Industry Committee on Feb. 26th, 2019

[The Chair, Liberal, Dan Ruimy]

Good morning, everybody.

It's a nice chilly morning out there—only -25°. It certainly felt like that walking from where I live.

Welcome to meeting 151 of the Standing Committee on Industry, Science, and Technology, as we continue our study on the impacts of Canada's regulatory structure on small business.

Today we have with us, from the Canadian Trucking Alliance, Stephen Laskowski, president. All the way from beautiful sunny Toronto, we have Kevin Freeborn, President, Food Safety Market. From La Cultura Salumi, we have Jane Abballe, Owner.

Welcome, everybody. You'll each have seven minutes to do your presentations, and then we'll go into our questioning for the balance of the time.

We're going to start with Mr. Laskowski from the Canadian Trucking Alliance. You have seven minutes, sir.

[Stephen Laskowski, President, Canadian Trucking Alliance]

Thank you very much, Mr. Chair and members of the committee, for having us here today.

I'll provide some brief background on what the Canadian Trucking Alliance is. We represent over 4,500 carrier companies from across Canada, both big and small. Our members serve all segments of the economy. With regard to our sector in particular, we have many large companies, but we are an industry dominated by small business. There are thousands of trucking companies with 10 trucks or fewer.

In terms of the topic today, we really appreciate the opportunity to discuss the impact on small business. I think it's important for everyone to understand—and I think you do have an understanding of it—that all laws and rules need to be complied with, but the adaptability of small businesses versus larger businesses can sometimes be a challenge.

With regard to our sector, I think it's also important to keep in mind that we are federally regulated for inter-provincial carriers with regard to trucking, but unlike telecommunications, banking, railways and the marine sector, which are basically dominated by large businesses, we are the exact opposite in terms of numbers. We have small businesses. I think that's something to keep in mind for federal officials and federal politicians.

There's something I just wanted to touch on quickly before I get into my piece. You always have people here testifying and telling you, “We have problems. We need you to fix them.” I think it's also important to recognize when problems have been addressed. In the last year, I think there have been a number of announcements with regard to positive impacts in our sector, specifically in the fall economic statement with regard to the accelerated investment initiative, which is going to be very positive to our sector in terms of accelerated depreciation for equipment. It's a great initiative.

There were two very important infrastructure announcements. One is in Saskatchewan with regard to Highway 6 and Highway 39. The other is obviously the Gordie Howe International Bridge. They're going to bring efficiencies to the trucking industry.

Also, the Council of Ministers Responsible for Transportation and Highway Safety, led by Minister Marc Garneau, made some announcements about flexibility in regulations with regard to tires. I won't get into the details. It's early in the morning, and I don't want your eyes to glaze over, but they are important for all businesses, big and small, for flexibility of equipment usage. Obviously, there was also the recent announcement for mandatory entry-level training and minimum training standards across the country. These are all very positive announcements, especially for smaller businesses.

Now I'm going to get into some of the issues we've addressed and what we'd like to see. One of the questions posed to us was about areas for improved efficiency to reduce costs to regulated parties. What we would like to see is the introduction of electronic logging devices. That regulation is in place in the United States. We would like to be basically harmonized with them.

That rule came into place in December of 2017. We'd like to see it hit the road as fast as possible. Why? There are a whole bunch of safety reasons, but you asked us for efficiencies. That's about a $2,000 revenue increase for truck drivers because you're eliminating paper logbooks that they would have to do, keeping up with those paper logbooks and the administrative labour. They can gain about $2,000 a year in efficiency time to make extra revenue. It's a big thing for safety. It's also a big thing for small business.

With regard to infrastructure to reduce regulatory issues, if you were to twin Highway 185, between New Brunswick and Quebec, and invest in this area, trucking companies would be able to use more efficient trucking equipment between the Maritimes, Quebec and Ontario. It's a big thing for small business, whether you're using trucking companies or you are a trucking company.

With regard to the carbon tax and the monies gained after April 1 from the tax on diesel, we would like everyone to consider reinvesting those taxes into our industry through efficiency improvements, a green trucking program, so that small companies can add different types of fairings, aerodynamic devices, tire technology and engine technologies that will reduce carbon emissions. We're saying that if we're going to do something with regard to the carbon tax, let's reinvest in the small companies and create an incentive program based on the monies paid by these companies.

One last thing on the carbon tax is to make sure that the carbon registry doesn't become an administrative burden for small businesses. Let's make sure it's as efficient as possible.

