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37th PARLIAMENT, 1st SESSION

Standing Committee on Agriculture and Agri-Food

EVIDENCE

CONTENTS

Tuesday, January 29, 2002

0900

The Chair (Mr. Charles Hubbard (Miramichi, Lib.))

0905

Mr. Howard Hilstrom (Selkirk--Interlake, Canadian Alliance)

The Chair

Mr. Michael Presley (Director General, Food Bureau, Department of Agriculture and Agri-Food)

0910

The Chair

Ms. Jeanne Cruikshank (Vice-President, Atlantic Office, Canadian Council of Grocery Distributors)

The Chair

Ms. Jeanne Cruikshank

The Chair

Ms. Jeanne Cruikshank

The Chair

Ms. Jeanne Cruikshank

0915

0920

The Chair

Mr. Stewart Wells (President, National Farmers Union)

0925

0930

Ms. Suzanne Tremblay (Rimouski—Neigette-et-la Mitis, BQ)

Mr. Stewart Wells

0935

The Chair

Mr. Stewart Wells

The Chair

Mr. Stewart Wells

The Chair

Mr. Stewart Wells

The Chair

Mr. Hilstrom

0940

Ms. Jeanne Cruikshank

Mr. Hilstrom

0945

Ms. Jeanne Cruikshank

Mr. Hilstrom

Ms. Jeanne Cruikshank

Mr. Howard Hilstrom

Mr. Michael Presley

The Chair

Mr. Stewart Wells

The Chair

Ms. Suzanne Tremblay

0950

Mr. Stewart Wells

Ms. Suzanne Tremblay

0955

Ms. Jeanne Cruikshank

Ms. Suzanne Tremblay

Ms. Jeanne Cruikshank

The Chair

Mr. Michael Presley

1000

The Chair

Mr. Michael Presley

Ms. Jeanne Cruikshank

The Chair

Mr. Paul Steckle (Huron--Bruce, Lib.)

Mr. Michael Presley

1005

The Chair

Mr. Steckle

The Chair

Mr. Stewart Wells

The Chair

Mr. Steckle

The Chair

Mr. Steckle

Mr. Proctor

The Chair

Mr. Steckle

1010

Mr. Steckle

Ms. Jeanne Cruikshank

Mr. Murray Calder (Dufferin--Peel--Wellington--Grey, Lib.)

Ms. Jeanne Cruikshank

The Chair

Mr. Proctor

Mr. Michael Presley

Mr. Proctor

Mr. Michael Presley

Mr. Proctor

Mr. Stewart Wells

1015

Mr. Proctor

The Chair

Mr. Proctor

Ms. Jeanne Cruikshank

Mr. Proctor

Ms. Jeanne Cruikshank

Mr. Proctor

The Chair

Mr. Mark Eyking (Sydney--Victoria, Lib.)

Ms. Jeanne Cruikshank

1020

Mr. Eyking

Ms. Jeanne Cruikshank

Mr. Eyking

Ms. Jeanne Cruikshank

Mr. Eyking

Ms. Jeanne Cruikshank

Mr. Eyking

The Chair

Mr. Borotsik

Ms. Jeanne Cruikshank

Mr. Borotsik

Ms. Jeanne Cruikshank

Mr. Borotsik

Ms. Jeanne Cruikshank

Mr. Borotsik

Ms. Jeanne Cruikshank

Mr. Borotsik

1025

Ms. Jeanne Cruikshank

Mr. Borotsik

Ms. Jeanne Cruikshank

Mr. Borotsik

Ms. Jeanne Cruikshank

Mr. Borotsik

Ms. Jeanne Cruikshank

Mr. Borotsik

Ms. Jeanne Cruikshank

Mr. Borotsik

Mr. Stewart Wells

Mr. Rick Borotsik

Mr. Stewart Wells

Mr. Borotsik

Mr. Stewart Wells

Mr. Borotsik

Mr. Stewart Wells

Mr. Borotsik

Mr. Stewart Wells

Mr. Borotsik

Mr. Stewart Wells

Mr. Borotsik

Mr. Stewart Wells

Mr. Borotsik

Mr. Stewart Wells

Mr. Borotsik

Mr. Stewart Wells

Mr. Borotsik

Mr. Stewart Wells

Mr. Borotsik

Mr. Stewart Wells

Mr. Borotsik

The Chair

Mr. Larry McCormick (Hastings--Frontenac--Lennox and Addington, Lib.)

1030

Mr. Stewart Wells

Mr. McCormick

Mr. Stewart Wells

Mr. McCormick

Mr. Stewart Wells

Mr. McCormick

Mr. Michael Presley

1035

Ms. Jeanne Cruikshank

Mr. McCormick

The Chair

Mr. David Anderson (Cypress Hills--Grasslands, Canadian Alliance)

Michael Presley

Mr. Anderson (Cypress Hills--Grasslands)

Mr. Michael Presley

Mr. Anderson (Cypress Hills--Grasslands)

Mr. Michael Presley

1040

Mr. Anderson (Cypress Hills--Grasslands)

Mr. Michael Presley

Ms. Jeanne Cruikshank

Mr. Anderson (Cypress Hills--Grasslands)

Ms. Jeanne Cruikshank

The Chair

Mrs. Rose-Marie Ur (Lambton--Kent--Middlesex, Lib.)

Ms. Jeanne Cruikshank

Mrs. Ur

Ms. Jeanne Cruikshank

1045

Mr. Michael Presley

Mrs. Ur

Ms. Jeanne Cruikshank

Mrs. Ur

The Chair

Ms. Suzanne Tremblay

Mr. Michael Presley

1050

The Chair

Ms. Jeanne Cruikshank

The Chair

Mr. Stewart Wells

The Chair

Mr. Calder

Mr. Michael Presley

Mr. Calder

1055

Mr. Michael Presley

Mr. Calder

The Chair

Mrs. Skelton

Mr. Lyle Wright (Member, National Farmers Union)

Mrs. Skelton

Mr. Lyle Wright

Mrs. Skelton

Mr. Lyle Wright

Mrs. Skelton

Mr. Lyle Wright

Mrs. Skelton

Mr. Lyle Wright

1100

Mr. Murray Calder

Mr. Lyle Wright

Mrs. Skelton

Mr. Michael Presley

The Chair

CANADA

Standing Committee on Agriculture and Agri-Food

NUMBER 039

1st SESSION

37th PARLIAMENT

EVIDENCE

Tuesday, January 29, 2002

[Recorded by Electronic Apparatus]

¿ (0900)

[English]

The Chair (Mr. Charles Hubbard (Miramichi, Lib.)): Good morning, everyone. We'll call our meeting to order. We have a new year beginning.

[Technical difficulty—Editor]...the House. I would like to see it go directly to the House, but I'm not engaging in a discussion here. I don't know if we need to know quickly, but when we're questioning, I think it's important to know where we're going to ultimately report this.

I think we should decide later, but my impression of why we wanted to begin early was that we wanted to open this as an opportunity, and after hearing some witnesses we would decide how we would proceed with our work hours.

¿ (0905)

Mr. Howard Hilstrom (Selkirk--Interlake, Canadian Alliance): Okay, that's a little....

The Chair: Do other members have anything? No?

Sorry for the delay, Mr. Presley. Are you to lead off this morning?

Mr. Michael Presley (Director General, Food Bureau, Department of Agriculture and Agri-Food): If you'd like me to, I'd certainly be pleased to do so.

Thank you for inviting us here this morning to speak on this issue on behalf of Agriculture and Agri-Food Canada.

With me today is Ms. Lynn Stewart, the director of cross-sectoral industry affairs within the food bureau of the Market and Industry Services Branch of Agriculture and Agri-Food Canada. Lynn is also the departmental representative on the Canadian General Standards Board committee that was tasked with developing a standard for the voluntary labeling of foods derived from biotechnology.

[Translation]

In my opening remarks, I will explain the department's position on the labelling of genetically modified foods and the way in which this relates to the specific questions that committee members asked us to discuss: additional costs that labelling would entail for producers, processors and consumers, the feasibility of separating genetically modified foods from traditional products, and lastly, market opportunities for genetically modified foods.

[English]

What is the Agriculture and Agri-Food Canada position on this issue? Well, I'd first like to point out that the Government of Canada's policy already requires the mandatory labelling of food derived through biotechnology if it differs significantly from traditional food or if it carries a health and safety risk, such as an allergen.

All the genetically modified foods on the market today have been assessed for food safety by Health Canada. Therefore, the voluntary standard that Canada is developing is not being developed for health and safety reasons, but instead to improve consumer choice regarding genetically modified foods.

Agriculture and Agri-Food Canada has funded the work of the Canadian General Standards Board and the Canadian Council of Grocery Distributors to develop a standard for the voluntary labelling of genetically modified foods, in order to help to ensure that when that information is provided, it will be meaningful, credible, and enforceable.

The CGSB process is indicative of the importance of the agricultural policy framework currently under development by agriculture ministers. The framework recognizes the fact that consumers are becoming more discerning and demanding in their food choices, and aims to ensure that farmers and the agriculture sector have the tools to better meet those demands. Such tools include systems for crop segregation, tracking, trace-back, identity preservation, and testing of crops and foods.

Your first question was what are the costs of labelling, mandatory versus voluntary. Well, the department believes that a voluntary labelling standard will assist consumers in making informed choices about GM or non-GM foods and will also allow the agrifood industry the flexibility it needs to determine its own technological, marketing, and production objectives. Mandatory labelling could, on the other hand, impose more significant costs for producers, the agrifood sector, and consumers.

Determining accurate cost impacts is difficult, given that this is a complex, highly technical issue, and no one is certain how industry will respond to pressures from consumers or government to provide labelling information. Monitoring the implementation of the CGSB voluntary standard will, over time, give us a better understanding of what the impacts will be. There is no doubt, however, that there are costs associated with implementing a labelling program that involves segregation and identity preservation systems to ensure there's no mixing of genetically modified crops with traditional crops.

Your second question was what is the feasibility of separating genetically modified from traditional food. Well, the trends are already clear. Aside from the impact of GM labelling, modern agriculture is already demanding greater investment in identity preservation and segregation systems. For example, the western Canada grain industry estimates that between 8% and 10% of production is currently identity-preserved, and we understand that within the next seven to ten years that demand will increase threefold. Therefore, it's important to consider the effect of GM labelling as being incremental to an already well established and well understood need on the part of the sector to invest in these systems.

It should also be noted that the question of ensuring a particular tolerance for the adventitious or technically unavoidable presence of approved GM material is a critical factor in assessing the feasibility and cost-effectiveness of identity preservation, particularly from a bulk commodity perspective. To determine the adventitious presence of GM material, particularly at very low levels, such as 1%, would require time-consuming and costly tests in modern state-of-the art labs. There seems to be some industry consensus that a 5% tolerance may be more feasible.

The third question was what are the market opportunities for genetically modified foods. Well, only seeds at this time are marketed specifically as GM products. The majority of Canadian markets buy commodities on the basis of quality and price, without reference to its potential GM nature.

With respect to the agrifood sector, it's estimated that 60% to 70% of the multi-ingredient foods produced for consumer consumption contain genetically modified ingredients, mostly derived from corn, canola, and soybeans. At this time it's quite safe to say that no processed foods are labelled as containing genetically modified ingredients in Canada. On the other hand, organic foods often bear claims that they do not contain GM ingredients.

To date, the bulk of breeding objectives in genetically modified crops has been geared towards agronomic or environmental benefits such as herbicide-tolerant canola, corn-borer-resistant corn, and potato-beetle-resistant potatoes.

