Agriculture Committee on March 26th, 2015

[The Chair, Conservative, Bev Shipley]

Welcome, ladies and gentlemen.

We're still working on agrifood products and reducing interprovincial barriers.

In our first hour today, ladies and gentlemen, we have the Canadian Horticultural Council and the Canadian Meat Council joining us.

With that, I'd like to welcome Anne Fowlie, executive vice-president of the Canadian Horticultural Council.

Anne, please start off. You have 10 minutes. Thank you very much.

[Anne Fowlie, Executive Vice-President, Canadian Horticultural Council]

Thank you.

Thank you very much, Mr. Chair.

It's always a pleasure to appear before the committee.

We're certainly no stranger to committee. We're certainly getting to become quite well acquainted, and we thank you for that.

It's also an opportunity to come and say thanks, because that's equally important. I think it's something that perhaps we don't have the opportunity to do often enough. It's very important to offer thanks where thanks are due.

For example, we have our agri-science cluster, that Minister Ritz announced in 2013, which was an allocation of $7 million. Industry is contributing $2.4 million in matching funds for the five-year project. Bill C-18 is, of course, something you're quite familiar with. The provisions respecting plant breeders' rights will improve access to technology, plant material, and have demonstrated that Canada is open for business.

Regarding the proposed repeal of standard containers, while we recognize that there will be changes in due course, we do appreciate that time has been allocated to a considered review of the situation and extensive dialogue with stakeholders across the country. While a compromise of sorts is likely, for us this is clearly preferable to the initial intention for a wholesale elimination, so I do thank you.

While interprovincial trade is important to our sector, our ability to export is even more important. Significant percentages of many of our crops such as potatoes, blueberries, and cherries, to name a few, are exported. Production efficiencies and production management advances are resulting in acreage and yield increases and making a valuable contribution to Canada's export profile.

We are fortunate to have the recognition and demand for our high-quality and valued Canadian products. However, our regulatory environment, which is conducive to trade abroad, will underpin and enhance trade and prosperity at home.

We represent producers, packers, and shippers of over 100 fruit and vegetable crops from across Canada, and our members include those provincial producers, packers, and shippers, as well as allied service organizations. We work on a number of key issues such as crop protection, access to a consistent supply of farm labour, fair access to markets, a favourable regulatory environment, research and innovation, and food safety and traceability.

Our active mission statement focuses on five key words as we work to ensure a more innovative, profitable, and sustainable horticultural industry for future generations. We're committed to ensuring that strong Canadian farms will be around to provide safe and secure food in Canada and abroad.

We've had a number of successes, including the CanadaGAP on-farm food safety program. We've led a collaborative initiative that included the World Wildlife Fund in the development of an integrated fruit production program. We're a founding member of GrowCanada. We're an active participant in many of the value chain round tables: horticulture, bee health, and seed.

A few weeks ago our colleagues from the Canadian Produce Marketing Association were here and spoke about the significant contribution of the fresh fruit and vegetable industry as a supply chain, field to fork. For the field part, with primary production over $5 billion, and after packing or processing of $10 billion, we're certainly a large and, I believe, the most diverse sector of agriculture.

When it comes to improving food diversity and security in a “by Canadians for Canadians” manner, it's a priority that can only be achieved through dialogue, understanding, and strategic collaboration. Again, that includes the regulatory environment that will serve us well at home and abroad; adequate funding for research and innovation; appropriate actions to develop and implement policies and programs that will foster producer profitability, which includes traditional and non-traditional risk management and other types of programs; supporting food safety and traceability initiatives; and ensuring that imports meet Canadian standards. Research and innovation are critically important to maintaining Canada's horticultural sector and its competitiveness position.

Enabling market access is key. The market access secretariat coordinates government initiatives with industry and provides provinces and territories with the ability to aggressively and strategically pursue new and existing markets and keep pace with international competitors. We've had some successes there, certainly most recently with the access of cherries to China.

