AGRI Committee Meeting

STANDING COMMITTEE ON AGRICULTURE AND AGRI-FOOD

COMITÉ PERMANENT DE L'AGRICULTURE ET DE L'AGROALIMENTAIRE

EVIDENCE

[Recorded by Electronic Apparatus]

Thursday, February 11, 1999

• 0908

[English]

The Chairman (Mr. John Harvard (Charleswood St. James—Assiniboia)): Members, we'll bring our meeting to order. Welcome to all of you. This is our first meeting since the Christmas break. On your behalf, I want to first of all welcome our newest member on the committee, Mr. Ian Murray, the distinguished member from Lanark—Carleton. Thank you for joining us, Ian. I'm sure you will find our work somewhat interesting. We're very glad to have you.

We're going to proceed to our main item of business today, the Pest Management Regulatory Agency, something members have expressed interest in for some time. We're fortunate to have from the agency Wayne Ormrod, the chief registrar; Dr. Claire Franklin, executive director; Wendy Sexsmith, director of alternative strategies and regulatory affairs; and Robert Woods, director of the management, planning and coordination division.

I gather, ladies and gentlemen, you have a few opening remarks. Then we'll go to our normal rounds of questioning. Thank you for coming and we look forward to your presentation. You may proceed.

• 0910

Dr. Claire Franklin (Executive Director, Pest Management Regulatory Agency): Thank you very much for your welcoming comments. On behalf of myself and my colleagues who are here, I'd like to thank you for the opportunity to update you on where we're at with the agency and answer whatever questions you may have for us afterwards. I will keep my remarks fairly short, but I thought it would be useful to perhaps touch on a few of the activities we've been involved in.

For those of you who are new to the committee, I have just a quick comment. The consolidation of pesticide registration or regulation was put under the Minister of Health in April 1995. Previous to that it had been in various departments, and these were all consolidated into a single agency. The legislation, the Pest Control Products Act, was also transferred to the Minister of Health at that time.

The mandate of the agency is to protect human health and the environment by minimizing risks associated with pest control products, while enabling access to these products and sustainable pest management strategies. That's a very broad mandate covering health, environment, and access to products, so I imagine you're as aware as we are of the challenges involved in that mandate.

The statutory responsibility of the Minister of Health under the Pest Control Products Act is to prevent pest control products from entering or remaining in the market if they pose unacceptable risk, merit, or value. Again, that's a broad mandate for both new entries as well as products that are on the market, so we have responsibility for the full aspect of products.

The one activity that is new, and I don't believe was discussed in any detail at the previous meeting we had with you, but it was mentioned, is the benchmarking study that was done. There was a request that this be done as part of the implementation of cost recovery for the Pest Management Regulatory Agency.

There were 18 quite detailed recommendations, but the key ones were that a pest management advisory council be established; that the membership of the economic advisory management council, or EMAC, be expanded; and that we continue to develop efficiencies for new submissions. This was a commitment we made at the time of implementation of cost recovery, and it was indicated that we should continue to do that. The consultant also recommended that we consider modifying the cost-recovery fee structure, and he gave some very detailed suggestions as to how that might be done. He also recommended that we proceed with the consultation on the re-evaluation program.

The Minister of Health, Minister Rock, accepted the recommendations in general, but asked the advisory council to comment particularly on the ones surrounding the fee structure. On the status of the agency, we developed an action plan for how we would respond to the recommendations. The action plan was tabled and reviewed at the advisory council meeting that was held, and it was accepted by the advisory council. The economic management advisory council, or EMAC, has also commented on the action plan. So we are, in essence, proceeding with the commitments we have made on implementation of the recommendations.

The first one that was very key, as I've mentioned, the Pest Management Advisory Council, which is a multi-stakeholder council, has been established. They had their first meeting before Christmas and will be meeting again next week on Monday and Tuesday. For your information, the EMAC committee is also meeting next week on Wednesday, February 17, so we will have a fairly busy week next week with our outside advisory groups.

On the efficiencies we are striving to move forward with, the general situation is that they are discussed within EMAC. We have working groups that are set up with that to help us work towards specific efficiencies, and there's a full agenda for the upcoming meeting to discuss the status of these activities.

• 0915

With regard to the benchmarking action plan and the fee structure modifications, the advisory council was asked to comment on them. They then tasked EMAC to review the recommendations, and that review is an item on the agenda for the upcoming EMAC meeting. I will discuss the re-evaluation in more detail a little later in this talk.

With regard to our revenue, when cost recovery was implemented, the revenue target was $12 million. In the first year of cost recovery, which was 1997-98, we had a shortfall of $4.5 million. We anticipate that the shortfall will be about the same for this current year. There have been a number of options put on the table for discussion in terms of how we could try to resolve this shortfall. The options range from modifying the fee structure, as suggested in the benchmarking study, to seeking increased government funding, or modifying the performance standards. By lengthening the performance standards, we would reduce our resource requirements.

I'd like to just touch on a couple of activities that are relevant to our efficiencies and to where we're proceeding. Success in the area of harmonization is critical to our efficiency gains. Harmonization helps to reduce trade barriers, and it certainly helps to enhance access for growers. We're very cognizant of the fact that one of the key issues is equal access in order to assist growers to remain competitive. As far as joint reviews and so on are concerned, the activities that we have are definitely keyed towards achieving that goal.

We work on the harmonization activity through two primary committees, the NAFTA technical working group on pesticides, which is a very active and productive committee, as well as OECD, the Organization for Economic Cooperation and Development, in which there's a much more global involvement for harmonizing data requirements and activities. We have defined harmonization as common ways of doing business. We've certainly not presumed that we will have everything identical in all countries around the world, but if there are no impediments to being able to file submissions at the same time, I think that's a reasonable goal to have for harmonization.

On the benefits of harmonization, we do have compressed times. I think that fact is very critical. Compressed times do allow products to get to market faster. We have a twelve-month performance standard for joint reviews, versus our standard eighteen-month performance standard. It fosters coordinated decisions. It certainly means that food residue levels will be the same, and that's an activity that some of you may have actually been aware of. It certainly can be a trade barrier if we don't have set food residue levels that are the same, particularly between ourselves and the U.S. I guess one of the major things that I've mentioned is that it does help to encourage a level playing field and reduce trade barriers. So these, I think, are some very significant goals with regard to harmonization.

We feel we've made significant progress. We've had a joint review initiative for reduced-risk chemicals and biological pesticides, so we are aiming towards encouraging products that are of reduced risk. We have had a joint review and a simultaneous registration for several products at this point in time, and I think that has really been a very key factor. We've had some very encouraging letters from growers thanking us for getting the products to them at the same time, and this is really what this whole activity is attempting to achieve.

With regard to bilateral agricultural trade, I think the harmonization is also critical there. The border dispute in the fall of 1998, which led to high-level meetings between Canada and the U.S., has pointed out just how critical this issue is.

• 0920

With regard to pesticides, the issue with canola has probably been one of the most significant ones. It has been driving a lot of the concern as far as access to markets is concerned.

There was a record of understanding developed between the United States Department of Agriculture and Agriculture and Agri-Food Canada, and it was signed in December 1998. One of the key commitments in that record of understanding was that the PMRA and the EPA would work with registrants and growers to accelerate harmonization and to encourage industry to submit products for registration simultaneously in both countries.

We have developed what we've called a North American initiative, and I will leave a NAFTA document outlining it with the clerk. This initiative really does point to the interest in having the chemical industry and the pesticide industry consider at least Canada and the U.S., but possibly Mexico as well, as a market in which they will introduce products at the same time. That's a very exciting activity we're working on and one that will ultimately help to minimize any future trade barriers that we might see because of the differences in registration activities.

The last areas I would like to just touch on are both the new U.S. legislation, the Food Quality Protection Act, and its impact on the re-evaluation program.

The U.S. Food Quality Protection Act is very broad, new legislation that the Americans have implemented, and it has the potential for significant trade issues. I guess all of us are very aware of the group of products being looked at as a priority within the U.S., and that is the organophosphorus pesticides. We've been working very closely with both grower groups and the provinces to try to get as much information as we can on the actual usage of these products in Canada. We will then also be able to assist in either protecting our critical uses or trying to ensure that there are alternatives at appropriate times for critical uses of these products. That's a very important activity that we're very active in at this point in time.

A number of scientific issues have been put on the table with regard to the Food Quality Protection Act. I won't go into detail on those at this point. If you have any interest in them, we can certainly provide you with more information.

The United States has spent a great deal of time working to support the scientific veracity of these activities and certainly has put a lot of effort into understanding what they are. I think there will be very little opportunity to criticize the scientific base for the direction in which they're planning to go with this legislation.

Re-evaluation is a program that is important. It's there to ensure that currently registered products do not pose unacceptable risks. It's important to ensure both food safety and confidence in the regulatory system in Canada. All developed countries carry out re-evaluation.

The program that was in place in Canada prior to formation of the Pest Management Regulatory Agency was inadequate, and we are in the process of establishing a new approach to re-evaluation. As for the key points in that new approach, we will maximize the use of U.S. and other international work in order to efficiently use resources and to complete re-evaluation in a timely manner. Because of the activities for the FQPA and the products that are being re-evaluated in the U.S., it's very critical that we keep up to speed with that work in order to mitigate or minimize wherever possible the implications of the U.S. decisions.

We're seeking input on the new approach to the re-evaluation from key groups, from our advisory council, from EMAC, from the provinces—which are keenly interested in re-evaluation programs—and from other government departments. We certainly will welcome input from these sources to help us mould a program that will be both efficient and protective of health and the environment for Canadians. It's a very critical program for all of us.

With that, Mr. Chairman, I will close the comments. We'll be more than happy to address any questions you might have.

• 0925

The Chairman: Thank you, Ms. Franklin.

Now we'll go to questions. The order of questioners in the first round is Mr. Hilstrom, Madame Alarie, and Mr. Calder. Each get seven minutes. We start with Mr. Hilstrom.