While there are significant public benefits to be gained, such as a cleaner agricultural environment, increasing the ability to feed a growing population, and some improvement of nutritional and quality traits, the benefits to consumers have not been as evident. However, it's estimated that within the next five to ten years, genetically modified crops will be produced that will have more direct appeal to consumers, such as plants with a superior nutritional value, enhanced levels of nutraceutical properties, allergens removed, and superior keeping or food safety quality.

Companies will need clear guidance on how to label in a meaningful and credible manner when these products are ready to be marketed to consumers. This is one of the reasons why Agriculture and Agri-Food Canada supports the need for labelling guidelines under the CGSB standard. Industry initiatives to implement the standard to provide the requisite investment and tracking, tracing, and identity preservation systems now will help ensure that they're well positioned to meet buyer demands in the future.

In conclusion, we need to look at the costs and market opportunities from a broader perspective than just GM labelling. We need to think about this from the perspective of a country that is heavily dependent upon export markets.

¿ (0910)

The Chair: Thank you, Mr. Presley.

Shall we hear all the witnesses and then proceed from there?

An hon. member: Good idea.

The Chair: As to the Council of Grocery Distributors, Ms. Cruikshank, how big an organization is that? How many members would you have?

Ms. Jeanne Cruikshank (Vice-President, Atlantic Office, Canadian Council of Grocery Distributors): Our size I'll give you in percentage, which is perhaps a better indication. It would be all the major retailers in Canada, and it's about 80% of food distribution. So it would be Sobeys, Loblaws, Colemans in Newfoundland, and Thrifty in Victoria, a coast-to-coast national organization representative of wholesale, retail, and in some cases food service.

The Chair: And the number of people and the number of firms that would be represented would be what?

Ms. Jeanne Cruikshank: In member companies, it's probably about 21, two of whom, Sobeys and Loblaws, would represent 52% of grocery business in this country.

The Chair: It's quite a shocking figure, isn't it, that two companies represent over half the distribution?

Ms. Jeanne Cruikshank: I think the good news, however, is that those two companies operate and employ people in every province throughout Canada.

The Chair: Yes, but it is a shocking event when our grocery distribution rests in the hands of two companies.

Thank you for coming.

Ms. Jeanne Cruikshank: Thank you. And happy new year, folks.

I have brought with me a deck, which I'll go through.

I'm pleased to be here to bring the representation on behalf of the Canadian Council of Grocery Distributors, but more importantly, the perspective I bring is on behalf of the Canadian consumers--who, as surveys would indicate to us, visit their grocery stores twice a week--and is based on responding to consumers, which is the survival instinct of our business. We have moved forward on some of these issues and moved them towards fruition.

You will notice in going through this that it does give an overview of who primarily we are, which has already been answered. I guess one of the things that qualifies me to be at this table is that the Canadian Council of Grocery Distributors in 1999 launched an initiative to try to establish a standard for the labelling of foods from biotechnology. To this time there is not a definition, nor is there a set of rules in place. What we learned from being part of the organic process is that discerning and highly educated consumers want to know more about the food they buy, and as retailers, we wanted to be able to provide that to them, but in the absence of a set of rules, we had concerns that the information might not be meaningful or informative. We based our approach on the consumer's choice and right to know about the food they buy, and we felt it would also complement the other labelling that has already been mentioned, mandatory labelling for health and safety reasons and to declare whether or not there's an allergen ingredient or difference in nutrition. So we already have a sound mandatory system. This information and consumer choice one can proceed well on a voluntary basis.

The process we initiated to do this is a legitimate, broadly representative, consensus-based process. Certainly, the dialogue is indicative of the demographic and geographic representation from across the country. We did an exhaustive review of issues, I think at some times with emphasis on exhaustive. We had eight two-day meetings here in the capital city. We had five working groups, teleconferences, facilitated on-line discussion, e-mails, telephone calls, and certainly, we very thoroughly reviewed this over the past two years. In doing so, we were mindful of international concerns, and now I'm pleased to tell you that with the support of Agriculture Canada and a number of the other agencies in funding, we are at a voting stage. The 18-page document was concluded and went to vote as of last Friday.

So in the near future we will have that set of rules that is so much required. The outcome will be a voluntary standard that provides us with a definition of what, in the Canadian context, these foods from biotechnology are. It will give us rules for both positive and negative claims, or presence and absence of genetically engineered material. It will give us rules for labelling both multi- and single-ingredient food. We operated throughout this entire process on the principles of the message and the labels being clear, meaningful, verifiable, truthful, and not misleading, but what I think is also an important aspect is that this label, which is one piece of the education information, will be a gateway to off-label information.

I want, in looking at the questions that are before me, also not to underestimate the significant challenge of this. This next page, which shows you corn, will give an indication. Corn can be present in 25% of store products, all the way from industrial products and health care through to food. Obviously, our concern for this issue is more with human-consumed food, but corn is a basic ingredient. When that corn appears as cornstarch or cornmeal in a processed product, it is significant what process would need to be involved to identify whether that safe corn product was originally a traditionally grown variety or a genetically engineered variety. So it gives some idea of the complexity and the challenge of this issue.

I'm also going to give you a glimpse today that few Canadians have seen of what might these labels look like coming out of our process and what the possible applications are. The process will be driven by industry, as it has been to date. It will be in response to consumer demand for choice and information. This example, which was discussed by our committee and is still theory at this point, gives you an idea of another aspect of this: at present there are no genetically engineered varieties of apples sold in this country.

¿ (0915)

In adherence to not only being truthful, but also to not being misleading, the discussion and the consensus was that it was exceedingly important that it be communicated to consumers. Rather than having in the produce section apples that would say “not genetically engineered”, which may in perception give differing messages to the consumer, we want it to be clear that like all apples, Canada fancy golden russets are not genetically engineered. That way it is in the appropriate context.

We also, as is indicated on the label on this slide, understood and put forward the importance of additional information, or as I call that, gateway information. So there is a toll-free number. Given space limitations, there obviously can't be the whole story on the label. But for those who would like to know more, we need a source they can contact.

On the next slide, moving to potatoes, we also wanted to provide some flexibility, so that industry, driven by response to their consumers and for their product, could best express what they wanted to say on this label. As an example, this next label says “Farm fresh potatoes are from plants genetically engineered to resist insect damage”, which gives the message to consumers why it was done, “and lessen the use of insecticides.” We also know from surveys that pesticide residue is one of the top six important issues that consumers have. From this information, as well as a toll-free number and a website, we want to allow consumers the right to make informed choices.

“Gateway to Information” is the title of the next slide I am going to cover. I have examples for you as well. I think a very important aspect of this is information and understanding. I'm sure on many other issues we find that Canadian consumers know less and less about agricultural practices and traditional agriculture. So it's important that this additional information be available. The Growing Appetite for Information booklet was one that the Canadian Council of Grocery Distributors was part of, but primarily was the work of the Consumers' Association of Canada in concert with the Food Biotechnology Communications Network, which also operates a toll-free number. It is now available and 1.2 million copies have been distributed in English, French, and translated into Japanese. We're pleased with how that volunteer effort came together.

In this real highlight of issues, the conclusion for the folks I represent is, with regard to CCGD's involvement, we are optimistic that we will achieve consensus on this set of rules that has gone to vote. I will also mention an important element. During the timeframe of this discussion, the people I represent, who are involved with 80% of food distribution in this country, agreed that until a set of rules was in place in Canada, they would not have products on their shelf making reference to genetically engineered, or not genetically engineered, genetically modified, or any of those terms, because we did not have, as retailers, a set of rules to make sure that was meaningful, truthful information.

The industry understanding was, until we have a set of rules, there will not be those products on the shelf. So we are very optimistic that once we have this set of rules, then Canadian consumers can start to be better served.

The next steps--and following this process one of the very important steps--will include public as well as industry education, as we set about to do a cost-effective approach to implementing the standard.

I think what is also of equal importance is that the constitutents who were involved in this committee will undoubtedly meet once more. I think it's indicative of a great deal of commitment. Approximately 80 people attended each meeting. There were 60 organizations involved in the process plus information members, and their commitment to get this right and to get a standard at the end of the day has been demonstrated right through until Friday afternoon when votes were going in. I think that speaks well, not only for the people who were involved in the committee, and the support of the government in providing the basic finances to make it happen, but also for what end product will best serve Canadian consumers.

That is what I would like to share this morning.

¿ (0920)

The Chair: Thank you, Ms. Cruikshank.

Mr. Wells, we're at the farm gate. We'll see what all those people who are out producing this food are saying. Welcome.

Mr. Stewart Wells (President, National Farmers Union): Thank you, Mr. Chairman, and good morning.

The National Farmers Union thanks the standing committee for this opportunity.

The remarks that I'll be making have not been distributed, but will be, I understand, over the next week.

With me is Lyle Wright, a Farmers Union member and pedigreed seed grower from Kerrobert, Saskatchewan.

The National Farmers Union has the only voluntary direct membership national farm organization in Canada and we strive to develop economic and social policies that will maintain the family farm as the basic unit of food production in Canada.

Now a note on terminology. Anywhere in our remarks that we refer to “genetic engineering”, or “genetic modification” or “biotechnology”, we use those as wholly synonymous terms, and it refers exclusively to the direct transfer or modification of genetic material using recombinant DNA techniques. And this definition is consistent with what the Royal Society of Canada used in their report of last January.

The NFU policy is very clear on the issue of labelling of genetically modified food products. Specifically, in our policy we have point number 11, which says that products that contain genetically modified components must be clearly and consistently labelled and that voluntary labelling is unacceptable.

In point number 12 we say that consumers must have access to non-genetically-modified product alternatives and the labelling information and ready access to alternatives are the three essential elements of a consumer's right to choose.

The NFU policy of mandatory labelling is based on the following considerations, and I have six points that I'd like to bring forward to the committee this morning.

Number one: for the benefit of farmers and everyone involved we must maintain consumer confidence in the Canadian food supply.

Consumer confidence takes years to build, but it can be weakened very quickly. In Europe consumer confidence has been undermined by multiple events, but none as evident as the situation around mad cow disease. In hindsight, the scientific community was overly optimistic about its abilities to identify, predict, and control the outbreak and the consequences. Hence, consumer confidence in the entire food system was severely undermined by an inappropriate reliance on scientific authorities by governments and corporations. The degradation of consumer confidence in England and Europe in general will play a role in shaping their food policies for decades to come.

Moving closer to home on the North American continent, consumer confidence has already been undermined to a degree. In some cases in the United States and Canada consumers were unaware that they had been eating food only licensed for animal consumption. It very well could be that some or all of us in this room have eaten this animal food. I'm talking of course about the StarLink corn variety. With no independent food stream testing or monitoring in place, consumers were surprised and shocked to find out that they might have been eating genetically engineered animal food. When the authorities were made aware, these products were immediately pulled from store shelves across North America.

Given this example, we need to ask ourselves what would have happened to consumer confidence if one person in North America would have died as a result of eating StarLink corn. Of course, we cannot be sure that StarLink did not create any problems, because it was not labelled and could not be tracked through the medical system. In fact, without mandatory labelling, our medical establishment will never have accurate data on which to draw long-term conclusions, as there will be no traceability of genetically engineered food within our food system.

How would mandatory labelling of food products in Canada have helped in the StarLink case? By their own actions of pulling the products off store shelves it is clear that governments would not have allowed the sale of StarLink corn products if the food had been tested for the labelling procedures. Therefore, it is safe to say that a policy of mandatory labelling would have prevented Canadian consumers from unknowingly eating genetically engineered animal food.

