Agriculture Committee on Feb. 17th, 2015

[Bob Zimmer, Conservative, Prince George—Peace River, BC]

Right. I can't remember who said this, but one of you talked about reducing duplication. It is one thing to align—or maybe I said that. I was reading my notes. Such a great idea—out of the gate when we both start out of the gate, but it's a complete other thing to align our processes before we get out of the gate: you go ahead, do this one and I'll do the next—that kind of alignment.

I think how much better and how much more we can get done doing this, but especially from seeing and listening to experiences of abattoirs, as the PS said, where they have run into issues like this that made the business no longer viable because of such regulations—

Anyway, that's all I have to say. Thank you for your work, and let's hope we can get this done.

[The Chair, Conservative, Bev Shipley]

Thank you.

Mr. Eyking, please, you have five minutes.

[Mark Eyking, Liberal, Sydney—Victoria, NS]

Just to follow up on our last conversation about making industry stronger, you also alluded to the fact that sometimes when you see these barriers they do not benefit the producer or the consumer. It's sometimes a bit of a bureaucratic cash grab, I guess. We have constitutional rights, but you hear stories such as if you're selling Ontario peaches in Quebec you need a vendor's number and you have to have a vendor's licence and vice versa.

Is the will really there because they are getting what I call a “cash grab” or whatever it is? It has nothing to do with food safety or with helping the producer or the consumer. It's a hidden cash grab and nobody wants to sit around a table and let that cash grab go.

How much is collected on interprovincial licences and duties or whatever is out there? Is some of it protecting their own bureaucrats? I don't know whether it's unions. Is something missing here? It seems as if the producers don't want these barriers. Consumers don't want them. Where is the problem? Is this protecting somebody's turf, such as an inspector, or does this protect money flow? Where is this all at? Can you give me some examples?

How much is it really costing Canadians at the end of the day?

[Frédéric Seppey]

Similar to the answer I gave to Madame Raynault earlier, it is difficult to pinpoint specific costs, but one element of hope is that this committee in its study could further examine the fact that the provincial premiers at the Council of the Federation meeting last summer embraced the objective of renewal, a review of the Agreement on Internal Trade. This is indicative that there is a general sense that having a more integrated economic space would be a win-win.

A number of measures are there for very legitimate reasons. A number of impediments are there because of the legacy of old regulations that had meaning several decades ago but may no longer serve a purpose. By discussing these issues in a truly horizontal manner you are able to move away from those kinds of chattels or specific interests and look at an outcome, if we apply the right principles. If I make the effort of removing some of the impediments to trade with other provinces—it is the same logic I am applying here as the logic that exists in international trade—I would get removal of impediments to my exports in exchange.

What should guide this exercise is that if we apply these principles it would be a win-win. I rarely hear in discussions with colleagues in the provinces that a measure is there because it is revenue generating. It is much more that it has always been there and we haven't had a chance to come to regulatory modernization, or it still serves a purpose and we don't want to lose that purpose. Instead of looking at specific barriers, having a discussion on the principles that apply equally means you can address many of these elements. You build a vested interest to move together toward a more liberal system.

[Mark Eyking, Liberal, Sydney—Victoria, NS]

Do you have a number for how much it costs our economy with all these barriers?

[Frédéric Seppey]

No, I don't have a general number—

[Mark Eyking, Liberal, Sydney—Victoria, NS]

It would be substantial.

[Frédéric Seppey]

—other than the estimate from, perhaps, some of these studies.

In terms of what it represents as an impediment on small and medium-sized enterprises—the heavy burden of some of these regulations that are not always clear about how they should be implemented—we have anecdotal information that it's a significant cost, from when we discussed it with stakeholders and specific industries.

[Mark Eyking, Liberal, Sydney—Victoria, NS]

Let's say we were to come out with a study with recommendations and the federal government wanted to run with them. You alluded to the provincial council of premiers. At the end of the day, they have to buy into this. As a federal government, we can't just get rid of barriers, unless we were to open up the whole Constitution, can we?