Mr. Howard Hilstrom (Selkirk—Interlake, Ref.): Thank you, Mr. Chairman, and welcome to all the presenters today.

We're bringing up, obviously, a lot of trade issues. I think that is a very important part of what you've touched on. In your mind, is this harmonization proceeding along efficiently and effectively at this time—in particular under the NAFTA and with the United States?

Dr. Claire Franklin: We have definitely focused our activities on the NAFTA rubric. We believe that's the one most critical to the competitiveness of growers, and I think it really is a very useful forum for us to be harmonizing.

In my view, it is proceeding. I've been in regulation for many years, and harmonization with large countries is always a challenge. I believe we have proceeded extremely well. I think the fact that we've had joint reviews and submissions that are already on the street indicates that yes, it can be done. It takes a certain amount of nurturing, and Wayne has definitely been the one who provided the leadership in that area, because it's a challenge. But it's positive and I think it's very successful.

Mr. Howard Hilstrom: What's your key recommendation to the committee that we should be trying to push the government on, I suppose, as to our trade negotiators and all of that? Is there anything that would be involved in these WTO talks coming up, one or two keys things we should be concerned with?

Dr. Claire Franklin: Any help you're able to give us would be very welcome. From the regulatory perspective, we have the process in place. In other words, we have established a joint review process. What we really have to do is encourage manufacturers to use that process, and they've been watching very carefully. Novardis was the first company to come in, and that's always a challenge when you're brand-new in a new process. We've had several other companies that have come in, and anything you're able to do to encourage them to do that would be helpful.

It's really getting into—we're seeing some interesting developments in this—companies really considering North America as a single market for entry for products, and they haven't always done that. The U.S. counterpart for a company and the Canadian counterpart don't necessarily function as intimately as one might consider, so it would certainly be very helpful if you could assist in that.

The second one would be to encourage growers to deal with their counterparts in the U.S. I think we're seeing some very key successes in that area, in the minor-use area. Wayne can also speak in more detail to this, if you're interested, but we've encouraged—and certainly I would say there are various grower groups—them to work with their counterparts, because often these products are minor-use products in the U.S. as well. That kind of consolidated “we need these products” is also helpful.

Those would be perhaps two areas where you could help us.

Mr. Howard Hilstrom: The last area I'd like to explore a little bit is your fees, as you're a special operating agency. Who pays your user fees and in what proportion? Who are your clients? Can you comment on that?

Dr. Claire Franklin: The fee structure has two components. There are application fees so that everyone who is filing an application to have a product registered pays a fee. The fee is geared in essence to the size of the submission, so if it's a brand-new active with food use they would pay a higher fee than if somebody is putting in something that's a formulation change.

Requirements or requests that come forward for minor uses—there are no fees for minor uses. We were very sensitive to that when we established the fee structure, that we did not want to discourage that rather challenging area, so it was one thing we took into consideration.

• 0930

The second type of fee is a maintenance fee, so that for every product that's registered there is an annual fee paid. There are fee reductions for the low-sales-volume products.

Mr. Howard Hilstrom: So those are the companies that produce the products and this kind of thing. Is there anybody else who pays fees to you? I know the government supplies extra money, but where do you get all your cost-recovery fees from in the agriculture sector?

Dr. Claire Franklin: The companies. The money comes strictly from companies.

Mr. Howard Hilstrom: Strictly from companies.

Dr. Claire Franklin: It's registrants, yes, and I'd like to point out that with the resources, or the revenue, we're collecting, it contributes only 30% to the total amount of resources we have for the program.

Mr. Howard Hilstrom: And the rest is supposed to come from the government.

Dr. Claire Franklin: The rest is from the government.

Mr. Howard Hilstrom: So where is the shortfall, then? Why is there a shortfall?

Dr. Claire Franklin: The shortfall seems to be from the first year when we had it. Of course, whenever you put a fee structure in it's always a little bit of a challenge to know exactly how it's going to settle out.

The application fee projections we made in fact have been very close to what we have gotten in. Where we primarily have the shortfall is on the maintenance fees, and that very generally was because we had been provided information through the business impact test that approximately 50% of the companies would be paying a full maintenance fee, and it turns out that only about 20%, 25% of the companies are paying a full maintenance fee. So that's basically where the shortfall is.

Mr. Howard Hilstrom: How is the accountability of your agency to the people who pay the fees? Where does their direct input come in as to, I suppose, helping you manage, helping you be as efficient as possible? How does that happen again, a committee or something?

Dr. Claire Franklin: We're a government group and our accountability is to the minister. We have assistance or advice that's provided to us through the Economic Management Advisory Council, and there is, or could be, advice that would also be provided from the broader, multi-stakeholder advisory council. But that's where we're looking for input into the ways in which we might try to move forward from this situation.

The Chairman: Thank you, Mr. Hilstrom.

Ms. Alarie, seven minutes.

[Translation]

Ms. Hélène Alarie (Louis-Hébert, BQ): Good morning. First of all, I'm familiar with the benchmarking study that was distributed to us and I found it quite interesting. I still have a problem with one thing, namely harmonization. You just explained to us briefly why we must develop efficiencies for new submissions and you stressed the importance of harmonization under NAFTA. When we ask what can be done to accomplish this objective, your answer is somewhat vague. You maintain that the regulations are in place and that manufacturers are standing by. What concrete action are you advocating?

When Canadian farmers see what's happening in the United States, often they are frustrated to note that the Americans have different products that haven't yet been registered here in Canada. That's what we're hearing from producers today. What could possibly motivate manufacturers to take action on this front? There is something I don't understand here.

[English]

Dr. Claire Franklin: First, your point of trying to have products available to farmers and have the same range of products I think is really very critical, and we've done several things to try to encourage that to happen.

One that I mentioned is the capacity to do joint reviews and to then encourage industry to utilize that, and we are starting to see this. We're seeing more, and I think we will continue to see more.

The other aspect was to take the steps that would encourage industry to do this. In other words, remove impediment from companies that were saying they don't want to come to Canada because our requirements are more stringent, or our requirements are different. So we've worked very hard collectively with the technical working group under NAFTA.

• 0935

We have worked to harmonize the guideline so that the data requirements we have are similar. We have established what we call zone maps. In the past we had a requirement that the residue trials had to be done in Canada. What we've done now with these zone maps is we've said regardless of the political boundary, if we're in a geographically similar area it doesn't really matter whether the trial is done south of the border or north of the border. We put this in place so that we don't have to have trials replicated. I think that was quite a significant detriment to coming in at the same time, because the market's not so large here. So people said, let's go to the larger market first and then to Canada.

So I think we have meticulously worked our way through to try to reduce those kinds of impediments to companies for them not want to come into Canada.

[Translation]

Ms. Hélène Alarie: With respect to cost recovery, I found one the study's recommendations quite interesting and I'd like to hear your views on the subject. The recommendation in question calls for a reduction in annual maintenance fees based on a percentage of sales.

Mr. Robert Woods (Director, Management, Planning and Coordination Division, Pest Management Regulatory Agency): we have recommended that maintenance fees be tied to a percentage of product sales, but that's only one part of our recommendation. We also recommend a major change in the application fee structure, specifically that these fees be capped at $25,000. In some instances, fees are in the maximum range of $200,000 to $225,000.

With this formula and a structure tied to one percent of sales, the impact of the fee structure on small businesses is minimized. Again, application fees for high sales volume products would be capped at $25,000. The consultant felt that this proposal, only one of many, would be fairer and more equitable, given the period of time during which a product is on the market, that is approximately 15 years. This formula would be fairer toward small businesses and low- sales- volume products. That is the gist of this recommendation.

Ms. Hélène Alarie: Do you intend to apply this formula?

Mr. Robert Woods: Yes. As Dr. Franklin mentioned, the PMRA has asked the EMAC to review this recommendation and a meeting has been scheduled for next week to draw up an action plan for implementing this proposal.

Ms. Hélène Alarie: My next question concerns the US Food Quality Protection Act. What is your relationship with the Canadian Food Inspection Agency, which also has a mandate to ensure food quality? Who has responsibility in this field? Do you work together, or are you at loggerheads?

[English]

Dr. Claire Franklin: It's rather interesting, because of course there have been many changes in government with regard to regulation involving pesticides. Our agency set up the Pest Management Regulatory Agency and then the CFIA. So there's been a lot of change in a short period of time.

The jurisdiction is actually quite clear. It's our responsibility to review the submission and establish what a residue level is that's acceptable on food. That level is then promulgated under the Food and Drugs Act. The responsibility of the food inspection agency is to see that food doesn't have residue levels that are higher than the level we said was okay. We aren't out doing any inspections to see whether that exists or not. It's very clearly the responsibility of the CFIA to do that. They may contact us for input or comment on the methodology they're establishing in their laboratories in that type of issue. So there is that kind of relationship, but jurisdictionally, there's a very clear distinction.

• 0940

The Chairman: That's it. Thank you.

Ms. Franklin, before we go to Mr. Calder, I have a question about biotechnology, especially as it relates to what's called pest-resistant grains.

We have something like Roundup, which has been on the market for years. Is it part of your mandate, is it your business, to assess or evaluate the long-term effects of Roundup? Do we know what the impact is of biotechnology? Is that part of your terms of reference?

Dr. Claire Franklin: I'll ask Wendy to address that.

Ms. Wendy Sexsmith (Director, Alternative Strategies and Regulatory Affairs, Pest Management Regulatory Agency): Thank you.

That is an area that the Canadian Food Inspection Agency actually regulates, under the Seeds Act. It is outside of our mandate. They would regulate genetically engineered plants and things like that.

Our role would be to review, in some cases, efficacy in resistance with regard to pesticide molecules in plants, and we also have a role in reviewing the relationship or the registration of some of the herbicides that would be used on these things like Roundup-ready canola, but we don't actually regulate the biotechnology plant.

The Chairman: But Roundup is your business—

Ms. Wendy Sexsmith: Yes, that's right.

The Chairman: —because Roundup has been on the market for a number of years.

Ms. Wendy Sexsmith: That's right.