In the words of the Royal Society report, “The absence of justification for the need for GM food, combined with the perception of lack of transparency from regulatory agencies, and the absence of balanced risk-benefit analyses have all undermined the acceptance of these products”. In plain English, the Royal Society is saying that consumers don't see the need. They don't trust the regulators and they don't think that the benefits outweigh the costs. Therefore the consumer's acceptance is undermined.

¿ (0925)

Point number two that I'd like to bring to your attention is that in the current Canadian context, mandatory labelling is necessary because our registration process is using substantial equivalence as a key determining factor as to whether a genetically engineered food product needs rigorous testing.

The flaw in the use of substantial equivalence is that it is not a science-based concept. Substantial equivalence does not have a clear definition. As one paper, written by Millstone in 1999, explained, it seems to have been introduced because “biotechnology companies wanted government regulators to help persuade consumers that their products were safe, yet they also wanted the regulatory hurdles to be set as low as possible.”

According to the Royal Society report, “In practice, the designation of a candidate GM crop variety as 'substantially equivalent' toother, non-GM, varieties essentially pre-empts any requirement in Canada to assess further thenew variety for unanticipated characteristics." So the Royal Society concluded that what often occurs in practice is that the improper use of the term “substantial equivalence” leads the Canadian Food Inspection Agency to base decisions about food products on unsubstantiated assumptions about the equivalence of the organisms. The expert panel went on to say: “We have grave reservations about the use of 'substantial equivalence' when employed in the decision threshold interpretation.”

What does any of this have to do with mandatory labelling? As long as our regulators have the option to forgo testing--

¿ (0930)

[Translation]

Ms. Suzanne Tremblay (Rimouski—Neigette-et-la Mitis, BQ): Would it be possible for the gentleman to read more slowly? The interpreter is having a lot of trouble keeping up.

[English]

Mr. Stewart Wells: So what does any of this have to do with mandatory labelling? As long as our regulators have the option to forgo testing of genetically modified food products on the basis of unsubstantiated assumptions through the use of substantial equivalents, it is imperative that consumers have the choice to accept or reject the increased risk that may come with the purchase of a new genetically modified product. In short, the Canadian government cannot refuse to test a product and then also refuse to label it.

Thirdly, consumers are our customers, and they need to be able to make informed choices. It is clear that consumers are willing to take some risk, but mandatory labelling helps them feel they are in control of the choice and the degree of the risk. For instance, many consumers smoke even though increased health risks are widely known. In this case, though, the consumer is able to make a clear choice--either to smoke, or not to smoke. In most cases that person is willing to accept the negative consequences if there are any.

Mandatory labelling of genetically engineered food is a key component to consumer risk management wherein the consumer is willing to accept some responsibility for his or her eating habits. In a Canada-wide poll conducted by Decima Research in August 2001, when asked if they believed they should have the right to know whether their food has been genetically engineered, just over 95% of the respondents said yes. At the moment, Canadians do not have that right--I refer again to the StarLink corn example--but the desire of Canadians to know what they are eating is clear.

Fourthly, there is at least one precedent for this type of labelling. Some opponents of mandatory labelling argue that labelling should be restricted to cases where a specific health risk or nutritional issue is of concern. This is referred to as “product-based” labelling. There is a second category of labelling currently used in Canada, which is called “process-based” labelling. For instance, any foods that have been subjected to the process of irradiation already have to be labelled according to the standards in the food and drug regulations. So genetically engineered food could fall under either category. Part of the discussion would again revolve around the definition and abuse of the term “substantial equivalents”.

The NFU agrees with the Royal Society of Canada report when it says, “It could be argued that the case for labelling of GM products is stronger than for irradiated ones, because genetic engineering may produce material changes in the product itself”. Indeed, for many genetically engineered products, this is the whole point of the exercise.

Fifth, mandatory labelling is easy to do and very inexpensive. I actually have an example here of a label that's used on a food product in England. If anybody wants to have a look at this later, we can certainly pass it around. In the list-of-ingredients section, one ingredient--the dried soy--has an asterisk beside it, and at the bottom of the list the asterisk appears again just in front of the words "genetically modified".

Now, it's not accurate for anyone to say that this labelling has cost huge sums of money. It is probable that the labelling change on this package has cost just a fraction of a penny per package. Given that overwhelming numbers of consumers are in favour of mandatory labelling, and given that the cost of labelling itself is extremely small, consumers would most likely agree to pay for this information. In other words, the small cost would be built into the cost of the product on the store shelf, but like the farmer's share of the cost component, it would be a tiny fraction of the sticker price, and would probably go unnoticed.

Dealing with any extra costs associated with the identification, identity preservation, and segregation of the genetically engineered components in the food supply system is a separate question. Any extra costs here should be attached to the proponents and the varietal registration system. In an indirect and unsatisfactory way, these costs are already being paid by consumers and farmers, and that is through the premium prices that non-genetically-modified and organic products are extracting from the markets. If non-GM and organic products are sold at a premium, it is equally true to say that the genetically modified food products are currently being sold at a discounted price. Most Canadian farmers are selling into this discounted market.

¿ (0935)

With the registration and release of genetically engineered food, with no consideration of the market impact or potential supply chain problems, the Canadian Food Inspection Agency food registration process has already caused many expensive problems for Canadian farmers and consumers. This is an example of reductionist thinking at its worst, where people fall into the trap of pretending that their own area of concern can operate in a vacuum isolated from the rest of the world.

In short, if biotech companies are creating problems within our food supply chain, they should pay the costs out of their intended profits. Currently, we are operating in a system where biotech companies are able to privatize the profits by means of patent protection, and on the other hand, socialize the cost by having government or the public pay the increased costs associated with genetically engineered food products.

The Chair: Mr. Wells, are you nearly done?

Mr. Stewart Wells: Yes. I have one more point and a short conclusion.

The Chair: Well, you're 13 minutes already, and probably we could give you another minute and a half to conclude.

Mr. Stewart Wells: Sure.

The sixth point is that the independent scientific community is very concerned about potential problems. There are a couple of examples given by the Royal Society in their report from last spring made at the request of Health Canada, the CFIA, and Environment Canada. What they actually said was that genetically engineered food products should have a mandatory label unless their recommendations are adopted by the Government of Canada. And a couple of their recommendations are reprinted here. One is 7.1:

The Panel recommends that approval of new transgenic organisms for environmental release, and for use as food or feed, should be based on rigorous scientific assessment of their potential for causing harm to the environment or to human health. Such testing should replace the current regulatory reliance on “substantial equivalence” as a decision threshold.

Also, Barry Commoner, a senior scientist at the City University of New York, in this month's issue of Harper's Magazine, writes:

By any reasonable measure, the finding of the human genome project (published last February) signalled the downfall of the central dogma; it also destroyed the scientific foundation of genetic engineering and the validity of the biotechnology industry's widely advertised claim that its methods of genetically modifying food crops are "specific, precise, and predictable" and therefore safe.

The Chair: Thank you, Mr. Wells. I'm going to end. You've had 15 minutes, and you keep giving the same message.

I'm a little bit perplexed with this, because it's the farmers who apparently use this system, yet you're saying that the people you represent, who benefit from new varieties that avoid some of the problems in respect of growing, as farmers, want mandatory labelling. You've said that repeatedly. Is that correct?

Mr. Stewart Wells: Yes, that's correct.

The Chair: Okay. Thank you.

I'll go to Howard then.

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

Yes, this is a big step. It's going to take a lot to cover it. But I note, just as a general comment, that China, with 1.5 billion people compared to our 35 million, is going ahead with massive investment in biotechnology, including foods. They're not sitting back over there seeing hungry people in their own country and other countries around the world and saying we have to be scared of this biotechnology, we shouldn't be doing it, we have to label it, and all this.

Having made that point, Mr. Wells, I had a really great day going this morning until I came in and listened to you, supposedly talking on behalf of farmers and consumers. I'm both a farmer and a consumer, and I've got to put it plainly to you that although we normally don't criticize our presenters, I am very disappointed and just incredulous with respect to your presentation today. You sat there equating mad cow disease and StarLink with labelling. What's the connection between mad cow disease and mandatory labelling? That's plain scare-mongering.

You've used words like "not science-based", and you've used regulators for GMO testing. Then when you talk about the cost to the farmer, you say it's just going to be negligible because in fact for the label it only costs a penny to put that asterisk on there and this sort of thing. I just can't believe, from either a consumer point of view or a farmer point of view--and especially a farmer point of view--your presentation.

The reason I'm making a big point of this, Mr. Wells, is that the NFU, even with the small number of memberships it has across this country...and I know that if there are five in the family, you include those as five separate members. But even with the small number of memberships you have, your organization is given a lot of credibility, and in the reports that come out I want to make it clear that in my opinion the majority of the farm organizations and the majority of farmers do not support your point of view. It's very negative for agriculture, and it's very negative for this debate for someone to be using scare-mongering tactics.

That being said, you'll have an opportunity to make some comments. I have a couple minutes yet to deal with this.

Ms. Cruikshank, let's look at voluntary labelling, whether it's voluntary or mandatory, from the viewpoint of toothpaste. I assume that a lot of our toothpaste--I know virtually all--contains corn, right? A lot of that toothpaste is, I assume, imported from other countries. I don't know whether it all is, but a lot of it would be, and even a lot of our foodstuffs are imported from other countries.

What are the trade implications, and what are--we can't stop imports, now--the processors and manufacturers of food and toothpaste going to do? Are they all going to build a label and have the gateway to more information? What about third world countries? Under the WTO, we want to give a lot of those poor countries access to our markets. Are they capable of this labelling? Will they have the gateways to more information?

¿ (0940)

Ms. Jeanne Cruikshank: Let me answer.

Toothpaste doesn't really come into the edible food category, so we'll move to another example.

In developing this voluntary standard, among the other pieces we're very clearly looking at those international implications, so we have a definition that's consistent with Codex, and, more importantly, we have a definition.

Any food sold in this country for whatever attributes comes under a great many regulations: food and drugs, package labeling, etc. Any food on the shelves, under our system of labelling for our safety issues and for a regulatory system that is recognized as being one of the best in the world, has to meet those standards.

So yes, this food, like any other coming in, would now already be under the mandatory health and safety issues for genetically engineered food. This being a voluntary system, the producer has the option as to whether or not they label, so there is a bit more flexibility, but the Canadian context and the toll-free number would still be information.

Mr. Howard Hilstrom: It's not going to be up to the producer, though, to decide whether to label or not. Perhaps we're using the same term. I'm using the word “producer” as being the primary producer, the farmer in that. That's not the person who's going to have to make the choice about whether to label anything or not. It's going to be the manufacturer and the wholesaler who are getting requests from the consumers to say they want to see in Loblaws their food labelled. And then that's going to get feedback to the wholesaler, who is going to say we need to have this because we want to put this label on it. It's not going to be the producer, right?

¿ (0945)

Ms. Jeanne Cruikshank: Absolutely, but let me take you through it simplistically, because that's what works for me.

If consumers have demand for a particular product that goes onto a retailer's shelf, the retailer, going back down the food chain, is going to need to know, either through an IP system or at least a paper trail system, what variety of corn the farmer planted. Was it a genetically engineered variety, was it a traditional variety? That information, in our principle of verifiable, is essential.

In a voluntary system that we would propose going forward, if that is not known and it is not a health and safety issue, that product cannot be labeled unless that information is available. So there is an onus on the farmer to provide what he has grown.

