Agriculture Committee on June 18th, 2018

[Earl Dreeshen, Conservative, Red Deer—Mountain View, AB]

To end the discussions with Maple Leaf, Mr. McAlpine, and Mr. Metzler, I know the key component is the regulatory burden. I know certainly with the Health Canada issue, they're not really looking at it from the perspective of the grower; they're looking at it from the perspective of the protection of consumers and so on with regard to pharmaceuticals. I hope the statement you went through, kind of explaining where the rest of the world is, will become a wake-up call, because that has been the key problem—getting overseas investors coming into Canada. The one advantage, when we are talking with people from other places in the world, and they say that maybe they won't come for oil and gas, and maybe they won't come for this is that agriculture still has a window there. But then they start looking at all of the other costs and all of the things that are associated with it, and they get nervous. With grain we had the transportation side. You get to the stage where you don't feel as though there's consistency there, and the same thing goes with many other things such as the seed regulations and so on. Are there specific regulatory changes that we could be looking at that would make it easier for you to speed your way through it?

Perhaps, Mr. McAlpine, you might have insight on that.

[Rory McAlpine]

Actually, I'll take it up a level beyond regulations: what about legislation? The point we discussed earlier about the conundrum within Health Canada to try to deal with a regulator who's looking at it from the perspective of drug safety and protecting Canadians in that context, to me this all starts from the fact that we're trying to regulate the food industry, fundamentally, on the basis of the Food and Drugs Act. It's literally a hundred-year-old piece of legislation at its core. It was created in an era when the biggest issue of concern in food was adulteration. It was built in an era when with the technology and the risk factors at the time it was perhaps appropriate to combine food and drugs and medical devices in one statute.... Bear in mind that it's criminal law as well.

[The Chair, Liberal, Pat Finnigan]

Thank you, Mr. McAlpine. I'm sorry but I have to cut you off. You might have another opportunity.

Mr. Drouin, you have six minutes.

[Francis Drouin, Liberal, Glengarry—Prescott—Russell, ON]

Thank you, Mr. Chair.

Would you like to finish that point actually?

[Rory McAlpine]

My argument is that the best thing we could do first and foremost would be to create a Canada food act. So separate all the critical issues that are associated with the regulation and the safety of drugs and medical devices, and that kind of zero-risk tolerance, if you will, that of course is so critical to health and safety in the context of pharmaceuticals and so on; but recognize, perhaps not in criminal law but in a new enabling statute that the food industry is fundamentally different, that it has a different set of risks and opportunities. We need legislation to enable innovation. We need to actually create a piece of legislation that would set as one of its legislative goals not just the protection of food safety, but to do so in a way that enables innovation. We're trying to build regulations on what to me is a rotten foundation of a very outdated piece of law in this country. Ironically we've replaced it, on the inspection side, with the Safe Food for Canadians Act, which is very modern, progressive, and risk-based, but we're doing inspections against a piece of legislation that is very old and outdated.

[Francis Drouin, Liberal, Glengarry—Prescott—Russell, ON]

On that point, Mr. McAlpine, how do you deal with Europe, which is against GMOs completely for human consumption? How do you deal with other jurisdictions that are saying, “We're not going to look at science-based evidence. We are going to go with what the people think is wrong for human consumption.” How do you regulate those particular issues, and how does Canada position itself as advancing a science-based, evidence-based regulatory framework?

I understand that obviously government is not the fastest innovator in the world. We do need to innovate more quickly when it comes to innovation, but there are some issues in other jurisdictions as well where they seem to go with “GMOs are bad for people”, even though that's not true, or they say, “It's bad for human consumption” and they just completely ban it, which is causing some issues for our producers here in Canada.

[Rory McAlpine]

This is where obviously I believe Canada does follow the right path of science-based regulation, although in this case where you have regulation in, say, approving poppy seed, it would seem like there is something awry in the way the regulation sets it out. But obviously, I would entirely support the premise that Canada leads in science and finds allies globally through international standard-setting bodies, and is prepared to litigate or go to the WTO when countries impose technical trade barriers that are not grounded in science. It's certainly critical in the meat industry that we maintain that.

