Agriculture Committee on May 8th, 2008

[Paul Mayers]

Many aspects of the label requirements are compulsory. At present, requiring a processor to indicate “Product of Canada” has not been compulsory. As I explained, should they choose to use that claim in association with their product, once they do that, what is compulsory is the guidance.

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

I understand. And what is compulsory now are the nutritional components.

[Paul Mayers]

That's correct.

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

Mr. Coomber, if we move to something that make identifying the source of the contents obligatory, where does that put us with respect to our international trade obligations and any push-back we would receive from other countries that don't have that compulsory “country of origin” type of labelling?

[Blair Coomber]

Sorry, I missed the first part of your question, sir.

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

I wonder, if we went into a regime in which the labelling of country of origin, etc., became compulsory or obligatory, what push-back would we receive from the WTO or from other countries that haven't yet gone that far?

[Blair Coomber]

The first point I would make is that when we're talking about the “Product of Canada” labelling and country of origin, it can get confusing. We're talking about two different things. In the “Product of Canada” labelling we're dealing with policy around the obligations or criteria for domestic processors regarding the content of that product, as Mr. Mayers said, if they choose to use the “Product of Canada” labelling, whereas with “country of origin” labelling, it's a requirement to name what country that product comes from.

By way of illustration, maybe I could use grapefruit. If we imported grapefruit into Canada and they went to a grocery store bin, they would have to be labelled “Product of U.S.A.”, “Product of Mexico”, “Product of Chile”, or wherever they came from. The concentrate coming in that goes into the grapefruit juice wouldn't have to be identified as a “Product of U.S.A.”, and that starts to evolve into the issue of how much grapefruit concentrate has to be in there to make up the content of “Product of Canada”.

[The Chair, Conservative, James Bezan]

Thank you.

I want to follow up on that. We've been going through this whole discussion about “country of origin” labelling coming out of the United States and how it's going to impact Canadian producers here, especially the red meat industry. As we move forward here, as we're making recommendations, as a committee what do we stay away from? What boundaries do we have to stay within so we aren't compromising our legal arguments against “country of origin” labelling in the United States?

[Blair Coomber]

I think the difference between what we're doing and what the United States is doing with “country of origin” labelling is that ours is voluntary, whereas they're proposing mandatory “country of origin” labelling requirements. The position of Canada has been that this is unnecessary and that under international trade obligations it's more trade-restrictive than necessary. So generally speaking, when we have voluntary regimes, if they meet the objective, that's preferable from an international trade perspective because it is the least trade-restrictive measure possible. And of course that's a requirement under the WTO.

[The Chair, Conservative, James Bezan]

So as long as we stay away from “mandatory”, we're good.

When we had Mr. Doering here on Tuesday, one of the comments he made is that we need to make sure we stay away from the unintended consequences of the recommendations that were coming forward. When you start talking about “Product of Canada” and “Made in Canada” as we go into the regulations, it has this ability to impact other industries, not just the food industry.

Again, I want to make sure we're clear that if we move forward in making a recommendation on changing the percentage of content under “Product of Canada”, it wouldn't impact other areas if we're talking about the guidelines currently enforced by CFIA. Or do we need to stick within just increasing percentage of cost?

[Paul Mayers]

Perhaps my colleagues from the Competition Bureau would like to comment on the non-food aspects and implications. Our focus, as you're well aware, is very much in the context of adjusting the policy as it relates to food, given the interests that have been expressed.

[Larry Bryenton]

Just to follow up, from the perspective of the Competition Bureau and our guide related to non-food, certainly we support any direction the CFIA takes with respect to food and making the guideline clearer and more informed for consumers. What we would do is take into consideration in our approach and how we administer our guideline any suggestions or direction they're taking. We would make sure that any consequences that may affect our guideline are properly reflected.

To pick up on Mr. Mayers' point, certainly we would carefully monitor their process and provide our support to make sure that any ancillary developments or changes that may relate to the Competition Bureau's non-food guideline are properly reflected and understood.

[The Chair, Conservative, James Bezan]

We've had discussions on country of origin, discussions on “Product of Canada” and content, and discussions about “Made in Canada” maybe being a better term for the stuff. Pickles and olives are good examples. You bring them in and pickle them here, and they become “Product of Canada”. Maybe they should be labelled “Made in Canada”. Then there's been a suggestion to have a voluntary “Grown in Canada” label, as well. I just want to make sure, as we move forward in making these recommendations, that they can be done relatively quickly through a guideline process rather than through orders in council. That is my understanding. Right?

[Paul Mayers]

That's our view. It is possible to do these in a policy context using the guideline.

[The Chair, Conservative, James Bezan]

Okay.