Mr. Howard Hilstrom: The farmer isn't going to generate it. The farmer's going to get the order from whoever he sells the bulk commodity to, and the order is going to come down. And the farmer is going to be the recipient, just like the farmer is going to be the recipient of these costs if the farmer cannot say “I will not produce that food unless I can make a profit at it”. If the cost just gets shoved down, the farmer is going to end up paying costs that he can't...if he can't charge $2 a bushel more for his wheat, or whatever, he's going to have to eat the labelling costs. How does that get sorted out?

Ms. Jeanne Cruikshank: We won't debate the push-pull aspect of it, but we know Canadian farmers are already using genetically engineered varieties in production. As was indicated, those may in some cases constitute up to 70% of processed foods. If one were to voluntarily label those, then the trail is going to need to go back to the farmer as to what varieties they were growing. Healthy, safe varieties of product that at the time they were growing them were destined for a market that may not have included voluntary labelling...certainly the onus would be much more cost-onerous if it were a mandatory system.

Mr. Howard Hilstrom: I appreciate I've probably used up my time, Mr. Chairman, and I'm not sure who should answer this.

Who is actively assessing, and can you provide us with a report of customer acceptance outside of this country? Right now, at this point, we've had the Wheat Board give us a presentation in regard to customer acceptance of wheat. Is anybody doing any studies? Were there any studies done that we can look at to see what customer acceptance is for GMO foods around the country? I've mentioned China, and I know Japan takes GMO canola.

Mr. Michael Presley: To what extent our international markets are accepting GM products, bulk products in particular, is a question that might have a different answer a year or two from now. As you may know, labelling requirements have been introduced in different countries around the world, and in fact some mandatory labelling requirements have been introduced. The European Union has introduced a mandatory labelling requirement for genetically modified foods; New Zealand and Australia have done the same, as has Japan. The United States has put out a voluntary guideline, which is out for comment right now. So it's a moving target in terms of understanding exactly how the international markets will treat these products.

The Chair: Thank you.

Ms. Tremblay.

Mr. Stewart Wells: Excuse me, Madame Tremblay.

Mr. Chair, might I respond to the...?

The Chair: I don't think witnesses should interrupt our meeting. I will give you an opportunity to rebut later, but it's not our practice, Mr. Wells. Sorry.

[Translation]

Ms. Suzanne Tremblay: Mr. Wells, my first question is for you. It will perhaps give you an opportunity to respond to the Alliance members.

I would like you to tell me how long your union has existed and who exactly it is that you represent. Do you have representatives throughout Canada? How many members do you have? What types of meetings do you hold to make your decisions and subsequently claim to represent people?

I was involved in organized labour for 35 years. When we held meetings, as soon as we had 51% of people supporting us, we said that we represented 100% of the people. That is how things work in a democracy. Only 38% of people support the Liberal Party, but because it has the majority of seats, the party claims to represent all Canadians. So can you please tell me how you operate, who you are, where you come from, how long you've existed and how many members you have?

¿ (0950)

[English]

Mr. Stewart Wells: Thank you, Madame Tremblay.

The Farmers Union, at its convention just this last November, celebrated the hundredth anniversary of the farm movement in western Canada. We are direct descendants of the first people who met in 1901 in Saskatchewan and formed the organization called Territorial Grain Growers' Association. Saskatchewan was not yet a province.

We currently have members in most parts of Canada. We're a national organization that was given a national charter in 1970 by an act of Parliament, and we have members in most provinces of Canada. Our membership is not large; in fact, it is relatively small. It would consist of several thousand farm families across the country. One of the things we say in response to that, though, is that any time the Parliament of Canada thinks the National Farmers Union is wrong on an agricultural issue, we invite Parliament to call a plebiscite on that particular issue.

I should say that our policy on genetic modification or genetically modified food in general predates the policy of most other organizations involved in agriculture. We were passing resolutions on these subjects as early as 1998, calling for labelling and other proper regulatory practices.

Thanks for the opportunity to respond to some of the earlier comments. It certainly wasn't my intention to ruin Mr. Hilstrom's day here so early this morning. It certainly isn't my intention to scare anyone by using the examples of mad cow disease or StarLink corn. If Mr. Hilstrom was scared by those examples, I again apologize. What I used those for was a chance to illustrate how better regulation and better labelling would have stopped those situations from occurring and maintained the consumer confidence.

It's totally unfair to say the National Farmers Union is against any kind of research or development in the area of genetic modification. What we're calling for in our policy is proper regulation and a national debate across the country so that everyone is at the same level so there can be good dialogue back and forth between the decision makers and the general public. So really that's what we're interested in.

If any of the members haven't had an opportunity to read the Royal Society report from last January, I would strongly urge members to take the time to do that.

I think that's where I'll stop. Thanks.

[Translation]

Ms. Suzanne Tremblay: Thank you, Mr. Wells.

There's something that really intrigues me. I recently discovered something. You know that in Quebec, for products to be allowed to be sold in our grocery stores and elsewhere, the labels must be in both languages. Products with unilingual labels are not sold in Quebec.

I discovered something absurd: some Canadian producers put unilingual English labels on products that they sell elsewhere than in Quebec, but they put bilingual labels on the products that they sell in Quebec.

Moreover, I noted that American producers who have good financial sense, who know about profits, benefits, and cost effectiveness only put one label on their products when they are exported to Canada or Quebec. Whether their products are sold in Ontario, the United States, Mexico or Quebec, there is only one label. When their products are sold in the three NAFTA countries, the labels are in French, English and Spanish.

It seems to me that in English Canada, there is a lack of political will to understand the importance of labelling. Labelling does not cost much. I personally do not believe you at all when you say that it is costly. At any rate, if there are any costs for you, you make the consumer pay for it. I do not see why you are being so stubborn. There are other reasons why people persist in not wanting to adequately label what they are getting us to eat.

The gentleman was right in saying that people are worried about mad cow disease. In August, we buried one of my friends in Quebec City who died as a result of mad cow disease, of Creutzfeldt-Jakob disease. There are more and more cases of that even in Canada. They are not being publicized, but people are starting to panic. I think that maintaining consumer confidence should be a guiding principle for everyone. We need to take steps to do so.

You have to reassure me this morning, because you have not reassured me at all on your political will to do something for consumers.

¿ (0955)

[English]

Ms. Jeanne Cruikshank: I'm happy to respond on the consumer confidence issue. One of the things we do on behalf of the retail sector is respond to food recalls.

Last year in Canada, we had 361 food recalls. That was almost one a day. They ranged from very minor issues with a missed ingredient. But despite that, because we always have the reassurance factor of a regulatory system that catches them, you're also correct that we're not perfect, and products that sometimes don't have the correct labelling do appear on shelves.

I can assure you we're a very highly regulated industry. We have the best inspectors, who are Canadian consumers, who notice these things, make mention of them, take them to their store managers, and come to me so the issues can be corrected.

Given the thriving nature of the grocery business, I believe Canadians hold confidence in their food supply. I think we have a system that holds up, bar none, to other examples that have been given in other countries.

Canadians want a variety of safe food choices. They want to know--and where the information element helps, I think, is in better understanding--that there is a very sound regulatory system in this country. To some degree, when there are food recalls, that's really when the education opportunity exists.

Regrettably it's not normally known what intense and extreme effort goes from the whole food chain into making sure safe food is delivered to consumers. We know, at the end of the day, if consumers are not comfortable with buying safe products, the entire food chain is in jeopardy. So extreme effort always goes into that, and culminates in a product on the shelf. The education aspect sometimes comes when they're not all up to the standards Canadian consumers expect and deserve.

[Translation]

Ms. Suzanne Tremblay: I have another question. In your presentation, you said that Loblaws was one of your members. Can you tell me why the Loblaws chain decided that they would not put any products labelled as organic on their shelves? They do not want to sell organic products to their clients. Why do they have such a policy? What is Loblaws afraid of?

[English]

Ms. Jeanne Cruikshank: I'd be very happy to answer that one. In fact, I was quite involved in it. In 1999, when we initiated the standard to develop a set of rules, the subsequent board meeting.... It was more than Loblaws. Loblaws seemed to capture the media attention of this, but all of the members I represent made a very conscious, business-like and appropriate decision that until there was a set of rules in this country that would allow informative and meaningful labels, they would not be putting products on the shelf that might or might not accurately communicate to consumers.

During the process we've been involved in to develop this set of rules for a voluntary standard, products that come to retailers--whether it be Loblaws, Sobey's, Overwaitea, Safeway, Coleman's, Thrifty, or Co-op Atlantic-- will not be put on their shelves until they know they adhere to a set of rules.

We had a good example of that before the organic standard. There were either provincial differences or just differences as to what someone would put on a label and call organic. You can't appropriately and fairly communicate to consumers until you say organic means thus, and compare it to a definition.

Similarly, in this example, we will not, by preference, have labels on a product until we know it meets the Canadian-developed definition. That's where we are, and hopefully we'll be able to do so very soon. So not just Loblaws was involved in that; in fact, it was all of the Canadian Council of Grocery Distributors members.

The Chair: Thank you, Madam Tremblay.

We didn't get an answer on your assertion about the two official languages. I'm not sure, Mr. Presley, if you can comment on that. We are taking more time, but it is a very strong point you made, and I've not seen evidence of it.

Mr. Presley, could you comment?

Mr. Michael Presley: Let me just verify that I have the question right, Madam Tremblay. You provided an illustration of food manufacturing firms that sell to various countries and simply deal with the cost of different language requirements on the packaging. You asked to what extent identifying whether a product was genetically modified or not would represent a significant cost for them.

À (1000)

The Chair: No, I think the question was that the labelling on grocery products in this country is not in both official languages.

Ms. Cruikshank, could you comment on that?

Mr. Michael Presley: If I could answer, the official languages requirement is that the packaging of food products in Canada be bilingual, in both English and French. So labelling on products sold on grocery shelves in Canada must be in both English and French.

Ms. Jeanne Cruikshank: And to confirm that, not only in English and French, but we have metric as compared.... So there are differences. But specifically in regard to bilingual, yes. The only difference that does exist is if there is a product being introduced on a trial basis--and that is very much defined in the legislation--it may appear in only one language for that defined time if it is a small business or they are introducing a new product. Other than that, we are a bilingual country. We carry bilingual labelling on our products, as we follow all other Canadian requirements.

There are some overriding situations in some jurisdictions, I believe in Quebec, where it may be French only. But in essence, as national retailers, product requirement is in both official languages.

The Chair: Thank you.

Paul, do you have any questions?

Mr. Paul Steckle (Huron--Bruce, Lib.): I want to start by thanking you for coming here this morning to present a very interesting topic, very timely.

I want to start off with a positive by commending Ms. Cruikshank on one of her pages here: “Farm fresh potatoes are from plants genetically engineered to resist insect change, damage and lessen the use of insecticides.” I think that's the kind of thing we need to see more and more.

The biggest concern I have is in the long term, because of the consolidation of the food distribution industry and where it has gone. We have three or four distributors now distributing food products in Canada. We have a thousand names on storefronts but three or four distributors. So we have larger groups of people becoming very much more consolidated, heavy control. Ultimately, the price of food will be what they want for profitability. My chief concern is that we're on a fast track to bankruptcy in the farming industry unless we find ways of returning more dollars to the farm sector.

