Agriculture Committee on Oct. 27th, 2025

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

I understand your answer, Ms. Allan.

That said, if the product name changes once it crosses the border, can we ensure it's traceable?

Let's take the example of a spent hen cut into four pieces. These would be sold as broiler chicken. At some point, an intermediary is going to jump.

I agree that your role is safety. You've made that clear. However, how would taking a sample and having it analyzed as part of your random inspections make your role more cumbersome?

Would it be that cumbersome? Couldn't the CBSA and the CFIA work together on this?

Don't take this as a personal criticism. Generally speaking, as elected officials, too often we see departments not communicating with each other and not working together. For example, three agencies manage the reciprocity of standards. Every time we call one of them, they refer us to one of the others. In the end, no one takes the blame.

It seems to me that the test may be worthwhile, especially if it's heavily funded by industry. It could be added to all your agency's existing measures. You're doing an excellent job on food safety. I'm not questioning your work.

Couldn't you work together on this?

[Diane Allan]

The labelling requirement, as I indicated earlier, and the attestation provided [Technical difficulty—Editor] the product to move across the border. Once it arrives into an importing facility, as you are aware, members of the committee, every importer and anybody who is producing product for their manufacturing and is sold within Canada is subject to the safe food for Canadians licence and, therefore, there are traceability requirements and preventative control plans in that space. Their whole chain is from a traceability standpoint.

Regarding your question about collaboration with the CBSA, we are working very closely on a variety of facets, this particular file as well—

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

Pardon me, Ms. Allan.

[Diane Allan]

—and we work very collaboratively.

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

I'm sorry, Ms. Allan. The sound is not very good, and it's preventing our interpreters from doing their job. Also, we don't have much time left. Thank you for your answers.

Mr. Lawton, you said that verifications that were done resulted in nearly $377 million in duty, interest and penalties.

Have you collected all that money? Has it all been spent?

[Alexander Lawton]

Unfortunately, I think this question may have been asked previously in terms of collections. While I had the amount assessed here with me, I do not have the amount collected. That's something we'll table. I'll have to provide it to the committee after.

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

I would appreciate that.

It seems to me that those funds could be invested in updating the DNA test. After all, it's related to the same issue. It could be done at virtually no cost, if we stop illegal fowl imports.

Do you think that money could be invested in developing the DNA test?

[Alexander Lawton]

I really wouldn't be able to comment on that, but one thing I should be able to note, if you give me two seconds, is that the $360 million is heavily weighted toward the beginning of when we began our compliance verifications. For example, for last year, ending March 31, 2025, $268,000 was assessed. It wasn't millions.

Even this year so far, we've assessed just over $16 million. Again, it's a significant amount, but it's not hundreds of millions.

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

Thank you very much.

In addition to investing that money in DNA testing work, the Canada Revenue Agency could verify the amount paid to buy the product.

That might give us a hint as to whether it's spent hens or not. I assume that chicken labelled as spent hen is cheaper to import, which is beneficial for the Canadian importer who is committing fraud.

To be more efficient, couldn't that be investigated? Isn't that something else that could be considered?

[Alexander Lawton]

That is something we could look at. We have a memorandum of understanding with the Canada Revenue Agency. We try to use all sorts of legally available data to further our compliance verification.

Potentially, it's a yes.

[The Chair, Liberal, Michael Coteau]

Thank you very much.

We'll go to the Conservatives now.

Mr. Barlow.

[John Barlow, Conservative, Foothills, AB]

Thank you, Chair.

Thanks to the witnesses.

Ms. Allan, I want to make sure we're very clear. I know you've been asked this question a couple of times. You were talking about traceability. You said that, if there were a recall on broiler chicken in the United States, it wouldn't be an issue in terms of traceability and food safety.

Are you saying, then, that all chicken imported into Canada from the United States would then be recalled by Canada and the CFIA? I don't want to put words in your mouth, though. Is that your response to this?

[Diane Allan]

What I indicated was that we have traceability for product from the U.S. crossing the Canadian border. There is traceability to the importer under the safe food for Canadians licensing. We have a traceability chain between the U.S. and Canada to the importer and traceability within the safe food for Canadians licence. If a food recall were to happen in the U.S., the chain would not be broken. It would facilitate that trace-back.

[John Barlow, Conservative, Foothills, AB]

You're saying the chain won't be broken, but our confusion is over this: A product is coming into Canada that's clearly mislabelled. I'm not sure how the chain is going in the direction you're expecting it to go when a product has clearly been mislabelled and put into the food chain in another unanticipated direction. There is some concern among several of the MPs here over your saying this isn't a food safety issue. We are clearly importing food into Canada that is mislabelled. Certainly, traceability and food safety should be paramount.

