Agriculture Committee on Feb. 17th, 2015

[Francine Raynault, NDP, Joliette, QC]

Okay.

The AIT has been amended 13 times since 1995. That's a good thing, as it means the agreement is being continually updated. The latest amendment was made in 2012.

What elements of the AIT are most effective in liberalizing interprovincial trade?

[Frédéric Seppey]

All the amendments made to the AIT show that the original agreement implemented in 1995 followed an incomplete sector-by-sector approach. It contained broad principles, but their application was limited.

As I mentioned earlier, a chapter on agriculture was added only in 2010 to cover a very important aspect. In other words, an effort was made to ensure that technical measures were not more restrictive than is necessary to reach a legitimate objective.

At the beginning of my presentation, I talked about barriers and impediments. Regulations differ from one province to another. There may be a legitimate explanation for that difference. Some variations are related to risks of outbreaks of disease or the climate, but we must always ensure that those differences correspond only to what is necessary to meet a public policy objective.

Thanks to the various amendments made to the AIT, we are getting closer to establishing consistent rules. Rules that apply to the automobile and agriculture industries are not consistent, but they are consistent in negotiated free trade agreements. That's the case with NAFTA, which was negotiated around the same time as the original AIT. If the best parts were taken from all sectoral chapters and applied to all sectors, we think that the outcome would be extremely worthwhile, especially in an area that tends to be heavily regulated such as the agriculture and agri-food industry.

[The Chair, Conservative, Bev Shipley]

Thank you very much, Madame Raynault.

We'll now go to Mr. Dreeshen for five minutes, please.

[Earl Dreeshen, Conservative, Red Deer, AB]

Thank you very much, Mr. Chair.

Thank you, gentlemen, for being here today.

As Mr. Allen mentioned earlier, you had spoken about the stakeholder meetings and engagement efforts you have made—14,000 individuals—and the number of written submissions you've done. I think that really sets the stage for recognizing the transparency and approachability we have with the department. That's certainly to be lauded.

We recognize that this study is on horticulture, red meats, and processed products. You've talked specifically, in the red meats sector, about the differences between federally and provincially inspected facilities.

One thing I would like to get on the record is that we have some amazing provincial inspections, so people don't think that because it isn't federal, it means we should have some kind of concern about the provincial level. There are simply organizations that say, “This is where we want to market; we don't need you”, and therefore we'll continue along those lines.

Still, even in their situations, they have problems with moving from municipality to municipality. They could be crossing a couple of municipal boundaries. Then you have to take a look at labelling, and you have to also take a look at container sizes. This is something that is standard and is expected, if you plan on taking your product interprovincially and then having the ability to move that at the international level. Certainly it's important, but I think we need to recognize the significance in those areas.

There was a discussion about HACCP versus outcome-based analysis, as far as safety is concerned. I'm wondering if we could expand a little bit on that and where we may be going, so that people can see the differences.

[Paul Mayers]

The approach that has been adopted internationally in terms of food safety is to shift from a highly prescriptive set of requirements to one that really focuses on process control.

Historically the requirements would have said that at the end of product production, have this particular pH or composition, and instead we've moved upstream.

We've said, “Really look at what you're doing in your production, understand where hazards might come into your process, and put in place effective controls to ensure those hazards are mitigated before you reach an end product.“

The change from an end product prescriptive focus to a more system-based focus is exactly what the Safe Food for Canadians Act makes possible for us across all foods. That is what the regulatory framework on which we are consulting with Canadians and with stakeholders is intended to do. It is to provide businesses the flexibility to innovate.

While we've had some fantastic innovation in Canada, some of that innovation has been constrained by the limitations of the regulations. So we see this shift as not only benefiting manufacturers and producers by giving them the flexibility to design their systems according to what works best for them but also as giving them a very clear sense of accountability for the safety of the product. The reality is that while as a government we have a responsibility to oversee and verify that they are compliant, we are not producing the food; they are. When they take control of their entire system, they deliver a much better outcome.

You noted that within provincial systems there is equal excellence, and I would absolutely agree with you. This is in no way to suggest that product produced under a provincially licensed system is somehow inferior to that produced under a federally licensed system. The differences in the rule sets may simply impede the ability to move product as opposed to suggesting that product is somehow inferior.

[Earl Dreeshen, Conservative, Red Deer, AB]

Thank you.

I would also like to expand somewhat. We've had legislation here, Bill C-18, which talks about innovation, investment, and new technology. We are, of course, trying to expand that to international trade.

How will strengthening internal trade by reducing barriers result in improved access to innovation, investment, and technology?

[Paul Mayers]

I can start, and perhaps my colleagues will want to add something.

Having a more aligned set of rules for business—and I'm obviously going to respond with respect to the regulatory context—means those businesses can then make their strategic investments with greater predictability because they are working with a single rule set as opposed to multiple rule sets.

As you can imagine, for businesses the more complex the rule environment is, the more difficult it is to innovate, because you have to meet the expectations of different players.

