Agriculture Committee on Oct. 30th, 2012

[The Chair, Conservative, Merv Tweed]

Good morning, everyone. Welcome to meeting number 53 of the Standing Committee on Agriculture and Agri-Food.

Our orders of the day are pursuant to the order of reference of Tuesday, October 23, 2012, on Bill S-11, An Act respecting food commodities, including their inspection, their safety, their labelling and advertising, their import, export and interprovincial trade, the establishment of standards for them, the registration or licensing of persons who perform certain activities related to them, the establishment of standards governing establishments where those activities are performed and the registration of establishments where those activities are performed.

Joining us today are, from the Canadian Meat Council, Mr. James Laws, executive director, and from the Retail Council of Canada, Ms. Karen Proud, vice-president, federal government relations.

Welcome. I think you know the drill, so we'll ask you to make your presentations and then we'll move to questions from the committee.

Mr. Laws.

[James Laws, Executive Director, Canadian Meat Council]

Thank you. Mr. Chair, I am going to make my comments in French.

Good morning, everyone. My name is James Laws and I am the Executive Director of the Canadian Meat Council. Thank you for the invitation to speak to you today about Bill S-11, the Safe Food for Canadians Act.

The Canadian meat sector is the largest in the food processing industry. It employs close to 70,000 people. Its annual gross sales of pork, beef, veal, lamb and poultry exceed $24.1 billion. Last year, Canada exported more than $1.3 billion in beef and $3.2 billion in pork to over 125 countries throughout the world. In total, there are close to 740 federally registered meat establishments that slaughter, process, quarter, bone, package, preserve or provide storage for meat and are inspected by the Canadian Food Inspection Agency.

Food safety is the top priority of meat processors. We support measures aimed at consolidating and modernizing the legislative framework governing food products. The CFIA currently runs eight food inspection programs. Each of them uses different inspection methods and tools.

Proposed Bill S-11 will improve food surveillance by instituting a more uniform inspection regime for all food products and increased control measures for imported food products. The government and the industry have known for some time that Canadian legislation governing food products needs to be modernized and strengthened.

In July 2009, the independent body tasked with investigating the 2008 listeriosis outbreak recommended that the government simplify and modernize the federal legislation and regulations that have a significant impact on food safety. That is the very objective of Bill S-11. We have long maintained that the meat industry in Canada is treated very differently from other food sectors.

That is why we support the consolidation and modernization of the legislation presented in Bill S-11, which is causing the repeal of the following acts: the Fish Inspection Act, the Meat Inspection Act, the Canada Agricultural Products Act and certain provisions of the Consumer Packaging and Labelling Act.

We believe in the importance of a modern approach to inspection based on the audit and compliance system. Grouping various powers and provisions in a single act will harmonize inspection and enforcement powers, make them coherent for all food products and allow inspectors to be more effective, and the industry to reach higher compliance levels.

Bill S-11 gives the government the power to create regulations to strengthen the act. For instance, subsection 51(1)(m) of the bill will require that certain persons prepare, keep or maintain documents and provide them to the minister or the inspector or that they give them access to them. Thus, consumers will benefit from a safer food supply system.

The bill repeals the Meat Inspection Act, a 17-page document, and replaces it by this new act, a document of over 60 pages. The bill contains several notable provisions, among them clauses 52 to 55 which describe incorporation by reference. Clause 52 states:

52. A regulation made under subsection 51(1) may incorporate by reference any document, regardless of its source, either as it exists on a particular date or as it is amended from time to time.

The meat industry is the most regulated sector in the food industry in Canada. Aside from the requirements that apply to meat and food under the Food and Drugs Act and its related regulations, and the Consumer Packaging and Labelling Act, we must comply with the Meat Inspection Act and its related regulations, as well as with the standard and comprehensive requirements of the Meat Hygiene Manual of Procedures, published by the Canadian Food Inspection Agency. The manual has 19 chapters and over 1,200 pages of text, and is already incorporated by reference in the meat inspection regulations, which are themselves 120 pages long.

The agency often changes sections in the manual without consulting the industry. Incorporation of documents by reference, under the regulations, is an important power according to which regulations will remain updated and could be modified. Indeed, section 55 of the bill states:

55. For greater certainty a document that is incorporated by reference in a regulation made under subsection 51(1) is not required to be transmitted for registration or published in the Canada Gazette by reason only that it is incorporated by reference.

