Agriculture Committee on March 26th, 2015

[The Chair, Conservative, Bev Shipley]

Thank you very much, Laurie.

Now we'll move to the rounds of questioning for five minutes.

We'll go to Madame Raynault, please.

[Francine Raynault, NDP, Joliette, QC]

Thank you, Mr. Chair.

My question is for either witness. Both can answer if they wish to provide different information.

You have spoken at length about interprovincial barriers. Have you already determined the economic impact of these barriers on your industry?

[Cory Van Groningen, President, Ontario Independent Meat Processors]

With regard to the interprovincial pilot project, which our family business participated in, we had looked at originally being part of that project as provincially inspected plants that would trade interprovincially. That was the original intent of the project. The project intent changed to evaluating what limits there were on provincial plants from registering federally afterwards. So the result wasn't exactly the same. The economic impact that we have evaluated and your government has evaluated would be the impact of provincial plants throughout Canada registering federally.

We found that there was still a culture, it seemed, with the CFIA inspectors who were providing input into the changes that would be required in our plant. That culture was very much still focused on the federal traditional, prescriptive nature of policy and regulation. We felt that we were still getting the baggage associated with that.

We did some preliminary investigations. At the end we found that to register our plant federally would probably take at least another half a million dollars and only allow us to do the exact work we are currently doing.

[Francine Raynault, NDP, Joliette, QC]

Do you think the federal government could help you overcome this obstacle?

[Cory Van Groningen]

The Ontario Ministry of Agriculture's Meat Regulation 31/05 is an outcomes-based meat regulation, as I understand the federal regulation strives to be. I think we need to be serious about understanding the outcomes that are required to meet those regulations.

I think that's how CFIA could help us—for instance, help us understand why we need to spend...to essentially double our kill floor to slaughter both hogs and beef when we're doing it perfectly safely within an outcomes-based regulation in Ontario. Why would we change that to be federally registered if it's only to satisfy the tradition of the federal meat inspection standard?

[Francine Raynault, NDP, Joliette, QC]

Do I have any time left, Mr. Chair?

[The Chair, Conservative, Bev Shipley]

You have another minute.

[Francine Raynault, NDP, Joliette, QC]

Thank you.

Mr. Van Groningen, does international trade have an impact on domestic trade, in other words, on the business you do with the other provinces?

[Cory Van Groningen]

I'm not sure I understand. In my case, we're provincially inspected. Currently we don't do any trade interprovincially.

Could you clarify your question for me?

[Francine Raynault, NDP, Joliette, QC]

I wanted to know whether interprovincial trade had a negative impact on your business and if international trade might as well.

Does international trade have a negative impact on your business?

[Cory Van Groningen]

We certainly deal in a marketplace where we trade and compete against international imports into our business. Our family is involved in both the agriculture and meat processing business, so we're competing with meat products that are raised and processed to a much different standard from our own. We feel that we're negatively affected.

We also are located in a certain marketplace. Here in southern Ontario, we have a very attractive market for importers from south of the border to export product to, because there are reasons that would make them want to bring product here at a price lower than they would sell it at within their own country. It is a competitive market for us. We feel that we have very high standards, and we want to maintain those standards. At the same time, we're very challenged in competing with product raised to lower standards.

[The Chair, Conservative, Bev Shipley]

Thank you very much.

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

[LaVar Payne, Conservative, Medicine Hat, AB]

Thank you, Chair.

Thank you for attending via video conference.

Earlier this afternoon we were talking with James Law of the Canadian Meat Council, and Joe Reda, and they talked about provincial standards versus federal standards. One thing they talked about was what I think you mentioned: that you thought you had met some federal standards.

Could you just review that for me again?

[Laurie Nicol]

One of the challenges is that the federal meat inspection program has been changing over the years. When the first national meat code or the meat hygiene standard was being developed, we were as a province developing a meat regulation to parallel it. Obviously there were some other trade requirements that were beyond that, but from a food safety perspective we felt, and back in 2002 it was deemed to be, equivalent. So Ontario's meat inspection program was looking for that recognition. But now, with the movement towards the Safe Food for Canadians Act, it is moving once again.

With the federal system there was also the requirement for FSEP, which is the federal HACCP program. Ontario built HACCP principles into its regulation, so while we always tried to show equivalency, it was a moving target for us.

[LaVar Payne, Conservative, Medicine Hat, AB]

Okay. Well, with changes in technology and everything else, I see this as an ongoing process. In terms of being a moving target, I think regulations will continue to change as we ensure that the Canadian public, and of course our international markets, meet basic scientific evaluations.

One thing I want to find out is this. You talked about provincial inspections. Is that a daily inspection process? Do you have an inspector or veterinarian on site all the time?

[Cory Van Groningen]

In our plant, we slaughter as well as process meat. An inspector is available for every single day that we slaughter animals, that we harvest animals. They view the animals in an ante-mortem state, so they look at them before we slaughter them, and then they evaluate every carcass during the slaughter process. We can't start the slaughter without the say-so of a provincial inspector, and he looks at the organs of every single animal. So we have a very good slaughter inspection.