Greater alignment can stimulate innovation because it now frees the system, so that if a best practice emerges in one jurisdiction, I can adopt it because it fits the rule set. I don't have to retailor it for the jurisdiction I happen to operate in.

It can be very liberalizing for the system, and as a result contribute to greater competitiveness, not just in terms of internal trade but also in terms of our competitive position internationally.

[The Chair, Conservative, Bev Shipley]

Thank you very much.

Thank you, Mr. Dreeshen.

Now we'll go to Mr. Keddy for five minutes to start the next round.

[Gerald Keddy, Conservative, South Shore—St. Margaret's, NS]

Thank you, Mr. Chairman.

I have a couple of questions. I just want to revisit for a moment, if we could, your statement that 95% of the meat-processing industry in Canada is federally regulated. Have we broken that down to separate what is export and domestic? For instance, Nova Scotia is certainly not a large beef-raising province, but we've got one federally inspected meat-packing plant for beef, for red meat, in Nova Scotia. So all of the rest of the meat-packing plants or smaller butcher shops are provincially inspected, selling to the domestic market.

I just want to question the 95% number. Have you broken that down to make sure this is a real number? I expect it's still high, and maybe it's 80%, but 95% seems high. If we take away the export part of that and allow for what the big-box stores sell, because I'm sure that's all federally inspected—it could go in the export line or it could go in the domestic line—does it allow for all of those little provincial abattoirs and butcher shops?

[Frédéric Seppey]

I'm not aware that the statistics can be divided easily, because of the way the business operates. You know, often when we talk, we think about the North American context, and I spend a lot of my time thinking about that, given the dispute we have with our U.S. colleagues on mandatory country-of-origin labelling, but we are very proud of our integrated system. In fact, when we talk about red meat, it's difficult to identify what the amount is, where that animal was born and raised, etc.

On the 95%, we are a big exporter, so a lot is going for export, but we also have a per capita consumption of red meat that is fairly high according to world standards, and we have a lot of movement of processed products across provincial boundaries. In fact, we can look more into that element and inform the committee subsequently, but I suspect there's a fair amount of that, given we are self-sufficient in terms of meat products. A lot of that is consumed domestically, and there's a lot of interprovincial trade in those products.

[Gerald Keddy, Conservative, South Shore—St. Margaret's, NS]

I expect that's the case. I just think that perhaps that 95% number may be a bit high, if you broke the domestic market out of that and looked more at the provincially registered abattoirs.

Another comment you made, and I've heard it now several times, was that the technical measures in the processes should not be more restrictive than they need to be. I think we're all in agreement with that. Is part of breaking down some of the trade barriers as simple as having all of the provincially licensed slaughterhouses and abattoirs licensed for the domestic market straight across the country, but not for export? And if anyone wants to be in the export industry or is supplying two lines and it's better economics for them because they're selling to the big-box stores and the domestic industry and they're also selling into the international market, then they would be federally inspected.

But if you're on the border across the river in Hull and you're producing a product that can be marketed on the Ontario side of the river, then why shouldn't you be able to market it there? It's obviously healthy, and it's obviously not any danger to society or to the individuals who are buying it.

Are we making this more complex than we need to, or should we be rethinking the box?

[Paul Mayers]

It is certainly a consideration to elaborate the hygiene requirements as a common suite. That would have tremendous benefit because the hygiene requirements are certainly the basis on which, from a CFIA perspective, the movement of product across the provincial boundaries would be governed.

We know that certain jurisdictions require of us additional things for the international trade. If a client wants it, and there is a Canadian processor that is willing to do it, we'll certify it from a CFIA perspective. But our marked preference...because, of course, in terms of training if we can train everybody to the same standard, from our perspective that's fantastic.

If that commonality were possible, it would still require alignment with the provincial requirements because of course those provincially licensed establishments would have to be able to demonstrate that they achieve that same outcome from a hygienic practice perspective. But that is certainly a consideration.

In fact, in Canada there have some attempts—the articulation in the federal-provincial-territorial space—of a national meat code that was aimed at that very outcome. So you're absolutely right that this is an area of opportunity but it will require us, collectively, to get to that same place.

[The Chair, Conservative, Bev Shipley]

Thank you very much.

Folks, we've wrapped up round one and round two. The next part is at my discretion so I'm going to go back and start the third round as we would using round one.

With that, I give Mr. Allen five minutes, please.

[Malcolm Allen, NDP, Welland, ON]

Thank you, Chair.

Mr. Mayers, the issue of traceability always comes up, even now. With the sense of one taking an eraser onto the map and take out those provincial borders, economically speaking—I don't think we can do it geopolitically, but in any case—would you see an impact on the traceability?

Clearly in some cases traceability is utilized, almost 100% in some cases, and in some cases 100%. Do you see a push to get to 100% so that we know where the product is coming from? Because now it's going to move; for instance, cattle moves all the time and for the most part it's traceable. It's not necessarily always 100% traceable, but pretty well. But there are some products at the moment that wouldn't necessarily be traceable to the same degree. Horticulture has a program for traceability.