One of the other comments that came up on labelling was that if there are going to be changes, there needs to be an educational component, whether it's through advertising or through point-of-sale information. Is it the responsibility of the agency or the Department of Agriculture and Agri-Food or Health Canada--I know we don't have any specialists from there today--to relate what the changes are so that consumers are better informed?

[Paul Mayers]

Certainly it would be our view that an important part of going forward would be to communicate that outcome and what it means in order to facilitate consumer understanding and to enable consumers to make decisions on an informed basis.

[The Chair, Conservative, James Bezan]

Okay.

Another comment I have is for the Competition Bureau. Mr. Taylor, you said that the Competition Bureau has no responsibility for food, and I appreciate that. But what about food production? We know you've already had complaints, for example, about high input costs in farming, and you've looked at that from the standpoint of the farmer as consumer. We've also had you here before talking about concentration in the meat packing industry, whether it's hogs or beef. Where does the Competition Bureau have a role to play in ensuring that the producers in this country have access to fair competition in the marketplace? When do you actually say that you're not involved any more, because it's food?

[Richard Taylor]

We're very concerned, as the market develops and as the farm product prices increase, about anti-competitive effects taking away those gains because of dominant firms abusing their dominance and raising prices for farm inputs, for instance. Another thing we're very concerned about is those who supply inputs to our farmers getting together to fix prices. We're monitoring that sector very closely. My colleague, Morgan Currie, can tell you a lot more about it.

For instance, we're following the increase in some of the output prices for wheat, canola, barley, in particular, and some of the edible oils. I'll just give you an example. Basically, the Manitoba non-board wheat price in March, per metric tonne, is up 15% from February and is up 64% from March 2007. At the same time, our fertilizer prices have increased 22%. We want to make sure that we know why those fertilizer prices are increasing, so we're doing work in that area. The reason we do that is to make sure they're not being artificially manipulated in an anti-competitive fashion.

I think you expressed concern before about the red meat industry, which isn't quite doing as well as some of the other components of the agriculture industry. I think I was here on April 3, and I think you expressed that concern. We went out and had Kevin Grier, a leading agricultural economist from the George Morris Centre, prepare us a little overview of what's happening in the red meat sector. Again, we want to make sure that the industry is not being affected, particularly the calf-cow operators, by monopolistic practices or price-fixing. We could certainly share that report. It's very complicated what's going on in that industry. In the food value chain of eight levels, it's very complicated. But we would certainly be willing to answer any questions you have on that or provide the committee with a copy of what I think is an excellent report.

[The Chair, Conservative, James Bezan]

Definitely we want to see the report. If you could give it to the clerk so we can circulate it, we would greatly appreciate that.

Does the Bloc have any further questions?

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

No, that is all.

[The Chair, Conservative, James Bezan]

Alex.

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

I was trying to think of an insulting political remark, but I know my colleagues are so sensitive that I might hurt their feelings, so I'll just move on to the question. I'd appreciate a real quick answer, because Larry has a train of thought, and I'd like him to follow up if possible.

Mr. Mayers, I believe you mentioned that once this is over, there will be a consultation process, and if anything new happens.... We have spent a lot of time consulting, and we've talked to a lot of people. Is it not redundant, if we give a recommendation, to then start another consultation process? I don't know how that works. Who then would you be consulting? Is this not enough information to get on with the job? I'll like a real quick answer, please.

[Paul Mayers]

It's certainly our view that the work of this committee is going to be very valuable in the process. As you know, we had initiated a review process, so it will feed into that process and be taken into account in that process. If there are good ideas out there, we don't want to close the door to getting them in our overall consideration. But we continue to be committed to working quickly, so we don't envision that consultative process will necessarily add an inordinate amount of additional time.

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

Thank you.

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

Thanks, Alex, for sharing the rest of your time.

I'm just going back to Mr. St. Amand's comments, and Lloyd, I think truly that you and I and the committee want to get to the same place. The reason I bring this up is that I'm not hung up—and I don't think we should get hung up—on mandatory versus voluntary. The reason I say that is that any Canadian producer, whether it's at the farm level or at the manufacturing level, is going to be at an advantage, at least for their domestic market, if they put “Product of Canada” on there when it is a product of Canada. So I don't think anybody will miss the boat. I would be surprised if they did.

The thing I think we need to be concerned about—and “we” means this committee, CFIA, Competition Bureau, everybody—is that there isn't something misleading there, when it is not truly a product of Canada. So I think that's the issue we have to go to.

Where I was leading on my question before, Mr. Taylor.... And I don't want you to take any of this personally. I may not be happy with some of the things in the Competition Bureau, but you're just the guy who's here, so it's that old shoot-the-messenger issue. I kind of chuckled earlier; I was glad to hear you tell us you weren't on drugs. That's good.