International Trade Committee on Oct. 4th, 2016

[The Chair, Liberal, Mark Eyking]

Good morning, everyone. Welcome to the people in the audience and the witnesses.

Today we're dealing with a bill that's been sent to our committee that deals with trade. It's Bill C-13. We're trying to deal with it and get it back to the House this week. We have some witnesses who want to say a few words on the bill. From the Canadian Consumer Speciality Products Association, we have Shannon Coombs, and from CropLife, we have Pierre Petelle.

If you want to give your take on the bill that's been put forward to us, perhaps you could do that. You're both separate, of course, different organizations, so you have five minutes each and then we'll continue.

Go ahead.

[Shannon Coombs, President, Canadian Consumer Specialty Products Association]

Good morning, Mr. Chair, and members of Parliament. It's a pleasure to be here today to provide our perspective to the committee's review of Bill C-13.

My name is Shannon Coombs and I'm the president of the Canadian Consumer Specialty Products Association. For 18 years I've proudly represented the many accomplishments of our proactive and responsible industry.

Today, I provided the clerk with a copy of our one-pager “Imagine Life Without Us?”, which illustrates the many types of products that CCSPA represents. I'm sure many of you have used them today.

We're a national trade association representing 35 member companies across Canada, collectively, a $20-billion industry employing around 12,000 people in over 87 facilities across the country. Our companies manufacture, process, package, and distribute consumer, industrial, and institutional specialty products, such as soaps and detergents, domestic pest control products, aerosols, hard-surface disinfectants, deodorizers, and automotive chemicals, or as I call it, everything under the kitchen sink. We are the downstream users of chemicals, as our products are generally based on the chemistry developed by the upstream companies.

I'd also like to take a moment, Mr. Chair, to thank the MPs around the table who assisted CCSPA with our education campaign in the spring on lyme awareness, “Don't be ticked off by ticks”, and on our fall campaign to educate children on the importance of handwashing. I hope that the education kits that CCSPA and the Canadian Institute of Child Health delivered to you last week were put to good use in your ridings.

Why are we here today? Bill C-13 amends six pieces of legislation to meet our trade obligations under WTO's agreement on trade facilitation. Five of the acts impact members of CCSPA. That legislation includes the Food and Drugs Act, the Hazardous Products Act, the Canadian Environmental Protection Act, the Pest Control Products Act, and the Canada Consumer Product Safety Act.

CCSPA and our members support the World Trade Organization's agreement on trade facilitation; however, we believe some of the amendments drafted to ensure that Canada meets our obligations for the provision of in transit.... Am I speaking too fast? I got in trouble from the translators last time.

[The Chair, Liberal, Mark Eyking]

No, no, go ahead.

[Shannon Coombs]

With that proposed amendment, we are looking to ensure predictability in the Canadian marketplace while meeting our trade obligations under WTO.

CCSPA is proposing amendments for two of the acts under discussion, the Pest Control Products Act and the Canadian Environmental Protection Act. We showed the clerk our proposed amendments in our submission, but we'd now like to explain to you our supporting rationales.

CCSPA member companies who manufacture domestic pest control products are regulated under the Pest Control Products Act. Our final products are designed for consumers, so they are personal insect repellents, ant traps, and rodenticides. Our ingredients, the end use, the packaging, the label, advertising, and reporting of those uses are all regulated, and they meet the rigorous requirements of the Pest Control Products Act and its regulations to ensure safety, value, and merit—the pillars of the act.

The amendments being proposed in the bill are meant to facilitate trade and goods in transit through Canada, but the amendment to define the definition of the pest control product label goes well beyond that as it applies to all activities under the act, so it impacts our day-to-day business here in Canada.

In Bill C-13 the definition of label no longer refers to the act or regulations, but instead uses a more generic language to include:

any written, printed or graphic matter that is or is to be applied or attached to or included in, that belongs to or is to belong to, or that accompanies or is to accompany, a pest control product or a package.

It's quite long.

In our opinion, the proposed new definition lacks clarity because of the inclusion of the words “belongs to or is to belong to”, and these words are broad and without clear meaning. Nothing that we have found helps to conclusively answer the question of whether the label includes marketing material not attached or physically proximate to the products such as a QR code or websites. There is nothing to suggest that it is not, and this is our concern.

We have proposed a definition of label that removes the ambiguity of “belongs to or is to belong to” and included the word “prescribed” in reference to the requirements of the act and regulation in the original definition. We believe this change will still allow Canada to meet our trade obligations while, at the same time, not expanding the scope of the definition of pest control product label.

I would now like to shift our focus to the proposed amendments to the Canadian Environmental Protection Act. CCSPA and member companies provide products that improve the lives of Canadians, and CEPA governs our ingredients, new and existing. Our ingredients and also the end use of the product—ant traps, disinfectants, and labelling—are all regulated under appropriate legislation. This is both for consumer use and the workplace.