Crop protection has been the subject of many previous studies. Investment in establishing ongoing activities with Agriculture and Agri-Food Canada's Pest Management Centre is a credit to those involved.

The productivity and international competitiveness of the multi-billion dollar horticulture sector is highly dependent upon timely and uninterrupted access to agriculture and food inputs and technologies that have received regulatory approval and are commercially available to, not only our competitors in other jurisdictions, but to us. At the same time, one of the foundations of Canadian agriculture is a key competitive advantage for Canadian farmers, and part of that is our world-renowned, science-based technology regulatory system. Many countries are envious of that system, which provides rigorous science to protect the health of Canadians and the environment, and a predictable, timely system that gives farmers and industry the tools they need.

I want to talk a little about pollinators. Agriculture relies heavily on crop protection products and pollinators, such as bees. The horticulture sector is an exemplary model of successful coexistence between farmers, producers, and a robust pollinator population. Coexistence is a must: no bees, no food; and conversely, no crop protection products, no food either. Pollinators play an important part in the agricultural success of Canada, and concerns have been raised both in Canada and around the world regarding long-term pollinator health. Canadian horticultural producers know there is a need for both the products and pollinators, and the loss of either could have devastating consequences. Some of our members are the biggest clients of commercial beekeepers in the country. ln fact, one of our biggest issues is the future increased demand for pollinators. We all overwhelmingly agree that the main stressors to bees are pests and parasites, inadequate diet, and weather conditions. We're supportive of the bee health round table that brings together stakeholders to collaborate in finding solutions.

I raise this today in the context of the foundation of our regulatory system, which breaks down when provincial governments, who do not have perhaps the research capacity of the federal agencies, such as the PMRA, start imposing regulations that contradict or override federal regulatory decisions. I refer specifically in this case to the proposed regulatory amendments to Ontario Regulation 63/09 under the Pesticides Act to reduce the use of neonicotinoid insecticides.

What does this result in? It creates unpredictability in Canada in what other jurisdictions should regulate or how and when they may do so, leading potentially to a patchwork of regulatory approaches across provinces, unnecessary and costly duplication between federal and provincial governments, and regulatory approaches by some provinces that appear to be grounded in perception rather than science. Growers do not know which way to turn or how they will compete with their colleagues and peers in other areas of the country. They don't know how to go about planning or managing. No one benefits when there are mixed messages under mis-consideration by the public, either.

What's going on the particular province that I mentioned will have far-reaching and very negative effects for farmers, forcing them to either go back to using older, outdated pesticides, or source their other inputs, such as seeds, from outside Canada. Notwithstanding the science-based regulatory system we have, I wonder if it sends a poor signal to international investors that significant risks are involved when investing in Canada due to provincial intrusion into federal regulatory jurisdiction. lt's complicated, but something that a lot of caution and care needs to go into. We've seen this as well with bans on urban pesticides. Such actions do raise concerns and have the potential to hurt investment or distort trade, and again I would mention the mixed signals that are sent.

The federal government has a leadership role to play in removing this and other potentials that could have trade-distorting and duplicative regulation implemented at the provincial level. Federal regulatory agencies have the obligation to regulate and enforce Canada's national food, feed, and environmental safety measures. We believe this should include ensuring that provincial governments take great caution in doing otherwise.

If I look ahead, what are some of the things that are on our immediate radar screen? We just completed our annual meeting a few weeks ago, our 93rd actually, and one of the key topics of discussion was sustainability. It means many things to many people, and there are many words to describe that. We refer to it as people, planet, and profit.

We recently agreed to establish a sustainability working group. We very much believe that we are at a similar crossroad today as we were in 1999 when the decision was made to develop the CanadaGAP on-farm food safety program. We believe this will become a market access or condition-of-sale criteria. We need to have a leadership role in how that is developed and a say at the table.

