Agriculture Committee on April 16th, 2018

[The Chair, Liberal, Pat Finnigan]

Welcome to this meeting of the Standing Committee on Agriculture and Agri-Food.

Pursuant to Standing Order 108(2), we are studying the role of food inspection agencies in the context of free trade agreements.

With that, I'd like to certainly welcome our guests today. From the Canadian Food Inspection Agency, we have Mr. Fred Gorrell, assistant deputy minister, international affairs branch, Department of Agriculture and Agri-Food. From the Department of Agriculture and Agri-Food, we have Frédéric Seppey, assistant deputy minister, market and industry services branch. Also, from Global Affairs Canada, we have Jay Allen, director, sanitary and phytosanitary division; and Mr. Michael Wylie, deputy director, sanitary and phytosanitary measures. Welcome.

We shall start with a statement. I understand, Mr. Seppey, that.... Sorry, Mr. Gorrell, you will be giving the opening statement.

[Fred Gorrell, Assistant Deputy Minister, International Affairs Branch, Department of Agriculture and Agri-Food, Canadian Food Inspection Agency]

We are both Fred.

[The Chair, Liberal, Pat Finnigan]

We usually have seven minutes, but since there is only one opening statement, we'll be a bit more lenient.

Go ahead, sir.

[Fred Gorrell]

Thank you, Mr. Chair.

As you said, my name is Fred Gorrell. I'm the assistant deputy minister of the newly created joint Canadian Food Inspection Agency and Agriculture and Agri-Food Canada international affairs branch.

I appreciate your invitation to participate in this study and for giving me the opportunity to explain the CFIA's roles in the context of free trade agreements signed by Canada.

While the Canadian Food Inspection Agency (CFIA) and Agriculture and Agri-Food Canada (AAFC) have different mandates—which continue to be upheld—our new structure offers opportunities, including the benefit of the CFIA and AAFC being able to maximize the use of resources dedicated to the resolution of market access issues and to speak with one voice internationally and domestically.

Concerning the CFIA's role regarding free trade agreements, I will start by clarifying that the CFIA plays a unique role in international trade. The CFIA is Canada's regulatory agency dedicated to food inspection and safeguarding Canada's animals and plants.

The CFIA's main priority is preserving the health and safety of Canadians. However, the work we do also plays a key role in facilitating international trade.

The CFIA supports the government's free trade agenda by participating in free trade negotiations and implementing free trade agreement provisions related to its mandate, once these free trade agreements come into force. In these free trade agreements, Canada has two main objectives: protecting the ability to take measures necessary to keep Canadians safe, and encouraging the adoption of science-based and risk-based sanitary and phytosanitary measures.

Canada's regulatory system to promote food safety and protect Canadians' animal and plant resource base is respected around the world, and our agriculture and agri-food products are in demand globally. In order to facilitate trade and to protect Canada's food supply and animal and plant resource base, the CFIA is responsible for administering and enforcing legislation related to the import and export of food, animal, and plant products.

For export, the work of the CFIA provides the assurances that export markets need to open borders to Canadian products and to keep markets open. For example, the CFIA is the only regulatory agency in Canada that can negotiate sanitary or phytosanitary export certificates with international trading partners.

For imports, our requirements are designed to protect the Canadian food safety and animal and plant health system. It is the strength of Canada's domestic system that gives other countries confidence in our food and safety and animal and plant health systems, and provides a foundation for advancing a market access for Canada's agricultural exports.

In many cases where Canada's regulatory requirements and oversight for export are recognized as meeting the requirements of an importing country, the CFIA negotiates equivalency arrangements. The CFIA also negotiates import conditions to make sure that food, animals, plants, and related products coming into Canada meet our own high standards.

Now let me get a bit more specific about free trade agreements.

Recently, this committee concluded a study on the impact of non-tariff barriers to the sale of agricultural products in relation to free trade agreements. During the discussions, witnesses testified to the negative impact that the unjustified use of non-tariff barriers can have on exports.

While there are a number of types of non-tariff barriers, the two categories most relevant to the CFIA are technical barriers to trade, often called TBT, and sanitary and phytosanitary measures, called SPS.