The Chairman: Have you taken it upon yourself to study the effects of Roundup and the pest-resistant grains?

Ms. Wendy Sexsmith: I think the specific answer to that would be no. When the submission comes in, we would look at it for environmental concerns, health concerns, and the value-efficacy portion, and consider registration based on that.

The Chairman: Is that something you would initiate on your own, or would you have to wait for some demand or request from some entity?

Ms. Wendy Sexsmith: This would be the question of long-term effects of Roundup?

The Chairman: Yes.

Ms. Wendy Sexsmith: It could happen several ways, and it will really depend on the issues.

In some cases, re-evaluation would address this kind of issue. Since this product has been registered for many years, it would come under the proposed re-evaluation program, and those kinds of issues could and would be looked at, at that point in time.

The Chairman: Mr. Calder, we'll go to you, for ten minutes.

Mr. Murray Calder (Dufferin—Peel—Wellington—Grey, Lib.): Thank you very much, Mr. Chairman. I want to go back to where Mr. Hilstrom was coming from, on the shortfall.

Claire, you said you're projecting a shortfall of $4 million. We went through this discussion before, when you met in front of us last year, on May 28. At that point you were saying $4 million, and it actually ended up to be $4.5 million, which you just said here today.

I'm curious. Where is this money going to come from? What department?

Dr. Claire Franklin: We're currently getting an additional $2 million from Health Canada, and that is sort of on a year-by-year issue. It's dependent upon a number of issues, but Health Canada is covering that.

Mr. Murray Calder: Okay, so you're still short $2 million.

Dr. Claire Franklin: That's right.

Mr. Murray Calder: Where is the other...

Dr. Claire Franklin: Well, I haven't been able to implement the re-evaluation at the level we had anticipated, and there are a number of other activities that we haven't been able to do, so we are operating with a reduced program because of that additional $2 million.

Mr. Murray Calder: Okay.

When the Nephin report came out, it highlighted three major points. I'm curious, and my question is, how do you intend to remedy these three points?

It pointed out that PMRA is 40% slower here in Canada than it is in the United Kingdom, the U.S., and Australia. It also highlighted the fact that PMRA has no management information system to track submissions, and it also said that PMRA's budget and staff are not in line with other countries and market sizes. How are you going to remedy those three points?

• 0945

Dr. Claire Franklin: The issue of 40% slower compared to the U.K. and Australia is a fact. The performance standard we had been asked to meet, put in place by government before the agency was formed, was to introduce for category A submissions a performance standard review time of 18 months, and we've implemented that and we're meeting that.

Approximately 20% of that 40% longer is because of public consultation; we were also asked to introduce public consultation before major decisions were taken for new submissions. So there are those aspects to keep in mind.

The other thing I would like to point out, though, is that we're working very hard, as we've indicated earlier, to harmonize with the U.S. We are not attempting to harmonize specifically with the U.K. or with Australia. Because of the quality of the work we do and the type of work we do, for us to be considered as equal partners with whom the U.S. is willing to harmonize, we have to achieve a certain way of doing business that they consider to be acceptable. I think it's very critical that we keep that in mind when we're doing these kinds of comparisons.

The third point I would like to make is if you look at the performance standard time we have for joint reviews, it's shorter than any of the other countries, and that's really the area we're targeting. It's approximately 365 days and that's the shortest of any of the countries in the world. So if you wanted to know how we were going to encourage companies to come into Canada and do it jointly, that's definitely one way to do it, to have that as a shorter timeframe.

Mr. Murray Calder: I guess maybe what I'm interested in here, because obviously you're going to be looking for money to cover that $2 million, is this. Are you considering, for instance, increasing fees before you find these efficiencies?

Dr. Claire Franklin: The recommendation in the Nephin report was to not increase fees as such but to modify the structure of the fee schedule. That's a way of achieving the same target but modifying the way in which that's done. I think we have to be aware of the fact that we're not attempting to increase fees or increase revenues as such.

The issue regarding efficiencies is we're fundamentally trying to do several things. We inherited a huge backlog of submissions when the agency was formed. We've implemented a performance standard that may not be as short as Australia or the U.K., but it's definitely shorter than it was prior to formation of the agency. Getting into a change really in the way business is done through harmonization...all of those are very activity-draining issues, and it's rather challenging to consider how we're going to get more efficient before we request additional resources. We won't need additional resources at a future point in time when we're at the levels of efficiencies we're striving for.

I think we can try to continue where we're at without going in and getting that shortfall, but we won't be able to get the gains that I think all of us want to see happen.

Mr. Murray Calder: I looked back here, though, because we had the same question and answer session back in May. At that point I mentioned that your backlog was about 914 and you corrected me; it was 300. You said you were going to use electronic submissions to reduce the 300. But then I had also found that PMRA was not going to incorporate electronic submissions for another six years. Have you changed that, or what's the status quo on that?

Dr. Claire Franklin: Since I wasn't at the meeting, I'm not sure exactly how the addition or the reduction of the 300 was to be done. We don't have electronic submissions from industry yet; we're working towards that. We in fact have had our first full electronic submission already this year, so it may have been a misstatement or a misunderstanding that we would be using electronic submissions to get rid of that remaining number of submissions. Those are backlog submissions. There's no way companies are going to take them out and put them back in electronically. So I apologize if there was a misunderstanding on that.

• 0950

We have certainly resolved the backlog. It was our commitment to do that and we've done that. The electronic submission activity we're working on is something that industry has to work with us to do, and we will gain efficiencies.

We committed to a 40% efficiency gain in the first six years, based on harmonization and getting electronic submissions, because we know there are reviewing gains that can be made when we get those, but we don't anticipate the majority of submissions coming in that way for several years. We're starting to see them now, which is incredibly encouraging. We had the first-in-the-world electronic submission in Canada this year.

The Chairman: Thank you.

In the next round we have Mr. Proctor and Mr. Hoeppner.

Mr. Proctor, you have five minutes.

Mr. Dick Proctor (Palliser, NDP): Thank you very much.

Dr. Franklin, you talked not only about the $4.5-million shortfall for the current year, but projections are that you'll have the same for next year. You indicated that there were three different options that PMRA could look at to try to deal with that in the coming year. I wonder if you'd go over those quickly, for my edification but also to indicate if you or your agency has any preferences as to what direction you should go.

Dr. Claire Franklin: I will hold comment on what my preferences are—

Mr. Dick Proctor: I thought you might.

Dr. Claire Franklin: —but I certainly would be prepared to discuss with you what the options are, and perhaps what the ramifications are.

The first option was to modify the fee structure, to make up for the shortfall. Now that we're in the second year and we see approximately the same shortfall coming from the maintenance fees, we believe that's a structural situation; this wasn't just a hiccup because of the first year. I think we feel that we have enough information now to understand that.

The modification to the fee structure so that we would be able to generate the amount of money we had originally targeted is laid out in a great amount of detail in the Nephin report. There may be other options. That's one he has proposed, and that will be under discussion to see whether there are any advantages or disadvantages to that.

The second option is to seek new resources within government. We have continually put these three options forward to the minister, and these are the kinds of things that I'm sure he is also looking at very carefully. I'm not in a position to know at this stage of the game exactly what his decision might be on it. He is also looking for some advice from the advisory council with regard to the fee structure.

The third one is to modify the performance standards, and even though I said I wouldn't comment, I would suggest that this is probably the worst of the three options for all of us, because we would probably be very soon back into backlog. If the inflow is greater than what you're able to put as your outflow, it doesn't take very long to get into the kind of situation we were in prior to formation of the agency. We also see that we don't encourage the competitiveness of growers if products are not available. I think the joint review performance standard is very critical to try to drive that. So my comment is that this probably is the worst of the three options.

Mr. Dick Proctor: Okay.

Another area is this advisory committee. Is that a multi-stakeholder advisory committee?

Dr. Claire Franklin: Yes.

Mr. Dick Proctor: As I recall, the benchmark study was critical of the agency for being too dependent, perhaps, on the larger companies at the expense of smaller organizations. Do you feel you've remedied that criticism with this advisory council?

Dr. Claire Franklin: The advisory council is structured so that it would be able to do that. On the advisory council, which is multi-stakeholder, we have a range of environment groups, health groups, consumer groups, as well as industry. We have growers on it, and as well, we have a group of people on it who bring some specific expertise and are not specifically representing any group.

• 0955

So I think we have the capacity to do that with that group. They are looking, I believe, to the EMAC committee to provide some commentary on the fee structure that was suggested by Nephin. I assume if there are other cost-recovery fee structures that could be put in place, they would certainly be something they'd be looking for.

Mr. Dick Proctor: One quick question. Approximately how many people are on both committees?

Dr. Claire Franklin: There are about 25 on the multi-stakeholder committee and about eight on the economic committee.

Mr. Dick Proctor: Thank you.

The Chairman: Thank you, Mr. Proctor.

Mrs. Ur.

Mrs. Rose-Marie Ur (Lambton—Kent—Middlesex, Lib.): Thank you, Mr. Chairman. In 1995, when the agency was set up, I heard the same information I'm hearing this morning. They wanted the capacity to do joint reviews with the United States to speed up the process. I'm hearing this today again from your presentation. This is one of the things you want to implement. We're in 1999 and this is a 1995 concern. What have we done in four years to really achieve much success at that?

Dr. Claire Franklin: We have implemented it. The joint review process was implemented in—

Mrs. Rose-Marie Ur: How productive has it been, though?

Dr. Claire Franklin: Wayne, maybe you could comment on that.

Mr. Wayne Ormrod (Chief Registrar, Pest Management Regulatory Agency): Thank you. The question of what the productivity has been is quite a reasonable one. Let me walk you through the examples.

Mrs. Rose-Marie Ur: Be very quick because I have more questions.

Mr. Wayne Ormrod: Okay. There's cyprodinil, which you've heard of, Distinct, which you've probably heard of, and sulfosulfuron, which you may or may not have heard of. The next one coming down the pike is a product called fenhexamid, which is a fungicide. It's seven months away. But those are four actual, tangible examples. Three are finished and the fourth one is well underway. We also have a series coming into that system that we previously haven't had—to keep the answer short.

