Evidence of meeting #10 for Fisheries and Oceans in the 44th Parliament, 1st session. (The original version is on Parliament’s site, as are the minutes.) The winning word was traceability.
A recording is available from Parliament.
Professor, Agri-Food Analytics Lab, Dalhousie University, As an Individual
In my opinion, this standard is a model. I won't go so far as to say that this is the model to follow, but it is a good model. It is robust and it is used internationally.
Liberal
Serge Cormier Liberal Acadie—Bathurst, NB
When you talk about food fraud, are you referring to fraud relating to certain products, such as seafood found in these packages?
Can it also be financial fraud or failure to declare catches?
Professor, Agri-Food Analytics Lab, Dalhousie University, As an Individual
In my opinion, fraud is the result of putting the wrong information on a label. There are three kinds of fraud, namely smuggling, mixing of ingredients and misrepresentation.
With regard to fish and seafood, what we see most often is misrepresentation. For example, it may be a label that does not necessarily state the correct species or provenance.
Liberal
Serge Cormier Liberal Acadie—Bathurst, NB
In your opinion, does Canada have sufficiently robust import and export rules in place?
Is there room for improvement, as you have outlined in your recommendations?
Professor, Agri-Food Analytics Lab, Dalhousie University, As an Individual
I think Canada has enough rules in place. What's important is to force companies to follow them.
Liberal
Serge Cormier Liberal Acadie—Bathurst, NB
Very well.
Thank you.
Mr. Zimmerman, I have a quick question. You're based in the U.S.A. As you know, Canada exports a lot of lobster and crab, for example, to the U.S. You talked about the certification, like the BRC and MSC. In my riding, I have something like 12 fish plants that are all moving to some of those certifications.
Do you think that the U.S. market is also looking at their certification? Will it be mandatory to have those certifications in the future to export to the U.S.?
Chief Executive Officer, Safe Quality Seafood Associates
For some of the larger companies, they're going to push. That third party certification is their insurance. However, I can't stress enough the importance of understanding that those certifications are a snapshot of what's happening at the facility and that they are only as good as the competency of that auditor during that audit.
Yes, the U.S. has started to weigh heavily on third party audits, as well, as a function of meeting the Food Safety Modernization Act requirements. These audits are going to have to be conducted. Without getting a new set of eyes into the facility and doing the walkthroughs and the traceability exercises, and challenging the quality management systems, you only have what the government can.... Do you guys have enough boots on the ground to do your own audits?
It's one thing for a big retailer to say in their policy that they require third party certification but who's auditing that they're meeting those requirements? Who's taking a closer look at the audit results as well?
Liberal
Serge Cormier Liberal Acadie—Bathurst, NB
Thank you.
Mrs. Boivin, is it difficult for companies to comply with the rules in place?
Chief Executive Officer, Fumoir Grizzly Inc.
It does require some expertise. In our factory, we have three people working full time on quality control. We consider such certifications to be necessary to enter the market. For example, we have just obtained ASC certification. We were already asking for it from our suppliers, but it is now required from some of our customers.
The cost of maintaining all these certifications is high. This adds to the final price the consumer pays, of course. Choosing a responsible supplier brings a certain constraint, for example in terms of the cost of maintaining certifications.
With regard to ASC certification, I was mentioning that you have to give a percentage on sales volume. In my opinion, the certifications we currently have are necessary, although they are difficult to maintain.
That said, I totally agree with what Mr. Charlebois said. The problem is with the application of the rules, not the current rules. Companies like ours need to maintain certifications.
Liberal
The Chair Liberal Ken McDonald
Thank you.
Thank you, Mr. Cormier.
We'll move on now to Madame Desbiens for six minutes or less, please.
Bloc
Caroline Desbiens Bloc Beauport—Côte-de-Beaupré—Île dOrléans—Charlevoix, QC
Thank you, Mr. Chair.
I'd like to welcome Mrs. Boivin, from Fumoir Grizzly, a responsible business that has been in existence for 30 years in Quebec and of which we are very proud. I thank her for being here.
In fact, I thank all the witnesses. Their comments are very interesting.
Mrs. Boivin, do certifications, like ASC and MSC certifications, all have a role to play? Couldn't we group them together in a more general standard?
Chief Executive Officer, Fumoir Grizzly Inc.
These certifications are aimed at different niches, but ultimately they are mostly about traceability and food safety. MSC certification is for wild salmon, and ASC certification is for farmed salmon. Ultimately, these standards are about ensuring sustainable fishing, food safety and traceability.
Some certifications could probably be grouped together.
Bloc
Caroline Desbiens Bloc Beauport—Côte-de-Beaupré—Île dOrléans—Charlevoix, QC
They could also be paired. Isn't that right?
Chief Executive Officer, Fumoir Grizzly Inc.
Yes, they could be paired up.
For example, some U.S. chains require Monterey Bay Aquarium Seafood Watch certification, which is only found in Norway. Others require ASC certification, and still others require BAP certification. Three-star or four-star certification is required.
We have to comply with various retailer requirements, and each one obviously creates new costs.
Bloc
Caroline Desbiens Bloc Beauport—Côte-de-Beaupré—Île dOrléans—Charlevoix, QC
What would simplify your work without increasing costs?
Chief Executive Officer, Fumoir Grizzly Inc.
In my opinion, a responsible organization must ensure that what it provides to the end consumer is what it claims to provide.
As you suggested, the existing certifications could be grouped together, but I think they are sufficient to maintain satisfactory traceability standards. Adding more would not prevent retailers from requesting a particular certification that they feel is absolutely necessary.