TBT measures are technical regulations dealing with the product's characteristics or how it is made, including procedures for assessing whether a product conforms to a requirement. Then there are SPS measures. Food safety and animal health fall under sanitary measures. Plant health falls under phytosanitary measures.

It is very important to remember that, in the vast majority of cases, the use of TBT and SPS measures are justifiable. In fact, they are often necessary to make sure that imported food is safe and that the agricultural sector is protected from the introduction of pests and diseases that could have a devastating effect. It is only when such measures are not justifiable or become overly restrictive that they become trade concerns.

Because Canada is an export-dependent country and a medium-sized economy on the world stage, multilateral agreements and standards-setting bodies are essential to create the predictable trade rules upon which Canada's agricultural exporters depend. The World Trade Organization Agreement on the Application of Sanitary and Phytosanitary Measures is the international agreement that establishes disciplines on measures dealing with food safety, animal health, and plant health. As such, the World Trade Organization SPS agreement is the cornerstone of Canada's international trade policy on animal and plant health matters.

As Canada's principal regulator of sanitary and phytosanitary measures, the CFIA leads Canada's participation on the World Trade Organization SPS committee, where the rules on SPS measures are further elaborated.

The CFIA is also involved with international standard-setting bodies and the development of international standards.

The CFIA leads Canada's participation when standards concern animal and plant health.

The CFIA co-leads participation with Health Canada when the standards concern food.

The CFIA works with the Codex Alimentarius Commission for food standards; the International Plant Protection Convention for plant standards; and the World Organisation for Animal Health (OIE) for animal standards.

In addition to pursuing work multilaterally, the Government of Canada has a bilateral trade agenda that is both ambitious and progressive. This includes negotiating new free trade agreements with a number of fast-growing Asian markets, such as India, as well as negotiating the modernization of existing free trade agreements such as the NAFTA.

In recent years, successive rounds of tariff reduction, through bilateral and multilateral trade agreements, have limited the country's ability to restrict access to certain markets through tariffs. Consequently, non-tariff barriers, including the unjustified use of TBT or SPS measures, would seemingly seek to protect human, animal, or plant life or health, but are in fact disguised restrictions on the international trade they have increased.

Members of the Canadian agricultural sector stress that the avoidance or resolution of non-tariff barriers will make the difference between achieving commercially viable access to critical export markets or not. As mentioned previously, the CFIA also supports the government's free trade agenda by participating in free trade agreement negotiations and implementing free trade agreement provisions once they come into force. The CFIA co-leads, with Global Affairs Canada, the negotiations of provisions that seek to preserve the right to take necessary measures to protect the country's food and plant and animal resource base, and include disciplines that these measures not be disguised restrictions on trade.

Ten of the 13 free trade agreements that are enforced in Canada include stand-alone SPS chapters. As I mentioned before, the CFIA does more than participate in the negotiations of free trade agreements. Once an agreement is in force, the CFIA plays an important role in implementing the provisions outlined in the agreement. For example, the Government of Canada often establishes sanitary and phytosanitary committees with key free trade agreement partners. These committees provide a forum to meet and discuss SPS issues with a view to facilitating trade, enhancing co-operation among partners, and resolving issues.

Seven of Canada's 13 agreements include SPS committees. The CFIA also undertakes the technical work, such as negotiating export certificates, assessing risk for importing goods, and participating in incoming and outgoing audits that support import and export activities as a result of new trade agreements.

Regulatory work to create predictable, science-based rules and regulations is increasingly important for the Canadian agri-food sector to gain access to foreign markets.

The CFIA does not work in isolation in the area of trade and free trade agreements. All of our work is done in active collaboration with other government departments, our stakeholders and like-minded countries.

What we do is bring our food safety and animal and plant health expertise to the table when agreements are being negotiated and implemented.

Following our mandate, the CFIA works to open global markets for the benefit of Canada and all Canadians.

Thank you.

[The Chair, Liberal, Pat Finnigan]

Thank you, Mr. Gorrell.

