Agriculture Committee on Nov. 1st, 2012

[The Chair, Conservative, Merv Tweed]

Good morning, everyone. Welcome to the Standing Committee on Agriculture and Agri-Food, meeting number 54.

Orders of the day, pursuant to the order of reference of Tuesday, October 23, 2012, are 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 Association of Importers and Exporters, Keith Mussar, vice-president, regulatory affairs; from the Canadian Cattlemen's Association, Dennis Laycraft, executive vice-president, and Ryder Lee, manager of federal-provincial relations; and from the Canadian Federation of Agriculture, Christian Lacasse, vice-president.

Welcome.

I think you have appeared before committee, so you know that you present and then we'll move right to members' questions.

Mr. Mussar, would you like to start, please.

[Dr. Keith Mussar, Vice-President, Regulatory Affairs, Canadian Association of Importers and Exporters]

Thank you, Mr. Chair and members of the committee.

My name is Keith Mussar. I am with I.E.Canada, the Canadian Association of Importers and Exporters. It is a privilege to appear before the committee to testify with respect to Bill S-11, the safe foods for Canadians act.

I.E.Canada, the Canadian Association of Importers and Exporters, is a national trade association that has been speaking on behalf of the Canadian trade community for more than 80 years. Our members include food manufacturers who import and export food, Canadian importers and exporters, wholesalers, distributors, and Canadian grocery retailers. We represent some of the largest food manufacturers, importers, and exporters in Canada, as well as small and medium size businesses. Our members import and export food across most food categories.

Bill S-11 will replace and modify the existing statutes governing food safety, packaging and labelling, and inspection under the Meat Inspection Act, the Fish Inspection Act, the Agricultural Products Act, and the food-labelling provisions of the Consumer Packaging and Labelling Act. It will also introduce new requirements on businesses that manufacture, import, and export food.

The bill provides authority to the minister to issue a licence to persons authorizing them to import, export, or convey food from one province to another. This builds on the CFIA regulatory initiative that will license importers of food in the non-federally registered sector. The bill extends the authority of the minister to license all food importers and exporters. In addition, the bill provides the minister with the authority to prescribe conditions to license, such as the requirement to implement a preventive food safety control system as a condition for obtaining and maintaining a licence.

The bill would allow for a number of other improvements, including tougher penalties for non-compliance, enhanced powers of the inspectorate, and consistent inspection and enforcement across all commodities. Also, the bill could provide for the creation of regulations to establish pre-clearance requirements for any imported food commodity. The latter could facilitate the movement of imported food commodities into Canada and would be consistent with provisions being proposed under the U.S. Food Safety Modernization Act .

While the objective to increase food safety is clear, the bill as currently written will have severe negative implications for Canadian food manufacturers and Canadian consumers. First, Canadian food manufacturing jobs will be lost. Canadian jobs will be moved to the United States or other foreign countries. Second, Canadian food exporters will lose access to foreign markets. Third, Canadians, particularly those in ethnic communities, will have less choice of safe, healthy, and nutritious foods. The following examples serve to illustrate these concerns.

First, many Canadian food manufacturers produce food exclusively for export to and sale in the United States or other foreign countries. It is common for such products to contain ingredients that are not permitted for use in Canada, yet are allowed in the foreign country of destination. Such products cannot be sold in Canada as they are not compliant with Canadian regulations. Clause 12 of the bill, which prohibits a person to have in his possession for the purpose of exporting a prescribed food commodity, unless it meets the requirements of the Canadian regulations, will preclude the manufacture of such products in Canada. Multinational companies that have manufacturing plants both in Canada and the United States will have no choice but to move the manufacture of these products from Canada to the United States.

Second, subclause 10(3) of the bill prohibits a person from exporting a prescribed food commodity unless the food commodity meets the requirements of the Canadian regulations. In other words, a prescribed food commodity that is exported to a foreign country must meet the requirements of the Canadian regulations as well as those of the foreign country of destination. This requirement will limit the export of Canadian manufactured products to foreign countries. For instance, the food and drug regulations require Canadian milled flour to be fortified with vitamins such as folic acid. Canadian manufactured products such as cookies, crackers, pasta, and breaded fish products, to name a few, if required to contain fortified flour, will not be allowed access to countries in the European Union, where fortification of flour with folic acid is prohibited.

Canadian companies are allowed under current Canadian regulations to import product that does not comply with Canadian regulations, provided it is brought into compliance before being offered for sale in Canada. This is allowed without prior notification to CFIA. CFIA inspectors visit Canadian companies and ensure compliance of these products with Canadian regulations as they would for any domestic manufacturing facility. This practice is used in particular to correct non-compliance related to food product labelling and often on products for smaller market segments, such as ethnic markets. Correction of non-compliance prior to sale is a cost-effective and efficient alternative to producing products in unique packaging exclusively for the small Canadian market. The prohibition to import non-compliant product under subclause 6(2) of the bill will prohibit this practice and limit food choices, particularly for consumers in small market segments.