I'll go to Mr. Lawton and Ms. Toxopeus.

The $360 million, I know, has been questioned in terms of how much that actually is. We have a DNA test that showed a great deal of potential about 10 years ago. That research wasn't carried through to the end. The response from the folks at Trent University was that there was a lack of resources. You clearly had a potential solution to a significant problem, but it was dropped.

Why was that not carried through to see that DNA test come to fruition and be used by CBSA?

[Alexander Lawton]

I'll put aside the science and scientific validity. I'm an accountant by training. I'm not a scientist, by any means.

As I alluded to before, in addition to any operational or logistical issues, and from a tariff classification, duty and tax perspective—which is what the CBSA is responsible for in this space—the DNA test is useful as a risking tool to the extent that it does not confirm the age of a chicken. How old a chicken is, really, is how spent fowl is defined. The test is an indicator of risk that some of the spent fowl is misclassified or mislabelled, but it wouldn't be determinative. It would just be one supplement to identify who we should be auditing, essentially.

[John Barlow, Conservative, Foothills, AB]

Mr. Lumby, who was on the panel before you, said that there was potential with this test. In fact, he said that, when importers in Canada and those in the United States who are illegally mislabelling chicken heard that Canada was looking at this DNA test, it was a significant deterrent. That's without us even doing it.

Wasn't there potential there to at least see this through until the end and to see what would happen as a result? Clearly, you're saying that everything is improving, but we have a 25% increase in the amount of spent fowl and mislabelled chicken coming into Canada, and 115% of the entire slaughter in the United States is being imported into Canada.

Excuse me, but this doesn't sound like success to me. If there are some options or tools to add to your tool box, I don't see why we aren't following that path.

[Alexander Lawton]

I'll have to start by noting that imports of spent fowl have increased, but in fact all evidence points to imports of mislabelled spent fowl, of non-compliance, actually going down significantly. It's still significant at 15%, but it's much less than the 38% or 40% that was seen a decade ago.

With respect to the DNA test and its usefulness as a risking tool, it has potential. At the same time, essentially, every importer of commercially significant volumes of spent fowl has either been audited or is currently under audit. That's something the CBSA is continuing to do. An additional risking tool would not necessarily add much to the way we identify who gets audited.

[John Barlow, Conservative, Foothills, AB]

Your tool box is insufficient now, so you need some help there.

[The Chair, Liberal, Michael Coteau]

Thank you.

We next go to MP Connors for five minutes.

[Paul Connors, Liberal, Avalon, NL]

Thank you.

If someone like you gets the first time.... Is there a penalty for repeat offenders?

[Alexander Lawton]

The biggest penalty, with respect to spent fowl or mislabelled spent fowl, is a 249% duty. In addition to that, there is an administrative monetary penalty that's associated with it, and it does increase, depending on the frequency of non-compliance.

To be frank, the most significant penalty, if you can call it that, is that, when we do have repeat offenders, repeated instances of non-compliance, at that point it becomes relatively clear that there may be some intent and it is a form of fraud, so we will make a referral to our criminal investigations area within CBSA to pursue that. It's no longer just a regulatory administrative matter.

[Paul Connors, Liberal, Avalon, NL]

You have consulted with the industry on the different ways of detecting, with DNA tests and all that. Is there any other way it can be detected? How are you detecting it now?

[Alexander Lawton]

The principal way in which we determine whether goods are truly spent fowl or are mislabelled or misclassified broiler chicken is through the audit of documentation of records—not just the importers' records but also their suppliers' and customers' records—to validate that there's consistency along the supply chain. That everyone everywhere is labelling the goods as spent fowl and all evidence points to its being spent fowl is, really, what we've relied upon.

With DNA testing or not, provided that the DNA testing wouldn't be able to shed light on the age of a chicken, that would continue to be our primary means of validating compliance.

[Paul Connors, Liberal, Avalon, NL]

Okay. You came up with a number of 15%, which is what I think you just said. Was it 15% or 19%?

[Alexander Lawton]

The CBSA did three rounds of national verification priorities, which basically means that, at a given point in time, we verified all significant importers of spent fowl. The first round was in 2017 and the second in 2020. Those two rounds found a 38% non-compliance rate. The third round, the one we're currently finishing up, was launched in 2023. At this point, we have a 15% non-compliance rate.