Any new traceability regulation will necessarily add a burden to the existing system. What is important is to ensure compliance with the regulations in relation to imported products. In many cases, the regulations are stricter for local products than for products from outside the country. The examples I gave you earlier were not necessarily about Canadian companies, but rather about companies that import.
More inspectors or on-the-ground monitoring is needed to ensure that what consumers are buying matches what companies claim to offer. Processors are already subject to many rules. Each rule represents an additional cost to the end consumer, because there is a limit to what we can absorb when the net margin is 5%.
Bloc
Caroline Desbiens Bloc Beauport—Côte-de-Beaupré—Île dOrléans—Charlevoix, QC
I am in complete agreement with you on this topic, Mrs. Boivin.
In previous meetings, witnesses shared with us their interest in the establishment of a round table that brings together all stakeholders, big and small: processors, fishers, owner-operators, large companies and government authorities. Together, they would study the possibility of establishing a more cohesive system. I even raised the idea of creating an auditor general position for traceability and labelling.
Mr. Charlebois or Mrs. Boivin, do you have any comments on this?
Professor, Agri-Food Analytics Lab, Dalhousie University, As an Individual
Thank you for the question, Mrs. Desbiens.
I have always been a supporter of the value chain approach, which was first adopted in Quebec a few years ago. This approach allows all industry players to work together and share the problems that they are facing. In my opinion, traceability affects everyone.
As I said earlier, traceability was first associated with food safety and security. Over the years, traceability has been presented as an added value, when it isn't one. It's a way of doing business, a guarantee that is offered to all players in the value chain, not just consumers.
The integrity of the chain has become critically important, and that is why, during my presentation, I insisted on the need to reward those who are doing good work to protect the integrity of the chain. In my opinion, we don't do this enough in Canada.
Bloc
Caroline Desbiens Bloc Beauport—Côte-de-Beaupré—Île dOrléans—Charlevoix, QC
That's very interesting, thank you.
I am out of time, so I will come back to this during the next round of questions.
Liberal
The Chair Liberal Ken McDonald
There is only about 10 seconds left. You wouldn't get your question in and certainly not an answer.
We'll now go to Ms. Barron for six minutes or less, please.
Lisa Marie Barron NDP Nanaimo—Ladysmith, BC
Thank you, Chair.
Thank you to the witnesses for being here today. There is lots of good information coming our way.
I was hoping that Madame Boivin could expand a little bit on the points made about the cost to the consumer of this traceability process that's being undertaken. I'm wondering if you can expand a little bit on the consumer response to these increased prices, the impacts on the business and any changes that you think would be helpful to your business to accommodate or better serve the consumer through this process.
Chief Executive Officer, Fumoir Grizzly Inc.
I don't have a general answer to that question. However, I can tell you, for example, that the certification recently obtained by Fumoir Grizzly represents a total cost of $100,000 annually on our products, and added to that is an annual cost of $10,000 to $20,000 to cover the audits for maintaining the certification. That is just the cost for this certification, and Fumoir Grizzly has several.
The last time that we calculated the cost of packaging for a specific client based on volume, it was eight cents. The certifications and the traceability process can have quite a significant impact on the cost of products.
What is the value added for the end consumer, at the end of the day? Many claim that it is significant. However, one of our certifications, Aliments du Québec, does not generate much value added for the consumer. Are consumers ready to assume the cost of this value added, given the current increase in food prices? I don't know. However, it frequently seems to me as though the consumer's response does not necessarily correspond to purchasing patterns and habits.
Mr. Charlebois, you have spoken about this often, so I won't come back to it.
Therefore, there is a cost, without a doubt. Any responsible business should have a traceability system and assume the cost of it. Are certifications necessary? If you want to sell to large retailers, you don't have a choice about having them and there is an associated cost. There is a limit to what we, as suppliers, are able to absorb. There is necessarily an additional cost that the consumer must be willing to pay.
I'm sorry that I don't have a more specific answer concerning the final cost.
NDP
Lisa Marie Barron NDP Nanaimo—Ladysmith, BC
Thank you, Madam Boivin. That information you provided is helpful. I was just hoping to gain a better understanding and for you to expand on some of the points that you were making. That's helpful, but anything further that you would like to add, please feel free to send our way as well.
My next question is for Dr. Charlebois. I'm wondering if you could expand a little bit on what you think could help make Canadians more aware of the seafood products and the labelling, some educational components that you feel might be helpful for consumers to better understand the seafood they're purchasing and consuming.
Professor, Agri-Food Analytics Lab, Dalhousie University, As an Individual
Thank you, Ms. Barron. That's a great question.
First of all just, to respond to add to Madame Boivin's answer on price, demand elasticity for fish and seafood is quite high. The market is not as price sensitive for those products as other products in the grocery store. I just wanted to throw that out there; it's important. Competitiveness is important, but price sensitivity is not as high.
To your point about education and awareness, about 10 years ago I started to discuss food fraud during my talks, and I had to explain what food fraud was. I don't today. I think a lot of people are aware there's a problem; they just don't understand what that problem looks like. I think education would be very important, whether it's by the CFIA or another agency. I think the CFIA should have that role of educating the public on how food fraud occurs.
There are several different scenarios. Food fraud can happen in many different ways, but I would suggest focusing on three types: adulteration, counterfeiting and misrepresentation. Those are the three categories that I think the public should know more about.
NDP
Lisa Marie Barron NDP Nanaimo—Ladysmith, BC
Thank you, and I hope there will be enough time at this point, as I would like you to expand a little bit or finish what you wanted to say in response to Mr. Perkins' questions, specifically around Canada trying to match the U.S. or EU standards.
I just wanted to have an opportunity to hear a little bit more from you about that.