In our opinion, the proposed CEPA subsection 118(1.1) is not necessary as it could cause some confusion by implying that illegal products with a final destination to Canada may be exempted from Canadian law.

The stated goal of Global Affairs is to be able to specify regulations allowing the import for export of in-transit products not saleable in Canada, as required under two new trade requirements. However, this ability is already in place in CEPA, division 1 of part 7.

The only regulation under the nutrient section of CEPA right now is the one limiting phosphorous in cleaning products, which is a regulation that was based on our industry-led initiative in 2008 to reduce phosphorous in household automatic dishwasher detergent to a maximum of 0.5% by weight.

To meet our trade obligations, the nutrient regulations under section 117 can be amended to accommodate import for export of in-transit products. Environment and Climate Change Canada have confirmed with the CCSPA that such a regulatory amendment would be necessary in any case. In our opinion, the focus should be on amending regulations, not on creating an unnecessary and confusing amendment to CEPA.

We again would like to reiterate our support for the intent of the WTO's facilitation agreement and Canada's participation in that. We believe that, with the amendments we are proposing, unintended consequences for those who deal with these pieces of legislation day to day will be avoided.

Thank you for your time today. I'd be pleased to answer any questions you might have.

Thank you, Mr. Chair.

[The Chair, Liberal, Mark Eyking]

Thank you, Ms. Coombs.

We're going to move over to CropLife Canada.

Mr. Petelle, you have the floor.

[Pierre Petelle, Vice-President, Chemistry, CropLife Canada]

Thank you.

Good morning, Mr. Chair, members of the committee, ladies and gentlemen. Thank you for allowing me to present here today.

My name is Pierre Petelle. I'm the vice-president of chemistry at CropLife Canada. We're the trade association that represents the manufacturers, developers, and distributors of plant science innovations. These are the pest control products and products of modern plant breeding, which are used by a wide variety of sectors in Canada. Our members provide the tools that keep utility corridors clear, that protect home and gardens from a wide range of pests, and that allow Canadian farmers to produce the safe, abundant, high-quality crops enjoyed the world over.

The pesticide sector in Canada and around the world is a highly regulated one. Latest estimates show that it takes approximately 11 years and over $286 million U.S. to bring a new active ingredient to market for growers, from the inception to the actual product on the shelf. Much of that cost is associated with meeting the regulatory requirements in various countries. Our members' top priority is the safety of their products for people, animals, and the environment. In fact, pesticides are among the most stringently regulated products in Canada. We're fortunate to have a relatively modern piece of legislation in the Pest Control Products Act in Canada. It has many transparency provisions and additional protections for human health and the environment.

We're supportive of the intent of Bill C-13, as stated by my colleague. We support the free movement of products in transit without unnecessarily being subjected to all the regulatory requirements of a product that would be intended for use in Canada. In fact, our industry, agriculture, is highly dependent on trade, so we're very supportive of that element of this proposal.

However, we do have some concern about the scope of the proposed label definition for pest control products, in particular as it relates to the electronic environment. The specific term “belongs to” or “belonging to” is particularly broad, and could inadvertently and then unnecessarily cover things like websites and unintended areas.

That said, we do support the language that would enable e-labels, electronic labels, in the future. Our industry is highly supportive of this initiative. We feel that moving in that direction will help the end-user better understand and better follow directions. Some of these labels can be quite long and complex. We're seeing our industry move in that direction, so we appreciate the attempt to try to get that language in there to allow for electronic labels in the future.

We support the amendment that's been put forward. We think it gets us to the place we want to be in terms of electronic label enabling. However, it defines the scope a little better. That said, we are open to alternative language, alternative proposals, if the committee or the department wishes to put some forward.

Those are my brief remarks.

[The Chair, Liberal, Mark Eyking]

Thank you, sir, and thank you for being on time. That's good.

We're going to have one round of questioning on this topic with the witnesses. We're going to start off with the Conservatives for five minutes.

Go ahead.

[Gerry Ritz, Conservative, Battlefords—Lloydminster, SK]

Thank you, Mr. Chair.

Thank you for your presentations here today.

We're in the final discussions on implementing this particular piece of legislation, which came out of some meetings in Bali, I think it was, in 2015. There are a number of countries that have already signed on. Of course, the U.S. has already signed on.

The only question I have is whether there is any concern that the amendments you're discussing or putting forward would put us out of step with the U.S., our major trading partner. They've signed without this amendment. Is that a concern? How would you square that circle?

[Pierre Petelle]

When we look at the definition of label under FIFRA, the legislation that covers pesticides in the U.S., it doesn't have the “belonging to” scope. It also doesn't have the very specific “as required under the act and regs”, so it's kind of in between.