There are some challenges to perhaps turn into opportunities, including the capacity to issue electronic inspection and phytosanitary certificates. In this case I refer to the Canadian Food Inspection Agency. Over the last couple of years in the busy shipping season in the south shore of Montreal, where we have the fresh fruits and vegetables that are highly perishable, CFIA reductions in staff have caused great concern for shippers in being able to access phytosanitary certificates for their shipments to the U.S. In fact, there was no more service directly made available on the south shore, so what shippers had to do was come together and find a way to arrange to have, every day, a courier pick up in Montreal all the phytosanitary certificates that were needed in that south shore area and have them delivered. There were many complications with that—missed opportunities for sales, and mixed market signals. We have highly perishable crops, and orders can change from 8 o'clock in the morning until 4 o'clock in the afternoon when the truck leaves. We rely on those certificates and the service to get them in order to be able to engage in commerce. We have to move quickly to move with technology.

With regard to organic standards, there are differences between the Canadian and U.S. standards that are posing challenges, particularly for the greenhouse production sector.

With regard to the CFIA inspection services in the western provinces compared to the eastern provinces for potatoes, again, there are significant differences there.

Unintended consequences often happen. While we support flexibility with federal-provincial-territorial negotiations and the ability to address regional needs, there are instances when such flexibility results in unintended consequences.

Opportunities surround us, and the challenge is for all of us to ensure that they are fully realized.

We appreciate the opportunity to be here.

[The Chair, Conservative, Bev Shipley]

Thank you very much, Ms. Fowlie.

We'll now go to Mr. James Laws, executive director of the Canadian Meat Council.

We also have Mr. Joe Reda, chief executive officer, from the Canadian Meat Council.

Welcome to both of you.

You have 10 minutes, please.

[James Laws, Executive Director, Canadian Meat Council]

Thank you very much.

Good afternoon. My name is Jim Laws. I'm the executive director of the Canadian Meat Council. Joining me today is Mr. Joe Reda, first vice-president and treasurer of the Canadian Meat Council and chief executive officer of Les produits alimentaires Viau Inc., who will be making some comments after mine.

The Canadian Meat Council has been representing Canada's federally inspected meat packing and processing industry since 1919. Today the council comprises 52 regular members who process meat, 90 associate members who supply goods and services to the industry, and three retail and food service members.

The meat industry is by far the largest component of Canada's food processing sector, accounting for some $23.6 billion in sales and $5.5 billion in exports, providing some 65,000 jobs and economic development in urban and rural communities across Canada. ln the case of labour, the meat industry alone accounts for 26% of the jobs in Canada's food processing sector. This number would be even greater if the industry were able to find workers to fill the many hundreds of vacancies that currently are jeopardizing the future sustainability of the livestock and meat sector.

On behalf of the member companies, I wish to thank you for the opportunity to present our perspective on your study on promoting the domestic trade of agricultural and agrifood products by reducing interprovincial barriers to trade.

The first and most critical point I wish to emphasize today is that food safety and quality should not be compromised by commercial considerations. Quite to the contrary: commercial considerations should be harnessed to increase the pursuit of enhanced food safety and quality. This perspective should be the pre-eminent consideration underlying the promotion of domestic trade of agricultural and agrifood products.

The second fact I wish to highlight is that the domestic and the international markets for meat are not distinct. To the contrary: there is a very direct and crucial linkage between domestic policies and regulations and the ability of the livestock and meat sector to access international markets.

The third element to underline is that the most effective manner by far to reduce barriers to trade, regardless whether it be in an interprovincial or an international context, is to harmonize requirements at a high level. The harmonization of requirements at a high level not only facilitates interprovincial and international trade but reduces concerns about lower standards that may result from unfair competition between parties.

lt is absolutely essential that the Canadian livestock and meat sector be present in international markets. The stark reality for livestock producers, as well as for meat packers and processors, is that Canadian beef and pork industries would be decimated in the absence of access to export markets. Those export sales account for more than 50% of the Canadian beef production and more than 60% of the Canadian pork production. ln addition, the livestock and meat sector constitutes a vital market for Canadian grain farmers.

