest—the public, industry, consumer groups, industry associations—to express their views so they can be taken into account. So consultation and communication, as my colleague has noted, will have to be an important part so we have the benefit of those views.

Once on the basis of that input we are in a position to then advance a change in terms of policy, then it will also be important to provide sufficient time in terms of implementation for the industry to adjust. As you can imagine, processors will have a stock of labels they are currently using. There will be product on the shelf, which will have to be permitted sufficient time to exit the market as new labels come into use. So there will need to be consideration of what is an appropriate time to allow for effective implementation in a manner that doesn't disrupt the industry unnecessarily.

I certainly can't tell you what the perfect time is in that regard. We will be listening with interest to the industry in terms of what time they believe they will need to make adjustments, while still keeping very much in our thoughts the very strong interest that exists in moving to review and make adjustments to policy on the basis of what we hear through the consultative process. So I can't give you an absolute time, but I can be clear that the time will be determined by effective consultation and an effective period of implementation that will allow the orderly adjustment to any change in policy.

[The Chair, Conservative, James Bezan]

Thank you. Time has expired.

Mr. Miller.

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

Thank you, Mr. Chairman.

Thank you to our witnesses here today.

There was a bit of discussion about resources, Mr. Mayers. I want to make it clear to you that if Mr. Easter had that $12 billion, I can guarantee you wouldn't be getting any of it. He'd be using it to go and take our babies and put in institutions or something.

On the fact about having resources and what have you, you can have all the resources in the world, if the will isn't there to make the changes necessary.... And I think that's a true statement.

One thing has been made very clear to me and this committee, I believe, over the days: using any part of the package as part of determining “Product of Canada” is no longer acceptable. I think that's definitely where we start. Where we come up with a percentage, whether it's 51% or whatever, anything and everything has to be part of it, without considering the packaging.

Ms. Bryanton, you made a comment there; you said “We look for truth in labelling”. You said also that it must not be misleading.

I've used an example here before. I drink grapefruit juice all the time. I've yet to find where grapefruit are grown in Canada, but I can tell you that the jug of grapefruit juice I buy says “Product of Canada” on it. That is misleading, right off the bat, because as Mr. Easter said, when people see something like that they take it that the product, not the packaging, came from Canada. How could you ever justify defending that as being a “Product of Canada”?

[Debra Bryanton]

The guidance that is included in the Guide to Food Labelling and Advertising is subject to consultation. Whenever we do propose amendments to the guide, there is a consultation process, so we have a transparent process, and the guide is published and available on our website.

As has been noted earlier, what we enforce at present is the current “Product of Canada” and “Made in Canada” policy. When it comes to issues such as something being a “Product of Canada” versus the ingredient being grown in Canada, that's not necessarily what is being addressed in the current policy.

If these are some of the parameters in which consumers have an interest at this point in time, these are considerations that can be fully taken into account in a review of the policy. But, as has been noted, that policy was developed quite some time ago, and important considerations were taken into account at that time. Some of those considerations may have changed.

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

Thank you--and I think that definitely does need to be taken into consideration. I think there's a movement out there, or definitely an impression, I'll say, that anything that isn't grown in Canada, or that can't be grown in Canada.... You can use the example of grapefruits, as I did, or olives, or oranges; I think it's pretty hard to put “Product of Canada” on those.

There's also a debate out there about “Processed in Canada” or whatever. For the sake of keeping it simple, which I think we have to do.... If we have two or three terms.... I'm not sure that would work either, but we certainly need a definition that is clear to the person in the grocery store that it is truly a product of Canada.

One other thing: you said it's up to CFIA to interpret some of the regulations. Frankly, that scares the hell out of me. It should be clear and not up to interpretation.

Mr. Taylor, on the Competition Bureau, we had a gentleman here at a recent meeting who had some examples for us. He was a grocery store owner but also had a company where they exported and also imported food products from Canada into the United States, and maybe also abroad. He gave the example here of a can of jam. He's having a heck of a time getting, and still hasn't gotten, approval from CFIA on the label for it, but he can ship that product--the way that he proposes--into the States and bring it right back here the next day, no problem.

First of all, obviously that's not right. That shouldn't be happening. But I would suggest that you guys....

You say, well, you're not responsible for food products. But I don't care what product it is; in my opinion, if you're the Competition Bureau, it should be anything that affects competition. And this does affect it, because it's almost in reverse. You're basically restricting Canadian people--Canadian businessmen, producers, whoever--from competing against imported products. So I think you're shirking your duty there.

It also brings the question of relevancy. I think you need to be looking at that kind of thing. Take the monopoly on grocery stores today by the large grocery chains. We've heard from witnesses at this committee--not to deal with this issue but with other issues in the past year--that there's a monopoly out there and it's a problem. Basically it restricts small businessmen and independent grocers from being in business.

So I think you need a review of your overall mandate in order to cover a little bit more--not just complaints about labels and what have you. I'm not suggesting that this isn't important, but I think you need to look at all of that.

[Richard Taylor]

If I may, I would make three very important points.

The first point is that if the CFIA would like our views on how to promote competition and promote more competition, we'd certainly be happy to provide them. We spend a huge amount of our resources advocating--

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

Did you say “if” CFIA would like your advice?