HEAL Committee Meeting

STANDING COMMITTEE ON HEALTH

COMITÉ PERMANENT DE LA SANTÉ

EVIDENCE

[Recorded by Electronic Apparatus]

Thursday, December 3, 1998

• 0911

[English]

The Chair (Mr. Joseph Volpe (Eglinton—Lawrence, Lib.)): Colleagues, ladies and gentlemen, thank you very much. I'm sorry we're running just a few minutes late. We finally have our quorum but may lose it at about 10.05 a.m., when bells will be calling members into the House, apparently. It's a half-hour bell, so we'll be able to stay on until about 10:15 a.m. That will give us a minimum of ten minutes to get over to the House.

To colleagues around the table, we may wish to come back to conduct future business, and I'll ask you just before we leave, but it might be asking too much of the witnesses before us today. However, I would like all of the members at that end of the table to consider staying until members come back after the vote, if we're in a dialogue that seems to be headed in a productive direction. I get a lot of advice because I'm one of those people who need it most.

At any rate we will continue, pursuant to Standing Order 108(2)—I like reading this because it gives me a reason for actually being up here—consideration of chapter 12, “Creation of the Canadian Food Inspection Agency”, of the September 1998 Report of the Auditor General of Canada.

That's what we're here for this morning. We have witnesses from the Office of the Auditor General of Canada. Maria Barrados is the assistant auditor general. Good morning, madam. Neil Maxwell is principal, audit operations branch; and John Mayne is principal, audit operations branch—you don't call yourselves co-principals, you're just principals. Maria, Neil and John, welcome.

From the Canadian Food Inspection Agency, we have Ron Doering, president, and Thomas Beaver. Dr. Karen Dodds is from Health Canada.

We have a system whereby we give our witnesses about five minutes to give a quick presentation and then we prefer to engage in rather immediate dialogue. If you need more than five minutes, please let me know, but I will ask you to try to focus.

Maria, whether you want to do it all or share the time with your two colleagues, that's fine. The same thing with Ron and Tom—about five minutes. For Dr. Karen Dodds, it's the same thing. You'll have about five minutes, so that will give us about 15 minutes of presentations from you. Using Maria as an example, if you want to give the presentation and have your colleagues answer all the soft questions, that's okay too.

• 0915

Ms. Maria Barrados (Assistant Auditor General, Office of the Auditor General of Canada): Thank you, Mr. Chairman. We'll leave it to that arrangement. I'll take around five minutes with an opening statement and then we'll all answer the questions together.

The Chair: Very good.

Ms. Maria Barrados: Thank you.

We appreciate very much being here today to talk about the report on the creation of the Canadian Food Inspection Agency, which was included in the Auditor General's September report.

John Mayne is responsible for accountability issues in our office and he's the author of the report. Neil Maxwell has the responsibility for the audit of the Department of Agriculture and Agri-Food, and the two of them have worked closely together on the assessment of the performance report.

[Translation]

The creation of the Agency holds important lessons to be shared with others pursuing new service delivery models, including the National Parks Agency and the Canada Customs and Revenue Agency. The objective of our study was to document these lessons.

We were particularly interested in the design of the Agency and its administrative flexibilities. The Agency was granted these flexibilities in order to provide Canadians with more cost- effective inspection services to enhance food safety. Our study did not Iook at how services have been improved, but the Committee may wish to ask the Agency how it is meeting its overall objectives of improving services—all, of course, directed toward ensuring that Canadians are provided with a safe food supply.

New delivery arrangements present new possibilities, but also raise several questions. As we pointed out in a discussion paper sent to the Public Accounts Committee last June, we would expect new arrangements to demonstrate whether they are achieving what was expected of them, have a sound accountability framework in place, be adequately transparent in their set-up and operations and protect the public interest.

We had the same expectations for the Agency.

The establishment of a single agency followed a long history of discussions about the benefits of consolidating the federal food inspection system, which previously had involved Health Canada, Fisheries and Oceans and Agriculture and Agri-Food Canada. The OAG also welcomed the concept of integrating the inspection system, as our 1994 audit had pointed to a number of duplications and gaps in the existing system.

When the Agency opened its doors April 1, 1997, a total of about $330 million and 4,500 staff were transferred from the three departments. Two hundred staff in the Agency came from Health Canada, with some staff responsible for food safety remaining in Health Canada.

There were many challenges in creating the Agency, including transferring program and corporate assets to the new Agency, developing a strong accountability framework, and putting in place a new human resource framework as a separate employer and outside the Public Service Employment Act since April 1, 1998. A number of specific lessons were learned in this change process that are identified in the chapter.

[English]

As you are aware, the Canadian Food Inspection Agency is innovative in that it assigns roles and responsibilities to two ministries.

The Minister of Health establishes policies and standards related to the safety and nutritional quality of food and assesses, through audit work, the effectiveness of the agency's activities in relationship to those standards.