We hope that incorporation by reference will be applied through a process that will guarantee consultation among the stakeholders. In that way, those who are affected by a change will have an opportunity to express their opinion. We think that this risks becoming a vicious cycle, because at least the Canada Gazette process, which is slow, is clear and well-explained.

Allow me also to point out that the new legislation applies only to meat processors that are inspected by the agency and that export or sell their meat through interprovincial trade. The new legislation will not create a unique standard, a national standard for meat inspection. We will continue to have hundreds of meat processors in Canada operating under different inspection regimes in the provinces. We think that all the provincial meat inspection standards should be consistent with the federal meat inspection standard.

Canadians should expect that all the meat products they consume are compliant with the same rigorous standards, regardless of where they live or make their purchases. We are willing to work closely with the government representatives and officials to make sure that the new act establishes a regulatory framework that will ensure that we are competitive in the international arena and will encourage the Canadian meat industry to attain the highest standards in food safety.

Thank you for your attention. I will be pleased to answer your questions.

[The Chair, Conservative, Merv Tweed]

Thank you.

Ms. Proud.

[Karen Proud, Vice-President, Federal Government Relations, Retail Council of Canada]

Good morning, Mr. Chair, members of the committee. I'd like to thank you for giving us the opportunity today to speak to Bill S-11.

My name is Karen Proud. I'm the vice-president of federal government relations for the Retail Council of Canada. I'm going to keep my remarks fairly brief this morning because we've already submitted a brief to the committee and it details our position around Bill S-11.

The Retail Council of Canada represents over 9,000 members with 45,000 storefronts across Canada. Our members range from the large multinational companies that you're all familiar with to the smaller, independently run and owned companies.

In February of last year, a new grocery division was added to the Retail Council of Canada which amounts to about 95% of the total grocery industry in Canada. Our grocery members include: Loblaws, Walmart, Metro, Federated Co-ops, Co-op Atlantic, Sobeys, Costco, and Canada Safeway.

I'd like to start off by saying that RCC and our members fully support Bill S-11. This is evidenced by the fact that Minister Ritz announced the introduction of this bill at the location of one of our members and I was in attendance in support of that bill. I'd like to also mention that last week Minister Ritz appeared before you and said, “Consumers remain this government's number one priority when it comes to food safety and consumer confidence.”

I can tell you with certainty that if it was any one of our members sitting here today, they would say that exact same thing. Food safety is the number one priority for the grocery members. They expend considerable effort and resources ensuring that the products they sell to their customers are safe. In this, we are completely aligned with the policy intent behind this legislation.

As you will see from our brief, we are proposing a few amendments to the bill that we believe will improve it. I'm not going to go over these in detail as you've already been provided with a copy of our detailed brief, but I'd like to draw your attention to a couple of key points.

We do believe that there a few areas in the bill where the authorities are a bit broad. In the interest of transparency and clarity, we have suggested some minor changes that we feel don't detract from the intent of the bill and still provide the minister with the necessary authorities.

With regard to disclosure of confidential business information, we feel that the language that can be found in the recently passed Consumer Product Safety Act actually provides for a balanced approach that would give the minister necessary authorities in this area while recognizing the sensitive nature of this information.

As my friend, Mr. Laws, commented, we also have some concerns about incorporation by reference. We're not actually suggesting any sort of amendment to the bill, but we are asking that the committee make a recommendation that the Treasury Board Secretariat develop guidelines for departments in using this authority, as we've seen more and more pieces of legislation being passed that have the authority to incorporate documents by reference.

We'd like to make sure the departments are given guidance on how and when to use this authority, what sort of documents can be incorporated by reference, and the need for proper consultation with industry on those documents.

As I said, I wanted to be brief and I'm hoping that I achieved that. I would like to thank the committee again for providing us with the opportunity to share our views. I look forward to any questions you might have.

[The Chair, Conservative, Merv Tweed]

Thank you very much.

Mr. Allen.

[Malcolm Allen, NDP, Welland, ON]

Thank you, Chair, and thank you to the witnesses for being with us today as we go through Bill S-11, I agree it is an update, and hopefully it will become a standard across the country for food safety. It's one bill rather than a multiple and makes it more transparent for all to understand exactly what the rights, obligations, etc. are for all parties whether they be primary producers or end consumers.