With regard to areas for legislative and regulatory modernization, here is an issue for CRA. A number of companies and drivers are misclassifying themselves as a small business, which we refer to as “Driver Inc.” The CRA has identified the issue as a personal services business. We believe there are billions of dollars in lost tax revenue for the federal government. We also see this as a very unlevel playing field for legitimate small businesses. Small businesses take risks. With risks come the benefit of the tax system, because you're absorbing that risk. If we have misclassification and individual companies and drivers misclassifying without taking that risk, we need to level the playing field and bring enforcement on this issue.

With regard to the truck driver shortage, we would like to see a trusted employer program. Right now in Canada, we have an acute driver shortage, where individuals—such as those from the companies here today—are having a hard time finding trucking companies to haul freight. Right now we cannot use the immigration system like other sectors can. Truck drivers do not qualify. We would like to see a pilot program that would allow us to bring over and use people from overseas, not on a temporary basis but on a permanent basis, where they become Canadians, work hard in our industry, and build families. We need the people. We want to work with you to make this change.

In essence, guys, this is what we believe needs to be done on the immigration file: a different lens. Times have changed; it's 2019, and we believe we are a profession. We believe we are a skilled trade. According to the historic definition, we're not, and this needs to be addressed.

With regard to the current programs out there, such as the temporary foreign worker program, there are some administrative pilots you could address in our sector that we'd like to see and that would be very good for small businesses. Right now the current system is administratively burdensome. We believe there are ways to address it.

I'll just complement that and add something I left out—the rural and northern immigration pilot for truck drivers; well, it's for everyone, but it includes truck drivers. That was a welcome announcement. We would like to see an evolution of that. We believe that pilot will be successful. If it is successful, we need to remove the word “pilot” and allow every municipality across Canada to participate in that sector so that, once again, we can have access to labour.

Thank you very much. I would welcome your questions.

[The Chair, Liberal, Dan Ruimy]

Thank you very much, sir.

We will move to Freeborn and Associates and Kevin Freeborn.

You have seven minutes, sir.

[Kevin Freeborn, President, Food Safety Market, Freeborn and Associates Inc.]

Thank you for inviting Freeborn & Associates Inc. to participate in the Standing Committee on Industry, Science and Technology's study regarding the impacts of Canada's regulatory structure on small business.

We have been in business since 1997. We're a team working in the high-tech environment, creating educational materials to train and certify food handlers. Our mission is to help food service operators serve safe food to their customers. Our vision is to create a culture of food safety wherever food is being prepared and consumed. With these goals in mind, we provide interactive educational tools to educate people at all levels of the organization, from those who manage food service operations to those who prepare and serve safe food.

By way of introduction, we'd like to say that we appreciate the opportunity to address the impact of regulations on small business. I will elaborate on our experience as it relates to the committee's mandate. I will briefly describe the current situation and requirements for recognition of food handler certification; look at opportunities to improve efficiencies and reduce costs; and the alignment of interprovincial, territorial and international standards. I will also suggest an improvement to the pathway to market.

Currently, in nearly all jurisdictions in Canada, food handler certification is regulated by provincial or territorial government legislation. For a business to develop a nationally recognized training and certification program, it must be presented to each jurisdiction for approval. While all the health authorities reviewing the applications follow a document called the “National Guidelines for Food Safety Training Programs in the Food Retail and Food Service Sector”, there are small variations between each jurisdiction.

These reviews are often carried out by health inspectors, also known as environmental health officers, who are tasked with many day-to-day responsibilities for the protection of public health. Once a program is approved, recognition is posted on each jurisdiction's website, so the business can verify the program's credibility to its clients. We would tell a client that our program has been approved by directing them to a listing on each jurisdiction's website. Recognition is posted there. It's also important to note that the people we work with throughout the approval process are great folks. They're thoughtful, caring individuals who are performing to the best of their ability within the paradigm they've been given.

Regarding some opportunities for improved efficiencies, having every jurisdiction review these programs is a lot of duplication of effort. There is an opportunity to significantly reduce the duplication by centralizing the review process. Currently, programs can take up to a year to be reviewed. Improving efficiency can reduce the approval process to weeks. If the approval process were streamlined, food service businesses would have faster access to state-of-the-art national food safety training and certification resources. They would also have access to more current resources; the more often we update these, the more current the resources available will be. Having better resources manages risk for business, and reduces the likelihood of food-borne illness for the public.

