Agriculture Committee on May 8th, 2008

[The Chair, Conservative, James Bezan]

I call this meeting to order. We're doing our last hearing before we start working on our report on “Product of Canada” labelling.

We welcome back people from the department. From the Competition Bureau we have Richard Taylor, Morgan Currie, and Larry Bryenton. I want to welcome all of you.

From the Canadian Food Inspection Agency we have Paul Mayers, Debra Bryanton, and Carla Barry, and from the Department of Agriculture and Agri-Food, Blair Coomber.

I welcome every one of you. We're looking forward to your input into some of the discussion we've had over the last couple of months on “Product of Canada” labelling. There are especially a lot of issues surrounding the technical aspects of how we move forward.

With that, I will open it up to opening comments. Who is going to go first? Mr. Taylor?

[Richard Taylor, Deputy Commissioner of Competition, Civil Matters Branch, Competition Bureau]

Mr. Chair, I only have a few words to say about the important role the Competition Bureau plays in Canada's agricultural sector.

The Competition Bureau is an independent agency that contributes to Canada's prosperity by protecting and encouraging market competition and helping consumers make informed choices. The objective of the Bureau is to be an excellence-based organization that produces results having an important impact and that is flexible enough to deal with today's and tomorrow's challenges.

The agricultural sector is a key priority for us. We know how hard our farmers and farm families work. We know it's the most dangerous job in Canada. And we know how important it is to all Canadians.

The Competition Bureau has made this a priority sector. We'd be happy today to answer any questions you may have about that important sector.

[The Chair, Conservative, James Bezan]

Thank you.

Mr. Mayers.

[Paul Mayers, Acting Vice-President, Programs, Canadian Food Inspection Agency]

Thank you, Mr. Chairman.

Good morning.

I appreciate the opportunity to appear before the Committee on its last day of hearings on this important matter. Indeed, the Canadian Foods Inspection Agency has been listening with great interest to the discussions of the Committee throughout this study of "Product of Canada" labelling.

In my brief remarks today, I would like to reiterate the government's commitment to help consumers make informed decisions about food products.

As you know, Prime Minister Harper announced Canada's food and consumer safety action plan in December. This action plan includes a commitment to review the government's current policies on using “Product of Canada” and “Made in Canada” food labels and advertising. The CFIA is already taking steps to review these policies.

Our goal is that claims for “Product of Canada” or “Made in Canada” are accurate and truthful, both for consumers who want to use this information to make their purchasing decisions and for industry that wants a level playing field.

Although the claims are voluntary--that is, manufacturers in most cases are not obligated by law to identify the Canadian content of their products--once the claims are made it is mandatory that they be accurate and truthful. Therefore, once manufacturers choose to make a claim about the Canadian content of their product, they must meet the prescribed guidelines.

It's no surprise, then, that the CFIA has followed these hearings with interest. We've listened to and reviewed the testimony of witnesses. This has strengthened our understanding of stakeholders' perspectives on “Product of Canada” and “Made in Canada” claims. We understand that producers, for example, would like us to raise the content threshold for “Product of Canada” claims. Processors want to ensure we recognize that their industry contributes to Canada's economy through value-added processing. Consumers, of course, want assistance in identifying Canadian food products.

The CFIA believes it is possible to reconcile these viewpoints, and it is currently exploring options to do so. That said, to know where we're going, we have to where we've been.

As a reminder, our current guidelines state that two basic criteria must be met before manufacturers can claim the Canadian origin: the last substantial transformation of goods must have occurred in Canada, and at least 51% of total direct costs of producing or manufacturing the goods must be Canadian. It's recognized that these guidelines derive from a time when the food supply was much less global.

Perhaps the most important point to reiterate is that this is not a food safety issue.

Canada has one of the most stringent food safety systems in the world. All food offered for sale in Canada, whether domestically produced or imported, must meet Canadian food safety standards. Manufacturers are responsible for ensuring that the materials they use, as well as the products they sell, meet all federal requirements.

“Product of Canada” labelling provides information to consumers that may assist them in making purchasing decisions. As we move forward with our review of “Product of Canada” and “Made in Canada” claims in food labelling, we will be listening to Canadians.

These hearings are useful to us, and we are pleased to participate. We are grateful to the committee for the investment, foresight, and interest, and we thank you. My colleagues will be happy to answer your questions.

Thank you, Mr. Chairman.

[The Chair, Conservative, James Bezan]

Thank you.

Mr. Coomber, do you have anything to add?

[Blair Coomber, Director General, International Trade Policy Directorate, Department of Agriculture and Agri-Food]

That's fine.

[The Chair, Conservative, James Bezan]

Thank you.

I'll open it up.

Mr. Steckle, you have the floor.

[Paul Steckle, Liberal, Huron—Bruce, ON]

Good morning, witnesses.

As has been noted by the chair, this will be our concluding message from witnesses to the committee in terms of our going forward and reporting on this very important matter.

I guess over the past month or so we have heard a lot of things. A lot of things were repetitious from one group to another, but one theme remained consistent: people should have the right to know, and they should have the right to know that the information they believe to be true is actually true.