Mrs. Rose-Marie Ur: But is that four in four years?

Mr. Wayne Ormrod: No, that's four in two years.

Mrs. Rose-Marie Ur: Okay. Do you consider that a success?

Mr. Wayne Ormrod: I do, yes.

Mrs. Rose-Marie Ur: Okay. I have another question, and maybe this is to Dr. Franklin, regarding backlog. Did the PMRA reprofile any of the backlog?

Dr. Claire Franklin: There were a small number of submissions in the backlog that had really not had any work done on them. We had a very complicated system where we used to call submissions one thing and then consolidate them and call them something else. We said they would fit into the new system because they were at a very early stage. We had not tried to retroactively apply performance standards to the backlogged submissions. The advantage of doing that was to put them into the newer system and actually have performance standards on them.

Mrs. Rose-Marie Ur: So with that in mind, are we charging for these? Are we double—

Dr. Claire Franklin: No, they aren't paying. The fee structure was such that there were no charges for submissions that were in prior to implementation of cost recovery.

Mrs. Rose-Marie Ur: Various farm groups that speak to me in my riding understand why we went to PMRA and accept it, but they are losing faith quite quickly because of what we see in the shortfall within the system. When 91% of the budget goes to salaries and such, they wonder whether salaries and operating costs are taking away from the efficiencies of PMRA.

Dr. Claire Franklin: Sorry, I'm not—

Mrs. Rose-Marie Ur: The dollars seem to be going into the operating costs and salaries. We didn't really reduce the numbers with the joint venture under PMRA. They're seeing a shortfall of several million dollars again. As a farmer, you can't keep operating at a loss, and this has been here for four years now. They're losing faith in the system.

Dr. Claire Franklin: The fact that the bulk of the dollars that come into the agency is for salaries is a reflection that really the only thing we're doing involves the regulatory aspects. Any of the research aspects or any of those sorts of things, where there would be non-salary dollars, were retained in the sectoral departments. None of those resources were transferred to the agency. So it is very appropriate that the money that comes in is for salaries because we just don't have these other activities.

• 1000

The point that I think is worth emphasizing is when the agency was formed, it was very clear that the consolidation was not—and it states in the documentation at the time of formation—to result in a reduction in the number of staff. In fact, we were asked to take onboard quite a number of reforms in the regulatory system. It was certainly not a consideration that there would be a reduction because of that. It was in fact significant that a number of the activities and the increases in and improvement in the time to registration was done without significant increase over the previous system. I think it's sort of the same thing, but doing more rather than reducing the numbers because of consolidation.

The Chairman: Thank you, Mrs. Ur.

We have our own pests and we're going to give Mr. Hoeppner five minutes.

Mr. Jake E. Hoeppner (Portage—Lisgar, Ref.): Thank you, Mr. Chairman. What a compliment.

Dr. Claire Franklin: We probably have a product for that.

Mr. Jake Hoeppner: Pass it quickly.

Well, I'm going to take the side of Mrs. Ur somewhat. As you know, no matter how you collect the fees, the final payer is the farmer. The farmer, the producer, or the user pays the bill.

When I was a young farmer, we already heard at that time that we have to have harmonization. It was the Treflan issue at that time in the U.S. and Canada. Today it's Roundup. How long do you think we can wait until we get some cost-effective chemicals to farmers?

I want to read you just two short statements I got in my office yesterday. Then you will find out what I'm talking about. We're losing farmers every year because of the input costs. This is what this gentleman says:

...his son in laws farm is going bankrupt and they have to get out of farming. ...his son-in-law and daughter would like to get retraining. They went to HRDC and they don't qualify for any funding because they haven't paid in and can't qualify for EI benefits. They were told if they went on welfare their training courses may be covered.

Another farmer writes me—and these are both yesterday—and says:

Stan called to ask me to tell MP Hoeppner that there is something wrong with a system where a farmer has to get a job off farm because of a financial crunch, his new job

—and he was lucky he found one—

deducts EI premiums, but because of his farm he is ineligible to “ever” collect EI benefits.

These are things that our young farmers are trying to cope with. I was coping with some of these. When are we going to get on the ball and do something? The costs are passed on to the farmer. He'll pay it no matter whether you're inefficient or you're efficient. You won't have farmers left for very long, because we've been losing farmers at a rate of...you know, it's unbelievable really.

What can we do to speed the system up so that the U.S. and the Canadian governments and their agencies realize that we still have to eat to stay alive?

Dr. Claire Franklin: These are very real issues, there's no question. I would just comment that prior to implementation of cost recovery, there were a number of concerns that were voiced. It's very difficult when you have no data to be able to say whether they actually will happen or not. One was that we would have a significant reduction in the number of products that would be available. In other words, manufacturers would simply not keep products registered in Canada because they wouldn't want to pay the maintenance fees. We have seen no reduction in the number of products that are available.

The second was that they wouldn't come to Canada because they had to pay a fee and we wouldn't see any new products coming in. We have absolutely no indication that that's the case. In fact, for the brand-new actives, the new technicals, etc., we are seeing as many as we've seen in the past. In fact, in the last month or so, we've actually had quite a significant number come in. So I think that fear hasn't shown that there would be significant differences as well.

• 1005

The third one was that the costs of pesticides would increase, and that's something we don't believe has happened. I find it rather interesting that one of the significant issues that has been on the table because of the Canada-U.S. issue is the significantly lower price of Roundup in Canada than in the U.S. The kind of markers that would be there that would suggest to us that we have significant problems with this—I don't believe we have that kind of evidence at this point in time.

Mr. Jake Hoeppner: What I'm concerned about is this, that come this spring—I know there are a lot of chemicals that haven't been paid for yet by farmers—the cutback in chemicals is going to be significant this next crop year. You will again see a decrease in the funds that you probably collect from the major companies.

So how do we get out of this system that we seem to be enslaved in, that always seems to be about 10 or 15 years behind the farming system? We dealt with it when I was a young farmer—the chemical issue, the harmonization, the testing, the residue issue—and now we have it with the Roundup issue, and I know it's going to affect us in canola production and marketing probably. A lot of the Roundup is used also in the bread wheats. I know there's some suspicion that it may cause us a problem later on for export.

We have seemingly one problem develop after another, and farmers are always at the end of it and taking the brunt of the costs and the effects—the disastrous effects, I would say.

The Chairman: Was there a question to that?

Mr. Jake Hoeppner: The question is, how do we get out of this system? We've changed it to the new regulatory organization now from what we used to have. We thought we would get harmonization quicker. I see now that you're talking of four years before the efficiencies will be the same as in the U.S.

Dr. Claire Franklin: I think we need to be very careful with what I'm saying as to where we're going to be with the total amount we've made a commitment to versus the true gains we're seeing at this point in time. As Wayne points out, the number of products that have come into the system—and really, as I mentioned in the opening comment, regarding encouragement to industry to use this process, I think they have to see a few and see that they were successful. I believe we will start to see many more of those. I think the numbers we've seen in two years, four brand-new active ingredients in that period of time, is a significant increase. And they're out on the market at exactly the same time in Canada and the U.S.

We've never seen that kind of situation before, and certainly we anticipate that this would be a normal way of doing business. But it will take industry a period of time to do that. It's a marketing issue for them and they have to start to consider that.

The Chairman: Thank you very much.

Mr. Murray, five minutes.

Mr. Ian Murray (Lanark—Carleton, Lib.): Thank you, Mr. Chairman.

Dr. Franklin, is keeping up with the science of pesticides a challenge for Canadian government scientists, particularly when they're working more and more closely with U.S. scientists in terms of regulation?

Dr. Claire Franklin: Keeping up with science is always a challenge. I think it's the sort of thing that's critical if we're to make the appropriate decisions. That is important. We have taken serious steps within the agency to establish a continuous learning program for that very reason, to keep our staff up to date and up to speed with the new happenings in science. I think that is very critical.

The relationship we have with the U.S. and with the harmonization is very positive. It brings us into a larger arena with more scientists, and I think that is very encouraging because it also helps keep us very current with what's going on in the U.S. as well.

Mr. Ian Murray: You mentioned part of the reason for the longer timeframe in Canada is the public consultation process. So as we move to this harmonization, does that mean we'll eliminate a good part of that consultation process, and therefore are we jeopardizing some aspect of public safety?

Dr. Claire Franklin: Maybe Wayne could chat a little bit about it. It is a challenge. because of course when you're harmonizing and you're harmonizing with someone who doesn't have this sort of stringer at the end of the decision process, it is a challenge.

• 1010

Would you care to comment on how we've managed to ensure that we don't lose that consultation?

Mr. Wayne Ormrod: The stringer, as Dr. Franklin describes it, is always getting to the ballgame late, and that's a difficult thing for us to manage in the eleventh hour, particularly as we approach a new season.

The longer-term solution to that challenge is the formatting of dossiers or submissions we get in what I would consider to be a pre-digested format that facilitates the review operation itself. It gives us an opportunity to force some efficiencies in that part of the process and, in addition, provides a proposed summary of findings as part of the submission that we would be able to verify in the course of our review.

That step is one of a number that are still emerging, and there has been a lot of discussion today about how long these things take. Harmonization is a whole series of things in terms of infrastructure, all of which really need to be in place to maximize the efficiencies that can be gained from harmonization.

We're operating our harmonization process now with some of that infrastructure in place. We're harvesting some results. I've mentioned a few this morning, and we're going to have some more down the road. But as we gain time and experience, our opportunity to improve increases as we go on.

Mr. Ian Murray: I have one more question. Is it possible that something could trigger a review, say five years down the road, in Canada, while in the United States there is no review going on, because of some concern someone has raised about a particular pesticide?

What is the process? What is the trigger, if you will, for a review in Canada?