[Frédéric Seppey]

You're absolutely correct. This is why the initiative that was launched—the indication of the federal government to take leadership in conducting a review of the Agreement on Internal Trade—required the full participation of the provinces. This is an agreement between the federal government and each province and territory. That's why it was a welcome development that the provincial premiers, last summer, indicated a willingness to engage and actually set a date for completion of these negotiations in 2016. We have at least an agreement of principle on the usefulness of conducting such a review.

[Mark Eyking, Liberal, Sydney—Victoria, NS]

We should probably send our report to the premiers, as we send this to Parliament. It would be a good idea.

[A voice]

Yes.

[The Chair, Conservative, Bev Shipley]

Thank you, Mr. Eyking.

I'll now go to Mr. Maguire, please, for five minutes.

[Larry Maguire, Conservative, Brandon—Souris, MB]

Thanks, Mr. Chairman.

I just wanted to follow up on my earlier questions in regard to some of the provinces that had set good examples.

Mr. Seppey, you mentioned the New West Partnership Trade Agreement. Manitoba's only connection there, I think, is in the trades and the weights and measures that I was looking at, some of those, as well. You gave examples of Quebec and Ontario.

Can you just give me some examples of what really worked in, let's say, the New West Partnership or here in Quebec and Ontario, and how we would look at bringing that together on a much broader scale across Canada, if those areas are the ones that have worked well so far? What are the main inhibitors in those regions that are still there, as well?

[Frédéric Seppey]

Taking the example of the New West Partnership—and I'm not fully familiar with the specific provisions—it is based on horizontal commitments and the principle of non-discrimination.

I described earlier that the Agreement on Internal Trade is based on a positive list approach. You list the areas or the measures where you're ready to have the obligations applied.

With the New West Partnership, my understanding is that it takes a negative approach. That is, it applies across the board except if you explicitly set an exception. This is an illustration of where that type of principle could be a point of reference for efforts to modernize the Agreement on Internal Trade.

[Larry Maguire, Conservative, Brandon—Souris, MB]

I wanted to acknowledge your comments, as well, Mr. Mayers, about how reducing these internal trade barriers can certainly help with the innovation of new products, new investments, innovation, and new technology in those areas. That just makes sense on the larger scale, from my perspective at least.

There have been agreements horizontally, as Mr. Seppey has just pointed out. What one or two things do you see in the new West Partnership that are major items they would like to tackle to get barriers even further reduced than they already are?

[Paul Mayers]

In the context of the discussions that have taken place to date in the federal-provincial-territorial space, as I noted earlier, standards of identity and grades are critical. We are not far apart. There are some differences, but we're not far apart on issues of safety, because you're either safe or you're not.

You get nuance, but on standards of identity and on grades, you do have some marked differences. These then can be very problematic in terms of the movement of products, particularly if you have myriad standards for what you might call, in one jurisdiction, the same product. So these influence issues of labelling and issues of the presentation of the product.

Those are significant if a business, in order to sell in essence the same product in three different places, has to subtly reformulate it as a processed product for each of those jurisdictions. What are they going to do? If they're big enough, they might run three lines of the same product, but more likely they'll focus on just one market because it's not economically feasible to produce to three different standards for the same jam. Those are the kinds of issues that exist in our current system, which can be tackled and streamlined.

I raise those as examples because they impact industry in a very real way.

[Larry Maguire, Conservative, Brandon—Souris, MB]

I know that the pork industry is very important in Manitoba, and I know the programming there to be able to do shipping. Of course it's international; there's a lot of export there. Do you see ways to look at other plants across Canada and to harmonize some of their needs with the needs of those export markets as well?

[Paul Mayers]

Absolutely. Again, I think there is tremendous opportunity in the international context.

Let me use a specific example. In the context of being able to control listeria, which as we know has been a very significant issue, we've seen some tremendous innovation undertaken by processing plants in Canada. In some jurisdictions, high-pressure pasteurization has been introduced. Having flexibility within the regulatory framework to allow for the use of a technology like that is game-changing. If you had a regulatory framework that didn't envision the use of a technology for decontamination, you might not be able to permit one, even though you could see the benefit of one, because your regulations were simply too restrictive.