Now we'll start our questions. As we don't have any from the Conservative Party, we'll just go ahead. I do want to highlight the presence of two new members on our side.

Mr. T.J. Harvey, who is not a stranger to agriculture, welcome to the committee.

[TJ Harvey, Liberal, Tobique—Mactaquac, NB]

Thank you.

[The Chair, Liberal, Pat Finnigan]

Also, welcome Mr. Majid Jowhari. We both got sprayed by a bus about 10 minutes ago on the sidewalk. It's been quite the walk.

[Majid Jowhari, Liberal, Richmond Hill, ON]

It was a great experience.

[The Chair, Liberal, Pat Finnigan]

We'll go to Mr. Francis Drouin for six minutes.

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

Thank you, Mr. Chair.

Thanks to the witnesses for accepting to come in front of our committee. I know it's not the first time that some of you have been here.

Mr. Gorrell, you mentioned the equivalency agreements amongst countries. Can you explain to the committee what that entails?

[Fred Gorrell]

An equivalency agreement is when we look at outcome-based regulation. If it's an inspection system—how we inspect meat, pork, whatever—we have an equivalency that our outcome, the protection based on risk, is the same as the other country. It doesn't mean that we do something exactly the same. It's not prescribed “one, two, three, four”. It means the outcome, protecting the health and the safety of the product, is equivalent. We deem it equivalent.

The two countries evaluate each other's systems. Do they have the positions in place to ensure that the outcome is exactly to the level of safety of the other country? Then it would be deemed equivalent. It's not done with every country. You have to have similar inspection systems. You try to have equivalent systems with other countries because it provides flexibility in how you will interact with that country.

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

Is it possible for those countries that have put these agreements in place to suddenly put a barrier in place, even though we have an equivalency agreement on certain products?

[Fred Gorrell]

That's a simple but very big question. As you heard, from your report that you tabled in November, there are a lot of non-tariff barriers. I'm going to get to your question, but I'm going to come at it in a couple of ways.

One of the answers is, yes, for equivalency agreements, if you look at what we do and what you do, and we deem it equal, it should work. At the same time, often other countries might put in other requirements, such as permits and labelling. There are opportunities, if a country wanted, to introduce non-tariff barriers in other contexts. Of course, we look at that very frequently to see what's going on.

To your question, equivalency doesn't mean you have access and there can't be other problems.

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

How do you determine priorities within your section when a Canadian company identifies a non-trade barrier after international trade agreements are signed? How do you say that you're working on this issue right now versus this other one? You would recall from the last committee that there were 300 priorities within the CFIA. How do you identify which is the number one you're working on?

[Fred Gorrell]

It's a good question. My colleague, Mr. Seppey, would be much more eloquent than I in talking about those 300.

The 300 is an example of the challenge. There are always lots of non-tariff barriers. We have the market access secretariat, which was in your report. We consult with all sectors in the industry every year. We talk with the provinces as well as other governments, colleagues, Global Affairs, Agriculture and Agri-Food Canada, and the CFIA. Based on that, we look at our priorities for the coming year. That will be based on a number of criteria. They're all open and transparent; we share that with the industry. The criteria are the following: What was the greatest economic opportunity? Do we have a free trade agreement? Has there been a ministerial commitment? How easy or how difficult would it be for us to achieve that?

At the end of the day, there will always be finite resources and a number of.... We will look at that. We're quite open and candid when we talk to the industry saying, for example, “We can't do yours now,” or “Yours is a priority and we're spending a significant amount of time with it.” That is done. We have an interdepartmental committee that also validates that.

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

When we're chatting with the stakeholders, the perception is sometimes that it is only we who face non-trade barriers. I've spoken to representatives from other countries, and they, too, hear that they face non-trade barriers in Canada. How do you factor that into the decision-making? Canada is in a hockey period. We are playing good hockey within the rules. We want to get it accomplished. How do you measure the other country's willingness to participate in that as a fair player? If they're not being up front about being willing to solve the issues, how do you factor that into your decision-making?

[Fred Gorrell]

Again, I would say it's a straightforward question, and the reply isn't always easy.