The farm community wants safe food, but just recently I heard a commentator on a radio program comment on the number of people who were dying annually in the United States because of drugs, prescribed in pharmacies and through doctors. Hundreds of thousands of people die whose deaths can be traced back to the pharmaceutical products they consume. Yet in every question I have put to people who have presented to this committee, not one person has ever been able to tell me of anyone who has ever been diagnosed as becoming sick and dying from eating a genetically modified product.

Why have we got all this concentration of effort in this area where it relates back to the farm community? I guess I am going to ask any one of you to respond. How are we dealing with that aspect of it? I have a further question I want you to answer as well, when you get done with this one.

Mr. Michael Presley: Mr. Steckle, there are a couple of issues you raised.

The first issue you raised was the level of concentration in the industry in Canada at the retail and at the distribution level. In order to give that some context, yes, there is a fair degree of concentration at the retail level and at the distribution level in Canada. It is less concentrated than the retail sectors in food and distribution in Europe, slightly more concentrated than in the United States, but the trends in the United States in this area are very much in line with the Canadian experience right now. So looking at Canada in the broader international context, it is commensurate.

I think the more important issue here, though, is the Competition Bureau has recently produced some very good guidance on how to look at concentration issues and what the effects of that would be on food prices, on such things as predatory pricing, etc., all those sets of issues. They have looked hard at the food industry and developed a perspective to take when doing that kind of analysis. Of course, they have looked at other industries, but they have now developed an approach for food and my understanding is, from talking to some of the small retailers who have worried about this issue a great deal, that they are quite pleased with that approach and that analysis would be helpful in understanding the effects of these issues.

That was the first question you posed. What was the second question, sir?

À (1005)

The Chair: It hasn't come yet. Is that right, Paul?

Mr. Paul Steckle: It wasn't a particular question, but it was a fairly broad-based...

The Chair: Mr. Wells wanted to answer that question too, Paul.

Mr. Stewart Wells: Thanks. There are two points. The first is maybe relatively small, but I think it's significant.

The reference to a label that says “this genetically engineered product has lessened the use of insecticides” I think is going to be a very difficult question. On the surface it seems to make common sense, but there is an example right now with the possible introduction of Roundup-ready wheat where the introduction of that grain may increase the level of use of pesticides and insecticides because other chemicals will be needed to actually kill those plants as they become weeds in subsequent years.

Also, the insecticides that are actually produced by the plant, in genetically modified plants--say a plant that's producing a BT toxin like corn--those insecticides are produced by the plant itself and may end up building up in the soil over time. So in fact we may get an increased use of insecticides, but they haven't been applied by people. They've been actually produced by the plant itself. So there's ongoing research into that area.

I think one of the other points you mentioned was the cost. I absolutely agree with Mr. Hilstrom and yourself that farmers cannot at this time withstand the increased cost that would be required, the increased cost of segregation and identity preservation and testing and all that kind of thing, if it's just going to be heaped on their backs. That's why in our report we called for those costs to be attached to the proponents and the patent holders of the technology.

My own personal example is an issue I have with the Canadian Wheat Board on testing equipment. Farmers' money right now is being used to develop testing equipment that is required to test patented, protected mechanisms and plants that I didn't ask them to produce or introduce into the system.

The Chair: Paul, your time is used up. I'm sorry.

Mr. Paul Steckle: How could that be? I'm the first speaker on this side.

The Chair: You had five minutes and we're up to five and a half right now. I will come back to you. Sorry.

Dick?

Mr. Paul Steckle: I can't believe it. I thought we had the same as they do on that side.

Mr. Dick Proctor (Palliser, NDP): Just for the record, I thought that for the first round we had seven or nine minutes or something. How much does Mr. Hilstrom get?

The Chair: You have corrected the chair, Mr. Proctor.

My apologies, Paul. I'll have to give you an extra minute.

Mr. Paul Steckle: I'm sometimes wrong, but I haven't been wrong yet today.

Let me then quickly go to my further question in the line of how are we going to continue to support agriculture if we're not going to get it in the marketplace. Let me put this to you. There has been recently some discussion about the whole issue--and it's been discussed over many decades--of a tax on food. If a 1% tax on food were to raise $5 billion, do you believe that there would be consumer resistance to that kind of a tax, given that at the till for every $200 you would throw another toonie into the pot, given that when we go to a restaurant we leave 15% on the table just because a lady has carried it from the kitchen to the table?

An hon. member: Or a man.

À (1010)

Mr. Paul Steckle: Or a man, I should say, because they do carry food as well, and they also wash dishes. But let me suggest that I would like to have you respond to that, because somehow there doesn't seem to be resistance on that end of it, but in the past there has been resistance, largely from the farmers themselves.

Ms. Jeanne Cruikshank: I'll try that one.

Everything we see in communicating with consumers would say there would be resistance. Perhaps it's based on the lack of understanding of what goes into producing their food and they think that as Canadians we have the luxury of a safe variety of food as close as our store.

When it comes to tax on food, your example is correct, but there are also deposits and there are a number of other things that add up, and at the end of the day price points--and this goes to your point about costs--are a key influencer. What will probably keep all of this in balance is the competitive nature and consumers' willingness or lack of willingness to pay. While the folks I represent might represent a large variety, there are other niche markets. Food is available in service stations. It's available in drug stores. There are other venues where consumers can buy food. If it exceeds a price point that is still very clear to them, and probably more so in Canada because we have one of the lowest food baskets, they can then look to the other issues and address price and value added.

While it might be a sound way to generate money, I think it's not one that's going to be received well by consumers.

In terms of the other side of it, to get back to your previous question, the retailers I represent operate in communities many of which are agricultural communities. It would be exceedingly short-sighted for them not to recognize that the thriving viability of the agricultural community is necessary.

I'll give you a quick anecdote. One of the things I do in the diversity of my job along with this issue is, for example, as retail we establish what requirements there will be for chicken, some considerable time out so that--

Mr. Murray Calder (Dufferin--Peel--Wellington--Grey, Lib.): I didn't say it.

Ms. Jeanne Cruikshank: --the farm community knows what expectations will be. We do the same for turkey. We deal with the Canadian Pork Council on safety issues, on common issues.

So those types of partnerships, both nationally and regionally, I think are very important in making the total food chain more viable. And those are opportunities that maybe don't exist to the degree they should, but there are some elements in place that I think we need to work at. Perhaps biotechnology is one aspect that will take some of the costs out of the system for the farmer so they can get some agronomic benefits out of it as well, but adding it on to the consumer at the end of the day will be a tough one to sell.

The Chair: Thank you.

Dick.

Mr. Dick Proctor: Thank you.

Thanks, everybody, for your presentation.

Mr. Presley, if I wrote it down correctly, you said that so far, on genetically engineered food, “not great yet, but wait five or ten years”--like a coach, if I could use an analogy, whose team has had a mediocre season: “but wait till next year”. Why are you optimistic about the long-term future?

Mr. Michael Presley: The commercialization process for genetically modified foods takes five to ten years. Colleagues of mine who follow investments in the life-science economy and have looked at investments in some of the new applications of genetically modified foods advise me that some of the new applications I described that have additional nutritional benefits--what we call functional food benefits, perhaps with allergens removed from their products--could be anywhere between five and ten years away from making the commercial market. So I'm not sure I want to convey tremendous optimism that we're going to see lots of varieties of these foods on the shelves. That will have to do with a lot more than just labelling policy. My comment was that more of the applications we've seen to date have been for agronomic purposes. Consumers don't always see the benefits to them of those technologies and applications.

Mr. Dick Proctor: But if you went back, say, five or ten years, there was a tremendous amount of optimism at the time, with the introduction of GM foods, that this was going to be of great benefit to the farmers, and to yields, and all of that. I guess there have been increases in yield. The question is, has there been any net return to the farmers? Lyle and Stewart would say no, there hasn't been. Would you agree that there has been some optimism, and that it has eroded in recent years?

Mr. Michael Presley: I'm not, Mr. Proctor, the best qualified person to answer that question. My understanding from the farm community of which Mr. Wells is a part, but from others as well, is that there have been some benefits in terms of yield; that the pest resistance does translate into some significant benefits in terms of reduced input costs.

The previous job I worked on was environmental policy. There were some fairly significant issues there in terms of pest resistance, notwithstanding the concerns Mr. Wells has raised with respect to the cumulative effect over time.

So I think there are many within the farm community who would argue that there have been some significant benefits attached to the technology being introduced.

Mr. Dick Proctor: Thanks.

To the NFU representatives, in your presentation you said the CFIA had already caused many expensive problems, for both Canadian farmers and consumers. Could you expand on that and give us an example or two of what you're getting at?

Mr. Stewart Wells: Thanks, Mr. Proctor.

The earlier comment I had concerned the cost-benefit analysis and the agronomic benefits people say have accrued to farmers. At the Farmers Union conventions, especially last year, we had a representative of the American Corn Growers Association in a panel presentation with a well-known economist from the University of Saskatchewan, Mr. Hartley Furtan. They were to be debating both sides of the issue about economic benefit versus agronomic benefit. Both of their presentations turned out to be very similar, in that if there was any kind of agronomic benefit it was more than offset by the extra costs involved of the seed and the chemical that a farmer had to purchase to go along with a certain seed variety. So in the end, their analysis was that there was no overall cost benefit to farmers.

On the second point--the idea of the CFIA policies already costing farmers extra money--there has been lots of conjecture over the years and discussion about the lost canola markets into Europe that Canadian farmers have seen. Part of the argument is about trade; part of it is about labelling.

That's just one example of how that might work. The costs we've already incurred in discussing and having to talk about Roundup-ready wheat are another; we've just seen the tip of the iceberg there.

À (1015)

Mr. Dick Proctor: Right. May I have one more?

The Chair: Sure.

Mr. Dick Proctor: Just very quickly to Ms. Cruikshank, I probably need to get more research on this, but a nurse who spends half her year in the United States and half in Canada says that on labelling in Canada--for snack food, for example--we don't have nearly as much information as the Americans have, and that somebody who is diabetic might have a very adverse reaction to it. I just wondered whether that's something that's been drawn to your attention and whether you could comment on it.

Ms. Jeanne Cruikshank: I've been working on nutrition labelling, and we're actually seven years into this process of nutrition labelling, health claims, and nutrient content claims, at gazette. So we will very soon have equal and in fact probably better information in Canada than they have in the U.S. During that interim, we have been serving consumers with nutrition information. It has been done on a voluntary basis, but set on an established set of rules. Similar to this voluntary genetically engineered standard, that's what we have been seeing when we do see nutrition labelling in Canada, other than some requirements. We will be communicating the same once we get through gazette and have this process under way.

Mr. Dick Proctor: Just so I understand it, we will have it, but we don't have it now.

Ms. Jeanne Cruikshank: We do not have a mandatory nutrition labelling system right now.

Mr. Dick Proctor: Thanks.

The Chair: Thank you, Dick.

Mark.

Mr. Mark Eyking (Sydney--Victoria, Lib.): Thank you, Mr. Chairman.

The way I see it, GMOs are here to stay. This booklet pretty well shows all the benefits of GMOs, but the public is going to drive this process of how the labelling is going to be done. For the last twenty years, I've been involved in farming and in the retail sector, so I have a pretty good idea of how it's going to go. The retailers will get the pulse of the consumers and will pass on what it is they want to the farmers or whoever. Consumers are going to want to know what they're eating, so there's going to have to be some sort of labelling. We can talk about voluntary labelling, but at the end of the day, the retailers are going to say products are going to have to be labelled a certain amount, so I think we have to start thinking about simplifying the labelling.