The current framework with its differences can sometimes actually prevent innovation. We see an opportunity to move beyond that.

[The Chair, Conservative, Bev Shipley]

Thank you, Mr. Maguire.

Mr. Dreeshen, go ahead for five minutes, please.

[Earl Dreeshen, Conservative, Red Deer, AB]

Thank you very much.

Mr. Meredith, you spoke a little about the Agricultural Products Marketing Act. Could you perhaps explain a little bit more about the marketing orders that are associated with that? As far as horticultural products are concerned, what purpose do they serve? Who oversees the act? I know there is discussion with regard to production, marketing, and branding of P.E.I. potatoes. I come from Alberta, where I know we also grow some pretty good potatoes. I'm just wondering where these things lie. Can you give an overview of the act and what we can expect from it?

[Greg Meredith]

Sure. I was getting kind of raspy not speaking, so thank you.

The Agricultural Products Marketing Act helps reconcile the fact that in our jurisdictional division in the Constitution the provinces have authority within their boundaries. The federal government is involved in interprovincial trade and export trade, as you have been hearing consistently.

The APMA allows the Governor in Council to delegate those authorities to individual marketing boards in provinces. So, for example, if the P.E.I. Potato Board has an order, it would have the authority to talk about pricing, marketing modalities, branding, and most importantly it would have the opportunity to collect levies on production that is destined for the province or for interprovincial trade. That's important for the board or the commodity group to undertake issues of branding to promote their particular product, for example.

Currently there are between 75 and 84 such orders covering at least 30 different commodity groups. It's a very well-used piece of legislation. It is one of the most efficient pieces of legislation I've seen and it's only four sections.

The minister is very interested in how it's operating and whether it's as streamlined, as modern, as it could be. The act itself goes back to 1949 so, like much in agriculture, it has a very long pedigree. We want to see if it still has the characteristics we want.

So that's it in a nutshell, Mr. Dreeshen.

[Earl Dreeshen, Conservative, Red Deer, AB]

I'm a grain farmer so I don't quite understand some of the specifics involved with the marketing of vegetable crops and those types of things, but I do have some knowledge of the potato industry.

I will ask the CFIA about inspection costs per acre and so on. People are taking a look for soil-borne diseases in the plants as they are growing. I know that one of the arguments has been that the costs have escalated immensely in the last little while. The reality is that you can find out what the issues are if you simply take the soil off the potatoes when they are coming in. It is not really going to change the ultimate issue. If they are not able to be dealt with they are not able to be dealt with.

I'm wondering if we are looking at innovative ways of managing some of the risks that are there when we take a look at crop rotations, analysis of all other aspects. There have been some concerns in that area and sometimes people are saying that maybe we've overreached. Sometimes they simply look at the costs and ask where this is going and what the advantages are.

[Paul Mayers]

That's a great question, thank you for that.

The area of innovation doesn't stop at the production. The control innovation is a critical area for us in CFIA. Indeed we have moved in a number of areas to much more modern DNA-based techniques that require much smaller samples to assess things like pest risk.

Unfortunately that's not possible across the board. One of the examples that I know creates frustration in the potato industry is PCN, potato cyst nematode, testing because we collect fairly significant samples. It's also a problem for us as an agency. We continue to explore innovation in identifying that pest because, as you can imagine, collecting and shipping hundreds of pounds of soil across the country and then managing that in our laboratories is not a simple task for us either.

This is an area that the industry has been very interested in. We too are very interested but we also have to recognize that it's not just our drivers in innovation. Any test that we shift to must be acceptable internationally. We carry out that surveillance to provide assurance to our trading partners that pests that may be present in Canada on a limited basis are not present in the products that are being exported, to assure them that they are not being exposed to that pest. Many of those specific tests aren't just because that's what CFIA would like to do, they are the international standard tests and we are obligated to do them until a new test is accepted internationally.

[Earl Dreeshen, Conservative, Red Deer, AB]

So that then becomes the key, finding out where the innovation can come from—