The legislation talks about an audit five years after it comes into force. They'll do a review to try and see what's working and what's not working and make adjustments. One of the things we've been saying is that if you don't have a reference point to start from, how will you know where you end up in five years? Specifically around CVS, a compliance verification system, it's still our contention that in the Weatherill report, although done by PriceWaterhouseCoopers, and in Carol Swan's analysis and review, an audit is still needed.

I'll look to both of you to comment. Do you have any suggestions about whether that's something that should be looked at? I realize you may not have a definitive answer on that. Is it reasonable to suggest that we have a reference point so when we count to five, we know we actually got to five and didn't get to four and a half? It's difficult, it seems to me, that if you don't have a reference point to start from, how do you know what you've counted? You'll know at 10 because you can count from 5 to 10.

I'll let you comment. Why don't we start with Ms. Proud. We'll work right to left.

[Karen Proud]

I guess I would say I don't have a strong opinion about when an audit should take place. I would have hoped that in developing this piece of legislation the government would have already done a bit of benchmarking as to what was working and what wasn't. I assumed that was why they brought this legislation forward. It would have been my expectation that some sort of a review of the system would have been done before bringing forward new legislation to try to fix things.

[James Laws]

I would add that it would not be illogical to do as you're suggesting. There was a review done of the compliance verification system, and it was a very good review. We had been pointing out for many years that there were inconsistencies in the different regions across Canada in how the system was applied. That compliance verification system was put in place in an attempt to make the inspection system across Canada more uniform. It still has challenges, and we continually need to train people right across the country, but it is a reasonable system.

[Malcolm Allen, NDP, Welland, ON]

Ms. Proud, we see at the retail end standards that retailers have set. Sometimes they seem to vary by individual retailers, especially large ones. Do you see this as being problematic with this legislation? The minimum standard is Bill S-11. If folks ask for standards beyond that, how does it affect this piece of legislation? We have producers who come to us and say that the standard is here or the standard is there. It goes back and forth. Do you think we should have uniform standards at the retail end, so that we all understand whatever the benchmark is? Should we have legislation that speaks to that safety standard?

[Karen Proud]

It makes it easier if there are uniform standards across the country so everybody knows what they're supposed to be doing. Not all of our members are national in scope.

In retail, the one thing that is not competitive is food safety. Our retailers work very closely together. If there is a lack of a standard, or if there is a gap, they will develop among themselves and in discussions with Health Canada and other authorities certain standards. They've already done this. In some areas where there is no regulation or legislation, they've developed their own. Of course, we're always advocating for a national, uniform approach to standards.

[Malcolm Allen, NDP, Welland, ON]

Mr. Laws, you've said you'd like to see a national standard for all meat processors, regardless of whether they're covered under CFIA as a federally regulated institution. Are you suggesting this right down to the smallest abattoir?

[James Laws]

We are, but we realize at the same that there are challenges when you do that. For instance, this past summer I visited five of the provincial plants on the federal pilot project, plants in line to become federally inspected: one in Alberta, one in Saskatchewan, and three in Ontario. It is great when you see them wanting to become federally inspected, just to have one set of rules. We have members in our association that are very large and others that are very small. It's not really a matter of size; it's a matter of whether everyone has the appropriate systems in place to ensure that they're making food as safe as possible.

[The Chair, Conservative, Merv Tweed]

Thank you.

Mr. Lemieux.

[Pierre Lemieux, Conservative, Glengarry—Prescott—Russell, ON]

Thank you very much, Chair.

Thank you to our guests for being here today.

I thank you and your members for your commitment to food safety. I appreciate the fact that you support Bill S-11 and what we're trying to accomplish here, by taking something that is good and robust and making it even better, particularly based on feedback provided by you, by the members of your organizations, and by the industry at large.

I wanted to ask a question regarding fines, because sometimes there can be confusion about fines or penalties. They basically break down into two groups, as you know. CFIA inspectors can use AMPS, which are the administrative monetary penalties where, I guess, a ticket can be written by an inspector for minor violations, serious violations, or very serious violations, but the monetary amounts are very modest. I think a minor violation is $1,300 and a very serious violation is $10,000.

Bill S-11 prescribes penalties through the court system. In other words, if someone is actually found guilty of contravening the act in certain circumstances and a judge rules on it, there are summary conviction fines and indictable offence crimes. I believe there has been a significant increase. Penalties used to be up to $250,000, if found guilty by a judge in a court of law. These have been increased to $5 million, as a maximum, and not in every case, of course. It's at the discretion of the judge, depending on the circumstances.

