Agriculture Committee on April 16th, 2018

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

Thank you. I have another question for you.

We are currently in the process of studying changes to product labelling and packaging. In your opinion, could that be interpreted by some countries with which we have agreements as a non-tariff barrier to access to the Canadian market?

[Fred Gorrell]

That is a good question.

In fact, the United States has said that they could perhaps consider it as a non-tariff barrier. However, according to the legislation, Canada has the right to use whatever labelling it wishes.

But it has to respect the international norms and the standards and the laws. We respect our international obligations, but we have every right to have labelling to inform Canadian consumers and to ensure that consumers are healthy. Any time any country changes a label or the rules of import, other countries get nervous.

It works both ways, for Canada and for other countries too.

At the same time, as long as our policies are based on and respect our international trade obligations, I'm quite confident that we can move forward, but it doesn't mean other people are going to like everything we do.

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

In terms of trade with other countries, they are sources of concern each time there are changes of that scale.

[Fred Gorrell]

The final thing has not been finalized. It will go for the final consultation, Canada Gazette, part two, and then there will be final comments both from Canadians and from our foreign trading partners. Based on those, Health Canada and the agency will make the final decisions, respecting, of course, our international trade obligations.

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

Given that international relations involve a lot of people, I would like to know whether Canada has made a decision on the way we are going to continue the discussion with Italy on durum wheat. I feel that the conflict affects us and it could be interpreted as a non-tariff barrier in terms of our exports.

Could you give me an explanation of the next steps that Canada intends to take in order to protect our wheat producers?

[Fred Gorrell]

I'll start and then my colleague...because it's actually—

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

Just be fast, because I don't have much time.

[Fred Gorrell]

The whole group is responsible for that. It is a challenge at the moment.

The idea would be that for the next steps, obviously, we'll be looking at the final regulation that the European Commission will put out. The European Commission supersedes the member states. Is Italy respecting the member states? Of course, we've been working very much with our stakeholders, the grains exporters, and they're, of course, not happy about a non-tariff barrier, whether it's country-of-origin labelling or....

At the same time, I have to say there's been a very good social media campaign by the farmers in Italy, who have basically said that the way we produce durum wheat in Canada is bad: Italy wheat, good; Canada wheat, bad. I think we lost that war on social media.

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

Oh, yes?

[Fred Gorrell]

I do, and the industry has made that point. Relatively, to what we have to say, is it discriminatory? Are they going ahead with country-of-origin labelling? We're waiting for the European Commission to finalize their labelling law, and then, based on that, we will make recommendations. We are advocating and engaging them, letting them know that this is not a good way to start a trade agreement with Canada, given that the impact is $300 million or $400 million.

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

Okay.

[The Chair, Liberal, Pat Finnigan]

Mr. Allen, do you have anything to add?

[Jay Allen]

There's not a lot to add to that. Mr. Gorrell covered it very well. The other things I can say we're doing are that we're using our posts in Europe. We're using our posts in Brussels. We are talking to the European Commission. We're also working very closely with Canadian industry, hand in glove with them. We're taking it very seriously. We are using the resources that are available to us.

[The Chair, Liberal, Pat Finnigan]

Thank you, Mr. Allen.

Thank you, Mr. Berthold.

T.J., you have up to six minutes.

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

Thank you, Chair.

I'd like to thank you all for being here, of course. I know you all have busy schedules.

Being from the agriculture industry, having worked both as a producer and in the processing side of the industry and still having strong connections there, I hear a lot of feedback from both producers and processors about cost recovery measures and some of the industry concerns around cost recovery.

I'm just wondering if you could speak to that. Mr. Dreeshen commented briefly on the way our policy affects our Canadian farmers; he touched on it. I think it's something that's worth noting. What I hear as feedback coming from producers is that, at a time when we're looking to reduce the cost burden of the department, we're also seeing declining service from the department and an unwillingness or an inability to bridge those odd hours on the weekends and some of those finer intricacies.

Do you feel those concerns are validated, first of all? Second, do you feel that technology has a role to play there, or are there ways we can innovate and think outside the box to deliver the services to producers, processors, and packers that they deserve and need, while at the same time recognizing the fiscal constraints of the government?