The Minister of Agriculture and Agri-Food, through the agency, in addition to his responsibilities regarding animal and plant health standards, provides all federal food inspection activities related to policies and standards set by the Minister of Health.

This new casting of roles between the two departments and the agencies means they must work closely together. For example, they have a shared responsibility in responding to food emergency situations that cause illness. Health Canada and the agency have signed a memorandum of understanding outlining procedures in the event of a food emergency and specifying their respective roles and responsibilities. The memorandum of understanding includes an amendment process that allows for adjustments in procedures as experience is gained. Your committee may want to inquire about the effectiveness of this amendment process for improving the investigation in recall procedures.

• 0920

Granting the agency new flexibility to provide more cost-effective inspection services created the need for a correspondingly strong accountability regime. A key part of this is the requirement that the agency report annually on its performance. The accountability framework is also innovative in that the Auditor General is required by law to assess the fairness and reliability of the agency's performance information.

The agency's first annual report, including its report on performance and our assessment of that performance information, was tabled in October. We also submitted a report to the Minister of Agriculture and Agri-Food. This was a learning experience for both the agency and ourselves.

The agency's accountability regime depends on its ability to provide Parliament with fair and reliable information. We are encouraged by the work done by the agency to report on its performance in its first annual report, particularly given the demands faced by the agency in its first year of operation. But as the agency acknowledged, there remains much to do.

In our assessment we pointed to several elements that are needed to help readers of the agency's annual report understand how well the agency is achieving its objectives. It will take several years of strong and visible commitment by senior management before the agency develops results-based management and information systems and is able to provide sound information on its accomplishments to Parliament.

You may wish to ask the agency for an update on its progress in this area. Your committee may also indicate to the agency how you would like to see its annual report improved. As the Auditor General said in his report tabled Tuesday, the support and involvement of Parliament and its committees is essential to successful performance reporting.

We would also appreciate hearing from the committee how our office could improve our assessment of performance information, which is intended to assist readers of the agency's annual report.

Thank you for your interest in our work with the agency. My colleagues and I would be happy to answer any questions.

The Chair: Very good. Thank you, Madam Barrados.

Ron Doering, do you want to go next?

Mr. Ron Doering (President, Canadian Food Inspection Agency): Yes, thank you, Mr. Volpe. I just have some brief opening remarks.

Members and Mr. Volpe, thank you for the invitation to come here today to talk about the creation of the agency. The agency has been an interesting experiment in public administration in some ways, by reorganizing the delivery of food inspection and animal and plant health activities at the federal level, and by giving it a range of human resource and financial flexibility not otherwise enjoyed in the departmental system.

The rationale for the agency at the time it went through the House was that it would have certain benefits. We would clarify roles and responsibilities, reduce overlap and duplication, improve service delivery, improve federal-provincial cooperation, and enhance accountability in reporting to Parliament.

We did what we said we would do. Roles and responsibilities have been clarified by the reorganization of the development of human health and safety standards with Health Canada, and by having some resources go to Health Canada in this regard. By the consolidation of inspection resources in the agency, there is a fair bit more clarity in terms of who is doing what.

In addition, a very detailed memorandum of understanding was developed to be absolutely clear as to who was doing what. I understand there had been some confusion in the past about that. There is no confusion any longer. It is written down clearly and practised well. Health Canada is with us here today to confirm that.

The agency's mandate, of course, goes well beyond food inspection. We are responsible for all animal and plant health, feed, seeds and fertilizers. In effect, by reorganizing it the way we have, we have a sort of pasture-to-plate responsibility for inspection of food, which is quite unique in the world. Many countries are quite interested in what we've done here. They're quite envious of the fact tha twe have this sort of whole food chain approach to the inspection activities the agency now has. There are a number of benefits to that.

Secondly, we said we would reduce overlap and duplication. At the time the agency was created, we undertook to save the taxpayers money through this reorganization. We've done that. A fiscal framework has been saved—the $44 million we undertook to save the taxpayers of Canada in this regard by way of efficiency initiatives. This was done through the consolidation of a variety of duplicate facilities and through a range of efficiency matters, particularly in the area of informatics, communications and overhead.

• 0925

The third rationale for the creation of the agency was the improvement of service delivery. We've done that. There's now a single window for all industry and consumers at the federal level in terms of inspection, recall and information. It doesn't mean we're not working closely in partnership with the provinces and municipalities, Health Canada and others, but there's a much more focused single-window delivery of these activities for Canadians. We've taken a variety of other steps to improve service, including the use of computerized networks for import services. We've moved to import service centres. We've reorganized the regional delivery system. The agency inherited some 24 government programs, delivered by four departments. Now we have a much more systematic and organized system for the delivery of these things through a single agency.