Ms. Wendy Sexsmith: As a quick comment on that, there could be a number of triggers, and I think I alluded to that earlier. We have something called re-evaluation or special review. The triggers can be external. Other government departments could raise an issue and that could be a trigger. The general knowledge about something could be a trigger.

Regarding our re-evaluation program, which Dr. Franklin mentioned, one of the issues there is that many of the products that are registered in Canada haven't been looked at for 20 or 30 years, and that's a big trigger. So there are many triggers in place.

Mr. Ian Murray: So there is a lot of review that goes on.

Ms. Wendy Sexsmith: I guess the issue has been in the past that the regulatory system in Canada has never been resourced in an adequate fashion to have a re-evaluation process in place that systematically makes sure that older products are up to modern safety or science-based standards, which goes to your earlier question, and the highlights that Dr. Franklin hit on the proposed re-evaluation process are really to do that.

It has never been done before in Canada, and so the idea is to use, in as efficient a way as possible, as much as possible from other countries, but to make sure that the products that are used in Canada are acceptable from an environmental and health perspective.

The Chairman: Thank you.

It's Mr. McCormick's turn, but I think before we turn to Larry, we're going to bring in Sally Rutherford of the Canadian Federation of Agriculture.

Sally, you can make your statement, and then we can continue our rounds of questioning, starting with Mr. McCormick.

Ms. Sally Rutherford (Executive Director, Canadian Federation of Agriculture): Thank you. Good morning to all of you.

It has been really interesting sitting here listening not just to Dr. Franklin's presentation but to some of the questions and the way they've been posed.

This morning when I was making some notes it occurred to me that I've been doing pesticide issues for 20 years. Nothing has changed. It drives me nuts, just as I'm sure it drives many other people nuts. Although I don't believe I'm as old as Mr. Hoeppner, many of the things he talks about are the kinds of issues that I've had to be dealing with for that length of time.

To make a broad statement off the top, I think one of the really big issues from a primary agriculture point of view—and it's becoming not just a primary agriculture issue either, as this comes into having to deal with not so much trade rules as trade irritants, and working with not the harmonization of product registration but the harmonization of other systems—is that there is nobody in the federal government who has any real responsibility for addressing the kinds of issues that you, Mr. Chair, actually posed to Dr. Franklin.

• 1015

The PMRA has no mandate to actually look at the future. Ag Canada doesn't, and CFA does not have the mandate to look at the future. So when you're asking who's actually paying any attention, we are. Our big challenge is trying to get somebody else to pay attention and to get this crowd to actually talk to each other. I gather the PMRA doesn't, on a regular basis, even deliver documents to Ag Canada, to the pesticide people there, in terms of discussion documents and that kind of thing.

In that kind of a situation, quite clearly the issues we're talking about are largely orphans within the federal government system. We're starving to death at the moment, I think, and it's becoming an increasing problem.

As the science becomes increasingly more complicated, the trade irritants become increasingly more prevalent and the issues around those become more complicated, and it really does become a very difficult problem to manage. I'm not trying to deny it all, that it's not a very complicated issue, that the issues of health and science and the environment have become increasingly more important over the years, and that everybody agrees they have to be dealt with, nut the way we're dealing with them overall is not an effective way; we're not being able to address the problems we need to address.

That being said, I have a few comments to make, and I do apologize that my piece of paper here is not available. Our computer system crashed this morning.

Within the PMRA overall, the truth is that while there's a lot of talk about performance standards, there is not a performance standard that is actually being met. There's a commitment, but there is no actual indication that the performance standard is being met. There is no concrete plan to increase the turnaround time for applications. It has been discussed at EMAC and PMAC, but there is no concrete plan that is anywhere that anybody can measure against to try to do that.

At the same time, one of the things that really is of concern, which relates I think to the comments I made earlier, is that the goal for re-evaluation at this point would be to essentially fund the re-evaluation process from the registration process. That's a really significant problem, because while Dr. Franklin is quite right in terms of what she knows in terms of what products are being registered, she doesn't know which ones are not being registered. It's like a farm safety program we were involved with where one of our benchmarks was to try to determine how many people didn't die. That's a good one. You can't do that very easily.

So I think the PMRA doesn't know how many products are not being—the submissions are not actually being tabled. I know of a particular example in relationship to the Canadian Grain Commission trying to get somebody to register a product in Canada to replace a product that would be banned. The people came, took one look at our submission fees, and said no, we're not going to do that.

The PMRA has never spoken to the grain commission about the fact that it has the mandate itself for maintaining a safe product, so again we have the disconnect here between what it is that's actually not just commercially important to Canada, but what comes down to a health and safety issue. We're not able to deal with it because it doesn't belong to them, yet it doesn't belong to anybody else.

The cost of the re-evaluation is going to be really significant. There's no doubt that they have to be done. The plan that's being put forward, and I know it wasn't discussed here in any detail—and it will be discussed at the advisory committees next week—clearly puts on the table a plan to re-evaluate well over 400 products. The way it's described, at least in the document, which may not be what indeed is being thought about, is that they will essentially determine which products will be re-evaluated by whether or not the companies submit new data. The relevant point here is that the budget for re-evaluation is being based on the total number as opposed to inquiring which products the companies actually have an interest in submitting new data on.

As I said, I've been around this game for 20 years. I know there are many products that companies are simply not going to be interested in submitting new data on. They know that if it comes up for re-evaluation they're never going to bother.

• 1020

So the fact that the budget for re-evaluation, which will be taken away from other activities, is based on this essentially very broad number, with not a lot of firmness to it, really is a concern. It does put into question then that maybe there have been new actives, but are they going to be able to actually deal with all the new actives? I think that's a really relevant question.

The whole issue of public versus private good in terms of re-evaluation and who pays for it I think is a huge and important question. In terms of the whole issue of fees being raised to cover the budget shortfall, as I said, if increased fees are going to continue to prevent companies from actually registering new products in Canada, this becomes important, and I guess that gets into the harmonization issue. We're trying to harmonize product registrations. And it's very true, as Dr. Franklin mentioned, that companies are now looking at the Canadian market as not being a Canadian market but part of a North American market. The truth is, though, that we have a completely separate registration system. So while they see one market, they have to go through two processes.

We're not denying that we are a sovereign country, that we have the right to register these products in Canada ourselves, but it's how we do it and what kinds of barriers we're actually putting in place. The U.S. still does not have a submission fee. Its maintenance fees are considerably less than Canadian maintenance fees. So while we may be in one big market, what we're saying is yes, okay, you can do it there, but if you want to come into this part of the market, not really.

The companies are obviously looking at that seriously now and they're going to look at it more seriously into the future.

Getting back again, this is a big circular argument, but one of the really big concerns is that I think the whole... One of the MPs asked about keeping up with the science. I firmly believe that in 10 years' time we will not have any real traditional chemicals, or very few, left on the market. The big companies are all moving away from them with a vengeance. They don't see any money in it for them. This is a truly economic game now. It has little to nothing to do with agriculture. They're not interested in whether there are products available or not. It's whether or not they can make any money. If they can't make any money with a Roundup, they'll move on to something else.

I don't believe we're actually structuring a system that's going to take this into consideration, that we're going to be spending a lot of time and money looking at products that nobody's ever going to be interested in marketing into the future. I think it's something that has to be taken into account in the prioritization of the products for re-evaluation.

I have a couple of comments on cost recovery overall. It's not an issue that has disappeared. It's not just back on the table; I think it's always been there. It has maybe just moved forward to the front again.

We don't believe, from a CFA point of view, that Treasury Board has adequately overseen the implementation of many fees, including those within the PMRA budget. The PMRA must focus on specific means to reduce costs, not how to increase revenues. If, for example, given the numbers that are in the re-evaluation document, approximately at $56,000 average cost per re-evaluation, if the PMRA didn't do 70 of the well over 400, that would eliminate the $4 million shortfall in one year at least—and I know it's over a number of years.

But there are other ways of doing things besides simply charging more money, and we have to look at this. From that point of view, CFA continues to hold the positions we have in the last number of years that until the PMRA can truly be held accountable for its performance and its budget management, it should only be granted a one-year budget, not the five- or six-year budget it has asked for.

With that, I'll stop. Thank you.

The Chairman: That was quite a presentation.

Dr. Franklin, you can pick yourself up off the floor. Maybe we'll give you five minutes to respond to that before we turn to Mr. McCormick. Would you like to do that? I'm sure there are two sides to every question.

• 1025

Dr. Claire Franklin: I think Ms. Rutherford has raised a number of issues that are of great interest to all of us. I would comment on the point she has raised with regard to trade irritant issues, that these are orphans and no one is looking at them. I think it has been and will continue to be the case that trade irritants have the potential of being very serious problems; I think that's absolutely correct.

We have worked under the NAFTA area to try in fact to tackle the trade irritant issue. We have set up a process to sort of structure it so that if there are ones that growers, or anybody for that matter, feel are trade irritants, they can come forward and ask that those be addressed. We recognize that this is an issue, and there is a process. We are really trying to do what we're able to do to reduce some of these types of issues.

Getting products on the market at the same time I think will certainly help to reduce that kind of thing. If they're out there and we do the tolerances at the same point in time or do import tolerances if they're required, if this is a product that's primarily used in Mexico or for something that's not grown in Canada, that really is what we're targeting, a forward look to see if we can alleviate some of that.

Concerning the issue on re-evaluation, when we indicate we're taking money away from new products, in fact what we are doing is taking the money as we get the efficiency gains and putting that toward the re-evaluation program. In fact, it isn't an effort of saying we're going to take money away from reviewing new products as such. I think we are being challenged continuously to become more efficient, and the commitment that was taken when the budget was structured was that those efficiencies would then be put toward re-evaluation rather than starting out with a fund for re-evaluation per se.

So I would like to comment that it is not our intention to reduce our capacity for getting new products on the markets in order to implement the re-evaluation program. I think we're very cognizant of that fact and we are making a significant effort to ensure that we don't have that type of situation happening.