[Fred Gorrell]

Thank you, Mr. Harvey. It is a good question. I think the key thing is that the CFIA is committed to continually improving to better serve the industry. That's a given. The service fees or the user fees, as they've been called as well, have not been updated for many years. It is an understanding that we need a consistency across that. The objective is to provide greater consistency in the fees as well as improve on the service, after hours, on weekends, as you made reference to. The trade environment is changing, as we've talked about here today. How we provide service to our industry also needs to change.

There are costs involved with that, but at the same time they are using technology, as I indicated. The industry is very happy about e-certification because it means, for example, that if you're in a remote area, an inspector doesn't have to go right out there at that particular time on the weekend. Certificates can be done electronically. That will both give greater availability and be cost-effective as well.

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

I'm from the east coast, and our traditional bargaining chip has always been the proximity to the east coast market in the U.S. What we find happening and what I hear a lot about from producers and packers in my riding is that a lot of times orders don't come in until after 3:30 or 4:00 on Friday afternoon. Traditionally, due to the way the programming has been delivered, this hasn't been necessarily a big issue, but there seems to be a reluctance on the part of CFIA to accommodate orders that come in after that time.

Twenty-four hours is a long enough window for fresh packed orders to be in Boston or New York. They're struggling as an industry not necessarily totally with the cost but with the fact that the costs are coming forward at the same time as we're saying, no, we can't necessarily deliver that unless we have that on the table before a certain point in the week. It's very difficult for the industry to navigate that.

I'm just wondering if you feel technology could play a role in that. Are there ways we could better ensure that the service is delivered while recognizing the fiscal constraints?

[Fred Gorrell]

Yes, I think you've made a good point. Through January to April last year, there were broad consultations across Canada with all stakeholders to make sure of what is needed. A number of these points came out. Again, we know that service after hours has to be part of it. It's very clear that we're trying to make sure of the competitiveness of the industry, that we keep up with the other countries. All of these comments are being reviewed. We'll be coming out with a final decision on the fee packages, but the decisions are in making sure we have greater flexibility and greater service, and at the same time, I think we need to make sure that our fees are consistent on the services that are provided, and are understood. Of course, it's not the goal to make us uncompetitive.

[The Chair, Liberal, Pat Finnigan]

Mr. MacGregor, you have six minutes.

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

Thank you, Mr. Chair.

I wanted to raise the question of the chicken meat that's entering Canada.

As you know, as it's one of our supply-managed sectors, it depends on one of the three pillars of import controls. I know all of us around this committee table have heard from the Chicken Farmers of Canada about the issue of spent fowl from the United States. They feel that a lot of chicken coming into Canada is being fraudulently labelled as spent fowl. How is the CFIA dealing with this issue? I understand a genetic test can be used to properly determine whether it's a broiler or spent fowl.

[Fred Gorrell]

I'm going to call on my colleague, Mr. Seppey, because he's more conversant on this issue than I am.

[Frédéric Seppey]

You're absolutely right that a test is being developed to be able to assess whether chicken meat, the broiler meat, is spent fowl, as declared. Generally it should be the case, but there's always a risk of abuse. This is why the Government of Canada, working closely with Brock University, as well as with the Chicken Farmers of Canada, is working on developing a test.

Such a test, however, needs to be robust to be used by the Canada Border Services Agency, which would be responsible for following a risk management approach. That's where the efforts are taking place right now.

But we are working as diligently as possible to ensure any tests sustain the robustness expected by our border services agency.

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

Effective deterrents depend largely on two things: the fear of being caught, and probably a strong and effective punishment regime. When people or companies are caught doing this, how do we make sure they learn their lesson?

[Frédéric Seppey]

There are a number of mechanisms. In the past CBSA has applied the risk management approach, as they currently do, and often it doesn't make the headlines. As you pointed out, supply-managed products are on the import control list, and therefore, are considered to be products that need to be monitored to ensure the effectiveness of our system. CBSA has conducted spot checks and found that some products were imported, the rules were not respected, or that certain goods were labelled differently than what they were. That led to very significant monetary penalties that, in certain cases, led to the closure of some enterprises. This has a certain deterrent effect. We have seen that the number of imports of spent fowl that has been declared as spent fowl has varied over time, and one could infer that it's because of these spot checks.

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

Thank you.

Thank you, Chair, those are all my questions.