The fourth thing we said we'd do is improve our delivery of food inspection, have a more seamless delivery of food inspection with the municipalities and provinces. We've done that. Frankly, as someone who was involved in the development of the agency from the outset, I think this has been even more successful than we had anticipated. We've now signed comprehensive agreements with Alberta, with Ontario, and with Quebec. In fact, the very detailed agreement with Quebec was signed the week before the election was called down there. Both Canada and Quebec for the first time have been very clear about who does what, with some modest rearrangement of responsibilities to enhance the delivery of these services to Canadians. Last week we finalized an agreement with the Northwest Territories, so we're clearly going to be able to have a better delivery of services for that area of Canada.

The other way we've been assisting in the more seamless delivery of inspection services is by having the lead on a thing called the Canadian Food Inspection System Implementation Group, which is a federal-provincial-municipal agriculture, health and environment harmonization initiative to move to more national standards for these matters. There are 30-some members. For example, from Manitoba they would have people from environment, agriculture and health working together with people from all aspects of this area to deliver a more harmonized system. There's already a national dairy code. There's work on a national meat code. A national retail food establishment code has been completed.

This is important. It's hard work. Federalism is more about process than product, but there's very significant progress in this regard.

Lastly, we undertook to enhance accountability and reporting to Parliament, and we believe we've done that, ladies and gentlemen. We now have full reporting and audit by the Auditor General. Our financial statements, which you see, have been looked at there and approved. In addition to that, we've experimented with a new role for the Auditor General, where we undertake to provide performance management information to enhance your ability to understand how well we're spending the taxpayers' money, and have built into our legislation a role for the first time for the Auditor General to assess the fairness of that information, which they've also done, which you can see in our annual report.

So I think, all things considered, we've clarified roles, we've improved our relationship with the provinces, we've improved service, we've reduced the overlap and duplication that formerly were there, and I think we've enhanced our accountability and reporting to you.

By way of concluding remarks, I was involved from the outset through the creation of the agency, and now just in the last while I have had the responsibility of leading it. We believe we've taken some very interesting steps to improve delivery to Canadians and to enhance food safety and related activities in Canada.

Thank you for being here. I'm looking forward to the dialogue you are going to encourage, Mr. Volpe.

The Chair: Thank you very much.

Madam Dodds, did you want to add something?

Dr. Karen Dodds (Special Assistant to the Director General, Policy and Integration, Food Directorate, Department of Health): I don't have anything prepared. I might just take a few minutes to respond to some of the comments that Mr. Doering made and give you Health Canada's perspective on the creation of the agency.

As someone who had responsibility for a national program in food safety before the creation of the agency, I myself had quite a role to play in working with others in developing the roles and responsibilities that Health Canada would have and that the agency would have that were compatible with the government's decision.

From our perspective, the decision to have inspection consolidated in an agency and to have Health Canada's role emphasized on policy and standard-setting research, and then a role to assess the agency's effectiveness, has allowed us to better focus our attention to those roles and to remove ourselves from some of the aspects we formerly had under the Food and Drugs Act, which related to food quality or composition but didn't have an impact on safety or nutritional impact of a food. So this has allowed us in Health to really focus our work on setting policies and standards that are directly related to human health and human safety in the nutritional impact of the food on people.

• 0930

The roles and responsibilities have then allowed this clarification, which has also then reduced any overlap and duplication. Clearly, the people involved recognize that for any system to work there needs to be both parts, a policy- and standard-setting part and an enforcement part. We see ourselves as two parts of one system, and there are strong working relationships. It's also, I think, allowed us to work to improve our relations with the provinces, again because there is more clarity now as to what our role is.

Thank you.

The Chair: That was brief. It has set a bad example for members, especially the chair.

Mr. Hill.

Mr. Grant Hill (Macleod, Ref.): Thank you all for being here.

I'd like to get a broad overview from the three different groups, if I could, to assess the effectiveness of the transfer. I'd like to know the number of employees before and after and see if you all agree on that, the amount of money that has been saved during this process, and finally, how do you judge the effectiveness? Would it be the speed with which a problem would be addressed? Say there was a problem with a particular food with a bacterial component; how quickly would that get to the point where the public was aware of that?

So I have three questions, then, relating to the number of employees before and after, the amount of money saved in this process, and how you judge the effectiveness. Maybe the assistant auditor general could respond first.

Ms. Maria Barrados: I could go first and then Ron can add his comments from his perspective.

There was money saved, as Ron said, because the amount of money that was given to the agency was a reduction. There was a reduction of money. They went from spending about $370 million. There's a reduction of about $40 million.

What is the saving is hard to determine because the nature of the work changes. There are additional things that were added on, but there was an additional reduction in the amount of money that was given to them.

The number of employees they started out with was about 4,500.

On the issue of effectiveness, we have some difficulty answering this question, and that's the nature of the comment we gave in our assessment of the performance report, recognizing that the agency was in a transition period. They had a lot of things to worry about in addition to setting up that framework that you need in order to be able to measure the effectiveness. But as we said in the assessment report, there are quite a few things they need to do to be able to answer that question.