Undeniably, the single most important factor in securing and maintaining access to those export markets is the creation and constant reassurance of foreign customers' confidence in Canada's food safety system. At present, all Canadians gain from the existence in this country of one of the best-performing food safety systems in the world. Nevertheless, even with the benefit of a globally recognized food safety system, Canadian regulatory officials and industry representatives must engage in constant and unwavering effort to sustain the country's hard-earned access to currently more than 120 countries to which Canada exports meat. Without the invaluable advantages associated with foreign confidence, access to critical export markets would be placed in jeopardy very quickly.

Given this reality, it is not surprising that food safety is priority number one for Canada's federally inspected meat packers and processors. We work in collaboration with Health Canada and the Canadian Food Inspection Agency to ensure a scientifically robust, innovative, and globally recognized food safety system.

The pursuit of food safety necessitates strict and verifiable adherence to a multitude of government regulations and industry standard operating procedures that extend from the health of animals that arrive at abattoirs to the physical characteristics of establishments, the equipment used, the health of the workers, the processes that follow, and the samples of the products that are analyzed.

Not only must federally inspected establishments ensure adherence to a high-level hazard analysis and critical control points program, or HACCP, but abattoirs are permitted to function only when Canadian Food Inspection Agency veterinarians are present. Moreover, not only must adherence to all requirements be satisfactory to the Canadian regulatory authorities; the level of adherence must be acceptable to foreign bodies.

lt is for this reason that the country's federally inspected meat packers and processors believe Canada should phase out the current two-tiered level of food safety that presently exists in this country. The two-tiered level of food safety is characterized first by a system of federal regulation and inspection that meets the significantly more stringent requirements of export markets, and secondly by a variety of provincial systems that exist for historic reasons and because of added investment and costs that are necessary to satisfy the more stringent federal requirements.

Not only does the current system provide a two-tiered level of food safety for Canadians; it reduces the level of confidence that critical export markets have in Canada's food safety system. The concern that the federally registered meat packing and processing establishments and cold storages have about the two-tiered system was evident last summer when the industry was questioned by counterparts in other countries about the characteristics and still-undefined origin of a major E. coli 0157 outbreak in Alberta that resulted in 119 confirmed cases of illness.

On July 29, 2014, Alberta Health Services opened an E. coli 0157:H7 outbreak investigation in Alberta. When we first saw the recall notice—“Food Recall Warning—Raw pork products sold by V&T Meat and Food, Calgary, Alberta and Hiep Thanh Trading, Edmonton, Alberta recalled due to E. coli O157:H7”—our hearts almost stopped. E. coli in pork was unheard of. The Alberta outbreak investigation team reviewed the investigation findings and concluded that the cause of this outbreak was exposure to contaminated pork products that were produced and distributed in Alberta in a provincially inspected meat plant.

Unfortunately, unlike what is typically done at the Canadian Food Inspection Agency and the Canadian Public Health Agency, there still is no lessons learned document published by Alberta Health Services for this outbreak. Nor do we know the root cause of this significant outbreak last summer in Alberta, which sickened seven times as many people as the E. coli outbreak from XL Foods of 2012, in which 18 people were sick. We have all heard of that one. This outbreak last summer caused 119 people to become sick and many to be hospitalized.

We don't know for certain where the problem started. Allegedly it was from a small Alberta-inspected meat slaughter facility that processed both hogs and cattle, which then resulted in contaminated pork. We do know that none of the meat came from a federally inspected facility.

We need to know exactly what happened there. A problem in one facility is a problem for everyone, and we don't want that event to be repeated. While the objective of more interprovincial trade of meat is understandable, the main objective must be to reduce the presence of pathogens to the lowest possible level and to harmonize all the rules.