In addition, it is estimated that 50% of the volume of spices imported into Canada are further processed in Canada to be made safe for consumption and compliant with Canadian regulations. The prohibition to import products that are not compliant with section 4 of the Food and Drugs Act will preclude the importation of such raw spices into Canada, resulting in the loss of these Canadian processing jobs.

I.E.Canada members have also raised concern regarding two other aspects of the bill.

First, the unrestricted authority for inspectors to take photographs under paragraph 24(2)(g) raises concerns over security and the possibility of intentional or unintentional disclosure of confidential information, such as processing, equipment design, and function. Many companies have taken steps to prohibit the use or possession of cameras, cellphones, and other devices with picture-taking capability by employees and guests in manufacturing facilities to minimize this risk.

Second, incorporation of documents into regulations by reference is an important authority that will allow regulations to maintain currency and allow for changes in a timely manner that will keep pace with the rapid changes in innovation. While desirable, a process is required to ensure stakeholder consultation is undertaken to allow those impacted by a change to have an opportunity to express their views. Additionally, a process is required to ensure that proposed changes to documents incorporated into regulation by reference are communicated internationally and an opportunity is provided to those impacted to provide comment.

[The Chair, Conservative, Merv Tweed]

Mr. Mussar, I'll have to ask you to wrap up, please.

[Dr. Keith Mussar]

In closing, while the food safety objectives of the bill are clear, there are provisions which, if not amended, will result in considerable loss of Canadian jobs and consumer choice. Our members are committed to consultation with officials to address these concerns.

On behalf of I.E.Canada and its member companies, I would like to thank you for the opportunity to be here today on a matter that is vitally important to all Canadians. I would be pleased to respond to any questions you may have.

[The Chair, Conservative, Merv Tweed]

Thank you.

Mr. Laycraft.

[Dennis Laycraft, Executive Vice-President, Canadian Cattlemen's Association]

Good morning and thank you for the opportunity to appear today. I'm the executive vice-president of the Canadian Cattlemen's Association, CCA.

On behalf of our 83,000 members from coast to coast, we want to emphasize that we consider food safety an absolutely critical issue for us every day.

I'm also the industry co-chair of the beef value chain round table and the industry co-chair of the agriculture subcommittee on food safety, which was created at the request of the various value chain round tables that represent industry in agriculture.

With me is Ryder Lee, who works in our Ottawa offices, and whom many of you know.

One of the bedrock pieces of our industry success and our brand promise—and you have seen this logo in many locations throughout the country, on many menus, the Canada beef advantage licensed logo that only certain people who meet our requirements can use—is our food safety system in Canada. Canada's food safety system as it currently stands is world-class. The system compares favourably to those in other developed countries, including the United States and European Union countries. Recently, as it was examined, it was considered one of the superior systems in the world. We believe that suggesting otherwise, as has happened recently, sends an inaccurate signal to Canadians that somehow foreign, imported foods are safer than Canadian food.

The reality is that all food for sale in Canada must be in compliance with rigorous Canadian food standards regardless of where it is produced. It is this strong world-class system that enables us to export our beef to much of the world; in fact, over half of what we produce is regularly exported. This export activity further enhances the safety of our system as it includes ongoing third party examination of the Canadian Food Inspection Agency's processes and performance by a rotating list of importing countries. We probably are the most inspected country in the world.

We believe Bill S-11 is a positive step in the continuous improvement of Canada's food safety system. This legislative step complements the regulatory modernization process now going on at the CFIA. We support these dual steps as they are important to the competitiveness of beef farmers and ranchers, and to the modernization of meat inspection as we continue to move forward with new technology, improved testing procedures, and the statistical analysis that becomes part of a robust system.

As you heard on Tuesday, increasing uniformity of regulation, consistency of enforcement, and enabling stronger reaction to tampering and other issues that endanger our food are all positive steps this bill enables.

The ensuing regulations from this legislative change will be important. How meats and foods are traced through the system is important to primary producers as well, as we've learned in the past couple of months. We hope the contents of this bill and its ensuing regulations can enable improved response, remedies, and resumption of production where inadequacies are discovered in the future.

These are regrettable occurrences, but the reality is they do happen. How we respond usually has a longer lasting impact than the initial event itself and really has a great deal to do with how people view the credibility of our system.