You read about all the benefits of GMO food. Consumers are going to want to know if they're buying a tomato that's using less insecticide, or if it's healthier for them, so the code is going to have to be a simple code. If it's a yellow code, this is what it's going to do; if it's a blue code, it's going to do this. I think we're going to waste a lot of time just wondering if it's going to happen, but it is going to happen and we have to be a little ahead of the process.

I want to get a comment from you, Jeanne. Sometimes we can be riding the fence on this, just waiting to see, but....

Ms. Jeanne Cruikshank: Actually, on this one we're trying to be ahead of things. Certainly in the fall of 1999, there was a lot more media attention, but I've been working on that booklet and previous booklets that actually have been at retail since 1991. Nine years ago we were doing point-of-sale material in booklets called What's In Store? and What the Heck is Biotech?, when no one even really thought it was an issue.

You're right as far as simplifying the label goes. We'll try to get it down to bare bones. That's why we put down the supplementary information sources. There has been a toll-free, bilingual number operating in this country since 1995. We have seen the actual consumer calls to that almost replaced by access to the Internet. But it is a subject about which a certain segment of the population certainly wants to know more. They want to know more about how their food is processed in general, so I think it does come back to some kind of an indication on the label. Perhaps the indication is no more than knowing that corn, canola, and soy are the three big contributors, and if you see that on the label, you might want to ask more questions.

But this is going to be based on informed consumers to a degree, and we see no reluctance for consumers to try to be informed. We just need to try to give them the avenues to do that. We see that as responsible retailing. It also means farmers already have a better handle on what they're growing, so they can communicate that as well.

À (1020)

Mr. Mark Eyking: On that, what do you see as the government's role? We have the Canada No. 1 labels and such, so sooner or later we're going to have to start figuring out how we'll label these things.

The retailers always have the pulse of the consumer. They seem to just know what will be hot next week or what the deal is. So they're going to have to convey to us and to these people from Agriculture and Agri-Food Canada how this labelling should be done, so that the consumer is confident that a yellow dot on it means it's produced in an environmental way or a blue dot means it's healthier for them, and somehow they can just press the button and see why.

That type of technology is going to come in the grocery store. They're just going to pick up a tomato and see a blue dot, and they'll push on the blue dot to see what it means. They're not going to go home and call up this 1-800 number. It's going to happen the other way. With technology and the information around it, it's going to be crucial for Agriculture and Agri-Food Canada and the retailers to get their heads around that.

Ms. Jeanne Cruikshank: You'll get no disagreement here. Bar codes are going to be able to provide that very soon, so that you can scan the product like you do at Toys-R-Us, and it will give you the information. Surprisingly, thousands of people do go home, call that toll-free number, and talk to people, so there is that element as well.

The other thing on this issue is that there is going to need to be a great deal of partnership on how we get it done. We have a significant head start on this, because for two years, over 80 people from all different perspectives in this, with some very diverse opinions, have sat down to come up with the 18-page document that we finally have. We have talked it through, and while I thank you for the compliment, I can't take credit. It was really an 80-person committee that came up with what should be on the label.

So I think we have a really good head start in Canada on what it is that's important to Canadian consumers from all across this country, and we can develop the right thing.

Mr. Mark Eyking: Do you mean we as retailers?

Ms. Jeanne Cruikshank: Retailers were only the initiators. The total committee was on the Canadian General Standards Board.

Mr. Mark Eyking: So you're comfortable that our government is quick enough on the bit there?

Ms. Jeanne Cruikshank: Our government has been supporting us through this entire process. We have had information members. They have both supported us and sat at the table. So we had all key federal departments and provincial government departments working for over two years, since 1999, putting together something that we think is the right set of rules for Canadian consumers and talking also through these working groups about what it should look like on the label. To me, the commitment of those people to attend that has transcended through, and they're still going to be around to make sure that the work they were proud to be part of is going to be the right thing on the label.

So Canada is ahead of the rest. We've had calls. The Egyptian embassy calls me. The U.S. embassy people are calling and looking to us as having set the benchmark.

Mr. Mark Eyking: Thank you.

The Chair: Thank you, Mark.

Rick.

Mr. Rick Borotsik (Brandon--Souris, PC): Thank you, Mr. Chairman.

To Ms. Cruikshank, just for my own information, I've heard numbers bandied about. Could you give me some idea as to what percentage of foodstuffs on the grocery shelves right now would contain a GM product?

Ms. Jeanne Cruikshank: In your produce section, probably zero, and in your processed food, probably up to 70%. And the reason it's a range is, as I indicated, for corn, canola, or soy being a basic in it, they could be. More information would determine that, so it's “up to”.

Mr. Rick Borotsik: Fair ball. Of those hundreds of thousands of different products on our retail grocery shelf, what percentage would be imported? Do you have any idea?

Ms. Jeanne Cruikshank: Importation primarily is more in the produce section where we don't have genetically engineered varieties at this point. So I would say--and again, DFAIT or others would be much better versed in this--probably only 30% to 40% would be imported.

Mr. Rick Borotsik: Okay. That's still a substantial amount, 30% to 40%, which obviously is the international standard you talked about with respect to setting these standards when dealing with mandatory labelling, and that's what I'm getting at right now.

Ms. Jeanne Cruikshank: That's right, and the only other step I'll mention--

Mr. Rick Borotsik: Actually, what I'm trying to get at is there's more than just the simple cost of the paper printing of the label. Would you please touch on that before everybody goes somewhere else?

Ms. Jeanne Cruikshank: Absolutely, but part of the process when we were developing the standard was that it had to go out for world review, as well, to look at what we had and what we were proposing, and if internationally it created concern for people sending food to this country, they would alert us and raise those issues.

We did not hear from them, probably because they were sitting at the table with us and making sure we got it right. So we would be confident that the set of rules that we have at the end of the day are not going to create international concerns.

Mr. Rick Borotsik: Okay, let's talk about that set of rules. I have very little time, and I have some questions of the NFU too.

On those rules, if I look at your process--would you help me with this, please--you're talking about going to the voting stage. You're setting some voluntary standards on labelling now, as we've seen in your report, as I assume. Who was part of that process?

You talk about a legitimate, broadly representative consensus base. Can you very quickly tell me who's part of that? This isn't just simply your counsel; this is the--

À (1025)

Ms. Jeanne Cruikshank: No. This is much more than me.

Mr. Rick Borotsik: --Canadian General Standards Board.

Ms. Jeanne Cruikshank: The Canadian General Standards Board is the standard-setting body for food in Canada.

Mr. Rick Borotsik: Okay, now. They're the ones who voted these recommendations as to the voluntary labelling.

Ms. Jeanne Cruikshank: They were the secretariat to a process that included, under categories of general interest, producer and user in the right proportions, about 37 in each category, some of whom would be voting. I can certainly get that for you.

Mr. Rick Borotsik: Okay. So could you--

Ms. Jeanne Cruikshank: It would include the allergy asthma association, the Canadian Wheat Board--

Mr. Rick Borotsik: And by any chance the NFU? I think they walked away from the table, didn't they?

Ms. Jeanne Cruikshank: I don't believe they were present in the discussions. We had provincial representation, federal representation, large and small retailers, the Canadian Organic Advisory Board, the Consumers' Association of Canada--

Mr. Rick Borotsik: Can you get us a list of that? I'm sorry I have to cut you off, but I want to go to Mr. Wells, if I could.

You had mentioned that the NFU's mandate is...I believe you said something to the effect of making sure that the family farm is continued on in agriculture. Is that not correct as one part of your mandate?

Mr. Stewart Wells: Yes.

Mr. Rick Borotsik: Do you see GMO as being a threat to that family farm unit?

Mr. Stewart Wells: Again, it depends on how it's handled.

Mr. Rick Borotsik: Does your organization see GMO as a threat to the family farm unit?

Mr. Stewart Wells: If it's improperly regulated and causes a loss of market and consumer acceptance and confidence, then it will very definitely--

Mr. Rick Borotsik: But it's not just the family farm. That would be agriculture in general, wouldn't it?

Mr. Stewart Wells: Absolutely.

Mr. Rick Borotsik: But my question is specifically about the family farm. Do you see that threatened by GMO?

Mr. Stewart Wells: To the same extent that any agriculture is.

Mr. Rick Borotsik: Okay. In my area there's a huge cost associated with a devastating disease, called fusarium, in wheat. If a genetically modified wheat were developed that would be resistant to fusarium, would your organization accept that and agree to that particular type of crop?

Mr. Stewart Wells: Well, that's one of those “what if” scenarios.

Mr. Rick Borotsik: Well, we've just heard from Mr. Presley that in five years it may happen.

Mr. Stewart Wells: Our position is that every product has to be assessed on a case-by-case basis, and that's why we call for rigorous testing. And here's the opposite to your question: if you could absolutely prove that a genetically modified food was going to cause some kind of harm, would you then be in favour of mandatory labelling?

Mr. Rick Borotsik: If I could, Mr. Chairman, that's the NFU's position as to how they always do the opposite.

I'm just asking a simple question. If there were a product that is fusarium resistant, would your organization accept it?

Mr. Stewart Wells: Yes. The simple answer is that we're looking at everything on a case-by-case basis.

Mr. Rick Borotsik: Okay.

Mr. Stewart Wells: And I have one further comment on the Canadian General Standards Board and the NFU's decision not to participate in that process. We were not alone in this decision. Our organization and others that represent a lot of consumers and farmers in the country chose not to participate because it was the mandate of the Standards Board to look at voluntary labelling only. As our position clearly states that we agree with mandatory labelling, we chose not to spend the time and energy in this process.

Mr. Rick Borotsik: I have one very quick question on the Royal Society of Canada's report, from which you quote quite frequently. I haven't looked at it point by point, word by word verbatim, but it's my understanding--and it's been in the back of my mind--that they actually agreed with the voluntary labelling going forward. Is this not correct?

Mr. Stewart Wells: I would say that's a common misconception. They said they agreed with voluntary labelling if all of their recommendations about testing and precautionary measures were adopted by the Government of Canada. And I haven't seen any legislation come through the government that would answer their caveats. So in the omission of such legislation....

Mr. Rick Borotsik: Because of this omission they're suggesting mandatory labelling then?

Mr. Stewart Wells: Absolutely.

Mr. Rick Borotsik: We'll agree to disagree on that point.

Thank you, Mr. Chair.

The Chair: Thank you, Rick.

Would you like to add something, Larry?

Mr. Larry McCormick (Hastings--Frontenac--Lennox and Addington, Lib.): Thank you very much, Mr. Chair.

Thank you to each of our witnesses for being here today. I also should say congratulations, Mr. Wells, on your anniversary and your election as the new president. I think it's very important that we have factors representing every aspect and venue of rural life. We hear a lot about the NFU; you're well represented here. You're a very strong voice within our own government. We expect to hear that around Easter time.

On this cost of labelling, those costs are one thing, but I'm concerned about all of this. I think education will be part of the final solution with the labelling and everything else. But the manufacturers and distributors will come at us with how they can't afford to do this segregation of the crops from the gate to the plate. It's going to be something we can work out over the years. I'm wondering if you have any comments on this, Mr. Wells. I'm sure that some of your people grow canola, which is a GM product, I am told, and there are different parts of it--and that's back to the education again.

Mr. Wells, since I'm asking you.... But you know we're so fortunate in Canada. We do enjoy some of the safest, best-tasting food in the world, and I've heard nothing but compliments for the CFIA in my eight and a half years here. Yet you're making some remarks about the fact that the CFIA is.... I'll give you the opportunity to clarify this, sir.