Mr. Grant Hill: I missed the before-the-change and after-the-change employee numbers. Maybe Ron could—

Ms. Maria Barrados: I think I'll ask Ron to give the current numbers.

Mr. Ron Doering: Basically, Dr. Hill, there's no doubt that we saved the taxpayers $44 million. That's how much the fiscal framework saved in the second year of operation of the agency. It was simply taking the money that was formerly spent in the three departments. There was no reduction required in the first year of operation. There will be transitional arrangements. But as of the second year, the 1998-99 period, as you will see in the estimates, there's $44 million less there.

As I say, these savings were realized almost entirely by taking out of the system the former overlap and duplication, and by concentrating on savings related to one computer system, one set of communications systems, and other kinds of savings in the regions where, instead of having three or four departments in that particular region, there would be one agency presence.

• 0935

The actual number of people, though, is quite small. It's very hard to give you an exact number. I'm not trying to be difficult here, sir, but there were two things going on. There was a high use of what are called “term employees”, and even if the agency's work is up and down.... If there's a new meat plant, you add people; if a meat plant closes, people leave. So there are a number of things that affect how many people actually work in this. But basically around 4,600 people came together to create the agency, and there are about 4,400 or 4,500 people there now.

Regarding where they came from, just before the agency was created, Industry Canada, which had some responsibility for labelling, both policy and inspection, had slightly over 100 people go to Agriculture. This happened, actually, before the agency was created. Again, that's the reason for some of the confusion about exact numbers.

About 500 people came from Fisheries and Oceans—between 400 and 500 inspectors. From Health Canada, the agency got slightly fewer than 200 people, somewhere between 150 and 200, and Agriculture gave Health a number of people, around 50, including the lab at Guelph, which formerly did some policy-making, policy standard-setting. Dr. Clarke's group, which had been with Agriculture, in terms of this consolidation went to Health Canada, and about 150 people who had done inspection across the country went to the agency from Health Canada. So there was a net shift of about 100 people there.

There has not been a significant reduction of people. Basically, we reorganized, and we're clear about what people did. That's the number of people—it's 46 to around 44 or 45. It 's a $44-million saving to the fiscal framework.

Lastly, on the performance measurement, sir, for all intents and purposes, and from an accountability point of view, we are another government department. Our performance management information is equivalent to or better than most government departments. On the other hand, we undertook to try to be leaders in terms of providing information to members of Parliament on our performance, which is the undertaking we've made to do a better job of that than the departmental system does.

The person who's responsible for improving that performance management system, improving information to you to judge the efficiency and effectiveness of our work, is Tom Beaver, who formerly was with the Office of the Auditor General and has joined the agency. I'd ask Tom to speak briefly about our modest success in the first year and our really hard effort to do an even better job in future years.

Tom.

The Chair:

[Editor's Note: Inaudible] as brief as the clock would dictate, but I'm going to give him a few seconds to pronounce himself. Dr. Dodds probably wants to give her time up to him, too.

Go ahead.

Mr. Thomas Beaver (Director, Corporate Audit and Review, Canadian Food Inspection Agency): Thank you.

The agency has a three-year business plan, and in that business plan we set out quite clearly what expectations we hope to achieve with the moneys provided to Parliament and through fees. Section 6 of the plan outlines the general framework, and behind that framework is a lot of more-detailed planning activity.

Every year we owe Parliament an annual report. This is our first one here. In the annual report we try to address each of the issues we are working on by way of reporting on our performance. We have 18 separate programs: meat hygiene programs, fish inspection programs, and animal health programs. It's quite a challenge to develop indicators that would help the public understand exactly what's going on in those sectors that we regulate.

What we have done for the first year is pick up some of the information systems the previous departments were using. For example, on the meat hygiene program we report to Parliament this year the pounds of rejected meat, and on fish imports we list those imports that did not successfully enter the country. These are the types of indicators we have available to us in the agency.

The challenge now is to work on areas that you mentioned in your opening remarks, for example, time standards. How quickly should we be able to respond to emergencies? All those things are in train. We have standards now. We have to have a public discussion on those, establish them, and then we'll be able to report on them in the years to come.

• 0940

The Chair: We're over Dr. Hill's time, but Dr. Dodds, you might want to add something.

Dr. Karen Dodds: I'll just add a couple of points to Grant Hill's last point on how to judge the effectiveness. The agency act gives our minister responsibility for assessing the effectiveness of the agency's activities related to food safety and nutrition. This is obviously different from a complete performance measurement. It's different from the kinds of information the Auditor General might be interested in. We're very much looking at what activities of the agency are directly related to the policies and standards we're making and how the agency is doing in applying those policies and standards.

Creating this role for Health Canada was part of the decision of the government to achieve a system of checks and balances. It's not unusual to have standard-setting separate from delivery, but to then have this further check system, we believe, is unique in the world.

We have an assessment group that has worked hard to develop a policy for this program. They are looking, then, at how the agency is doing in applying our policies and standards. We are working both in Health Canada and the agency on doing a better job, as Tom has said, of setting more specific indicators of performance.