The issue of public versus private good is really a Treasury Board situation, as to how that is defined. It's not something that is within our jurisdiction to define. As we were told when the cost-recovery fee structure went in, the fact that the work we do is tied to products that are either put on the market or retained on the market...that is considered to be a private good. That really is the situation and the kinds of discussions we've had with Treasury Board.

The issue as to whether we charge more in cost-recovery fees than the U.S. government does, again, is a government policy as to how cost recovery was implemented. I think that's something we have to keep in mind, that in the U.S. there are many additional cost-recovery fees that are established or charged at the state level. In total, in fact, there probably is a higher amount of cost recovery for products in the U.S. than in Canada. Again, that's not something that is within our area of responsibility to call the shots on, as it were. We are simply trying to implement this in as painless a way as possible for all of us.

The Chairman: Can I just interrupt on that point, Ms. Franklin, by pointing out something Sally Rutherford mentioned. As government, we take a less than holistic or cohesive approach to some of these issues because there are so many split jurisdictions and so many departments involved. You've mentioned Treasury Board, for example, and of course there is the Department of Agriculture, and there's you, and there's CFIA. Would you lend credence to what Sally Rutherford has said?

If Sally is right on this point, is there a way of getting around that, or is this just the nature of government, that governments have more than one department at any given time and issues have to be split up this way? Is there a way around it or not?

• 1030

Dr. Claire Franklin: Definitely, the complexity of government is such that there are responsibilities in different departments. It would be facile to even try to suggest that that isn't the case. What really causes a trade irritant, from the perspective of pesticides, is if you have a product that's registered in one country and it's not registered in another, or if you have a residue on a commodity that is crossing the border, that really is an issue if you have a time disjunction, as far as registration is concerned.

I'm not sure whether I would suggest that's a government-to-government issue within Canada. I may be missing the point Sally was making on that. I think it is more of a case if you have these registrations in one country versus another.

We've tried to illustrate how there is a way forward on that—I don't think an instant fix is possible—and we are starting to see that. Hopefully we will see some improvement.

The Chairman: Thank you. I think we'll go to Mr. McCormick now for five minutes.

Mr. Larry McCormick (Hastings—Frontenac—Lennox and Addington, Lib.): Thank you very much, Mr. Chair, and I thank each one of our witnesses for being here.

We talk about the jurisdiction and all of the players involved, but my concerns and questions are for the producers. The producers are the ones who are lost and not being heard from here. I recognize that Sally is speaking loudly for them, but we need to recognize their plight.

All I hear is frustration from the producers. The same thing we're hearing now is what we heard two years ago; they can't get the same product their competition is using in the United States and even Mexico. Yet products are coming across the border every day that were treated with pesticides we can't use here.

I don't know whether there should be more of a shared jurisdiction between the food inspection agency and yourself. You mentioned how you're making progress and you'll be able to accept testing done in the same geographical areas, without looking at the political boundaries. This sounds like it will be a really significant step. I hope it will save time and money and not take years to happen and for us to see the results. I want to give you the opportunity to fill me in a little more on this, if you would, Dr. Franklin.

Dr. Claire Franklin: Certainly. For example, we're saying we don't need to have residue trials done on carrots that are grown in Ontario versus those grown in a contiguous area in the U.S. But it takes manufacturers several years to develop the database and get it ready to submit to regulatory agencies. So with some of the activities and changes we have put in place in the last year or two, we're only now starting to see companies in the position to take advantage of them. They've been able to do it, but there has been a lag between when they generate the data and when they file. I anticipate we will start to see, with the joint reviews, many more products coming in. They now have the message: try to do your marketing, get your approach, and do your trials in areas where you can go into both countries at the same time.

So we see companies starting to make those kinds of changes. That's really why there's a bit of a lag phase. It's there, it's out, and it's ready to utilize, but it takes time for industry to generate the data.

Mr. Larry McCormick: I'm still concerned, though. It takes time for the industry to make these things effective, but certain pesticides are being used in the United States every year just a few miles away from western Ontario, across the border in the United States. Whether it's carrots coming out of the valley in California or strawberries or tomatoes coming from Mexico, the food inspection agency will admit the same product is being used there, and we're bringing it in every day. No wonder I see producers who are so frustrated that it takes so long and is so costly for them.

• 1035

Mr. Wayne Ormrod: Perhaps I could comment and share a little bit of the history and background.

Traditionally, our small markets here—and that basically includes everything outside of cereals and canola—have been dependent upon products developed in the United States and then brought in here later on. That history has been at the root of the frustration you hear from your constituents and we hear when we come to visit with you at the committee meetings. There are many examples of it, and there's no question that we're still living with some of this history.

The comment Sally made—that there have been no changes and it has been the same for twenty-odd years—doesn't reflect my experience. The changes in the last two or three years have been more dramatic than in the previous fifteen to twenty—and Sally and I are almost tied in terms of the number of years we've been in this business, while I probably have a few on you.

First of all, I think it's important to recognize that there has to be an incentive for companies to play in this game. There are a couple of incentives that are very important, and the companies are responsive to them. First of all, there is the time factor. If we can turn around a registration in twelve months in a shared review, a joint review, that's very important to manufacturers. Secondly, they get two registrations, whereas they would normally get one. They do it in whichever country they come into first, so that's a very important incentive.

My observation would be that, as we entered into the joint review game, there was a certain amount of skepticism that, first, we would never pull it off; and that second, when we were successful on our first try with cyprodinil, we were lucky and it will never happen again. We have to demonstrate a few more of these, and I've mentioned those that are underway and successful this morning. These things are creating a keener and keener interest in that.

Each one of these things alleviates and in fact eliminates the whole problem that is so difficult for the farm community. For Distinct, which we just registered a couple of weeks ago, it's the same product in two countries. For all practical purposes, it has the same registration at the same time. If we were able to do that more routinely, this situation that we're all concerned about wouldn't exist. The changes are never as quick as we would like—I understand that frustration—but they are moving in the right direction.

The Chairman: Thank you, Larry.

We have five questioners left. We're probably going to have to spill over by five minutes. It's Alarie, Ur, Proctor, Hilstrom, and Hoeppner.

[Translation]

Ms. Hélène Alarie: The further along we go, the more complicated things become. Following up on what Ms. Rutherford said, a number of concrete commitments have in fact been made, specifically an undertaking to increase exports of farm products. Coincidentally, this is also a goal of the Department of Agriculture and of farmers. Moreover, the government is also committed to ensuring that producers operate at a profit, otherwise they will go out of business. The third commitment made is that of achieving zero tolerance, if we wish to increase our exports. That's where things become complicated, because although we have the feeling that the goal is harmonization, in concrete terms, we don't seem to know how to work to achieve this. I fail to understand why things should be different on the harmonization front in Canada from what they are in United States, given that we do a substantial amount of business with our neighbours and enforce the same zero tolerance principle. I'd just like to say that this zero tolerance should work both ways. In other words, why should have to do the same evaluation over again? Couldn't there be some mechanism in place that would recognize the evaluations done in the United States, which handles a higher volume of products, so that we would not have to duplicate work that has already been done? Why couldn't we confine ourselves strictly to scientific evaluations? We may not always have the resources for doing re-evaluations, whereas under their Food Quality Protection Act, the United States invests large sums of money in this area to keep up. We are already lagging behind. When we do find the resources to do these re- evaluations, products aren't necessarily registered even then and we fall even further behind. Something isn't working.

I greatly appreciated what Ms. Rutherford had to say about the government ultimately being committed to ensuring that our farmers and products are cost-effective.

• 1040

How can we achieve efficiency in terms of harmonization? I'm certainly in favour of our country demanding its rights—and heaven knows that a sovereigntist like myself wants her country to enjoy every right to which is entitled—but maybe things have gone a little too far on the international trade front.

I also have the feeling that as the number of agencies increases, government responsibility is being watered down. It is no longer clear who has responsibility for a particular area, and we are often dealing with split jurisdictions.

I don't pretend to have the solution, but I am interested in hearing your thoughts on the subject.

[English]

Dr. Claire Franklin: Thank you.

You have raised a number of different comments. Perhaps I could tease them apart a little bit, because I think it may help you to understand things.

The responsibility for registration of pesticides and for ensuring that they are used according to label directions is clearly and strictly a responsibility of the PMRA. The role of the CFIA is to ensure that food is safe, based on a number of different parameters. There could be pesticide residues. There could be drug residues. There could be a whole range of issues, so CFIA's responsibility is very clear. There isn't an overlap in jurisdiction between what they're expected to do and what we do.

In essence, we provide a number to CFIA that says that, with all the work we've done, we believe the product can be used and we do not consider that the level of residue that can be on the produce in question causes unacceptable risk. It's their responsibility to ensure that the food either coming into the country or being used in the country doesn't exceed that level.

You raised an issue with respect to re-evaluation and the fact that it is being done in the U.S., and you asked why we are doing anything with regard to it. What we have put forward as a proposal for the re-evaluation program is to build on what they've done. The bulk of the decision-making in the re-evaluation is to review the primary science with the active ingredient, but there's a lot of activity on the end-use products that are out there. As you have so eloquently told us, the end-use products that are in the U.S. are not necessarily the same end-use products we have in Canada.

So what we're really focusing on is building on the chunk of information or data that's obtained and on the review that's done in the U.S., but we have a responsibility to identify whether the products are used in the same way and whether there are different products that are being used. We can't expect the U.S. to do that for us, so that's really why we're saying there has to be a very large focus on what it is we're doing. The chunk of our activity is really based on that aspect.

On where there are either differences or gains on the registration side, I'll ask Wayne to comment. He has been intimately involved in the whole joint activity.

Mr. Wayne Ormrod: I think the observation on cost-effective chemicals this morning is right on the money. Clearly, that's a component of the agency's mandate. Competitiveness is also part of that mandate, and competitiveness for our farm sector is obviously where the buck stops.

The traditionally practised process of evaluating products has been out of sequence, as I've mentioned this morning. If you take the other side of this coin and listen to canola growers in the U.S., they have exactly the same kinds of problems that our small-crop growers have here, so this challenge isn't unique for us here in Canada. That may not be very helpful, but I think it is a fact that we have to be conscious of.

