Thank you, Mr. Chair and committee.
By way of background, NSF International is a not-for-profit organization helping businesses in the agricultural processing, food equipment, restaurant and retail industries. We help them navigate through the food safety and regulatory environments, and have been doing so for over 70 years.
Our extensive suite of food safety and quality services spans every link of the food chain from farm to fork, including certification, product testing, training, consulting, auditing and regulatory compliance. NSF Canada is located in Guelph, Ontario.
I serve as managing director and oversee the consulting and technical services area, as well as our retail audit services teams for North America. From our organization's engagement with industry, my own background in public health and participation in projects and networking activity with both industry, academia and the regulators, I think I have an interesting perspective on the regulatory burden facing small business in Canada.
In 2018 my team consulted in one form or another with around 800 Canadian food facilities. Approximately 560 of these were SMEs. In preparation for my participation today, I solicited feedback from several of my consulting team members. I spoke directly with several of our clients, and I also reflected back on my 25 years of experience in the food industry.
Today I will focus my comments on food safety regulations, in particular the safe foods for Canadians regulations. I'll share with you what we are seeing and hearing as an organization as it relates to the regulatory burden and impact on small business.
I will start, though, by talking about what I think before I talk about what I see and what I hear. In general, I do believe food safety regulations are necessary. I don't think anybody would argue with that, and it does make sense to revamp them as we have been doing.
When you look at food recalls and the outbreaks that have happened—even as recently as last week—the University of Guelph published a study showing that 14% of the sausages they sampled contained meat products that were not on the label. So, clearly, we as an industry have a lot to learn and can do a better job providing safe and wholesome food to consumers.
I had some first-hand experience dealing with manufacturers. I will say for, the most part, that when a food manufacturer approaches us for help, they want to do the right thing. They want to make their product safer. They want to be in compliance. They want to grow the business, and that is the vast majority.
Once in a while we run into clients, food manufacturers, who want to be in compliance but they do not necessarily understand the reasons for doing so. They just want to be in compliance. They want to satisfy their direct customers and perhaps take the quickest route through.
One example is a bakery I worked with. Early on, I saw on their labels them declare that that all of their products were peanut-free. I thought that was interesting because, as I walked through their bakery, I saw peanuts everywhere. I asked the owner how they could declare on their label they were peanut-free, how they could put a spotlight on their product telling people with peanut allergies to eat their product, that it was safe, when they had peanuts basically everywhere. He responded with an answer that did not really give me a sense of comfort. The bottom line, he said, was not to worry, that they had it handled and that it was basically a marketing approach.
Fortunately these sorts of clients are few and far between, but because they do exist, I do think it behooves regulators to make sure that our regulatory framework can provide sufficient standards and enforcement.
I would also say that there is little extra burden from the safe foods for Canadian regulations on any existing food manufacturer out there, large or small, currently providing food products to some of the large retailers, such as Loblaws, Sobeys, Metro, or even some of the large food service companies such as McDonald's. I say this because, for years, these companies have been required to have higher levels of food safety systems in place, and higher from a regulatory perspective as well, so they're used to it.
However, it's estimated that between 20,000 and 40,000 new food companies will require licences to comply with the safe food for Canadians regulations. These companies have never had these systems in place and do not fully understand them. When they're asked to put these in place, I'm telling you that they will not know what hit them, because these requirements are a game-changer. They change how you operate your facility day to day, how you maintain your records, who you hire and how you train. The impact is quite significant. It is my fear, and the fear of many others in the industry, that a lot of those companies will not be prepared.
I will also say that the safe food for Canadians regulations can actually help smaller companies. A smaller manufacturer does not have the bandwidth or the sophistication to police its own ingredients supply chain. The Maple Leaf Foods of the world can do it. The Loblaws can do it. The local candy manufacturer or the local bakery cannot do it. The more the regulators can ensure that the ingredients coming in to that small manufacturer are safe, the better able that small manufacturer is to produce a safe product.
So I see a lot of good, for sure. I also see that the Canadian Food Inspection Agency, the CFIA, is trying to communicate these new standards through their website, through consultations, through communications. They're also making it known that they will take a graduated, soft-enforcement approach. Again, to me the question is this: Is a soft-enforcement approach the best solution versus maybe a cleaner and simpler way of launching a new regulatory regime?
What we see is that the Canadian Food Inspection Agency is not getting the message out enough to the SMEs. What we see is that the communications channel, such as the CFIA's website, is a good attempt. But someone like me, who's been in the industry for 25 years, can navigate it and understand the new rules; someone who really hasn't been working with the terminology for 25 years will have a hard time understanding it. So it's of limited help to those small and medium enterprises, for sure.
The funding that is available to help companies develop their programs will help, for sure, but often that funding is difficult to gain or to understand, and it runs out. Then the small business owners are still burdened with having to maintain their operations day in, day out, especially in the very competitive environment where they're being faced with other cost pressures. Again, it's one additional cost pressure.
We have also heard from many—