We get it: it does sound illogical that a meat product produced at a provincially inspected plant in, let's say, Kenora, Ontario, can be sold almost 2,000 kilometres away here in Ottawa but cannot travel across into Manitoba and be sold at nearby Winnipeg, Manitoba. But from our standpoint, it is equally illogical for our federally inspected meat establishments that we must operate and compete in a domestic market in which there is such a variety of rules. Every province has different meat inspection rules, and some have very infrequent inspection.

ln conclusion, the best option for reducing interprovincial barriers and promoting trade of meat products in both the Canadian and export markets would be to terminate the existence of a two-tiered system of food safety regulation and inspection in this country. lt is the year 2015. We really should expect no less.

[The Chair, Conservative, Bev Shipley]

We are out of time. Maybe you can put some of the comments in that presentation into responses to the questions that come forward.

Now I'll move over to questions.

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

[Malcolm Allen, NDP, Welland, ON]

Thank you very much, Mr. Chair.

Thank you, folks, for being here.

Mr. Laws, those were interesting comments about a two-tiered inspection system. I don't think I've actually seen it described that way before, but I don't necessarily disagree. I guess the obvious question is whether harmonizing into one means harmonizing into a federally regulated standard. Is that basically what I'm hearing?

[James Laws]

Absolutely, yes.

[Malcolm Allen, NDP, Welland, ON]

We'd federally inspect whatever is left, of the ones that make...because some may close, as we already know has happened with many of them before, at the provincial level. There would have to be, then, a federal inspection of all facilities across the country. Is that where the end game would be?

[James Laws]

Well, that would be the end game. Currently, in those places, there is a variety of different levels of inspection, depending on the province.

Why is it that meat is inspected at different levels, with different testing requirements? It is historically understandable, given the history of Canada, but in this day and age, and with the concerns that we have, it wouldn't be unreasonable to have one set of rules. We're pushing for one set of international rules for meat inspection. That's what we need to move to. Certainly, as evidenced by the 120 countries that accept Canadian meat, we are one of the countries in the world that are most highly regarded, and that is why we have so many other markets.

But indeed the answer is, yes, that would be ideal. I mean, you wouldn't look at hospitals and ask whether you should have different sets of rules at large hospitals and small hospitals. No: you would expect the same level of sanitation, procedures, etc., in any establishment, regardless of size.

[Malcolm Allen, NDP, Welland, ON]

I don't know whether you have given this thought or would have suggestions, or whether you want to leave it to others to figure out, but one of the issues we hear from small provincially run abattoirs is the whole issue of cost.

If we indeed move to your industry's suggestion, a single system, how do we keep some of these facilities in existence? Is there a granting program? How do we manage to get there? Do we simply let the market do what it needs to do, and those who aren't successful and can't afford it move out, and we end up with whatever folks can survive in the marketplace? Do you have any sense of what the thinking is around that, or is it just that we need to get to a system...?

I mean, we are the policy-makers. I wouldn't be surprised if you said, well, you guys do this. But I don't know whether you have any suggestions or not.

[James Laws]

I can tell you that if you were to invite Agriculture Canada or CFIA employees here to appear before you, they could attest to the fact that they have been working with the provinces for probably almost two decades on a single meat inspection system for Canada, a national meat code of some kind. They haven't been able to succeed in that regard.

But look, it is 2015. We want to know what happened in Alberta, for instance. We had some serious questions from international markets, and we want to know what happened. We hear rumours of what happened, but we don't know what happened. We can't afford to have 119 people sick from an event. People's safety and the safety of food have to be paramount, of more concern than what the cost will be.

[Malcolm Allen, NDP, Welland, ON]

I agree about the information sharing. It should be a given between health authorities and with the industry to share what happened, so that we know what happened in these occurrences. That obviously is a piece that in the interim, on your way to one system, if indeed that's where we head, the information sharing has to be a given. One needs to know where these incidents came from.

