Agriculture Committee on Oct. 27th, 2025

[Richard Bragdon, Conservative, Tobique—Mactaquac, NB]

Thank you, Ms. Allan.

Mr. Lawton, according to the March ministerial statement, $361 million in duties, interest and penalties were assessed during the verification rounds. However, we do not know how much was actually paid to CRA.

Could you please update the committee on that issue if you have any insight on that?

[Alexander Lawton]

Unfortunately, I don't have the number in front of me in terms of how much was paid. That's something I could circle back on and provide at a later date. I don't have that number here.

[Richard Bragdon, Conservative, Tobique—Mactaquac, NB]

Please table that with us. Thank you.

My colleague, Mr. Epp, has a question at this time.

[Dave Epp, Conservative, Chatham-Kent—Leamington, ON]

Thank you, Mr. Chair.

I'd like to explore with the witness online a bit more about how this is not a food safety issue.

How is mislabelled product that prevents food traceability not a food safety issue? Could she elaborate, please?

[Diane Allan]

As I indicated in my opening remarks, we work with our USDA colleagues and we have full traceability of all chicken product, whether it be spent fowl or broiler chicken, through the system. We have access to all that traceability information. It is, therefore, not a food safety issue.

[Dave Epp, Conservative, Chatham-Kent—Leamington, ON]

How can you trace something that's mislabelled?

[Diane Allan]

All product that is processed and slaughtered in the U.S. has to be indicated on the meat import documentation with a U.S. veterinarian attesting to that information, so it is fully traced out on both sides of the border.

[Dave Epp, Conservative, Chatham-Kent—Leamington, ON]

Why did your agency shut down a storage warehouse in Detroit?

[Diane Allan]

I was not at the CFIA, unfortunately. I'd have to go back and look into the details of how that shutdown happened. I can table that with the members of the committee.

[Dave Epp, Conservative, Chatham-Kent—Leamington, ON]

For the record, that warehouse was involved in the mislabelled export of product. Spent fowl labelled as broiler meat was coming into Canada. The CFIA—your agency—shut it down.

Thank you, Mr. Chair.

[The Chair, Liberal, Michael Coteau]

We'll go to MP Dandurand for six minutes.

[Marianne Dandurand, Liberal, Compton—Stanstead, QC]

Thank you very much, Mr. Chair.

I'd like to thank the witnesses for being with us and sharing what they know about this situation.

I'd like a clearer understanding of the relationship between the Canada Border Services Agency and the Canadian Food Inspection Agency.

How do the two organizations share information with each other?

[Cathy Toxopeus, Director General, Commercial Programs Directorate, Canada Border Services Agency]

Thank you for the question.

What happens first, regardless of whether the poultry is spent fowl or broiler chicken, is that the import documentation is submitted to the CBSA. It goes through the single-window information system. That single-window information system submits that and triggers a review by CFIA, which has access to that system. CFIA makes the release decision. When it comes to the border, our officers are not permitted to release any sort of poultry without that CFIA decision on record. That is how that goes.

Further to some of what Ms. Allan mentioned, we do have an exchange of information for any sort of thing they want to flag for anything related to trade verification fraud.

[Marianne Dandurand, Liberal, Compton—Stanstead, QC]

As I understand it, the CBSA would eventually do the DNA testing and then send the samples collected to a university in Ontario for the analysis to be done. The results would then be forwarded to the CBSA.

Based on your experience in similar situations, how long would this process take from start to finish?

[Cathy Toxopeus]

It would very much depend on the way in which it is done, whether it is done at the port of entry, whether the truck is held at the port of entry to do that DNA testing, whether that truck is referred to a warehouse inland to do that DNA testing.... We wouldn't be able to opine on how much it would cost or what the implications would be before knowing exactly how that would function.

[Marianne Dandurand, Liberal, Compton—Stanstead, QC]

Would a DNA test improve the situation?

Could imports of spent hens be stopped?

[Cathy Toxopeus]

For the CBSA, we can't comment on the DNA testing and if that's going to stop it. The only thing I think we can comment on is whether the DNA testing would have any sort of implication on our trade verification processes.

