Mr. Chair, I am pleased to rise tonight to speak on the subject of supply management. Perhaps I will spend a few minutes to educate those who are watching as to what supply management is all about.
Canada's supply management system matches production to Canadian demand and allows farmers to receive a fair price from the marketplace without relying on taxpayer dollars.
Supply management eliminates major fluctuations in prices at the farm processing or distribution level and ensures an efficient and secure food supply that respects Canadian safety and health standards.
The dairy, poultry and egg industries are important to Canada as together they contribute a net $12.3 billion to the GDP, generate $6.8 billion in farm cash receipts, sustain more than $39 billion of economic activity, and employ more than 215,000 Canadians throughout the country.
Supply management empowers farmers while benefiting processors, consumers, government and taxpayers. It exchanged the boom and bust cycles with a stable and orderly market, once again without costing the government or taxpayers a dime.
In Canada, pricing mechanisms are based on the farmers collectively negotiating minimum farm gate prices for milk, poultry and eggs. By acting together, farmers can negotiate a fair price for their food based on what it cost to produce that food.
In other countries without similar pricing mechanisms, an even smaller portion of the price paid by consumers is received by the farmers. For example, baskets of dairy products were surveyed in all cities in Canada versus cities in the United States by ACNielsen in June 2004. It was found that the cost on average in Canada was $89.75 versus $110.92 in the U.S. As a result, dairy products are approximately 23.6% cheaper in Canada than in the United States.
I would now like to speak specifically on issues related to Canada's dairy industry and the progress the government and the members of the Standing Committee on Agriculture and Agri-Food have made to address serious concerns facing dairy farmers.
The government has been working hard for some time to establish a fair and equitable regulatory regime for dairy product standards and the use of dairy terms. For the dairy producers there are two key issues: the definition of dairy products contained in the regulations; and the labels used to describe dairy products and food containing dairy ingredients. Both of these issues fall under the responsibility of the Minister of Agriculture and Agri-Food and the Canadian Food Inspection Agency, the CFIA.
Let me first discuss the need for clear regulatory definitions. There are some inconsistencies in the dairy products regulations' definition of milk product and the definition included in the food and drug regulations. The government wants to remove these inconsistencies, but we should do it in a manner that is transparent to all interested involved. That includes both dairy producers and dairy processors.
The second regulatory issue involves the labelling used to describe dairy products and non-dairy substitutes. The hon. member for Montcalm and his Bloc colleague have been working with the Dairy Farmers of Canada on product labelling. Liberal members have previously tabled amendments regarding labelling and the Conservative Party has brought forward private members' bills relating to this topic.
The issues are complex. To make informed choices, Canadians rely on the accuracy and the truthfulness of product information. The CFIA protects consumers and industry and promotes fair market practice by setting and enforcing standards related to the accuracy of product information appearing on food labels.
In fact, the Canadian Food Inspection Agency launched an extensive consultation on food labelling related to highlighted ingredients and flavours which include new rules for dairy terms. The stakeholders who participated in this consultation included producers, including the Dairy Farmers of Canada, processors, exporters, importers and consumers.
Producers and consumers were very much in favour of rules for clear food labelling. The issue has been before the Standing Committee on Agriculture and Agri-Food as it studies Bill C-27, the Canadian Food Inspection Agency Enforcement Act. I am sure that my hon. colleagues on both sides of the House applaud the breakthrough reached last week.
As hon. members may be aware, I brought forward an amendment that adds a clause dealing with the use of dairy terms. Under these provisions, it will no longer be possible to market an agriculture product using a dairy term on the label unless the product contains the dairy ingredient represented by the dairy term. Nor will it be possible to market an agriculture product that has a dairy term on the label if the agriculture product is intended to substitute for a dairy product.
There are exceptions allowed. One exemption applies to products that have traditionally been used under a specific name. No one wants the term “peanut butter” to be disallowed simply because it is not a real dairy produced butter. The other exemptions deal mostly with the words that now must be added to clearly inform consumers that these are not real dairy products. On product labels we will see more terms such as “artificial flavour” or “simulated flavour”. These words will tell consumers that the products do not contain actual dairy products.
It is through these measures that we have provided the solution to a problem that we have discussed and debated for some time now. I believe that this amendment and other approaches, such as making the regulatory definitions consistent, is the best way to address the issue.
It is important to note that the Dairy Farmers of Canada supports the amendment that I put forward, which was unanimously adopted by the committee. I wish to thank all hon. colleagues on the agriculture committee for their support.
In a recent letter sent to my office by the Dairy Farmers of Canada, it stated:
On behalf of the Dairy Farmers of Canada I am pleased to extend our gratitude for your contributions that resulted in the unanimous adoption of labelling amendments to Bill C-27.... These amendments are the culmination of several years of active lobbying to ensure that dairy terms are not misused or misleading. They will help to protect the integrity of dairy products.
We should be reassured by the progress that was achieved last week in the standing committee. We should continue to bring both sides together, the producers and processors, so that we can build a competitive agriculture and agri-food industry in Canada, one that maintains its worldwide reputation for quality.
To further this objective, the Minister of Agriculture and Agri-Food has offered to both processors and producers to establish a forum to discuss dairy issues and standards, to build a consensus on recommendations to him. We look forward to the results of these discussions.
Supply management is a valuable system that not only benefits Canadian farmers but also consumers throughout Canada. That is why the Government of Canada remains committed to defending the supply management framework and defending the ability of Canadian producers to choose how to market their products.