Public health authorities across the country, as we learned from the listeriosis outbreak many years ago, are supposed to share when these things happen. The dilemma, as I found out when I sat on that subcommittee, is that they don't often do that and it takes a large piece to do it.

Would it be your suggestion that the information should be deposited with CFIA, say, so that they can actually disseminate it?

[James Laws]

Well, certainly we were expecting that by now, which is almost April—this thing happened last summer—they would have told us what happened there. They must have found out something and they should be very much more forthcoming. The Canadian Food Inspection Agency and the Public Health Agency of Canada are very much more forthcoming about what happens during a certain investigation, and that has not happened yet with this particular one.

Joe would be very good to comment on what it takes, how much investment he has made in his facility.

[The Chair, Conservative, Bev Shipley]

Thank you, Mr. Allen.

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

Sorry, Mr. Reda; maybe we'll catch that in the next round.

[Earl Dreeshen, Conservative, Red Deer, AB]

I may give you an opportunity to talk.

Thank you, Mr. Chair.

Actually, I want to start with you, Ms. Fowlie, and speak to some of the things your organization has. We have this “Fresh Thinking” booklet that you've provided. In it, you speak about bee health and neonicotinoid pesticides, the update, and so on.

You talked about the issue of having a province deciding that they have a certain solution that perhaps is not based on the reality of the business. Of course, with that, you talked about the document they were looking at being somewhat one-sided. You also have the facts about bee deaths, but you talk about the increase: New Brunswick went from 2,700 to roughly 4,300 colonies in the province, Quebec from about 36,000 to 50,000—this is over four years—and Alberta from 251,000 to 280,000. This is important for people to recognize, so that when you start hearing about bee deaths and so on, you realize what is actually happening throughout the country. All of these are going up, and of course everyone is doing the utmost they can.

I think it's important because, such as we are studying here, that is the issue we have for interprovincial trade. Once you stop that, or you start people thinking that those who perhaps don't quite understand what is happening on the farm are making decisions, it's going to have an affect from province to province. Then of course, as you had indicated, you have discrepancies with how you are going to manage your farm if that is the case.

That's really the one point I wanted to make. I would like to have you comment on it, but I do have to speak to the comments that I've heard from the Meat Council.

Certainly I do understand the significance.... Again, international trade is so important as far as our meat industry is concerned. But I have spent a lot of time...and I realize that there are a lot of fantastic provincial abattoirs and meat plants that are there, that do the work they need for what they wish to do, which is to sell within their provinces.

I'm sure you're looking at one issue that was a concern, and you were quite emphatic about it, but I don't want people to think that we don't have some amazing provincial standards as well. Some of the differences are simply someone saying, “Am I going to have a footbath when I go from here to there?”, and to keep those types of things different. There are a lot of different aspects associated with it.

Perhaps, Mr. Reda, I'll give you a chance to speak to some of that, and then, Ms. Fowlie, if we do have some time, you could react to the other.

[Joe Reda, Chief Executive Officer, Les produits alimentaires Viau Inc., Canadian Meat Council]

In my experience, you're right, there are some good plants there, and abattoirs. We talk about abattoirs and processors. I'm a further processor, which is a little bit different—I cook, I ferment—and there's a lot of regulation on that part. In Quebec we have small businesses where they sell locally dried products. They don't have the same rules as federal plants, I can guarantee you that. I bought a provincial plant and shifted all my production to my federal plants. It was a lot less costly to do that than make up the buildings that the business was in.

Simply, yes, with the abattoirs, it's slaughter. I've seen some good plants that are provincially run, but when we get into the further processing, for example, for E. coli, in federal regulations we have to have traceability programs; we need to provide, in my case, for some of my customers, in 48 hours. For example, with a batch of salt, if the salt company calls us and says there might be glass in the salt, I need to be able to trace that salt all the way to the end user. We trace boxes. That is in the federal system.