If I may, I'll just use an example. Whatever the country is, I want to export my greenhouse peppers. I'll put it in, and we will ask the other country to do it. One of the problems right now with the number of bilateral agreements that are being, if I may say, proliferated around the world, is that there's a capacity issue for many countries the same way there is for us.

Look at China. Everybody wants to export to China, but the Chinese have the capacity to do only so many risk assessments at any particular time. So for those peppers, they come back and say, “Mr. Gorrell, you know what, we'll get to those peppers after we do your blueberries, after we do your cherries, after we do your whatever,” and that is an issue, too. Part of the discussion is about the prioritization, having the candid conversation about what we can do on our side, but also on the other side.

To your question, yes, sometimes there will be, let's say, a less than honourable intent in the delay on it, but often there is a natural progression in the time it takes us. For example, with some of the non-tariff barriers and the access we've had with other countries, it is not unusual—and I'm almost apologetic about saying this—for it to take years in some cases to get things done. There are some less than honourable non-tariff barriers, but in many cases the capacity and the ability to get things done do take years.

[The Chair, Liberal, Pat Finnigan]

Thank you, Mr. Drouin.

Thank you, Mr. Gorrell.

Mr. Berthold, it looks like you may be speaking a lot today. You have six minutes.

[Luc Berthold, Conservative, Mégantic—L'Érable, QC]

Thank you. Yes, it is possible. Because of the weather conditions, my colleagues are still in Alberta and they were unable to be here today.

My apologies for being late. The leader of my party was making a statement in the House about the tragedy of the hockey players in Humboldt, and I really wanted to be there to show my support for the community.

My questions may be the same as my colleague's. Unfortunately, I missed your presentation, but I beg your indulgence for that today.

Thank you very much for being here.

Here is one of the reasons why I proposed that the committee study the agency's role in free trade agreements. In my dealings with producers everywhere, both small and large, I have heard all sorts of things. I said to myself that the best way to get answers was to invite stakeholders to the committee.

Among other things, I was told that it is more difficult for Canadians than for others to engage in international trade. Mr. Gorrell, I'm sure you've heard that before. Small producers say that they must follow certain standards to have CFIA's authorization to export their products. Unfortunately, we don't feel that Canada's competitors, when they export to our country, have to undergo the same inspections and constraints. It may just be an impression, but it's the first comment I heard when I became the agriculture critic. That's what I hear most often when I talk about the agency. I hear other things as well, but that's the first comment I get when it comes to international trade.

Could you tell me what you think?

[Fred Gorrell]

Thank you for your question.

I think Canada is very successful on international markets. However, Canadian standards are more or less in line with international standards. We follow international standards, but Canada ultimately sets its own standards.

That is a good question and I would like to take some time to think about it before I answer. Could you repeat the question?

[Luc Berthold, Conservative, Mégantic—L'Érable, QC]

Why is it more difficult for Canadian producers, particularly smaller ones, to obtain permission from the Canadian Food Inspection Agency to export their products than it is for producers from other countries to export their food here?

That's the comment I have heard most often.

[Fred Gorrell]

Okay.

Standards for imports and exports in Canada are the same. We may feel that it's not the case and that imports are subject to standards that are lower than Canadian standards. However, all the products made in Canada and all those imported to Canada must follow the same standards, without exception. We may have this impression, but the Canadian Food Inspection Agency reviews the imports and determines the risk. Is the risk high or low?

There's always the perception that other countries' standards are lower than Canadian standards. I don't think so. In fact, I know they are not.

[Luc Berthold, Conservative, Mégantic—L'Érable, QC]

I'm telling you about it, because I often hear that comment. People think their products are inspected too much. Of course, when there is competition, people always want the best results.

[Fred Gorrell]

In a sense, it's a bit difficult because there are more free trade agreements between Canada and other countries. Because of that—or thanks to that, depending on the viewpoint—the competition is fiercer. This is one of the challenges. The Canadian border is also more open to importing products now.

[Luc Berthold, Conservative, Mégantic—L'Érable, QC]

Go on, it's interesting.