Concerning some opportunities to reduce costs, the costs to business would be reduced by requiring preparation of only one application for approval, instead of the current application for each jurisdiction. There is also the cost to taxpayers, which would be significantly reduced if the duplication of effort in each jurisdiction were eliminated, freeing up public health resources to attend to their core responsibilities. The cost to business, in terms of lost revenues while programs await approval, would be significantly reduced.

Relative to the alignment of interprovincial, territorial and international standards, there are criteria for practices required for food safety. These are all based on accepted science. It means that what is taught can be consistent between jurisdictions, because those jurisdictions rely on the accepted scientific evidence.

Since we already have national guidelines for food safety training programs, and these are generally acceptable to all jurisdictions, the variations in criteria between jurisdictions are nearly always very minor in nature. Having all jurisdictions agree to one set of criteria, without variation, would permit alignment nationally. It's would also be good to look at further alignment of our national standards with other countries, because that would open the doors to international export of training programs from Canada.

The food service and hospitality industry requires workers to move through various jurisdictions, and students of culinary programs travel across the country to get work. Provinces and territories benefit from the alignment of standards, in order to attract these much needed human resources.

I have some suggested improvements to the pathway to market. We should harmonize requirements for food safety between provinces and territories to create one set of national criteria without interprovincial or territorial variations. We should review international standards to align Canada's criteria with them, since they're all based in science. We should create a national body that can independently review and accredit programs meeting those national standards. This body would not be in the business of delivering or promoting food safety training programs, so it would remain objective in its program review. Finally, we should establish a streamlined review process that reduces the time to market for programs that meet the required standards.

Thank you for listening to my comments.

[The Chair, Liberal, Dan Ruimy]

Thank you very much.

We're going to move to Jane Abballe.

[Jane Abballe, Owner, La Cultura Salumi Inc.]

Good morning, ladies and gentlemen.

Before I start, I would like to point out that English is my second language, and please bear with me for any mistakes I may make.

I'm from La Cultura Salumi Inc., a company in Belleville, Ontario. Salumi means “dry-aged meats” in Italian. La Cultura Salumi Inc. is a dry-aging meat plant where we use specialty systems imported from Italy to naturally dry-age the meat. We produce high-quality products with temperature and humidity controls only. We don't inject anything into the meat. We do not put meat in brine. We don't cook the meat or dry-cure it with high temperatures. We use an artisanal way to dry-age bresaola, prosciutto, salami, etc.

We started La Cultura Salumi in 2012, but prior to that my husband had 30 years of experience in the meat industry and had travelled all over Europe to research and understand how to produce high-quality charcuterie products.

Our main product is bresaola. We make beef bresaola, water buffalo bresaola and turkey bresaola. Bresaola is an air-dried salted piece of beef with a long aging procedure. It originated in the Valtellina area of northern Italy. The whole area is dedicated to making bresaola, the speciality product from beef.

There are over 30 major producers, and the biggest one is JBS, and one of the biggest meat processors in the world. They purchased a plant in Valtellina called Rigamonti. Rigamonti produces 125,000 kilos of beef bresaola weekly. But the issue is that over a hundred years ago when Italians started making bresaola, there was enough meat in Italy to supply this product. However, now over the last 40 years, the market in Europe has grown so much that Italy does not have enough beef for the demand for beef bresaola. Italy is now importing beef from South America and Africa to feed the demand.

We knew that Canada is a big resource for beef, providing a wide assortment of quality beef. That is why we decided to make this product in Canada with high-quality Canadian and U.S. beef only. The beef bresaola market is also getting bigger for religious and health reasons, for Muslim and Kosher markets, and also for people who do not eat pork.

Now I would like to say a few words about the challenges of pork we found in Canada. To produce a high-end quality pork salumis as they do in Italy and Spain, the pigs should be a minimum of 12 months old. When we started the dry-curing business, we worked closely with Conestoga Meats in Kitchener, Ontario. The company owners are a group of co-op farmers. Because my husband, Frank, used to deal with Conestoga in his previous business, they agreed and were happy to do a test run for us. They tried to raise the pigs to 12 months, but the animals started to die around nine months. This was due to the fact that the pigs in Canada are modified and the carcasses are not able to hold large weights. Another problem we found is that all slaughterhouses in North America have slaughter lines only for small pigs around six months old. Pork from a six-month-old animal is not the best quality to make high-end, dry-aged products as they do in Italy and Spain. We need 12 month-old animals to have firm meat and less moisture in the meat for dry aging.