When we're processing meat, we're also subject to inspection—not every day, every hour, but we are subject to it. It's based on risk. Certain plants throughout the province.... Our family makes some ready-to-eat products. That is a risky product, so the inspection interval is reflective of the risk of the product we produce.

[LaVar Payne, Conservative, Medicine Hat, AB]

You also said there are some 500 abattoirs, but how many organizations belong to the Ontario Independent Meat Processors, and are they all meeting the same provincial standards that you just talked about?

[Laurie Nicol]

There are 500 provincially licensed plants. Of those, only 132 are abattoirs. Ontario is unique in that it's the first province to actually require licensing of those who are further processing. In what Ontario calls an FSMP there is no slaughter component. Cory mentioned that he does both, but he's in the count of the 132 abattoirs.

For those 500 licensed plants, there is no requirement for mandatory membership within our organization, but we currently represent, I believe, about 235. As I said, it's voluntary in nature, but all of the 500 provincially licensed meat plants are subjected to the same audit program, and that is on an annual basis, as is licensing review.

The audit has moved away.... It mirrored the federal system for many years, when there was a letter grade. Now it is to see that you are actually in compliance with the regulations. There is a “conditional” or a “fail” result, and they have all the tools in place, as does the CFIA, to suspend operations if they see a food safety hazard during regular operations.

[LaVar Payne, Conservative, Medicine Hat, AB]

Here is one more quick question.

You talked about the investment required; I think you said half a million dollars. I'm just wondering whether, if you spent that, it would open up some more interprovincial trade opportunities for your organization as well as potential international sales.

[Cory Van Groningen]

At this point, yes, if we moved forward with federal registration we would have access to more markets. We would be allowed to try to sell to interprovincial markets.

Where we are in Ontario, we found that the investment we looked at making would decrease our competitiveness, because we would have more capital invested to do the exact same work. So we couldn't justify it as a business case, at that point, without having sure markets in place. At this point, labour is an issue for us, as it is for many of our colleagues, so we had planned to spend some time to try to do some training and find a solution locally to our labour issue first.

[The Chair, Conservative, Bev Shipley]

Thank you.

Thank you very much, Mr. Payne.

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

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

Thank you, Mr. Chair, and I thank these folks for coming today to talk to us about their interprovincial challenges.

Going back to what you were previously talking back—that the Canadian Meat Council would love to see a uniform inspection system right across the country—you said that you had 500 members and 132 abattoirs. Now, on the outside it sounds pretty simple: you would train more provincial inspectors to be federal inspectors, I guess.

But the devil is always in the details, and even if there were a big initiative across the country to make this happen, who would end up paying for it? You alluded to some numbers already. Who would end up paying for it, and how much of an advantage would you really have? Can the taxpayer or a small abattoir afford to have a federal inspector there at all times?

If this happened—and you talked about the numbers it would cost—you would almost need a federal program like a Growing Forward program, or something to help offset these costs, or you would be losing many of your 500 members, wouldn't you?

[Cory Van Groningen]

Well, I think the point I'd make is that the provincial meat inspection standard is an outcome-based system already. When I say that, what I mean is that the outcome of food safety is achieved in our system as well as in the federal system. So I'm not sure I agree with the comment that we'd have to train them all to be federal inspectors. They're already trained provincial meat inspectors, and I think we are producing safe food for Ontarians, just as we could produce safe food for Quebecers or Manitobans.

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

Looking back to your 500 producers, how much of that product would be going to retail, restaurants, food service, farm markets, etc.? Am I right in saying that most of the big players—I'm talking about the big players—do most of the retailers, and that the people you represent do mostly farm markets and restaurants? Is that the way it's divvied up?

[Cory Van Groningen]

Our business has certainly changed over the past number of years. There was an event in Ontario that painted the provincial industry with sort of a negative tint. There were federal charges on a provincial plant for what they were doing in their plant. That painted our entire industry with a pretty negative stigma.

We lost a lot of business at that point. My father was doing business with provincially owned government institutions as well as food retail chains. After that, we lost a lot of that. In Ontario we went to a procurement system that didn't help a provincially inspected plant compete very well, which was a very large.... You know, you had to supply every government institution building rather than the...[Technical difficulty--Editor]...that you could locally.

I think certain events have changed our business. What we're seeing is a pendulum swing back now at this point, where provincially inspected plants are actually gaining a foothold in national chain retail stores as well as larger independent retailers, and the government institutions are interested in buying provincially inspected product.

The way we've made inroads in that sector is that we have actually given the purchasing agents for those institutions tours of our facility. We've explained to them that we do have an inspector on site during every animal harvest. We do testing and swabbing in our plants for microbial loads and so on, and for sanitation effectiveness.

So I think we used to do a lot more independent retail and farmer market stuff, but that was because of an event that challenged our entire industry.