This bill also amends the Health of Animals Act regarding the traceability of live animals. It's our understanding the live animal traceability is governed by the Health of Animals Act rather than this bill. The CCA has long been a supporter of national individual animal identification and actually brought forward the recommendation that created that system and has been working with governments as we look to implement the next steps of live animal traceability.

This bill fits into the bigger legislative and regulatory agenda. As part of the current agenda, we appreciate the government's commitment to a one-for-one regulatory regime where new regulations have to be offset by eliminating the same number of existing regulations. We're also highly supportive of the Regulatory Cooperation Council's work with the United States. We urge lawmakers to do what they can to ensure this undertaking lives up to its potential. We really operate in an integrated market in our industry in North America.

As regulations are drafted with these commitments in mind, we'll work with the government to ensure Canada's competitiveness is improved along with improving food safety.

We had previously mentioned a small concern in the language that could leave the door open one day to increasing the registration or licensing burden on producers of livestock. We will continue to monitor that. We are visiting with those particular provisions in mind to ensure that this bill does not add an extra degree of regulation that would be unnecessary.

We look forward to the questions, and thank you for this opportunity to comment on this legislative process.

[The Chair, Conservative, Merv Tweed]

Thank you very much.

Mr. Lacasse, welcome.

[Christian Lacasse, Vice-President, Canadian Federation of Agriculture]

Thank you, Mr. Chair.

Good morning, ladies and gentlemen, members of the committee.

I am Christian Lacasse and I am a farmer in the Bellechasse region in Quebec. I am the vice-president of the Canadian Federation of Agriculture.

First, I would like to congratulate you on your election, Mr. Chair. I wish you success in your new responsibilities.

To begin with, the Canadian Federation of Agriculture supports the bill in principle. For several years, food safety and traceability have been matters of great importance to farmers in Canada.

As well, you are undoubtedly aware that farmers have been involved in food safety programs, through their farm organizations, for the last 20 years or so, since the early 1990s. Their goal has been to improve their practices and their control measures, to ensure that farm commodities are of very high quality. I think this speaks well of the commitment farmers made to this objective some years ago now. These food safety programs are based on national standards, but they could be applied globally.

We have also worked with Agriculture Canada and the Food Inspection Agency since 1998 to ensure that the food safety programs used by farmers on the farm and at other stages in the process meet global requirements, both in administrative terms and in relation to the various controls. It is important to note that together, these food safety programs cover 99% of primary agricultural production. This means that all production is now covered by these food safety programs.

In addition, these programs attest to the high degree of sensitivity to food safety that farmers have developed. As producers, our objective is to be able to meet consumer demand, whether here or abroad, by supplying very high-quality products. Over the years, Canada has distinguished itself well in that regard.

We do still have some concerns about the bill, however. I will list a few of them.

First, it seems that producers will require a licence to export, that is, to send their animals or commodities to other provinces. On the other hand, producers who do not need to send their commodities to another province, since there are processing establishments in their own province, do not need to obtain a licence.

We would note the same problem for the prevention and inspection mechanisms. Producers who have to send their animals to other provinces must undergo additional inspections. We would seriously question this. We hope that regardless of the province they are in, farmers will be treated equally. We hope they do not have to obtain additional licences or undergo further inspections just because there are no processing establishments in their province.

Our second concern relates to traceability. You know that farmers, with other partners, have been in the vanguard when it comes to implementing traceability systems. We are not questioning this objective or these approaches. I think traceability is a very important factor in ensuring that we are on top of the situation and have good control mechanisms. The bill provides new powers relating to traceability, but they are not clear. The bill is lacking in precision. We would like to have more information and clarification.

The traceability systems put in place create an administrative burden for producers. I reiterate that we are not opposed to traceability, but it has to be arranged so that these systems do not make too many additional demands on farmers.

Last but not least, there is the question of access to certain confidential information. The bill says that inspectors could have access to computers on farms. I would remind you that these computers contain a lot of confidential information that is not related to food safety. We hope that access to information by way of the computers on farms will be limited and will always be justified. This is also a business issue for farmers, since their farms are businesses operating in competition. We would therefore like assurances that this information will remain confidential.

In summary, the Canadian Federation of Agriculture supports the objective of greater harmonization of the various inspection platforms. We support the objective of greater consistency in the performance of inspection activities. We support the inclusion of new offences for tampering with a food commodity, threats to render a food commodity injurious to health, and so on. I think these are among the deterrent elements that are needed in the act.

We are particularly pleased to see the provisions that will establish a level playing field with foreign competitors. We have been raising the question of reciprocity in standards for many years. We hope the passage of this bill will bring about new tools to control imports that do not meet Canada's requirements.