But what we're doing now is looking to see that the agency is applying our standards to the level we think is appropriate. If there is non-compliant food in the marketplace or they're taking the kind of action we think is appropriate, we've done what we can to provide them with our standards. We're looking at how Health Canada, which previously had the responsibility for emergency management, did historically, and we're looking at how other international agencies do in similar situations in applying those. But we look more and more both to develop more objectives for our policies and to have the agency also set their own objectives.

The Chair: Thank you very much.

Judy Wasylycia-Leis.

Ms. Judy Wasylycia-Leis (Winnipeg North Centre, NDP): Thank you, Mr. Chairperson.

I have a number of questions. I'll try to frame them in the context of concerns I hear from a number of organizations and individuals about the ability of our government, through the Canadian Food Inspection Agency, to be proactive and to be able to ensure Canadians that products they are consuming are proven not to be harmful. My sense is that in the transition from a full-fledged departmental responsibility to an agency framework, we've lost that proactive involvement.

I want to refer to three or four examples and then ask both the Auditor General folks and departmental folks how we're dealing with these issues.

One is with regard to inspection staff. My sense is—and I can't point out a specific number overall—that in this transition we've actually lost inspection capacity. One example I give is that I learned recently that for Manitoba and northwestern Ontario, which is a huge region, we are down to two inspectors for all stores selling food produce. That tells me that we're only able to respond when someone detects a problem, that there's no proactive capability.

Two, with regard to the controversy around rBST—and not getting into the whole question of approval or not, although I'd like to come back to that—my sense is that we don't have the capacity in this country in fact to determine which by-products coming in from the United States have rBST in them and that we've taken no steps to let Canadians know.

Three, recently there was a article in the Canadian Medical Association Journal saying that there are excessive levels of antibiotics being fed to livestock on Canadian farms that are spawning drug-resistent super bugs that in turn cause serious illness. The article suggests that Health Canada and the Food Inspection Agency do not have the capability for determining if that is the case. Instead, we're reacting when there's a serious outbreak, as we did in the case of E. coli.

• 0945

My fourth comment would be based on the Auditor General's report not of September 1998 but of December 1998, where some very strong statements were made, including—and I'll point to pages 35 and 36—one, that this agency has not followed through in terms of risk assessments for diseases, pests, and toxic substances.

Then on page 36—and this to me is shocking—it says:

...the Agency has made limited progress in the area of simulation exercises and updating of procedural manuals to assist with preparedness to respond to an incursion of a serious disease or pest.

I was referring to the report just tabled, pages 34, 35 and 36, Agriculture and Agri-Food Canada and the food agency. I think that builds on the September report and gives further documentation of the weaknesses of the system.

So I'd like to hear from both the Auditor General's staff and the departmental staff on these issues.

The Chair: While the Auditor General's staff finds that particular reference, I wonder if we could have Mr. Doering and Madam Dodds attempt to address the first three questions. Maybe you'll follow the example Dr. Dodds set for us at the very beginning but which members decided to ignore.

Mr. Ron Doering: Madam, there was no reduction of inspection staff in the northwestern Ontario and Manitoba region through the creation of the agency. The same number of people who were doing retail inspection there at the federal level are there now. There has been no reduction of frontline inspection staff in this regard at all.

Ms. Judy Wasylycia-Leis: There are two on the retail side.

Mr. Ron Doering: I don't have the exact numbers as to who is doing what in what region.

Ms. Judy Wasylycia-Leis: I heard that it was six and it's now down to two.

Mr. Ron Doering: No, that's not true. There has been no reduction of frontline retail inspection staff by virtue of the creation of the agency.

I want to point out that of course inspection itself is a shared responsibility with the industry, the provinces, and the municipalities. The primary responsibility for the retail inspection of food rests with the provinces, as you know. This is the role of the medical health officers, and under the Constitution it is primarily the responsibility of the provinces. There is some federal role at the retail level in terms of response to crises or recalls. We leap in there and do what we can to assist. In this regard, through the reorganization we have actually enhanced our ability to respond to recalls, even though there are a great deal more recalls of food now than there were previously.

I have no comment on the standards relating to rBST. There's no role there for the inspection agency until a decision is made by Health Canada on that.

Ms. Judy Wasylycia-Leis: Mr. Chair, if it's not approved, then isn't there a role for our government and our agencies to assess what products have a hormone that's not yet approved by this government?

Mr. Ron Doering: I'll perhaps ask Dr. Dodds to speak about that and the difficulty relating to inspection of this particular aspect.

On your comment about antibiotics, there has been no change in the policy or numbers of people regarding that issue. It's a major issue that's being studied. I've read the Canadian Medical Association Journal report you're talking about. It certainly highlights a number of challenges for governments at all levels to determine to what extent you have this antibiotic resistance. There has been a fair bit of work done on this matter both within the agency and at Health Canada. As I understand it, they're doing a major assessment on this matter, and when they set a standard, we'll enforce it.

