Good morning, everyone, and thank you for inviting us to speak to you this morning. My name is Jim Laws. I am the executive director of the Canadian Meat Council. We are Canada's national association representing federally inspected meat packers and processors in Canada.
With me is Brian Read, the general manager of Levinoff-Colbex, who will speak after me. They operate a cattle abattoir in Saint-Cyrille-De-Wendover, Quebec, and a beef processing facility in Montreal.
Canada's meat industry is the largest of the food processing sectors, employing some 67,000 people and with gross sales of over $20.3 billion. In 2008 Canada exported 393,000 tonnes of beef, valued at almost $1.4 billion, to 63 countries. Of that total, the United States of America is by far the most important market, with Canadian beef exports to the U.S. totalling 304,000 tonnes, valued at $1.03 billion. In addition, we exported one billion tonnes of pork, valued at over $2.74 billion, to 107 countries. Of that total, 307,000 tonnes of pork, valued at over $833 million, was exported to the United States.
Of course, as you all know, we've had several challenges over the last few years, from BSE in 2003 to avian influenza, E. coli 0157:H7, and most recently, as you are all aware, the rare listeriosis outbreak at one facility in Toronto.
Another thing that has really affected us lately is the enhanced ruminant feed ban. In July 2007, Canada's enhanced ruminant feed ban regulations came into effect. These imposed tremendous costs on our beef sector not faced by the American packers to the south. We continue to advocate for a $50 million bridge fund to help our beef industry pay for the disposal of these specified risk materials. We have been disappointed that no program has been announced so far.
One of our farmer-controlled cull cow members, Gencor Foods, closed its doors and declared bankruptcy on April 1, 2008, citing the high costs of regulatory compliance of disposing of specified risk materials as one of the main reasons for their demise.
The United States was to put in place its new enhanced ruminant feed ban effective April 27. They have now delayed that implementation date—although I saw something this morning indicating that perhaps that implementation was back on. I have to confirm that. But their regulatory requirements are different from ours, in that they focus on removing specified risk materials only from the older, higher-risk animals in which the vast majority of potential risk material is present. The United States may also soon get “negligible risk” status at the OIE, the world animal health organization, which will make it more competitive than Canada.
Food safety is the number one priority of the Canadian meat industry. Controlling bacteria, such as E. Coli 0157:H7 in beef, requires huge investments in laboratory testing, plant sanitation, equipment, conveyances, packaging, leading edge technology, and research and development. Existing E. coli intervention, such as steam, lactic acid rinses, and others, is estimated to cost over $5 per head. These are essential food safety aids.
The United States has had access to new antimicrobials and food processing advances for beef, such as irradiation, that we here in Canada don't have. This is a competitive disadvantage to Canada.
On meat inspection fees, last year in Canada we paid $21.4 million for those inspection fees. They are mandatory, and unlike other food sectors, we have no choice on meat inspection fees. These inspection fees are in addition to the growing staffing costs to deliver programs, such as the new HACCP-based inspection program, the new compliance verification system, and the significant increase in mandatory pathogen testing requirements.
Meat inspection fees are a competitive disadvantage to Canadian federally inspected meat processors. American meat processors pay no regular-time meat inspection fees—only overtime fees. Provincially inspected meat processors in Canada pay no meat inspection fees.
At the Canadian Meat Council, we have been pleased to be working on the new Canadian Food Inspection Agency working group on user fees. There has been a lot of work done on that to date. A change in the fee structure will hopefully result in more competitive fees and a fee service standard to ensure value and timely service for the fees paid.
We're also grateful to the Government of Canada for providing last year the red meat sector's processing facilities with $2 million in fee remissions. We certainly encourage the Government of Canada to adopt the recommendations in the working group report and to remove regular-time meat inspection fees.
Finally, on U.S. mandatory country-of-origin labelling, Mr. Read will expand on this. But we're certainly fully supportive of the Government of Canada's submission to the United States on mandatory country-of-origin labelling and its subsequent notice of a WTO challenge. The final rule did provide some added workable flexibility that has much improved the fate of Canadian meat and livestock producers from the interim final rule.
We in the meat sector are less affected than Canada's livestock producers. We can sell Canadian meat into restaurant and food services and to further processors in the United States that are exempt from the mandatory country-of-origin labelling requirements. However, the recent letter from Agriculture Secretary Vilsack to the industry asking for voluntary compliance with a more stringent labelling requirement causes us concern, and we are hopeful that he will respect the final rule.
Thank you for your time. I'll now pass this on to Mr. Brian Read.