As a final point, I would say again that we support the objectives of this bill. However, this bill is going to lead to reform of the regulations, and we do not, at present, know what the various elements of the reform will be. The regulations are what will enable us to determine whether the bill, or the reform, is satisfactory, whether it enables us to achieve our goals, and whether it is responsive to the concerns we have raised. We do not know what that reform will consist of, but we hope to know that as quickly as possible and to be brought into the process, so that the broad objectives of the reform will make it genuinely possible for us to achieve our objectives, and for Canadian food commodities to continue to be in the vanguard when it comes to food safety.

Thank you.

[The Chair, Conservative, Merv Tweed]

Thank you, Mr. Lacasse.

Mr. Atamanenko.

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

Thank you very much to all of you for being here.

This is a very important part of the process. We have a bill to improve food safety in this country and I'm sure all of us here want to strengthen it even more. Your input is very valuable.

Before moving on to other questions, I would like to ask you something, Mr. Lacasse.

If I understand correctly, you want your federation and other federations to be involved at the point when drafting of the regulations begins. Is that correct?

[Christian Lacasse]

Exactly. As I said earlier, we agree on the broad aims of the bill, but it raises a lot of concerns and it calls for considerable clarification. Those answers will come with the regulations, undoubtedly, but it is essential that our organizations be brought into the process.

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

Thank you.

Mr. Mussar, I'd like to turn my questions to you, if I may.

I think nobody around this table would like to see jobs lost in Canada. How do we ensure we have food safety and at the same time we don't keep jobs at the expense of safety? We have to somehow reach that goal so that Canadians are protected.

You mentioned clause 12 of the bill, which would preclude manufacture in Canada because certain ingredients are not permitted in Canada and therefore these companies would move their operations elsewhere. I'd like you to expand on that a little bit, please.

[Dr. Keith Mussar]

Thank you very much for your question.

In Canada, Canadian companies produce product for export sale only. Because the requirements in Canada are different from what they are in certain other countries, we are allowed to use ingredients that are not permitted in Canada for the manufacture of those products, provided those products are for export sale only.

The concern that's been raised by our members is that if the products they export out of Canada are required to meet the Canadian regulations as well as the regulations in the foreign jurisdiction, they will not be allowed access to those ingredients that they need to manufacture the products that are permitted in a foreign country.

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

So basically we could have two streams.

[Dr. Keith Mussar]

Right.

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

If I understand this correctly, you mentioned clause 10. Because it hits our exports, and you mentioned flour, as the bill proposes, all flour would have to be fortified and yet in the European Union, this is not acceptable. Could you expand on that, please?

[Dr. Keith Mussar]

It's very much the same kind of thing, only it's the reverse. In this case we are required to include ingredients in our products under regulation that are not permitted in a foreign country. Because of that, our products will not be acceptable in a foreign country if they have to meet our requirements. Currently, a company can manufacture a product for export sale that contains flour that's not fortified, and as a result, it is perfectly permitted in a foreign country.

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

It doesn't present a problem on the ground. There's no contamination. It's workable. Is it at a flour mill, for example?

[Dr. Keith Mussar]

It's a legislative conundrum. It's an unintended consequence of how the legislation is written. If we did not have the export provision in the bill, the risk that I talked about regarding the loss of Canadian jobs, aside from the specific example that has to do with spices, would not exist.

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

Thank you.

[The Chair, Conservative, Merv Tweed]

Thank you.

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

That's it? I was just getting going.

[The Chair, Conservative, Merv Tweed]

That's it.

Mr. Hoback.

[Randy Hoback, Conservative, Prince Albert, SK]

Thank you, Chair.

Welcome here this morning to everybody. It's nice to see you all at the table.

I think we all agree that if there is one thing that's important to Canadians, it's to have safe food. That has to be a priority and job one here as we go through Bill S-11.

Mr. Mussar, of course a priority of this government is jobs and trade. You can't give up safety for jobs but in the same breath you've got to try to accommodate what makes sense when it makes sense.

You used the example of spices for Mr. Atamanenko, I believe, where you're bringing in ingredients from another country that you're going to export back to another country. I think that the regulations, when they come forward, will address those concerns. Do you not think that? Do you think it actually has to be in the legislation itself?

[Dr. Keith Mussar]

We've had discussions with CFIA and we've had discussions about how that might happen. Again, as my colleague has raised, until we see those regulations we do not know whether or not the regulations will adequately address the concerns that we have.

Also, one of the challenges we face with the regulatory process in our country is that once we have a regulation in place, it is very hard to change a regulation that does not meet the requirements of Canadians or industry. For instance, we need to have a sponsor for the regulation within the bureaucracy, and on average it takes two years to execute a regulatory amendment. We're better off if we can get the act written correctly to avoid having to patch it.