I agree, and I have to say that with CETA, notwithstanding what is obviously a very positive potential new trade agreement, there is still too much evidence, in my view, that the European precautionary approach is going to disable some of the benefits because there is a continual move to set a standard that isn't science based.

[Francis Drouin, Liberal, Glengarry—Prescott—Russell, ON]

Mr. Metzler, I'm curious to find out.... You said you had a discussion with Health Canada and that Health Canada said, “This is what the regulations are.” Have they said, “We're willing to change the regulations if you help us identify some of the issues.” Has that conversation happened?

[Glen Metzler]

We've applied for an exemption, so technically an exemption would be outside the regulations. The minister may, under the terms and conditions the minister deems necessary, exempt any person or class of persons if it's for the growth of poppies for.... Sorry, I forgot the regulation. I had it memorized at one point.

Basically, if it's for scientific, health, or otherwise in the public good, that's the way the exemption request is made under section 56 of the Controlled Drugs and Substances Act. Based on that, we're basically saying that this is under the public good, because food is not included in that so this would be saying that food is obviously part of the public good discussion.

As far as the regulatory side is concerned and trying to break that out right now, that discussion has never gone forward. It's something we could consider, but I think then you're probably looking a several years before that would happen and we've already been at this long enough that we need to see some movement forward in this direction on the commercialization.

If they were to grant the exemption, then typically once you have enough interest from that perspective, they do put regulations through once the industry is established. That's how they did it with the hemp industry, for example. It started out with an exemption and then the regulations were added.

[Francis Drouin, Liberal, Glengarry—Prescott—Russell, ON]

Yes.

[Glen Metzler]

What we're saying is that it is great, but we still need to see the exemption come forward from the minister first for our initial eight-hectare commercialization process and then scale that up.

[Francis Drouin, Liberal, Glengarry—Prescott—Russell, ON]

Okay, great.

Mr. Wallener, I assume you did have to go to the U.S. for seed funding and whatnot.

I'm just curious to find out, did you try to find any investments or capital investors in Canada? That's one complaint that we hear often from Canadian start-ups. Do you have any tips on how we promote, or how we allow potential investors to move forward on that?

[Damir Wallener]

I have no idea.

About 10 years ago we sold our first start-up. It was in Vancouver, with primarily Canadian investors over a period of time. Investors walked out with basically a sixfold return. The core team went back to that same group of investors two years later with a new project. These are the investors we'd just made a lot of money for, and not just for them, we did okay, too, but—

[The Chair, Liberal, Pat Finnigan]

Thank you.

I have to cut you off. Sorry about that.

[Francis Drouin, Liberal, Glengarry—Prescott—Russell, ON]

We'll speak off-line.

[The Chair, Liberal, Pat Finnigan]

It's our five-minute round.

Mr. Barlow.

[John Barlow, Conservative, Foothills, AB]

Thanks very much, Mr. Chair.

I couldn't agree more with Mr. McAlpine and Mr. Drouin on the need for science-based decision-making, but I think one of the concerns we have right now is that if we're going to do that with our partners in CETA, I would argue that the Government of Canada has to be at the leading edge of it. We have to put our money where our mouth is, so to speak, and back it up.

I wanted to have the opportunity to bring this up. Right now, I don't think that we are making science-based decisions. I would say that front-of-pack labelling is one of those examples. You've talked about the regulatory regime. I would say that one of the reasons why Canadian investment is scared off is that bureaucracy, that regulatory regime.

Can you talk a bit about trying to bring in investment and looking at accessing new markets and what a new regulation such as front-of-pack labelling does? What is that going to do to our opportunities here?

[Rory McAlpine]

It certainly is problematic, not least in terms of timing.