À (1030)

Mr. Stewart Wells: The remarks we have made about CFIA and varietal registration and testing really come out of the Royal Society report. That's where we would go.

Mr. Larry McCormick: I'd like to get your comments on it.

Mr. Stewart Wells: Pardon me?

Mr. Larry McCormick: I'd like to get your comments on the record about the CFIA.

Mr. Stewart Wells: Okay. Well, we have several issues. The main one is the conflict of interest that exists when a government agency of the Department of Agriculture both regulates and promotes the industry. We think there should be some arm's-length independence put in between those two processes.

In conjunction with the proprietary technology and patent agreement, it created a situation where even test results cannot be peer-reviewed by other scientists. They're considered to be proprietary information and not for public consumption. So right away, whether there's anything improper with the testing or not, there's a suspicion because it can't be peer-reviewed by other scientists. This is one example.

As for where the costs are going to be attributed, we share all the concerns that farmers should not and cannot be expected to bear the cost of any segregation in IP systems. I'll go back again to the example of the testing equipment being developed. My money, the money of farmers who market grain through the Canadian Wheat Board, is already being spent trying to develop testing equipment. Now, this is money being spent, my money being spent, to create a solution for a problem I did not create. I did not ask for, say, Roundup-ready wheat to be put onto the market. I feel this is an improper attachment of the cost.

Mr. Larry McCormick: Mr. Chair, one of the challenges of not having many players involved in the food distribution--and I realize we do have one of the least expensive food systems in the world--is that it's pretty hard for a small company to get on the shelf of a grocery store. That's for another day, but I notice on Vancouver Island the Island brand has been very successful at marketing. Thank goodness they have been, because there they have labelled non-genetically-modified potatoes, and they have this label on that product. Of course, they have to market that themselves because no supermarket will let them do that. I've only been into one of the new Loblaws stores in Kingston, Ontario--beautiful store, great produce section--yet here we are selling all this organic. So of course Loblaws can do that as long as they can draw up the description, but don't let anybody else try to do it. The perception is that the big company only wants to work with the big company.

I'd like to get your comments on the testing. Here we are talking about labelling. I understand there are tests that can tell whether the wheat is GMO or not, but I also have always heard that if we order a pizza in, there is no test available to tell whether that pizza has GMOs in it or not. I don't think we've heard much about the testing here. How far down the road is that? Where are we, Mr. Presley?

Mr. Michael Presley: You won't like my answer. I know the CFIA is coming before the committee on Thursday, and I think the more appropriate thing would be for the CFIA, which does the testing, to answer. They'd give you, I think, a much more credible answer to that particular question.

With respect to the issue of a small firm on Vancouver Island versus a Loblaws in terms of making labelling claims, I think the whole virtue behind the CGSB's standardization of how you would define genetically modified foods and then how you would label them was to do just that: to basically provide an even playing field for anyone who wants to be able to present their product as genetically modified and define it in a standardized way.

À (1035)

Ms. Jeanne Cruikshank: I guess I'm going to go to another part of the country, that special part where Mr. Eyking and I come from, and mention also that in 1996, 1997, and 1998, genetically modified potatoes were sold throughout Atlantic Canada and in Ontario labelled as genetically modified, with a toll-free number with the information provided. As Mr. Presley has said, the key to whether or not one can put the product out there is dependent upon a set of rules. So Loblaws, no more than any other, would need that set of rules, and that's really what we've tried to develop coming out of this.

It will be in response to what consumers want. As you indicate, organic is popular. You see it taking up more space in the grocery store because consumers want it.

Mr. Larry McCormick: I'll save my testing question for Thursday, Mr. Chair.

The Chair: David?

Mr. David Anderson (Cypress Hills--Grasslands, Canadian Alliance): Mr. Chair, I'll just make one comment on this testing thing. If there is a fusarium-resitant wheat, as Rick had brought up the issue before, that exists, it's not being allowed to come to the market because the Wheat Board can't distinguish it from some of the other varieties. There is a major benefit there, but they're not capable of doing that, and it's being kept off the market because of that.

But I wanted to talk a bit about the cost here. We're at the point where you're at the voting stage in setting these standards. I would like to know, what is the cost to the system from seed to shelf of voluntary labelling, and what is the cost of bringing in mandatory labelling requirements?

Michael Presley: As I mentioned in my opening comments, there are a lot of different elements in that cost. One thing I should mention is something we've discussed a bit this morning, the issue of the cost of actually putting a label on the package. That's a relatively small part of the overall costs. For some food manufacturers that's a very significant cost, particularly those that have small margins, but I think it's probably more important to focus on the segregation systems, the tracking and tracing systems, and the identity preservation systems. Those are where investments need to be made right through the food chain, right down to the farm level. The challenge of asking whether those costs can be directly attributed to this voluntary labelling system is quite difficult because these are the sorts of systems that are increasingly being required of farmers across the country for a variety of reasons.

Jeanne was referring to bar code information. Now, the kind of information that's available to consumers about the attributes of food products is just going to increase in the years ahead. People want to know more about those products, whether they're from this technology, where they're from, and whether they're organic if they're not labelled that way. We see those sorts of tracking and tracing systems as being an increasing requirement, which was why agriculture ministers in the agricultural policy framework established tracking and tracing in these sorts of systems as a really high priority within the next five years with agriculture.

Mr. David Anderson: Okay. I want to know the cost, though. I'm a producer and so are my neighbours. We'll talk in a minute here about identity preservation, but if that's going to happen, it's going to cost the farmers, because of a number of things. We need to store it; it has to go into bins, and they have to be put up. I want to know what the cost is to the system to bring in mandatory labelling of GM products. We're at the stage right now where we're voting on those standards; they're putting them in place. I would like to know what the cost is.

Mr. Michael Presley: The standard that's being voted on, that was actually voted on as of last Friday, was a voluntary standard, not a mandatory standard. I can't tell you what the cost would be of a mandatory system--in other words, a mandatory system that would require every food product to be labelled as either having an absence or a presence of genetically modified foods. And it would depend upon the tolerance level you would establish. For example, what level of--and this is my word--“contamination” material, adventitious material, would appear...a very significant cost associated, whether it's 1% versus 5%, or a higher percentage rate. How would you define, under your mandatory system, that technology? Would it be defined narrowly as recombinant DNA? Would it include accelerated mutagenesis? Would it include traditional breeding?

Mr. David Anderson: We're several years into this discussion. Are you telling me that you haven't done an analysis of what it would cost to do mandatory labelling in Canada?

Mr. Michael Presley: There are six government members on the 53-member committee that voted on this. The six government members all voted in favour of the standard that was up for vote last week because recombinant DNA had a narrow definition--it required both presence and absence labelling, which was important to us--and because the tolerance level was 5%.

We don't have precise costs for that. In fact, when you do a literature review on the costs associated with this, you don't find very much expertise around the world on this, so we can't give you precise costs. We felt that this was more feasible and more implementable as a voluntary standard, where you have the discretion on the part of the food industry to determine how fast they can move with this.

À (1040)

Mr. David Anderson: I would suggest that one of the reasons that's not been done is because the producers are going to end up bearing the majority of the cost, in either system. So you haven't done a cost analysis of what it's going to cost to bring in a voluntary labelling system, either?

Mr. Michael Presley: For the reasons I explained, it's difficult to do a comprehensive cost analysis.

Ms. Jeanne Cruikshank: I was just going to comment on why we're not getting perhaps to the precise answer that you'd like. It's not a single task of segregation. Probably what we have both in technology and with on-farm programs and the emphasis on food safety is that there are a number of practices that are increasingly going to allow that to be done simultaneously with something else. For example, cattle in this country now have an earring with a bar code on it that will allow you to trace that animal. That's multi-purpose information for this as well.

So the cost of a specific to this issue becomes perhaps a component of something that's already taking place and advancing quickly across this country in agricultural practices.

As far as putting a fixed cost on it is concerned, we will be moving into nutrition labelling. The cost will be diffused by the fact that there will be some label changes. It gives the flexibility in a voluntary system to more cost-effectively do it, while not increasing the cost to consumers and while not overburdening down the food chain.

Mr. David Anderson: The most cost-efficient way to do this, then, is to use health as a standard rather than some labelling standard that's forced on people. Is that correct?

Ms. Jeanne Cruikshank: We already have as a standard for health and safety mandatory labelling. That's what's essential and important to consumers.

The Chair: Thanks, David.

Rose-Marie.

Mrs. Rose-Marie Ur (Lambton--Kent--Middlesex, Lib.): I find the discussion very interesting this morning on labelling. When we're moving forth on voluntary labelling, when we haven't been able to establish in our grocery stores the country of origin, I think we should be ensuring that we have that in place before we start discussing a lot on labelling.

I realize that discussion has to start, but I was in the produce business before coming to Ottawa, and I had many a fight in our grocery chains. They would not put country of origin, say, for asparagus. And when I was growing my good Ontario asparagus, Michigan was shipping over their crappy stuff, and there was no labelling on that.

To say that National Grocers and so on in our rural communities are there embracing the rural community, trust me, the embrace was not there. I was a farmer, so I can see it through a different venue as well.

I think, Ms. Cruikshank, you had stated that produce was not GMO. Grapes without seeds, would that not be a bit of a modification? A golden delicious, would that not be a bit of a modification? Tangerines, tangelos?

Ms. Jeanne Cruikshank: I think you've hit upon the core of this issue that we've struggled with. Under a definition, you'd say they would be. With the exception of wild blueberries and salmon, you would probably say almost all food we eat is genetically modified in the broadest context. In order to have meaningful and informative labels, we've developed a Canadian definition that will allow us from that point to define whether a thing meets this definition or doesn't.

You're correct, under other techniques there was a modification, but not perhaps as it would adhere to this definition. Similarly, for the organic ones, start with a definition and then label it based on that, on whether it meets or does not meet the definition.

Mrs. Rose-Marie Ur: With due respect, I think the definition should be such that it's not to.... Farmers are consumers, believe it or not, so the fact is, when we have a definition, we should make sure the definition does not embrace just our consumers. It should also relate to our farming primary producers.

That stated, with regard to the rules and guidelines put out on labelling, Canada is known for its high standards. Are the rules we're trying to work by, in going to voluntary labelling, the same guidelines used by other countries, or is our basis set higher than other countries who are in the same mode?

Ms. Jeanne Cruikshank: In this I guess Canada is a pioneer, considerably, in trying to establish voluntary labelling rules, but we do have the firm foundation of all of these other rules as well. So we have taken this issue certainly much further than other countries, to add, with higher standards and establish under a consensus process, that, yes, the committee includes farm community, as well to come up with a science-based definition.

Mrs. Rose-Marie Ur: Yes, Mr. Presley.

À (1045)

Mr. Michael Presley: Perhaps I can give you a bit of an international comparison in terms of the countries in the world that have put in place either a voluntary guideline or a mandatory labelling requirement. We looked at three key issues in this labelling. The first is the definition. The standard that was voted upon was recombinant DNA. All of the countries in the world that now have these standards in place require recombinant DNA. So it would be consistent with that approach. The United States is silent with respect to the tolerance level.

So that's the challenge, and that has to do with some of the questions raised this morning around the feasibility of being able to do that detection and being able to do that separation.

Mrs. Rose-Marie Ur: With the busy lifestyle of all consumers--and Mr. Wells had held up that labelling presentation earlier--how much time does the consumer really have to go through a grocery store and read everything on every product they're going to buy? You might as well take your nightwear and spend the day doing your grocery shopping. As I think Mark had said, it's really important that we have information there that can be identified in terms of coding or whatever.