On the question of common tolerances, again, whether or not we're doing it after the U.S. or before the U.S., usually those tolerances harmonize at the end of the day when we come to looking at a product. In many cases, historically, however, we haven't been able to get a product for the purposes of examination until two or three years or more after it has been offered in the U.S. We can't have a common tolerance in that situation.

The solution to this conundrum, I believe, lies exactly in the direction in which we're trying to move our regulatory programs jointly with the U.S.: create the incentives for manufacturers to bring submissions into the two countries at the same time; gain the evaluating efficiencies that you raise as legitimate responsibilities that we should have and take seriously; get our registrations done at the same time; make those registrations compatible; and have harmonized tolerances. The opportunity to do all of this is only provided when we get a submission that is compatible with what's available in the U.S., and at the same time, not three years later. We just can't win at that ball game if we're three years out of step.

• 1045

The Vice-Chairman (Mr. Murray Calder): Thank you, Madame Alarie, but your time is up.

I have one quick question before we go to Mrs. Ur.

Wayne, those are great buzzwords—“competitiveness“, “efficiency” and others like that—but the fact is that the Nephin report said the PMRA is 40% slower than its equivalents in other countries. The fact is that the Nephin report said that you have no way of tracking a submission right now. Which is it? How are you going to improve this situation? How are you going to get to the efficiencies and everything that you're talking about when in fact the Nephin report says you're 40% slower and you have no way of tracking it?

Mr. Wayne Ormrod: In my view, there is no single silver bullet for achieving the efficiencies and progress we'd all like to see. I personally have invested a great deal of time and effort in the harmonization area, the joint review activity being the most tangible. You've heard this morning—and I can repeat it—that our standards are tops in the joint review process. There are none that I know of that are any better. That has to be a key part of our future. In my view, it is the strongest plank in our platform if we're going to move forward—and we have to move forward.

On the question of how well we track things, yes, there's always opportunity for improvement. We are conscious of that opportunity and we're working on it. I think we've accepted the observations from Nephin, and we are trying to respond to them. I keep coming back to where I believe the answers to be, and that's in the harmonization and joint review business.

The Vice-Chairman (Mr. Murray Calder): Mrs. Ur.

Mrs. Rose-Marie Ur: Thank you, Mr. Chairman.

In dealing with this idea of being 40% less efficient than the U.S., the U.K., or Australia, Dr. Franklin, you noted that probably 20% of that is due to the public consultation that takes place here in Canada. Would you know if they do not have public consultations in the other countries?

Dr. Claire Franklin: Not of the type of public consultation that we were asked to implement. In the U.S., they do have comments at various points, but the public consultation we're putting in place was in fact raised at their track meeting as an example of how it could actually be utilized, of something that could be put into the U.S. system. It's really giving people outside of the agency an opportunity to comment before the final regulatory decision is taken.

Mrs. Rose-Marie Ur: Mr. Calder has a stakeholders' meeting at the University of Guelph each year. This year there were presentations made by the various stakeholders. They stated that participation on the PMRA advisory committee is limited, and they felt that the PMRA demands product testing beyond scientific needs. A representative from the University of Guelph later went on to say he had concerns about the makeup of the advisory committee. He felt there was a lack of academic production agriculture on that committee. Could you address those two issues?

Dr. Claire Franklin: On the comment on requirements that go beyond scientific need, I think that may be the view of the person who raised it. In the last two to three years, I think we've spent a great deal of time harmonizing our data requirements with what is internationally acceptable as appropriate. So perhaps those sorts of changes were ones the individual who made the comment was not familiar with. However, I think there has been a great move forward to come into that kind of harmonization.

• 1050

With regard to the makeup of the council, there were a number of names that were put forward. As you may well be aware, the minister was the person who had the last commentary on the makeup of the council. I think it was his opinion that there was a range of people, that we did have a broad group of people to choose from. Membership is not permanent, which may be the good news or the bad news on the council, and there certainly will be opportunities for movement of people on and off that council.

Mrs. Rose-Marie Ur: We may have it in our possession, but I can't remember—would you be able to present information to the committee as to the makeup of the advisory committee?

Dr. Claire Franklin: Oh, absolutely. Yes, certainly.

Mrs. Rose-Marie Ur: In your presentation in reference to Ms. Rutherford's presentation, were you suggesting that the applications that are being presented now are not complete and are causing the delays in the reviews? You indicated because they're not getting their information from Canada and U.S. that this is adding to the delay.

Dr. Claire Franklin: No.

Mrs. Rose-Marie Ur: Is your problem the manufacturers who are making these applications?

Dr. Claire Franklin: That's a separate question. The one that was asked was, since we have zone maps and we don't have to have studies done just in Canada, why haven't we seen movement forward on that? My point was that if a company wants to do studies they have to be somewhere in that zone, whether it's on the north or the south side of the border.

That's really an issue of trying to encourage manufacturers, when they're doing their residue trials, to do them in areas where they can get bang for their buck and go into two countries. I believe they are doing that, but it's just taking them; there's a bit of a lag for them to do that. That was the answer to that question.

The question you've asked is, are submissions complete or not, and does that have an impact on our capacity to do the reviews? The completeness of the submission absolutely has an impact on whether we're able to do the reviews. We've implemented screening of submissions so we don't have in our system submissions that don't have all of the elements for us to be able to do the review, and we do have a fairly high failure on the first screen.

The good news is that most of the manufacturers are able with one round to be able to get that submission complete.

The Chairman: We'll go over about five minutes because we have three more questioners. I just want to remind members that we'll need a motion at the end of the meeting to concur with the report of the latest steering committee meeting. It's in front of you. You can look at it while we're finishing the meeting.

Mr. Proctor and then Mr. Hilstrom. Mr. Proctor, five minutes.

Mr. Dick Proctor: I have two questions. Ms. Rutherford, I think we have all found your comments very insightful here this morning. If I may, I'll just read a couple of sentences from the executive summary of the benchmark study, because I'd like you to comment on it:

We have recommended that PMRA consider changes to its fee structure, within the context of the revised Treasury Board policy on cost recovery, to adapt some of the practices of the other countries. A lower application fee together with an annual maintenance fee based on a percentage of sales would be fairer and more equitable for registrants, while being consistent with long term PMRA costs.

In your opinion, do you think that would go some distance towards answering the problems you articulated earlier?

Ms. Sally Rutherford: I know it's an issue that's on the table for the agenda next week at EMAC, so I don't want to prejudge what members of EMAC will say.

I know the view of that recommendation was that it had some good parts and some bad parts. I think the analysis that has to be done is to try to—because when he talks about changing it, the maintenance fees can be considerably larger.

I think one of the elements that has been missing...you know, I've known Wayne for two decades. It's a very scary thought. He had grey hair then, actually—both of us, probably.

When I say nothing's changed, I mean the complaints have not changed. You guys haven't quit complaining, we haven't quit complaining, the chemical companies haven't quit complaining, and everybody's complaining about exactly the same thing. Twenty years ago FP and I complained that submissions weren't coming in properly, companies complained that the times weren't right—all of that kind of stuff.

• 1055

But there hasn't ever been a really good economic analysis of the state of the industry overall and how indeed the imposition of maintenance fees, particularly large maintenance fees, would impact. The industry has significantly changed over the past number of years, even since the PMRA was envisaged, and I think that's the kind of thing one has to be really careful about.

On what Treasury Board says and what Treasury Board doesn't say...Treasury Board provides some pretty basic guidelines. It doesn't follow most of them itself, so it's not very tough on anybody else who decides they're going to interpret them one way or the other. I think there is leeway there, and before any of those recommendations on fees are implemented, there has to be a really long, hard look at what the actual impact would be.

Mr. Dick Proctor: Thank you very much.

My second question is to the PMRA officials who are here. In her presentation at the outset, Ms. Rutherford mentioned that the big guys, the big companies, are moving away from chemicals because they don't see any great return on their investment.

Your agency talks about lower-risk chemicals, which one would hope—and I don't know whether this is true or not—would also come at a lower cost. Do you see that as part of your mandate, to promote non-chemical alternatives in this area, and can you give us a little bit of an indication of what you're doing here?

Ms. Wendy Sexsmith: Thank you very much for the question.

When the agency was formed, one of the new pieces that was given to the agency was the issue of finding ways to support sustainable pest management and finding ways to put that concept into our decision-making process.

We're still product-focused, but I think we are looking for ways to support what I guess you're calling lower-risk products, and the U.S. does the same, whether that's lower-risk traditional chemicals or other things that might fall into that same category, like biopesticides. So we are looking at ways within our agency, and working with the U.S. as well, to structure our data requirements and encourage registrants to come in, in that arena.

We also work broadly with grower groups, registrants, provinces, and a wide variety of stakeholders in that mix, to find ways to implement more integrated pest management approaches to managing crops.

We have a number of projects, one of which is canola, which is a highly successful project. All of these are grower driven, and in this case the canola growers are up front and centre.

One of the key issues for them—and it relates to some of the discussion that has been around the table—is that they're very interested in reducing inputs and maintaining the perspective that they are producing a very healthy oil. So they are interested in moving from what might be perceived as some of the bad traditional-type products towards new technology. I think the issue of new technology can also mean traditional chemical types of products that are newer and perhaps better in certain ways, as well as some of these other things.

Thank you.

Dr. Claire Franklin: If I can quickly comment, it doesn't mean they're going to be cheaper, though. The fact that they are reduced risk doesn't mean they're going to be less expensive.

The Chairman: Okay, we're going to finish off.

Mr. Hilstrom and Mr. Hoeppner, you may want to share your time to save some time. Go ahead.

Mr. Howard Hilstrom: Thank you, Mr. Chairman.

We've done a lot of the technical stuff—I don't know if we need a lot more on that—but we'd like to look inside your operation a little bit here.

Is it the health minister you report to?

Dr. Claire Franklin: I report to Mr. Dodge, the deputy minister.

Mr. Howard Hilstrom: When was the last time you met with him?