I wanted to ask each of you whether you feel this is reasonable, if you feel this is a positive step. What are your thoughts on that?

[James Laws]

Certainly, it is a twenty-fold increase in the maximum fine that could be imposed, so it is very serious and we certainly don't oppose that in principle. We do want Canadians to know that we support the bill. This is a very serious situation, no doubt, if one is convicted to the maximum extent of the law for probably purposefully doing something wrong.

That aside, in the very situation we see right now, if a company does something and not willingly, by any means, something goes wrong, ultimately the CFIA can pull their licence. They stop producing. That is quite serious. That's really what makes a huge impact and the agency does have a great deal of authority in that regard.

[Karen Proud]

I think the increase in fines really does show Canadians that the government is taking food safety very seriously. From a retail perspective, it's really not an issue for us, because as I said, for our members, food safety is the number one priority. If there is an issue that's identified by CFIA or Health Canada or the Public Health Agency, our members will act.

I think the fines are important. It sends a good message, but it's really not of concern to our members because they work with CFIA on all food safety issues.

[Pierre Lemieux, Conservative, Glengarry—Prescott—Russell, ON]

Very good. I appreciate that, thank you.

I'm glad we had the opportunity to clarify the difference between the monetary penalties and actually being found guilty of a violation in a court of law by a judge, because sometimes those get confused and someone thinks the CFIA inspector can write a ticket up to $5 million, which is not the case.

I want to ask a question about traceability. Traceability, as you know, plays a key role within our food safety system. This legislation builds on what we already have, and of course, it wants to move the industry toward even better traceability. I believe the industry wants to go to traceability as well, because it's a win-win for everybody. Yes, there can be some initial costs incurred to move in that direction, but of course, the savings and the benefits are tremendous.

I want to ask each of your organizations your thoughts on the traceability portions of Bill S-11.

[Karen Proud]

I can be quick and then I think James probably has some more commentary.

For our members, the only caution around traceability is to make sure we have a uniform system for all products. In keeping with the spirit of the legislation, which is bringing things to a harmonized approach, I think that's what we need to ensure in moving forward with any new requirements around traceability. That's the only concern that's been raised by our members.

[James Laws]

From the Canadian Meat Council's standpoint, we support and have supported full traceability from the farm to the meat processing plant.

Beyond that, there are some facilities that are able to track and trace a particular piece of meat right back to the farm. That can be quite an expensive process, but some facilities view this as a competitive advantage for their particular businesses.

The biggest issue really is that in the event of a recall, and there was a major recall recently, maintaining traceability back to a certain supplier of meat helps one to get products back as quickly as possible, for the consumer's benefit but also to limit the scope of the recall to particular suppliers. The better they manage that traceability of the product, the lower will be the amount of product they have to recall. If they're not able to identify the product specifically, they'll have to do a broader recall.

[The Chair, Conservative, Merv Tweed]

Thank you.

Mr. Valeriote.

[Frank Valeriote, Liberal, Guelph, ON]

Thank you, Mr. Laws and Ms. Proud, for coming. I want you to know that everyone around this table supports the legislation as well, and like you, some of us are going to suggest a few amendments.

I'm curious, Karen. You represent a number of retailers. Are you aware whether any of those retailers ever have any outside, independent audits of their systems and of the adequacy of their staffing?

[Karen Proud]

I wouldn't be able to comment on that, but I am certainly happy to go back to find out from our members and send that information back to the clerk.

[Frank Valeriote, Liberal, Guelph, ON]

Would you do that? Could you do it before the end of the week and provide it to the clerk?

[Karen Proud]

Absolutely.

[Frank Valeriote, Liberal, Guelph, ON]

All right.

I want to be a little more probative on a question that Mr. Allen asked. He spoke about systems. I'm talking about the audit that Ms. Weatherill recommended in paragraph 7 of her list of recommendations: a full, independent, outside, objective audit of all of the CFIA, all of the resources, including human resources.

Given that the Auditor General has an outside audit on a yearly basis to make sure that everything is running right, do you see the value of an objective outside audit of all systems and resources, including human resources, so that we would know the CFIA is able to do what they are supposed to do, because they're adequately trained and adequately supported, financially and otherwise?