With regard to the labelling, it's for health and safety. Is the environment also going to be a part of the labelling?

Ms. Jeanne Cruikshank: Other government departments are better versed, and you'll hear some more on Thursday I guess, but as it relates to retail, Health Canada is the final, and perhaps one would consider the arm's length, authority. There's certainly registration and regulation all the way through the seed process, fertilizer, and all of those elements. CFIA has a role and Agriculture Canada has a role, but when it's food that goes on the retail shelf to be consumed, Health Canada is the final authority.

Mrs. Rose-Marie Ur: Just before I lose my time, I want to go on record as stating that I certainly will not support going ahead in great haste until we have a costing with regard to what it's going to cost our primary producers. In the primary sector they always get saddled with the burden, and they cannot absorb any more costing for the benefit of all Canadians. And as I said, they're consumers as well.

The Chair: Thank you, Rose-Marie.

Suzanne.

[Translation]

Ms. Suzanne Tremblay: Thank you Mr. Chairman.

During the Christmas holidays, I watched the news several times and I heard, for once, Madam, that Canada was not in the lead; the United States is. The report said that as a result of the security measures taken following the events of September 11, the United States was refusing to allow any meat produced outside the United States into the country if it was impossible to tell by the label exactly where the meat was from.

Were you informed that this was what the Americans planned to do, and are you going to tell us once again that Canada is in the forefront, that we are pioneers, and that we set the example in this area? Have you examined this matter? We export. If the Americans were to decide to put this decision into practice, it would have a huge impact on people in the west, in terms of pork and beef exports. Do we have the means to meet this American requirement?

[English]

Mr. Michael Presley: Again, I'm not the person best qualified to talk about specific commodities vis-à-vis the issue of country-of-origin labelling.

On the references made earlier this morning to Canada needing country-of-origin labelling, in the United States, in the context of food security, the legislation working its way through the House or Representatives right now has provisions in it that would require country-of-origin labelling. Of course, Canadian food manufacturers selling to the United States find that to be unnecessary, and they consider it to be, in some instances, a provocation, if you will. So there are two sides to that issue of country-of-origin labelling and how it affects Canada in Canada and how it affects Canadian manufacturers when selling products in the United States.

But I can't really answer the broader set of questions that you've asked. I'm not qualified to do that.

À (1050)

The Chair: I have two others, but they have to be very quick replies. I'm running short on time.

Ms. Jeanne Cruikshank: Very quickly, I also deal nationally with meat issues. Perhaps the Americans are better at marketing what regulations they have in place than Canada is, so we do hear more about them. Canada already had regulations as they would relate to commodities. Spinal cord and eyeballs—not a very appetizing discussion—have to be removed to prevent the issue. So as has been mentioned earlier, Canada already has higher standards than the U.S. had to address some of these issues.

The Chair: Stewart, very briefly.

Mr. Stewart Wells: Thank you.

On the issue of whether Canada is leading or not, the National Farmers Union maintains contacts with many international organizations and agencies. One specifically is an organization called Via Campesina, which represents farmers from many countries all over the world. The general impression that we get from those international people is that it has looked like Canada has, in the past, adopted the approach that we are going to force other people in the world to eat genetically-modified foods no matter what, through the use of international trade agreements; that we're now being forced to back off on that a little bit because of resistance from importers; and that we're now not actually leading, we're following the consumer and customer demands from export markets.

The Chair: Thank you.

Murray.

Mr. Murray Calder (Dufferin--Peel--Wellington--Grey, Lib.): Thanks very much, Mr. Chairman.

On this labelling being credible, Michael, you said we have to have a tracking and tracing system, and I agree. In fact, the poultry industry is working with a HACCP auditing protocol that we're trying to put in place right now. The pork industry is trying to put in quality assurance, but it is definitely an auditing protocol.

So my questions lead into what David and a few others were talking about, and that's the cost of this to the primary producer. First, how much of this tracking and tracing system is in place? Second, how evasive is it going to be for the primary producer to make your labelling credible?

Mr. Michael Presley: When you look at the commodities for which the technology is used in a significant measure--canola, soybeans, and corn--I referred earlier, in my opening remarks, to the western grain industry and the level of segregation in the IP system investment there. It's about 10% right now, with an expectation that, quite aside from “genetically modified” labelling requirements, it is likely to increase to about 30% over the next five to ten years. Those trends are happening already.

Our view really comes down to the question of whether or not you want to have a mandatory versus voluntary labelling system. We felt—and I think the ministers felt, quite frankly—that we didn't know enough about what the cost implications of this would be in terms of requiring it on a mandatory basis or in terms of understanding the readiness of the industry to be able to introduce labelling on a mandatory basis. On a voluntary basis, as industry takes stock of what the implications are going to be for its different suppliers, for the different ingredients, to be able to conform with this, it will have a better sense of what those cost implications are, and it will be able to introduce this in a way that works better for individual business cases.

On this, we would expect that, for example, for the cost implications for those who see a premium that they could attach to a product that would have an absence label, they may well have a business case to move very quickly. We may therefore see a more significant uptake on absence labelling within the first few years than we would on presence labelling more broadly. In other words, those food manufacturers who see an opportunity to perhaps secure a premium in the market for what they call GM-free products may see a return on those investments, and they may calculate that those investments have a much better business case.

On the present side of things, that's going to be something each farm, each food manufacturer, and each retailer is going to have to look at and decide upon. So, again, the government's view on this was that it simply didn't have enough information available to push for mandatory labelling at this stage.

Mr. Murray Calder: Okay, so what I see you saying here is simply that you'll have a processor who decides that they will have this auditing protocol right from day one to the finished product. They will market it under a certain brand name, and on that label they will have the voluntary labelling the consumer wants. And if anybody isn't able to come up to the standard of that auditing protocol, obviously the processor is not going to buy their product. That's basically where you see it going?

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Mr. Michael Presley: That's right. The logic behind the standard is that it has to be verifiable. So if you produce canned soup, and if that soup has corn ingredients in it, and canola oil, then you're going to have to have the systems in place to demonstrate, first of all, that 5% tolerance level has been met, and be able to demonstrate that right through your supply chain to your soup product. As I say, that's a business calculation each manufacturer is going to have to work their way through before introducing the label.

Mr. Murray Calder: Okay, that's fine.

The Chair: Thanks, Murray.

Carol.

Mrs. Carol Skelton (Saskatoon--Rosetown--Biggar, Canadian Alliance): Mr. Wright, you're a pedigreed seed grower from Saskatchewan?

Mr. Lyle Wright (Member, National Farmers Union): Yes.

Mrs. Carol Skelton: May I ask how many acres you have?

Mr. Lyle Wright: Our farm is currently 1,800 acres, and we custom farm some other land for some families.

Mrs. Carol Skelton: I'm assuming that you belong to the Saskatchewan Pedigreed Seed Growers.

Mr. Lyle Wright: Yes.

Mrs. Carol Skelton: Has your organization done any cost differential between a regular grain producer in the province and a pedigreed seed producer? How much more have you invested in your operation than a regular producer?

Mr. Lyle Wright: We have many extra costs. Time is a main one. We spend a lot of time cleaning out machinery. We also have to have isolation strips. We have to consider previous land-use history in terms of future volunteers. We also have costs because of plant breeders' rights in terms of levies and royalties, and we have to belong to associations.

I'm not sure if the Canadian Seed Growers' Association or the Saskatchewan Seed Growers' Association could say that aside from the costs I've mentioned, it's going to be another 84 cents per bushel extra to do this. My cost per bushel varies dramatically each year, depending on my yield.

Mrs. Carol Skelton: I understand that, but what I was trying to get at is that we don't have any cost. Nobody has analysed anything to tell us how much it's going to cost. What I was trying to get is a number--how much more it costs a pedigreed seed producer to raise the grain than it does a producer like myself to raise grain.

If we go into mandatory labelling, if we have to have that, we are going to be under just as extensive rules and regulations as you are. That is going to cost the ordinary producer an awful lot of money, especially when we're looking at the big farms of 8,000 to 10,000 acres that are becoming the norm in Saskatchewan.

Mr. Lyle Wright: That is a very good observation. On that point, I would like to clarify the misconception regarding identity preserve systems and quality assurance protocol that we have in our country right now.

Pardon me, Mr. Chairman, but I'm a little bit nervous, because I'm used to driving a tractor and not sitting around this table.

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Mr. Murray Calder: Most of us here are farmers anyway.

Mr. Lyle Wright: Okay.

Current IP systems work because they only guarantee one thing: minimal mixing. They also work because the system doesn't crash if somebody buggers up. For example, if you want to grow Canada Western Extra Strong IP variety for the Canadian Wheat Board, I think the tolerance would be 3% to 5% that they allow. From a seed grower's standpoint, that is enormous. We have tolerances of five or six off-type plants to be found per 10,000, for example.

The whole problem with the IP concept is that we believe that if we just fill out enough forms and process the paper, suddenly the product will be pure. Well, farm machinery has never, ever been perfectly cleaned, nor can it be. All of our current inland terminal systems are not designed for segregation. Also, animals eat here and they crap there. Birds fly around the country thousands of miles, take off and land. Wind blows, sometimes 100 miles an hour.

Do you know that in this country we don't even know how far pollen will drift? Pierre Hucl is currently trying to get research funding to come up with pollen drift data. By the way, Monsanto doesn't even have to provide this before Roundup-ready wheat comes off the shelf.

One of our greatest costs that I see could be loss of market. For example, no one in the pedigreed seed industry right now would sign an affidavit saying that their conventional canola is free of GEs. That's a real cost if you want to access the non-GE market.

Can I clarify anything?

Mrs. Carol Skelton: I was just going to tell you that a lot of us feel more comfortable driving our tractors than sitting around this table too. I want to reassure you on that.

I want to have a clear definition from you, Mr. Presley, of the difference between mandatory labelling and voluntary labelling, in your words, right now, just to me, sitting here.

Mr. Michael Presley: Simply, a mandatory labelling system would require all foods sold off the shelves to be labelled. The mandatory system you design would establish how that would be different from the voluntary system and what it would require. How would you define the technology? Would it be narrowly or broadly defined? Would you cover both absence and presence labelling? What would your tolerance levels be? Those would be the issues you'd think through in your mandatory labelling system.

A voluntary labelling system needs to think through the same issues. However, it's a voluntary system, so it would be based more on business cases and industry's evaluation of consumer demand. I think that's the simplest way of being able to distinguish the two.

The Chair: Thank you.

For members, if they could, I'd like them to stay for a few minutes afterwards, because we want to discuss our trip to western Canada. There are a few points to make.

For the witnesses, we have to conclude this part of our meeting. We've had a good discussion on a very perplexing problem. We don't know what the solution will be, but it has tremendous implications.

I can only reflect on probably one of the largest purchasing groups of potatoes in the world, the McCain group, who have taken a very strong position on genetically modified potatoes. As members, we certainly want to hear about that, and we'll discuss with other committees and try to get a report back eventually to Parliament.

For all of you, we want to thank you for coming. You'll have to watch what happens over a period of time, because at least three other committees are involved in this process as well.

The public out there have a great interest in this. I think there's a growing concern among Canadians and among consumers. The implications, as I said, are great, when we look at 80-some percent of the grocery supply here. I know all of us have particular concerns with it too.

We will try to invite you back, if you want to come. We are still in a learning process, so don't look for any quick report or any great solutions or recommendations in the very near future.

Thank you.

With that, we'll adjourn this part of our meeting this morning.

[Editor's Note: Proceedings continue in camera]