After searching all over Canada and the U.S.A. for 12-month-old pigs, we could not find any anywhere. To stick to our passion to make only high-quality aged pork products, we started to import frozen pork from Austria and Spain, and they all are from a minimum of 12-month-old pigs.

Also, I would like to bring to your attention that with the high-end standard at our plant, we cannot ship and sell across Canada because we are a provincially inspected plant.

I am receiving a lot of phone calls and emails from people in businesses all over Canada asking if they can buy from us. Even one owner of five casinos and restaurants in the Calgary area asked me why people from Alberta cannot eat products made in Ontario. This question for us is very important. It does not make sense that Canada has two levels of inspection, provincial and federal. In the U.S.A., for example, for the U.S. market, there is only USDA inspection in all states.

Also, we would like to use the artisanal old Italian way to make bresaola. When we asked our meat inspectors about this, they told us to call Guelph and do a validation study, which will cost around $30,000 or $50,000 for validation, and there is no guarantee they will approve it. With the current regulations, we send samples of every batch we make to the lab in Toronto to check for salmonella, E. coli and other bacteria. It's hard to understand why we cannot make small test batches with no preservatives, which are healthier, and check each test batch in the lab to prove whether it's safe or not. It would cost much less.

I appreciate the opportunity to speak in front of this committee. We hope we will see some positive changes in the near future.

[The Chair, Liberal, Dan Ruimy]

Diakuju.

We are going to move right into questions, starting with Mr. Baylis.

You have seven minutes, sir.

[Frank Baylis, Liberal, Pierrefonds—Dollard, QC]

Thank you, Chair.

Thank you, everybody, for being here. I appreciate your time.

Mr. Laskowski, I'd like to start with you.

I found it interesting your mentioning that one of the areas for improved efficiencies is the use of technology, specifically electronic logging devices. I'd like you to elaborate a bit more about what you'd like to see there.

[Stephen Laskowski]

Since December of 2017, and coming into full effect at the end of this year, the U.S. has completely phased out the use of paper logbooks. Paper logbooks capture the hours-of-service rules of a driver and of the company. I think it's important to alway recognize that a company has a responsibility; it's not just the driver.

From our point of view, having paper logbooks to govern a system that is so important because it manages the fatigue of drivers, and leaving that in the hands of paper, which is far more open to falsification.... It's time for a change.

What we are asking for—and Minister Garneau is leading this—is to see as soon as possible the final rule published in the Canada Gazette and to have a rule come into force as quickly as possible. That could be in as little as a year.

That is what we'd like to see. We think it has tremendous benefits for public safety. As I mentioned, because we are talking about efficiencies, there are significant efficiencies, in particular for small businesses.

[Frank Baylis, Liberal, Pierrefonds—Dollard, QC]

So I could say this is like a regulation, a safety regulation. You like the regulation, but you're saying let's use new technology to make it both easier to use and safer at the same time?

[Stephen Laskowski]

That's correct.

This is about small businesses, but from a governmental perspective, and a provincial perspective, this will bring enforcement cost savings to the provinces. This rule has nothing but an upside, nothing.

[Frank Baylis, Liberal, Pierrefonds—Dollard, QC]

So it's win-win both for safety and for the people wanting to adhere to the safety rules. In this case, through using technology, it can be win-win for everybody.

[Stephen Laskowski]

That's correct, and it would be win-win, and add one more win, for the governments, because it will bring efficiencies.

[Frank Baylis, Liberal, Pierrefonds—Dollard, QC]

So who would win? Do you mean the three—

[Stephen Laskowski]

Provincial governments would. This is a federal regulation, but the provinces enforce this regulation. So as you drive down a highway, a 400-series highway, you'd see what we will call scales, enforcement facilities, down there, and those are housed by provincial officials. With paper logbooks, this is a difficult task at the side of the road. These officers are highly trained, but it's a difficult task. With electronic means, it's not. The only other difference we're talking about here, a little nuance, is that we are asking the federal government to break away from the U.S. rule a bit and to have third party certification. This would mean these devices would be tamper-proof. They would go over to a third party, which would make sure that these devices could not be tampered with, and we want that.

