Thank you, Mr. Chair.
We appreciate your invitation to be here today.
As I say, with me is Dr. Stephen Yarrow, our vice-president of biotechnology. Dr. Yarrow is here to answer all the difficult questions.
CropLife Canada is the trade association representing the manufacturers, developers, and distributors of plant science innovations, including pest control products and plant biotechnology, for use in agriculture, urban, and public health settings. We're committed to protecting human health and the environment. We believe in driving innovation through continuous research.
Our mission is to enable the plant science industry to bring the benefits of this technology to farmers and to the public. Those benefits manifest themselves in many different forms, including by driving agricultural exports and job creation, strengthening the rural economy, and increasing tax revenue for governments. Increased production due to crop protection products and plant biotechnology generates $7.9 billion worth of additional economic activity annually for farmers of field, vegetable, and fruit crops in Canada. Approximately 65% of Canada's food surplus can be directly attributed to increased yields as a result of modern farm practices, such as the use of crop protection products and biotechnology. Canada's canola industry, for instance, saw a 20% increase in yields between 2000 and 2009. This is largely due to improved genetics. The pace of innovation in the industry is increasing. Globally, CropLife Canada's member companies invest about 11% in research and development. About the same percentage is seen in the pharmaceutical sector.
This kind of innovation and growth, however, is entirely dependent on Canada maintaining its strong tradition of science-based regulation at the federal level. Canada relies on innovation and trade for prosperity and growth. Our members work in a regulated industry and they need the assurance that they are working in an environment where sound science, not political whim, is the final arbiter.
We are fortunate that at present the Department of Health's regulatory bodies, the Canadian Food Inspection Agency, Health Canada, and the Pest Management Regulatory Agency, are clearly science-based in their operations. We are pleased with the broader direction of science-based regulation at the federal level and see it as a model for other nations to follow. Science-based regulation is, however, under increased threat. Activist groups who do not like the results of science-based regulation would like to see it replaced with a more political, socio-economic lens. This would essentially be the model as seen in the European Union. Let us be perfectly clear: that is where this might lead Canada.
At present, Europe is the world's largest per capita food importer. European food production is decreasing as farmers are denied the tools they need to increase yields and grow new varieties. There are over 35 years of backlogs in approvals in plant biotechnology products that have received safety approval but are now awaiting political approval in the European Union. As one might expect, actions have consequences. In 2012 one of our member companies moved its entire plant sciences division out of Germany and over to the research triangle in Raleigh, North Carolina. Last year, another company announced it was withdrawing all pending approval requests to grow new varieties of genetically modified crops in Europe due to the dwindling prospects of these requests ever being heard.
However, it should be noted that Europe is one of world's major buyers of biotech grain, importing more than 30 million metric tonnes of mostly GM animal feed each year for its livestock industry. Therefore, Europe still embraces GM crops; they just don't receive the benefit of the innovation that goes into it. This is why it's so important that the federal government continue to defend science-based regulation both internationally and, increasingly, inside Canada's borders. It is the cornerstone of innovation and a vital component of modern agriculture. It is also key to our trade success.
Canada's economic prosperity is strongly tied to maintaining and growing export markets. There are exciting opportunities ahead for Canada to improve international trade in agriculture. As Canada looks for enhanced trade opportunities, it's important for all trade agreements to contain provisions for harmonized and science-based maximum residue limits of pesticides. This allows our farmers to use the latest pesticides without fear of a non-tariff trade barrier in the importing country.
CropLife Canada strongly supports the Canada-European Union trade agreement and we are encouraged by the provisions within the recently signed agreement on biotechnology. The global crop protection industry does, however, have concerns about the European Union's regulatory framework for plant protection products. Its approach moves the pesticide registration process away from a science-based regulatory system. This not only impacts trade and pesticides, current and future, but also the food, feed, and seed products produced using these pesticides. The import tolerance specified by the EU for these products is effectively zero, so even trace amounts of perfectly safe products could prevent the shipments from entering the EU countries.
The use of hazard-based cut-off criteria has the potential to have negative and far-reaching impacts on global commerce. This approach is not consistent with the World Trade Organization's sanitary and phytosanitary agreement, to which the EU is a signatory. We have concerns about the impacts of this action on Canadian farmers.
Here at home, fair, effective, and modern regulations are critical to Canada's future competitiveness, not only between Canada and other countries' agricultural sectors but also within the multinational companies that choose to invest in Canada. Science-based, predictable, and efficient regulatory systems will support competitiveness and continue to attract investment in Canada. Improvements through CFIA's current regulatory modernization initiative, while maintaining Canada's reputation as having one of the safest food supplies in the world, will be critical to sustaining and attracting investment in Canada. If there is one aspect of the current Canadian regulatory landscape that is causing a lot of issues with our members, it is the overly onerous livestock animal feed regulatory program, as it pertains to plants with novel traits and to novel feeds—products of modern plant breeding.
Intellectual property protection is essential to rewarding innovation. It takes seven to thirteen years to get a novel trait or active pest control product ingredient from discovery in the laboratory to full registration and use in the field. The cost to companies for each new product can be up to $150 million for products of modern plant breeding, and $250 million or more for new pesticides. In order for the Canadian economy to continue to grow and for Canada to be a centre of excellence in the knowledge-based economy, the support of intellectual property, patent protection, and protection of regulatory data must be robust.
To conclude, Mr. Chair, Canada's plant science industry has a proud history of encouraging and facilitating innovation that has been immensely beneficial to farmers, consumers, and the environment. Canada's climate of innovation at present is a very good one relative to other nations. There are, however, a number of opportunities for the federal government to undertake regulatory review and to take action on harmonization in order to ensure that regulations are as minimally prescriptive as possible. We support the need for regulations that safeguard the public and give them confidence in the safety of our products. At the same time, it is vital for governments to understand the role of regulatory reform in building a climate for innovation and investment.
On a broader scale, we encourage the federal government to stand up forcefully for science-based regulation. Our industry's ability to act as an engine for innovation and growth is entirely dependent on it.
Thank you for the opportunity to express our views, Mr. Chair. I'd be happy to answer any questions committee members have.