Do you see either a necessity for, or the suggestion to the industries that if indeed they want to engage in it, that kind of traceability? I'm not asking you to write a policy here, but what is your sense of what you think folks should be thinking about?

[Paul Mayers]

I think the simple answer to your question is, absolutely, traceability is becoming recognized more and more as a fundamental tool in terms of protection. Indeed, for CFIA one of the things we were very pleased to see is that the Safe Food for Canadians Act enshrined that focus on traceability.

The reason that's so critical is, as we've seen in Canada in managing events, no matter how good the system is, errors may occur. Our ability to rapidly contain and address those issues, especially as they relate to food safety in terms of product recalls, etc., is enabled by a strong, effective, and comprehensive traceability system.

Indeed, it is our common interest across all food commodities to pursue a clear system of traceability. The Safe Food for Canadians Act, I'm thankful to say, provides the very clear policy underpinning in that regard.

[Malcolm Allen, NDP, Welland, ON]

I don't want you to say that this one is better than that one, necessarily, but from your perspective at CFIA, which industry groups do you see as being at a good level? It might be 100%, maybe it's not, but at least they're reaching towards trying to get that piece done. Is there a sense you have that you can share?

[Paul Mayers]

I think most of the industry sectors have actually put in a lot of effort in this space, not just in terms of traceability but in the entire supply chain risk management as well. We can be very proud of our Canadian agrifood sectors in terms of their commitment to looking both at traceability on farm food safety and at food safety through the chain. A number of them have taken these systems to the point where they make them their highlight message in terms of their delivery, whether you're talking about eggs, which is excellent, or in fresh fruit and veg, where they're making tremendous progress.

I certainly wouldn't be in a position to rank. I think all of our sectors recognize the value and importance. They're all making great strides in that regard. They're not all at the same stage, and some of them are more complex than others, but I think we can be very proud of that commitment in Canada.

[Malcolm Allen, NDP, Welland, ON]

I didn't want you to have to rank things. It would be an unenviable position to be in if you got a phone call tomorrow morning.

It is interesting to see how the industry may be talking about how individual enterprises may do certain things differently. For instance, I toured a Quebec egg producer's enterprise not long ago. He literally had a date stamp on the eggshell. He was selling to commercial breakers. Rather than it being on a package that might lose some eggs, the stamp was blown onto the shell. It was almost like an ink-jet stamp.

That's not necessarily a standard for the industry, but that's one particular aspect where someone has said that since we're going towards traceability, this was what he was going to. When he sells that tray of eggs to someone, those breakers can actually look at it and they'll know those eggs are fine. Those are the types of things that individually some folks are looking at, but not necessarily as a holistic industry yet. That's why I was interested in the sense of where we see things. Everyone obviously is raising it up. I understand that.

[Paul Mayers]

Exactly.

[Malcolm Allen, NDP, Welland, ON]

The issue is about where it is going to be, because folks are actually looking for it.

Anyway, I appreciate that. Thanks.

[The Chair, Conservative, Bev Shipley]

That's right on. I could give you a little time, but I know that a little doesn't work that well.

[Voices]

Oh, oh!

[The Chair, Conservative, Bev Shipley]

Mr. Zimmer, please, for five minutes.

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

Thank you, Chair.

Thank you, Malcolm.

I'm from British Columbia, as I've said, and we've had a similar process in terms of federal projects, along with provincial project analysis regimes, I guess, in that they're duplicative. They go along doing the same thing and sometimes conflict with each other even though they're basically going through the same set of rules. We see this in agriculture, too, where we have some of the same inspectors saying the same lines and doing the same thing. To me, it's completely redundant and for unnecessary reasons, I guess.

This is where I see this going, where we as a federal government..... I'll read from this one page. It says, “The opportunity now exists for provincial review processes to be substituted for federal processes where they meet federal requirements, which will help reduce duplication.” I recognize that the Province of British Columbia does a great job at inspecting what they do, and they recognize that we do a great job inspecting where we need to, but let's not do both all at the same time. This is where I see this going. That's why this study was enacted: to see if some of these things can be fixed.

Do you see anything in the way of rolling out a program like this? Again, to go to what I said when I finished, we need to have provinces agreeing to this, but I can't see them being upset, necessarily. Their regulations are still going to be respected. It's the same with the federal regulations. Just speak to that, if you can.

[Paul Mayers]

Yes, certainly. I think it's a great example of where it then promotes not only greater alignment and opportunity for the industry, but a more effective and aligned system of control for those who have regulatory responsibility. Also, as we discussed earlier, it is shared.

I think one very good example is in the province of Quebec, where the provincial agency and the CFIA have a number of areas of very high collaboration. The provincial agency undertakes inspection and is recognized to be undertaking that inspection on our behalf.

This is absolutely possible. It is part of our overall vision in terms of the system. The last thing we want for a particular processor is that yesterday it was the provincial guy, and today it's the federal guy, and they're doing the exact same thing. There is tremendous opportunity in this space, but it starts with an alignment of the rules, with common training, so that the outcome is always the same no matter who is actually doing the delivery.