[Frank Baylis, Liberal, Pierrefonds—Dollard, QC]

It's a very interesting topic. You've given us a great example for the trucking industry, but I'm wondering whether we should be looking at that for all kinds of industries, so we can keep the regulation but use technology to make it easier to adhere to the regulation and to make it safer and better. Is that what I'm understanding you're saying?

[Stephen Laskowski]

You know, that's exactly our philosophy. I think, when we look at regulatory introduction and regulations, period, the best regulations are those that are followed and enforced. The move to an electronic world allows a higher level of compliance and in this case also allows the enforcement community to be able to enforce the rules and ensure that public safety is at its highest point for all trucking companies and drivers.

[Frank Baylis, Liberal, Pierrefonds—Dollard, QC]

That's a very good point. I'm sure our analysts will write it down.

The second thing I want to touch upon with you is the concept of a pilot program. You talked about this pilot program, I think, in the north. Where is it?

[Stephen Laskowski]

Yes, the northern project pilot program was announced, I believe, two or three weeks ago. It would allow, I guess, a certain number of municipalities to participate in it. That would, in essence, allow industries that currently don't have access to immigration the ability to participate on a local basis.

[Frank Baylis, Liberal, Pierrefonds—Dollard, QC]

Pilot programming is another one of these areas we're looking at. They also call it sandboxing. It's when we have a regulation in place, but so much is new and changed, and people want to try something else, so they say, “Let's put in a sandbox”, they call it, or they say, “Let's put in a pilot program, and let's test it out.” Theoretically, if it works—and you mentioned this, and I'd like your thoughts on it—you take away the word “pilot”. Is that correct?

[Stephen Laskowski]

First of all, I'm going to steal the sandbox from you. I hadn't heard that one, so I'm going to use that.

Absolutely. From an industry perspective, the ideal situation is always, “Let's go from zero to.... Let's bypass the pilot.” But understanding governments, we need to make sure there are no unintended consequences. I don't see any here, but we do appreciate the role of government and the need to perhaps sometimes walk before you run, but that is indeed the case. We have a severe driver shortage, and the current system....

I'll back up a little bit. You're always pressed to give everything in under six minutes.

Indeed, the Canadian Trucking Alliance and its membership are looking at current Canadians to find ways to attract young people and different people to our industry and to put those people to work. It is a challenge, especially for long-haul trucking operations. In terms of moving to the next step, indeed, we need to think a little bit out of the box, which think governments are doing, and we need to continue to evolve.

I saw an announcement on Sunday or Monday morning, I believe, with regard to another pilot for, I believe, child care workers coming over into a pilot in the same type of thing.

The trucking industry moves the Canadian economy. We have a severe driver shortage, and we need to address it quickly.

[Frank Baylis, Liberal, Pierrefonds—Dollard, QC]

And that pilot....

Sorry, I'm over the time. Thank you, Chair.

[The Chair, Liberal, Dan Ruimy]

You're being very co-operative. Thank you.

We're going to move to Mr. Lloyd.

You have seven minutes.

[Dane Lloyd, Conservative, Sturgeon River—Parkland, AB]

Thank you to our witnesses who are here today. It's always a pleasure hearing from our small businesses and our associations about their challenges, but also some of the positive things they're doing in our area.

My first question is for Mr. Laskowski. My stepfather is a truck driver. I come from a trucking family. When I hear about electronic logging devices, I definitely think, especially in the wake of the Humboldt tragedy, that we see such a necessity for these things to prevent bad actors from causing terrible things to happen.

There have been some concerns raised about inflexibilities by truck drivers I know. In the consultations over implementing electronic logging devices, I am wondering if we are considering the safety of the truck drivers when, let's say, they're 15 minutes away from home and are coming up to the end of their allotted 13 hours of driving. Are we taking that into account?

[Stephen Laskowski]

The short answer is yes. My answer to everyone, including the drivers and the companies who ask questions—and they're legitimate questions—is that all electronic logbooks are doing is taking the law that we currently have and bringing it from paper to electronic form. There is always enforcement flexibility when they look at it.

I guess the short answer is also that if there is a pattern of what I'll call “I needed that extra hour that day”, but they always seem to need that extra hour every day, that's not flexibility, but non-compliance. If you're stuck in a snowstorm, that won't be an issue. The auditors note it. There's a system in place for that. If there was a bad accident on the 401, you note that in your logbooks. There are systems in place to deal with that, so we do not have what I'll call overly officious rules. There is a system in place to deal with that.