I'm not familiar with the December 1998 report you're talking about there, madam, but I'll get back you on it. That's all I can do.

The Chair: Maybe, Dr. Dodds, you'd like to address some of what Mr. Doering was not able to address. Maybe we could focus on that issue.

Dr. Karen Dodds: I think it's clear that, yes, the agency is the enforcement arm and does make sure that the standards set by Health Canada with regard to health and safety are enforced. That means that when we have an explicit standard and something is approved and there is a certain level, they implement a program to ensure it. When something is not approved, then we work with them to determine the best method. The hormone rBST poses unique difficulties because it is so similar to the natural product that there are no analytical methods available for detecting the recombinant product versus the natural product.

• 0950

Again, on all fronts, the best way to be proactive is to push your point of control as far back from the consumer as possible. Although inspection is the agency's mandate, I will say that retail is your last barrier. You want to put your resources as far back as possible, not at the last point before the consumer.

It's the same situation with rBST. It is certainly not unknown that this is not an approved veterinary drug in Canada. We work with people to make sure they know that status. There are other authorities that have the jurisdiction to make sure the product, the veterinary drug itself, isn't imported into Canada. That system is in place.

The issue of increased antibiotic usage is again a very good example of an initiative that takes many stakeholders working together to address it. Health Canada recognized this as an issue a couple of years ago. In November 1997, we hosted a broad stakeholder meeting to look at the issue from the human health perspective. In that meeting, several areas of work were described, one of which was looking at the impact of antibiotic usage in the agriculture and food production sectors.

The food directorate of Health Canada organized a meeting in June of this year. We again got interested parties together to indicate what some of the issues are, and what some of the steps are that we can take to increase our control over this situation. We're continuing a policy development process based on that, again working with many people, right from the farmers through to and including the people who produce veterinary drugs. Again, the agency is there; if there is a role for enforcement, they will be there to give us their insights as to what will work and what won't work.

The Chair: Madam Barrados, I don't know whether you're prepared to give us a brief comment on that item. We're well beyond the period allocated for this normal question, but this is the very first time we've actually had the CFIA report to this committee, so I thought it would be useful for members to hear a full response.

Ms. Maria Barrados: I have one comment in response to part of the question. I'll ask Mr. Maxwell to answer the specific question with respect to the follow-up that was in the December 1998 report, because he was the author of that section.

My comment was with respect to the coverage of inspection staff. As we both agree, there hasn't been much change in the staff numbers, although I can't speak to the specific allocation.

In 1994, we did an audit of the food inspection system and all of the different agencies at that time. One of the things we highlighted at that point was that there weren't enough inspectors to inspect everything everywhere. There has to be a system in which there is an assessment of where they should go, and in which we make sure there's coverage, some form of inspection system that makes the reporting of the effectiveness of this system all the more important. That's why we are very pleased that the agency is putting the effort it is into reporting its effectiveness, and we are putting the effort into working with them and doing the assessments of it.

It's an important point that needs attention, because the system can't have inspectors everywhere. It's just not possible.

Mr. Maxwell.

Mr. Neil Maxwell (Principal, Audit Operations Branch, Office of the Auditor General of Canada): Thank you, Mr. Chairman. I'll try to be very brief.

The reference is in fact to work that we've done in the past year on the animal and plant health side of the agency's work, not on the food safety side. As a member mentioned, we talked about the movement on risk assessments, and we highlighted some slow points in terms of how they're progressing.

Our overall view was that the agency has made some quite genuine efforts in terms of trying to deal with improving risk assessments and the like. However, the issue we highlighted—one that comes back to Madam Barrados' comments about performance measurement, as well—was that the agency was making a very good start on these issues, but both that issue and the performance reporting are going to require quite a concerted effort. It won't be an effort that's going to be accomplished over a short period of time. This is going to take work this year, next year, and in the years following, to move the system towards sound risk assessments and, again, sound performance reporting.

The Chair: Thank you.

Mr. Myers.

Mr. Lynn Myers (Waterloo—Wellington, Lib.): Thank you very much, Mr. Chairman.

Mr. Doering, I wanted to begin with you, if I might. As I read the Auditor General's report, there actually is some credit to be given to you in terms of what you've been able to do over the last little while. In terms of meeting huge flexibility and innovation kinds of expectations, you've been able to do this quite well. I congratulate you for that.

I wondered if either you or Dr. Dodds could give me a sense of where we fit in the world in terms of food safety. Where do we stack up in that area?

• 0955

Mr. Ron Doering: Thank you for your kind remarks, Mr. Myers. We're pretty proud of what we've been able to do there, too.

