I would like to thank the committee for inviting us to express our concerns. My name is Michel Dessureault. I am accompanied by Mr. Philip Cola, Director General of Levinoff-Colbex. I am the Chairman of the Fédération des producteurs de bovins du Québec, which is the main shareholder in Levinoff-Colbex.
SRMs, for Quebec's beef producers—I will not repeat what Mr. Pellerin said—is a reality on the farm. It is also a reality in the industry. The costs associated with Canadian regulations on SRM are quickly destroying the Canadian slaughter industry. Over the past few years, we have seen a large slaughterhouse shut down in Ontario, the Gencor slaughterhouse, and right now we are witnessing the same situation in Saskatchewan, with the closure of XL Foods.
These regulations appear necessary, given the importance for Canada to obtain a BSE-controlled risk status. Although without financial compensation for operational costs, damage caused by the Canadian SRM regulations has been accumulating for more than two years, making the situation increasingly difficult and rendering the slaughter industry in eastern Canada even more vulnerable.
It would be a huge mistake for everybody to go back to the situation that prevailed before the BSE crisis hit in May 2003. In a recent letter sent to Mr. Ritz, and to which Mr. Pellerin alluded, slaughter industry producers and renderers came to a consensus, for the first time, in order to request the Canadian government to quickly implement an assistance program for the industry, based on the needs of the industry, to help it cover the cost of $31.70 per head. Why $31.70? This amount was taken from an exhaustive study undertaken by the Canadian Meat Council and it is the result of the competitive gap with the United States.
The situation is somewhat particular in eastern Canada. As far as slaughter capacity is concerned, it is focused almost entirely on call cows, and the American buyers are very active in our market. So just imagine a market with a $31 differential per head; that is enough to create an exodus of animals from Quebec, Ontario and the Maritimes, animals that will then find their way back on our markets as meat. It is incomprehensible why in Canada, we have not yet managed to harmonize our prices. We do understand that this harmonization must and can be done, but this will take years, and until this time, the Canadian government must help and support the industry so that it is not completely altered here, in Canada.
Levinoff-Colbex is in a unique situation. We are totally dependent on rendering plants. We do have a good rendering service in Quebec, however, naturally, the costs of these services are making us uncompetitive. People do take our material and try to add as much value as it is possible to the products. However, as Mr. Clarke told you previously, there are costs associated with the disposal of the material that they cannot bear and these are passed on completely to the industry.
The other aspect that we wanted to discuss is the infamous COOL legislation, the American legislation on imports. The complexity of country of origin labelling regulations is preventing the United States from reaching its objectives in an effective manor and has resulted in some perverse effects. Our company has lost clients in the United States, because the legislation requires those companies that purchase Canadian livestock to carry out a great deal of segregation, making them uncompetitive because of the additional production chains, additional costs.
The sharp decline in the number of feeder calves which are normally exported to the United States in the fall continues to cost the industry a great deal of money, and these animals will remain in Canada. There will probably be a glut in our market, at one point, which will be very expensive for the Canadian industry.
The Fédération des producteurs de bovins supports the actions taken by the Government of Canada to defend itself against these regulations, both at the political and legal levels. Thank you.