Dr. Claire Franklin: What's today, Wednesday? I actually had a meeting with him on Monday.

Mr. Howard Hilstrom: Okay, so there's no problem in that area.

Dr. Claire Franklin: Absolutely not.

Mr. Howard Hilstrom: There are regular meetings there.

You have 315 FTEs.

Dr. Claire Franklin: Yes, approximately.

Mr. Howard Hilstrom: Approximately?

Dr. Claire Franklin: I have a fluctuating staff, coming and going, so that's really why I say it's approximately that number. I don't know the strength as of today.

Mr. Robert Woods: The strength would be about 310 today.

Mr. Howard Hilstrom: Your admin staff doesn't fluctuate. That has to be fairly stable.

Mr. Robert Woods: When you say fluctuate, do you mean the turnover, people leaving?

Mr. Howard Hilstrom: Well, what do you mean by fluctuate?

Mr. Robert Woods: Do you mean people leaving for other jobs?

• 1100

Mr. Howard Hilstrom: Dr. Franklin used the word “fluctuate” and I'm wondering about that.

Mr. Robert Woods: We have people who leave for other jobs and we replace them, so the staffing process takes some time. But over the last two years, since cost recovery, we've been at about 315.

Mr. Howard Hilstrom: So you don't have any staffing problems there. Do you have a full complement of research people, scientists, or whatever you call them, most of the year?

Dr. Claire Franklin: We don't have people doing research. We have scientists who are doing evaluation and regulatory work. We have not had problems obtaining staff in these positions, but it's fair to say there is movement within government. It's not that we have a huge deficit and are unable to fill staff positions.

Mr. Howard Hilstrom: I'm only interested in whether the positions have been filled all year long. With these positions you require, are there 250 people for the most part doing evaluations?

Dr. Claire Franklin: There are, but, for example, two or three people have left in the toxicology area. We brought in some people and we're in the staffing process. You always have this kind of moving situation in government.

Mr. Howard Hilstrom: So you would be able to say here unequivocally that you're not filling positions in order to save money anywhere; you're trying to keep your staff numbers up, even if you're running a deficit.

Dr. Claire Franklin: I think we're at a fairly core level for a lot of the evaluator positions. We have never really staffed right up to what we indicated initially because we have a shortfall. I have some positions that are vacant. I may have misunderstood what you were driving at.

Mr. Howard Hilstrom: If you need x number of people for a job, the positions have to be filled. The true name for cost recovery is taxes. Cost recovery is simply a tax. In the case where it goes down to users, a smaller number of taxpayers are paying it.

I have a dispute with the agriculture minister on the idea that any time the government regulates something and puts in an agency like yourself to evaluate and do something, it is a public or common good for everybody in the country. As a result, those cost-recovery fees should be over the whole country, not boiled down to the manufacturer. But that's something you can't do too much about.

Dr. Claire Franklin: No, but it is an interesting discussion. I guess that really stems from the decision within government on what constitutes public and private and where cost recovery is applicable. It's definitely not my area to try to redefine what has been defined.

Mr. Howard Hilstrom: Okay. We don't have much time. I'll add one last little bit here. Is there no problem interprovincially with any of the pesticides or anything you deal with?

Dr. Claire Franklin: I don't believe so. In fact, since the formation of the agency, we've been able to restructure a federal-provincial-territorial committee that I believe is working well. I'm not aware of any issues that are problematic. I don't know whether Wendy has any.

Ms. Wendy Sexsmith: I think the new federal-provincial committee is working very well. I also interface fairly regularly with the federal-provincial-territorial committees on the agriculture and agri-food side. There's the pesticide group that deals with pesticides on both the regulatory side and the agricultural use side in each of the provinces. Then there's a federal-provincial trade committee run out of Agriculture and Agri-Food Canada. I interface with them on a regular basis because of the interest in trade issues. So I would say we have very good communication on the provincial side.

Mr. Howard Hilstrom: But there are no problems. Is everything that's registered for use in Ontario also registered for use in Quebec?

Ms. Wendy Sexsmith: In most cases we do national registrations. There may be some differences in the minor-use area, but certainly our view is there should be national registration in most cases.

• 1105

The Chairman: Thank you.

Mr. Hoeppner, we'll finish with you.

Mr. Jake Hoeppner: Thank you very much, Mr. Chairman.

Being called a pest—I don't know whether that's a criticism or a compliment around this table, but I think I'm not the only one here today who will be leaving with that label.

I would like to go back to the common good, or the private good and the public good. I see you're $4 million in the hole, as we would say on the farm scene. Is this problem more due to the inefficiencies in government itself than the inefficiencies in your organization? To me it looks as if to define the common good and the public good is something government has used to pass the buck for the last five years I've been here. Am I wrong in that summation? When I see that it's 40% slower in registering chemicals, it can't be due to the farmers and the manufacturers. Is it maybe government itself, not just your regulatory body but the good, ordinary Liberal government, as we would say today?

Dr. Claire Franklin: The first comment I would like to make is that I don't believe we're 40% less efficient. I think when we're compared to Australia or the U.K., that's perhaps a fairer criticism. We're not 40% less efficient than the U.S. I'd just like to make sure that nobody leaves with the sense that that's a real live figure. As Wayne and I have both pointed out, for the joint reviews in fact we are more efficient than anybody else. So I'll leave that last message.

The issue of private good, public good, whether the government has utilized cost recovery for whatever purposes—it's not my position to comment on that. But I will indicate that when the recommendations were put forward to reform the pest management regulatory system, in fact cost recovery was on the table and it was acknowledged, and this is perhaps at an earlier time than a lot of the cost-recovery programs were implemented.

That was in 1990, and there was a recognition that it would be not unjust to have a cost-recovery component in order to move on with that. So from the perspective of the agency, that's always been on the table, and it may be somewhat different from perhaps the implementation of some of the programs that occurred at a later point in time.

Mr. Jake Hoeppner: I see agriculture probably brings in the most foreign currency of any industry. When you look at the taxes that are collected on a bottle of beer, where the farmer has 1¢ of barley in it, the common good of agriculture in this country is unlimited, I think. Then to say that maybe the private people, the chemical companies and the farmers, should bear this percentage of the cost recovery is a little unfair.

Dr. Claire Franklin: That's a view that's held. One comment is that certainly from the perspective of the impediment, or the perceived impediment, that cost recovery has on the chemical manufacturers...I don't believe we have evidence at this point in time that indicates there has been that impediment. There may be other views that are held, but for hard, on-the-table facts that would indicate that, we haven't seen those signals. I think that is good news for all of us, because we're kind of treading into an area that is a bit unknown. From our perspective, there are undoubtedly modifications or ways that one could improve any system, but I do think we haven't seen the catastrophic impact that was predicted before cost recovery was implemented in our area.

Mr. Jake Hoeppner: My concern is that about 3% of the population, or less, are farmers. The political clout they carry on the Hill is not really worth a hill of beans. If we can ignore the issue with the farmers, that they're being overburdened by taxation or by cost recovery... Politically it's not going to affect us too much here in Ottawa.

I think farmers are getting very suspicious and disillusioned with this type of attitude toward them, and I think Ms. Rutherford pulled that issue forward. I was disillusioned in the 1970s when this became an issue, and so are my sons today. Nothing has really changed.

• 1110

Dr. Claire Franklin: I think that's an opinion for each individual to hold. I can only indicate from the perspective of the impact on availability of products, which is I think really very critical, that we don't have signals that indicate it is the case. I think we're seeing products coming in. We're getting them jointly at the same time. So I think the directions are in fact showing that we are seeing improvements, and we'll see even more of that.

The Chairman: Thank you very much, Mr. Hoeppner.

I have a final question for Sally. In your opening remarks, you alluded to the complexities of government and the number of departments, the number of players, involved, which makes settling some of these matters even more difficult. Does the CFA have any proposal, any idea, of how we as government can get around having to cross so many departments in dealing with issues of this kind?

Ms. Sally Rutherford: I did propose to the gentleman here from Ag Canada this morning that I might just invite everybody to a meeting and not let them out till they agree to get along.

Dr. Claire Franklin: Is it at your house?

Ms. Sally Rutherford: Yes. That might happen. Maybe I could do it. That would work. There's an opportunity there.

One of the things we are trying work through with Ag Canada at the moment is a proposal to deal with minor-use registrations, which has been an enormous bugbear for everyone. I don't think anybody is more at fault perhaps than anybody else. We do have a proposal on the table to do that, but in addition, we do have a proposal for some small amount of funding from Ag Canada to try to address some of the developmental issues.

I really do believe in talking with the people in the chemical industry. You can just look. DowElanco is not DowElanco anymore; it's Dow Agra Sciences. They're not interested in developing new chemicals; they're looking at biologicals and biotech-related products. Their market is changing and they see their product lines changing fairly drastically.

We have to figure out ways of actually bringing that back in. The analogy there might be that somebody has to start paying as much attention to the input side of agriculture, in relationship to fertilizers as well as crop protection products, as we're spending on manure management.

The Chairman: Thank you.

Thanks, all of you, for staying over a few minutes, including members.

I would ask the witnesses to hang on for a moment. We have, I would hope, a few seconds of housekeeping work to do. I need a simple motion of concurrence to concur with the fourth report of the Subcommittee on Agenda and Procedure. I would like to have a motion to concur.

Mr. Larry McCormick: I so move.

The Chairman: Mr. McCormick, seconded by Mr. Calder.

(Motion agreed to)

The Chairman: Finally, the clerk was kind enough a few moments ago to distribute binders, which contain material for the Washington trip. I would just simply suggest that you make some time to go through the binders, particularly in view of the fact that we're going to be having briefings from the Departments of Agriculture and Foreign Affairs. Agriculture will be here next Tuesday, which is budget day, of course, and then Thursday will be the Department of Foreign Affairs' time for briefing. If you can take a few moments to look at the briefing material, it will help us in our briefing with those two departments next week.

If I hear nothing further, this meeting is adjourned to the call of the chair.