We're not against interprovincial, but for food safety reasons there has to be one regulatory body. Now you're talking about 10 regulatory bodies that are all different. Even in the federal system, when I travelled the country I saw irregularities from one side of the country to the other side of the country, and that's with one regulatory regime. This is because rules are interpreted. This is my fear. I ship 20% of a pre-cooked product, beef, into the United States. Take the mad cow incident we had recently: that's one. We have a few more, and I stop shipping to the United States.

One of the things we've been very proud of is that we traditionally make products that are usually sold to us from Americans. We've been able to develop our business so that we supply the Canadian market to a lot of the American chains. Food safety is essential. I've been on the Meat Council for three or four years now.

In terms of our partners and how they perceive our system, it doesn't take much—

[The Chair, Conservative, Bev Shipley]

We're going to have to go on, Mr. Dreeshen. Thank you.

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

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

Thank you, Chair.

Thanks, folks, for coming. You represent a lot of farmers and a lot of processors who have put a lot of food on our plates, and it's good to see you here.

My first question is for you, Anne. It deals with PACA and the repercussions of PACA, the Perishable Agricultural Commodities Act, and how it's going to translate.

I have a couple of questions for you. My understanding, and you can correct me, is that you need a $50,000 security deposit now to do a $25,000 complaint. That's what I hear, so I have a couple of questions.

What percentage of our horticulture products do we sell to the United States? What are the repercussions back here on the Canadian market of exporters going down there? Is there also concern that maybe Canadians are not going to be able to get as much readily available fresh produce from the United States? As a former strawberry grower, I found it always important that people ate strawberries year round so they would continue to eat them when we got to market.

Those are my first questions for you.

[Anne Fowlie]

Thank you very much.

We have some very huge exports. Some of our commodities to the U.S. in some years go as high as 90%. So we're very dependent on that market and we enjoy the relationship we have. We have a lot of small to medium-sized business operators in horticulture. Yes, there are some very large farms, but for the most part they're small to medium-sized business enterprises and entrepreneurs. So selling in the U.S. with the privileges that we have with the U.S. Perishable Agricultural Commodities Act, when I refer to non-traditional risk management, that's very much a non-traditional type of safety net or business risk management program.

In my previous life, I was on a sales desk in Atlantic Canada selling potatoes back in the era of Steinberg's and so forth. I stopped selling in Canada. I couldn't afford to. I had an added security net, if you will, if there were problems in the U.S.; I had recourse. I had none in Canada. So there's definitely an impact. We do still have access to the PACA. However, as you correctly stated, now if you want to file a formal complaint, you have to post a bond in twice the value of your complaint.

So if you're a small carrot producer from wherever or a blueberry producer, whatever the situation is, that's a lot of money out of your cashflow, because it is in fact cash. If you happen to be out or chasing $25,000 and you have to go to your banker and ask for $50,000 out of your cashflow to chase the $25,000, I think we all know what the banker is going to say. It is a hardship for a small to medium enterprise. And we know through the dispute resolution corporation there are people who are walking away from those opportunities to file claims.

So there's an impact. There are repercussions. I really encourage an in-depth look at the facts and situations around this. I know there's talk around insurance as being a solution. The only persons who are going to make any money on insurance are going to be the insurance brokers and the purveyors who look to set up those programs. There are no margins to pay for insurance-type programs. It is not acceptable to the U.S. as being comparable either. It's not. That's the only way we're going to get back the privilege of not having to post a bond in twice the value of the claim. It's to have something that our competitor in the U.S. will deem as being comparable, and it will not be insurance.

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

My question to the meat packers or meat producers goes back to these small plants we have across the country. We need some of those small plants. In certain pockets of the country you're not going to have big plants. People want to process their turkeys. You have small farmers. That's the way it is.