I guess before this committee we've had a number of issues. A number of years ago we had Bill C-27, where we brought together a number of bills. The bills died in 2006. Where we tried to bring some clarity, where truth in advertising was really the foremost issue, that was on dairy products, where we brought the dairy terms part into that bill. Even though the department felt we shouldn't do that, we did it.

Yet we hear this morning from you that we need to make sure that people have confidence in the system. We know there are things on the shelf today that shouldn't be there. You know they shouldn't be there, particularly the Competition Bureau, the CFIA. It's not a health issue. We're not talking about safety. I think you've made that very clear and I don't think there's anyone here who questions the safety of our Canadian food products.

Given that so much of the product that we buy on the shelves today is marked “Product of Canada”, when in fact the product within the contents of that packaging or containment is not Canadian, and when you ask a Canadian, they believe it to be Canadian, isn't that misrepresentation of fact or truth?

If the Competition Bureau knows this, why do we not have the watchdogs? Why do we not have the people who can go into the stores and make sure that what's on the shelf actually is what it says it is?

I just don't understand why this has gone this far. I have some other comments in terms of what we might be doing in the future, but can I have your comments on that and why we have failed so miserably in the past?

[Richard Taylor]

Mr. Chair, we don't actually make the rules of the game with respect to food products. What has happened in the Canadian context is that we have come up through multiple stakeholder meetings and over the years with rules and regulations and guidelines that are primarily based on older manufacturing industries, where there was some certain sense to the rules we have.

I'm going to pass it over to my colleague Larry Bryenton. He is the acting assistant deputy commissioner and is primarily responsible for handling our labelling statutes.

[Larry Bryenton, Acting Assistant Deputy Commissioner of Competition, Fair Business Practices Branch, Competition Bureau]

Thank you very much, Mr. Chair.

Following up on Richard's comments, I'd like to reiterate that the guideline the bureau uses with respect to “Made in Canada” claims is a voluntary guide. It's not legislation or regulation.

It's important to recognize that it relates to non-food products, and a lot of the commentary and concerns expressed to date about the serious issues relate to food. I defer to my CFIA colleagues on that.

Certainly, as Richard indicated, the guide has its foundation in the manufacturing days, when there was an attempt to try to balance the need to have clearer information for consumers on the Canadian content as well as to give the opportunity for Canadian manufacturers to source inputs to be able to competitively provide their products in the marketplace.

Maybe I can turn things over to my colleagues at CFIA, who can comment on the food aspects.

[Paul Mayers]

The question goes not only to the guidance, but also to compliance with that guidance.

In terms of the CFIA's compliance responsibilities, which cut across—as you're well aware in this committee—animal health, plant health, and human health issues, we prioritize the application of our resources on the basis of all of those interests. As you can imagine, our human health responsibilities come first. However, as they relate to the issue of compliance with the existing guidance, we do investigate “Made in Canada” and “Product of Canada” claims issues on a case-by-case basis. That assessment would generally focus on the value of expenditures directly related to the production of the food, consistent with the current guidance relating to the ability to make these claims. In assessing compliance with the guidance, we consider the direct expenditures, in terms of the cost of production, including raw materials and labour, as well as the expenditure on the overheads that are incurred relating directly to the production of the food.

[Paul Steckle, Liberal, Huron—Bruce, ON]

Well, everyone has pretty much deflected responsibility for taking on this issue, but in the case of buttery popcorn, when there is no butter in the popcorn, whose responsibility is that? We're saying that we want truth in advertising, that we want the public's confidence in buying our products, but given that we've now basically conceded that the cost that has gone into the product, and not the content, must constitute 51%, I believe it's time that we move to a new method, because people have come to understand that we can't really know what's in the product because of the way we've derived this 51% of Canadian product. So we need to devise a new method of identifying what is Canadian, “Canadian Grown”, or “Grown in Canada”, with an exclusive name brand signifying or noting it is exclusively Canadian. I think we need to move in that direction.

Would you be in favour of bringing in that kind of labelling and of having the 51% going perhaps to something higher, not through regulation, but simply through a ministerial order? Would you agree with simply having those guidelines changed without regulation? Would you agree with those two things?

[Paul Mayers]

In terms of the ability to make such a claim, the key question will remain, is it truthful and accurate? As you are aware, we are in the process of reviewing the policy. In the context of that review, we will be listening with great interest to all of the stakeholders, including the perspective of consumers and certainly to the output from the work of this committee in that regard in terms of moving forward.

I will turn to my colleague in a moment, but in terms of the ability to use additional claims, such as “Grown in Canada”, that potential exists. Again, the standard in that regard will be its truthfulness and accuracy.

I'll ask my colleague to elaborate further.

[Paul Steckle, Liberal, Huron—Bruce, ON]

And what about simply changing the guidelines versus the regulations?

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

I believe that during our last appearance before the committee we had indicated that within CFIA we use the Guide to Food Labelling and Advertising as our interpretive guideline document for a core provision in the Consumer Packaging and Labelling Act, which does state that claims must be truthful and not be misleading. In that guideline, you will find interpretation of a range of different labelling issues.