As far as we know, Canada has the safest food supply in the world. There's no reason to believe otherwise. Many countries come to Canada to ask us to describe the regulatory system that we have. In terms of the information that's available from the work Health Canada does on food-borne illnesses, we seem to stack up very well. Actually, the unique feature here in terms of the reorganization of the agency is quite dramatic, as I've said. I'd say we have some country or other in almost every week and talk to them about how Canada was able to reorganize itself into a single agency at long last—something that had been recommended about five times over the last 25 years.

In the United States alone, there have been no less than four studies recommending a single agency there, because they apparently have quite a serious conflict between the turf of the Food and Drug Administration and the turf of the USDA. Their Government Accounting Office and, most recently, the National Academy of Sciences, I believe, recommended that an arrangement like Canada's should be considered by the U.S.

The fact that we've taken a whole food chain approach, from pasture to plate, for all inspection and all activities is helpful in terms of food safety. For example, we have agricultural input responsibility. Seeds, feeds, fertilizers, animal health, plant health and food inspection are all in the same agency. As far as I know, we're the only country in the world that has that.

Mr. Lynn Myers: I think that's a good approach, Mr. Chairman.

I want to go back to Dr. Dodds, if I might.

I still live on the family farm as a former hog producer. I emphasize the word “former”, because I don't want any of this payout stuff—just kidding.

In terms of the use of antibiotics, there always was a real concern with that. In answer to a previous question, I think you indicated that steps were being taken. I think it's important that we get to that point, because I can tell you that I know people who, within days of shipping, for example, would inject their animals with antibiotics. I always found that very hard to watch and to see, and I think it's a real concern in terms of the kinds of things that take place.

I wondered if you could perhaps articulate where you think this is going, and how soon, because I think there are real concerns here.

The Chair: Just before you respond to that, the bell you are now hearing is just the bell that's convening the House. It will be the next set of bells from which we will then begin our half-hour countdown.

Madam, please go ahead.

Dr. Karen Dodds: I would like to start, Mr. Myers, by referring again to your first question about how Canada stacks up internationally. I would agree with Mr. Doering. We're seen as international leaders in this area. Indeed, in the United States there are fourteen federal agencies that all have some role to play in food safety and food quality. That makes it very difficult to deal with anything, especially in a time of emergency. It also makes it very difficulty for all of the users, whether they are consumers, producers, food processors, to know exactly who to go to.

The step ahead that Canada has taken is the fact that we have separated food policy-setting and standard-setting from delivery, and we then again have the assessment as a check system. In the United States, one of the considerations has been to put everything together, both standard-setting and inspection, so that one agency is doing absolutely everything.

With respect to antibiotic resistance, I'll start with what the current status is. For antibiotic use in animals, if it's considered a veterinary drug, it must be approved by Health Canada before it's used in Canada. There are different reasons for why you might want to use an antibiotic in an animal, both for therapeutic use and for prophylactic use and, in some situations, as a growth promoter.

What we do now at Health Canada is review all veterinary drugs. We look at animal safety, we look at animal efficacy, and we look at human safety. If there are no concerns with any of those things, we'll approve a veterinary drug for a specific use, we will set a maximum residue level, and we will set a withdrawal period, which means a producer should not be using that drug within a certain time before shipping—for example, hogs to a slaughter house. Obviously, the withdrawal period is very difficult to enforce. But what is enforceable is the maximum residue level.

• 1000

Again, the agency would be able to speak to you. They do have a program to ensure that those maximum residue limits are adhered to. It's a risk-based program. You're looking at where there have been problems with compliance and where there are issues. That's where they would focus their attention. There's a lot of concern right now that we may need to take steps beyond that.

As I said, we started what we are calling a policy development, a review, to see if there are further steps we need to take. In the food program now, we have a formal process for developing these kinds of policies. We recognize that if we want to be successful, we need to have a commitment from all parts in what the end result is. So we now include all parties at the outset—this is from the farm production level through to the practitioner and the people who produce veterinary drugs—to look seriously at these uses.

No decisions have been made. This is very early on. But all of these issues will be on the table for consideration.

Just from an initial response to the media publicity around one article in the Canadian Medical Association Journal, you can see that the Canadian Cattlemen's Association in Alberta has put money into research. This is the kind of thing that, once we start focusing attention on an issue, all parties start working on. In that way, we're really leveraging our resources.

Mr. Lynn Myers: I have a supplementary question, Mr. Chairman.

Are the federations of agriculture, for example, and the commodity groups all part of this process?

Dr. Karen Dodds: Yes.

The Chair: Very good. Thanks very much.

Mr. Jackson.

Mr. Ovid L. Jackson (Bruce—Grey, Lib.): Thank you very much, Mr. Chairman.

I guess you guys have a lot of challenges. I understand that some farmers are now putting electronic devices in the ears of animal, and they want to know its pedigree and exactly what it's fed so that the end user has quite a niche.... Your forensics in trying to get this stuff back must be quite interesting.

Here's what I'm interested in. What I hear from a lot of farmers—I come from a rural riding—is that cost recovery is something they're always concerned about. They feel that in comparison to the Americans, they're getting a raw deal. There's probably not a big enough component of public good versus private gain.