I'll turn it over to my colleague.

[Alexander Lawton]

Thank you.

Yes, from a tariff classification duty-rate perspective, the defining characteristic of spent fowl, what makes spent fowl spent fowl, is essentially the age of the chicken, the fact that it has to be an older chicken that no longer produces eggs. To the extent that a DNA test would be able to establish how old the chicken is, we could use it. It could be useful. However, if the DNA test was only able to indicate, for example, what breed of chicken was used for that meat, it could not be used to determine tariff classification or to determine whether the goods were mislabelled or misclassified or not. It would just be one indicator among many that we would use to inform our paper-based audits and verifications.

[Marianne Dandurand, Liberal, Compton—Stanstead, QC]

Could you explain again what the CBSA and the CFIA are currently doing to detect these cases of spent hens coming into Canada?

[Alexander Lawton]

Essentially, it's a trade compliance process, an audit process, where we have a number of different ways of risking individual shipments, especially within spent fowl. We'll look at import patterns. If there is a new importer or somebody begins importing spent fowl, that becomes one factor we look at.

Within the spent fowl space, if there are certain importers who are bringing in what they call spent fowl, but it's at a different price from everyone else, that's another factor. By looking at all these different factors, even, for example, an importer declaring their goods at the border as broiler chicken and then when it comes time to account and pay the duties they call it spent fowl, that's another risk. It's a pretty obvious risk factor, but it's a risk factor.

Using that, we're able to identify who should be verified, who should be audited, by the CBSA to confirm whether their goods are spent fowl or not. During the verification process, we don't just look at the importer and the importer's books and records, we'll also contact the foreign exporter as well as the importer's customers. At that point, we have a full line of sight on the supply chain. If the exporter in the foreign country is calling it spent fowl and everything lines up in that respect, and if the importer has all the documentation saying it's spent fowl and if their customers in Canada say they're using spent fowl and are able to demonstrate it, then we say, okay, it's spent fowl. There is no non-compliance; there's no mislabelling.

If there are discrepancies, we'll pursue it further, and if those discrepancies are significant, we'll say the goods are misclassified, reclassify them as broiler chicken and assess the duty and tax. Where there is evidence that this was intentional in some respect, we'll make a referral to our colleagues in criminal investigations within the CBSA.

[Marianne Dandurand, Liberal, Compton—Stanstead, QC]

You've therefore stepped up efforts to detect these cases of fraud.

Given the time it takes to get results and the efforts you're currently making, could we assume that, if you continue in this way, the results will be exponential?

In other words, will you detect more and more of them in the coming months and years?

[Alexander Lawton]

The short answer would be yes. We're becoming much faster—especially with CARM, as I alluded to in my opening statement—at identifying imports of spent fowl as soon as they start, and we're addressing it much more quickly.

[The Chair, Liberal, Michael Coteau]

Thank you very much.

We go to Mr. Perron for six minutes, please.

[Yves Perron, Bloc, Berthier—Maskinongé, QC]

Thank you very much, Mr. Chair.

Thank you to the witnesses for taking the time to be with us today. We appreciate it.

I have a lot of questions. I would therefore ask them to provide brief answers, if possible.

Ms. Allan, you said there were no labelling issues. You're saying that the CFIA has no role to play in this, because it's not a food safety issue.

If the spent hens entering Canada are labelled as spent hens and they turn into broiler chickens once they cross the border, that's a labelling issue, in my opinion. It seems to me that something's not working.

For example, there would be a problem if this product were recalled in the United States for food safety reasons. If the label has been changed so that spent hens can be sold illegally as chicken, we wouldn't be able to locate them.

[Diane Allan]

Thank you for the question.

As I indicated earlier, the product is labelled as chicken. Whether it's spent fowl or broiler chicken, it's labelled as chicken.

We do not look at the age or the process by which it was slaughtered beforehand, but we do have a veterinarian-signed document, when the product moves across the Canadian border from the U.S., that attests to the full traceability of the product, where it was slaughtered and how it was slaughtered. The U.S. also attests to the animal health and the food safety elements of it.