When it comes to issues such as “Product of Canada”, “Made in Canada”, “Grown in Canada”, there is a range of qualified claims that may be made; and when we evaluate these claims, we do look to determine whether they would be considered truthful, and not misleading, in the eyes of the consumer. As has been noted in some cases, there has been more specific guidance provided, such as the current guidance on “Product of Canada” and “Made in Canada” claims—and that was developed, as we know, a few decades ago, based on current policy and the objectives of government at the time. Evidently, consumers are interested in a different interpretation of “Product of Canada” and “Made in Canada”, and that is what's being explored in the review of the current policy. So the full range of qualified claims can be explored.

With regard to regulation versus guideline, what we are currently looking at is the review of the current approach, which uses the guidelines to interpret that provision in the regulations.

[The Chair, Conservative, James Bezan]

Thank you. Your time has expired.

Madame Thi Lac, s'il vous plaît.

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

I want to thank all witnesses for coming to meet committee members on the last day of our hearings on this matter. I wish to thank the two witnesses who addressed the committee and started their comments in French. I really appreciated it.

My colleague, the member for Rivière-des-Mille-Îles, introduced a bill on the mandatory labelling of GMOs. Yesterday, Mr. Perron’s bill was rejected by a vote in the House.

Since the standard on voluntary labelling of the GMOs was put in place, consumers are hardly more informed than they were before the standard was introduced.

Don't you think a standard should be mandatory rather than voluntary if the goal is to better inform consumers?

[Paul Mayers]

Thank you.

I will answer in English.

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

That is no problem at all.

[Paul Mayers]

I am not very familiar with French terminology.

The issue of addressing the right to information is important. However, in the context of the example, the position of greatest relevance has been that of addressing issues of health and safety; and an issue of health and safety, as it relates to genetically modified products and the mandatory obligation, could be addressed through labelling. Clearly, if there is a risk related to the product, then that product should not be in the marketplace. However, there are some issues relevant to health for certain sectors of the population that can be communicated quite effectively through labelling. Where such a product would be presented, that information would be required on a mandatory basis.

The ability to provide further information regarding the process by which the product was developed is currently provided for through work undertaken in collaboration with the Canadian General Standards Board in order to provide a standard for the voluntary labelling of products derived from, or not derived from, the techniques of genetic modification or genetic engineering.

It might be useful for me to turn to Carla Barry, who can provide a little more insight in regard to the application of that voluntary standard versus the mandatory requirements as related to health and safety.

[Carla Barry, Acting Director, Consumer Protection, Canadian Food Inspection Agency]

Thank you, Mr. Mayers.

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

I have another question. Perhaps you can answer both questions at the same time. I wanted to know what authority your organizations have to enforce the guidelines relating to the truthfulness of the information provided.

Mr. Mayers, you said compliance is important. What powers do your organizations have in terms of compliance?

[Carla Barry]

Under the CFIA Act, CFIA has responsibility for enforcement of the Food and Drugs Act. In the Food and Drugs Act, subsection 5.(1) prohibits false and misleading labelling and advertising. We also have responsibilities for setting standards, both under the Food and Drugs Act and the Consumer Packaging and Labelling Act, for matters not related to health and safety. We also enforce both of these acts for the purposes of food.

As for our enforcement capability, the Canadian Food Inspection Agency, as already indicated by Mr. Mayers, has an enforcement program for verifying that industry complies with the general prohibitions against false and misleading labelling and advertising.

These resources are identified through a risk prioritization. This covers risk to the consumers: first, for health and safety, which can also be mitigated through labelling; and second, for protection of the consumer against fraud.

Any labelling presented on a package or in advertising must be accurate and truthful. Every year the Canadian Food Inspection Agency goes through a process in which priorities are identified. We also respond to complaints. Complaints and investigations—those we are committed to following up—are our number-one priority.

Then we proceed, based on risk and available resources, to follow up on the identified projects, which go through on a rotational basis, depending on the issues present. For example, it could be in relation to labelling, mandatory information such as nutrition labelling, information related to allergenicity, or information related to methods of production.

In the case of genetic engineering—

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

I have one last question. You said you respond to complaints. How many complaints do you receive each year and what are the main issues the majority of them deal with?

[Carla Barry]

I don't have exact data on the number of complaints. The agency doesn't track complaints specifically. We have some that are tracked under different databases, because complaints with respect to labelling affect all food programs. It's difficult to pull all the complaints together.

In the consumer protection division, a number of complaints have to do with, for example, nutrition labelling. Since last August, we've had several complaints with respect to “Product of Canada”, whereas in past years we had very few complaints of that kind.

There are other complaints with respect to different kinds of misleading labelling and advertising. We don't track those specifically; however, in our prioritization the complaints can be ranked based on mandatory information—whether the labels are bilingual; whether all the mandatory information is present, such as name and address of the principal dealer; whether there are common name issues; whether there are complaints related to method of production, such as organic; and whether there are complaints in relation to authenticity of a particular food.