Bear in mind what this is. It's very much a technical trade issue, a barrier that actually will disproportionately affect packaged U.S. consumer goods sold in Canada. That's many billions of dollars. At a time when we're of course trying to salvage NAFTA and are on the verge of a trade war, we should not, in my view, be doing things—at least at this point in 2018—that could create further friction in the trade relationship.

But I think there's an important point here. While nobody in industry would dispute at all the importance of the healthy eating strategy of Health Canada, the goals, and what was up till recently a multi-year history of partnership with Health Canada in promoting nutrition literacy.... We led the world in a collaborative way to put nutrition facts tables on food in Canada. We have been a driver of the best nutrition guidance in the world. Somehow we let this get away from us, to where we have now a suite of regulatory actions that do seem to be out of step with that collaborative approach.

As you point out, just as we're launching this ambitious export goal for the industry.... We've embraced agrifood, the strategic innovation fund, and the mandate of ISED, and we have all the recommendations from the Barton report around growing the industry, but we seem to have a disconnect and a lot of friction around this among departments in Ottawa, frankly, which I think we do need to solve, because it's making it very difficult to understand where we should be investing in that situation.

[John Barlow, Conservative, Foothills, AB]

I think that's a good point on the timing side of it. I don't think any of us would disagree that a healthy food strategy is a positive. It's something we should follow, but we need to ensure it is based on good science. To me, it does give that mixed message, right? We're trying to tell our trading partners, whether they're in CETA or the United States, that we would really like them to buy our great products, but we're telling Canadians that these products are actually unhealthy for them. If I were Italy, for example, I'd be saying, “Why should I buy that if you're telling your own residents not to buy it?”

When it comes to the food guide and the front-of-pack issue, would your suggestion be to just slow down? Would it be to look at this a little further? As a health issue.... I know that I have letters from hundreds of health professionals who are saying that this is not based on up-to-date science, that we need to do additional work on this.

[Rory McAlpine]

Yes, I think so. Also, I think it's important to look at the solutions. For example, one—just one—is the SmartLabel digital platform. The world is going digital. As for this idea that you inform consumers based on a narrow bit of space on a label in terms of what they need to understand, with the digital environment, of course, people are getting far more information from other sources.

SmartLabel is a QR code or bar code scan that could instantly give you all of the nutritional information, but a lot more too. For example, if you're lactose intolerant, or if you want GMO-free produce or whatever, it can all be enabled through digital platforms. That exists now. We're going to pilot it in Canada this year. It's industry that is leading the charge, giving consumers choice, and not trying to lock it into a regulation.

To go back to the regulatory, how are you going to enforce? I think government takes this on, but the challenge of enforcing now is across thousands of food products, imported and domestic. I don't think Health Canada has realized what they're biting off here in terms of an enforcement challenge.

[John Barlow, Conservative, Foothills, AB]

Really quickly, Mr. Metzler and Mr. Mercer, this is the same sort of question. It just doesn't seem that we're making decisions based on due diligence and good science. Obviously, you would share that. I saw that with your passing around of the bag of poppy seeds. That we're regulating this as a harmful product just doesn't seem to make sense.

[Glen Metzler]

Yes. I think we have too much of a silo effect in Ottawa. It would really be helpful if the departments were all on one page. You have this situation where you're running around between departments. When we come here, we have to go to see Public Safety, then Industry, then Agriculture, and then Health Canada, all about the same thing: just to grow a poppy. I understand that all these departments have some say. They all have some interest in how we're moving, even the international trade department, so—

[The Chair, Liberal, Pat Finnigan]

Thank you, Mr. Metzler.

Now, Mr. MacGregor, go ahead for three minutes.

[Alistair MacGregor, NDP, Cowichan—Malahat—Langford, BC]

Mr. Metzler and Mr. Mercer, my wife is from Tasmania. The first time I was there, I remember travelling in the north of the state and being absolutely amazed as I saw growing there thousands of acres of opium poppies spreading off to the horizon, separated from the road by little more than a barbed wire fence and a warning sign.

[Glen Metzler]

Yes.