That's why I said we're open to something that helps us achieve where we need to be. We don't want to be an impediment to moving this forward. However, we would like to see some parameters around this “belonging to” environment, just to keep that scope where it needs to be.

[Gerry Ritz, Conservative, Battlefords—Lloydminster, SK]

Have you had discussions with your American counterparts along this line? Regulations can always be adjusted by the country of origin.

[Pierre Petelle]

We had some discussions in terms of trying to understand the scope and if they had any issues with their current definitions, and if, in an ideal world, they would change them.

There hasn't been any specific issues related to the definition down there.

[Gerry Ritz, Conservative, Battlefords—Lloydminster, SK]

The beyond the border initiative's regulatory co-operation could address some of this, could it not?

[Pierre Petelle]

Potentially, it could. We've done quite a bit as you know around pesticides and environments, especially between Canada and the U.S. in harmonization, data packages, and that kind of thing. There's been a lot of work already done. Labels are country specific, though, and unique in that regard.

[Gerry Ritz, Conservative, Battlefords—Lloydminster, SK]

Yes, we have major differences with the U.S. already with two official languages and with metric rather than imperial. There's always those. I fully support what you're trying to do. I think it's a good initiative, and we'll get down to vote on it at some point. It's all about predictability and the stability of trade corridors. As you rightly point out, we're a large agricultural nation, but we don't develop a lot of these pesticides and chemicals. They're done elsewhere and then we import them. To have that ease of importation, we have the own use program and different things. There's a bit of a stigma attached when you have to go through all that extra work to get a product here. We already import the finished goods with those chemicals applied, but we don't allow the chemical here. It's problematic as well, so I support what you're doing.

Ms. Coombs, you also talked about the changes to the environment side in clause 31. This is basically targeting flow-through product.

[Shannon Coombs]

Do you mean the amendment we're making in CEPA? Yes, we think that the in-transit provision can be managed through the regulatory process, and we know they're going to have to change the regulations anyway. There's only one set of regulations currently under the nutrient section that's for our members' products. It's for laundry soap, automatic dish soap, and other cleaning products.

We do have the benefit of having a national regulation in Canada, so it's a level playing field for everyone with respect to the maximum present by weight that we can have. In the U.S., it's usually done state by state, or county by county. They have a different approach. I would say the majority of the U.S. has moved in the same direction as Canada with respect to that, so there aren't any trade issues.

[Gerry Ritz, Conservative, Battlefords—Lloydminster, SK]

Okay, great. Thank you.

[The Chair, Liberal, Mark Eyking]

We're going to move over to the Liberals. Madam Ludwig, go ahead.

[Karen Ludwig, Liberal, New Brunswick Southwest, NB]

Good morning. Thank you both for appearing here. Ms. Coombs, thank you for your work online.

[Shannon Coombs]

Thank you.

[Karen Ludwig, Liberal, New Brunswick Southwest, NB]

I'm wondering about the harmonization. We've heard a number of witnesses from coast to coast to coast talk about their concerns with the challenges for exporting and importing when non-tariff barriers, for example, are not harmonized. With any change that you're proposing here with this amendment, how would that impact harmonization of regulations from country to country?

[Shannon Coombs]

Under CEPA, we already are harmonized from our members' perspectives. On a North American basis, we sell those cleaning products with the same amount of phosphorous at 0.5% per weight, so there won't be any issues with consumers having products that make their dishes sparkly.

With respect to labels, Pierre, did you want to say anything?

[Pierre Petelle]

I think separating out the definition of “package” from “label” will enable exactly what you're saying. It will enable that trade to take place for products in transit. We're not proposing any changes to that element. The new label definition is quite a bit broader in scope. We applaud the attempt to add that “belonging to” language because it foresees an electronic label environment in the future, but we think it may be unnecessarily broad. Any language that can help focus that a little bit, we would be supportive of.

[Karen Ludwig, Liberal, New Brunswick Southwest, NB]

Thank you.

According to WTO estimates, full implementation of the TFA by WTO members will boost global merchandise exports by up to $1 trillion, including up to $730 billion of export opportunities accrued in developing countries. Ms. Coombs, your association represents, I think you said, $20 billion in industry directly employing over 12,000 people and with annual exports. How will the WTO's TFA labelling practices affect all of your 35 member companies who have a number of facilities across Canada?

[Shannon Coombs]

Since it's for in-transit purposes, you would be bringing something in and it would be for another final destination, so it wouldn't be manufactured here, per se. A lot of our member companies manufacture on a North American basis, and for the domestic market we're quite a mix of different products. I'm not sure Canada has quantified what the direct results would be for our industries or for others, but I think it's a laudable goal to have those kinds of numbers in front of us and be able to see if we can meet them.

[Karen Ludwig, Liberal, New Brunswick Southwest, NB]

Thank you.

Out of your 35 member companies, do you perceive certain member companies benefiting more than others from the labelling practices?