So if, for instance, I don't know who would sit around the table, if the Prime Minister and the premiers had this agreement or the agriculture minister, how much resources...? You'd want CFIA people in those plants. You wouldn't want to just close those plants down. You would need quite an additional amount of funding to have more CFIA and you'd have to have more inspectors in order for us to have a Canadian-broad uniform inspection system.

Do you have any sense on what would it take to do that, how much it would cost, and how many more people we would have on the ground? Considering you would be replacing some of the provincial inspectors—

[Joe Reda]

Or train them to be a CFIA. You know, I'm a businessman. When you have a food safety issue, let's say the Maple Leaf listeria problem, my business dropped to 10%. In Ontario it was even more. You've got to spend it at one end or the other. If we do have safety issues in this country, how much is it worth for the country when other countries stop trade? On the mad cow, when they stopped beef going across the border, it was $4 billion. I'm sure we can train inspectors and get them on board. I have no problem with interprovincial trade. I think that's a good thing. For a small business today, an entry level in the federal system is very, very costly. I know; I've experienced it. But the regulatory has to be from one body, and then with further training the provincial inspectors can be brought up to speed, to that level. It has to be regulated by Health Canada.

[The Chair, Conservative, Bev Shipley]

Thank you very much, Mr. Eyking.

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

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

Thank you, all, for coming to committee today.

I'm from northeastern B.C. We had a little community called McBride—we still have it—and there was an abattoir there. They had issues with inspection and trying to sell to Alberta. You would think it would go the other way around, but it's not always the case. They had markets on the other side but were hamstrung by this kind of regulatory problem that we have. We have two separate systems that pretty much do the same thing.

You're even saying the Canadian model is even stronger than the provincial model, and I appreciate that. We've heard different examples from other presenters that often the inspectors are doing almost the exact same thing. To us that's redundancy. We work really hard at getting rid of some of these redundancies and trade issues with other countries, and yet we still see these within our own country. That's why we're here doing this study.

Joe, I will come back to you, but James, you mentioned some examples of the impact of the inconsistent provincial regulations or inspections. How has that affected the industry in Canada? You've used a few little examples. Can you just give us a good example on that?

[James Laws]

Yes. The challenge is that I often get members, including people from Joe's company, who say they sell their product at a store in Montreal and they have to go through these very stringent requirements, such as testing requirements. For instance, they produce dry-cured meat. At the same time, he's competing against other provincial products that don't have those same costs of production as his. Of course, companies do sample each other's products, because they want to know what the competition is doing, and they know their product is better than the competition's.

I, personally, have visited many of the plants that are on this pilot project. There were several plants across the country that were to become federally inspected, and several of them were very close to having gotten over to federal inspection. One of the things they tell me is that they currently don't pay anything, that they get their provincial inspection for free, and that maybe they will reconsider whether they will join, because our members do pay a fee to the Canadian Food Inspection Agency and that's the way it is. So it's unfair, as well, to our members, that they're competing in their own province against that.

In other provinces—I have a whole deck on it—the inspection is done at some places twice a year. We have inspectors in our facilities all the time. We cannot operate or slaughter at all without a veterinarian there. With other facilities, albeit they're much smaller, but still, if they're not inspected more than twice per year, that doesn't give me.... It's not the same. It's not the same costs, and it's a competitive disadvantage. It's not just the cost that's mentioned of what it will cost the small guys to become federally inspected. What about all the money the federal companies have invested in their facilities to meet those requirements? They would expect anybody else coming into the market to have to meet those requirements, as well.

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

Joe, to follow up, I think you ran out of time with the last statement. As a businessman, too, I think you've already made the case, but perhaps you want to say something more to this.

To me, there's redundancy there that's somewhat needless. Plus, there's inconsistency. Foreign markets are looking at the Canadian market and looking at what are some little inconsistencies within the country and how best to iron those inconsistencies out.

Just finish up with what you were saying, I guess, in terms of one inspection model for the entire country.