I have two questions. How do we compare? Are we being fair to them? I know we do have meetings of stakeholders. How is that working out? And can you tell me something about your vote netting?

Mr. Ron Doering: Mr. Jackson, in fact, I haven't been able to come to a standing committee in three and a half years and not talk about this topic, so I've kept my record straight.

The Government of Canada is part of the process. The Canadian Food Inspection Agency was confronted fairly regularly with criticisms about the cost recovery that was introduced coming out of the 1993-94 period, which was well before the agency was created. The result was that Mr. Goodale announced a moratorium on all cost recovery at least until the year 2000-01. That moratorium is still in place.

So there have been no new additional cost recovery initiatives taken since that time. This was about a year and a half ago. There were some modest adjustments at the request of industry, but there have been no new cost recovery matters imposed on producers.

My guess is that the level of cost recovery we now have is around $45 million or $46 million. It would represent something in the order of 15% to 20% of our resources. My guess is that this is likely, in the foreseeable future, to be how much cost recovery will be done. Of all the savings that were attributed to the creation of the agency, none of them came from cost recovery; they all came from efficiency and moves we took through consolidation.

Mr. Ovid Jackson: Okay. Are you passing on any of these inefficiencies back to these people, or is that not something you do?

Mr. Ron Doering: Well, no. The fact is that with any savings we can make in terms of what we do, we basically reassign these resources to areas of higher risks. These are areas where we continue to have significant pressures in our work. But as I say, the cost recovery itself doesn't happen any more.

I think even industry would be reasonably comfortable with the existing situation. I deal with many of these industry organizations on a regular basis. I've had no criticisms or complaints about cost recovery in the last many months from the Canadian Meat Council, Canadian Poultry and Egg Processors Council, or Fisheries Council of Canada. These kinds of organizations have accepted the proposition that they were heard—members of Parliament heard them—and cost recovery as an initiative has really stopped. The group that used to do it in the agency has been reassigned to other duties.

• 1005

Mr. Ovid Jackson: I meet with the agricultural caucus on a regular basis, and the potato farmers of P.E.I., or what have you, are claiming that some of these costs are creating problems for them with their inputs, and their end price is going to actually put them out of business.

You were also going to tell me something about your vote netting. You didn't respond to that question.

Mr. Ron Doering: The vote netting is the $46 million we receive. We're a part II financial administration organization, so we spend the money we get to carry out our responsibilities for safe food, market access and consumer protection.

Mr. Ovid Jackson: So that's where it goes.

Mr. Ron Doering: Yes.

Mr. Ovid Jackson: Thank you.

The Chair: Ms. Barrados, do you want to comment on Mr. Jackson's previous question?

Ms. Maria Barrados: I don't have any comment, but I'll ask Neil Maxwell just to make a quick comment about the work the office is doing on cost recovery.

Mr. Neil Maxwell: We are doing some work on this issue of user fees in the agency work that's begun, and we expect to have it available as a report some time in the coming year.

The Chair: Thank you.

[Translation]

Mr. Bigras.

Mr. Bernard Bigras (Rosemont, BQ): Thank you, Mr. Chairman. I'll be relatively brief since we are short of time this morning.

It is somewhat ironic that I must take the floor this morning, in about one hour, on Bill C-43, which deals with the creation of an independent Canada Customs and Revenue Agency. I'll voice several concerns about the creation of that agency, with regard both to the issue of transparency and to the issue of human resources.

I don't intend to take the Canadian Food Inspection Agency as an example of what we should expect in terms of the revenue agency. However, last summer, I visited a tax processing center in the Saguenay—Lac-Saint-Jean area, and several employees of the Canadian public service confirmed their concern about their section coming under a legislative regime other than the Public Service Employment Act. They stated they were worried about some of the conditions they enjoy at the present time or they may have had in the past.

I'd like to know two things, first what it was like to go through that transition, that move to an independent agency, and then whether that move made it possible for you to live up to the food inspection standards.

My question deals more specifically with the workers and the employers. Some employees of the public service are very concerned at this time. I'd like to know how the change took place in the agency.

The Chairman:

[Editor's Note: Inaudible]

Mr. Bernard Bigras: In the agency. I am convinced that the Auditor General's representatives have some comments as well.

Mr. Ron Doering: Thank you for your question.

[English]

Yes, the report we're meeting on today that the Auditor General has done, reviewing the steps taken to create the agency over a year and a half and the first year's performance of the agency, was actually requested by the agency. I was the executive vice-president at the time and we wanted the Auditor General to determine how well we did, and if there were lessons that could be learned and shared with the agencies that might be coming down the road. So we requested this report, and I'm pleased to be here to talk to it.

Indeed, the point you make about the revenue agency is part of the reason we asked for this report to be done. For example, what did we learn about the human resources regime for the agency that would be helpful for those coming after us, such as the parks agency and the revenue agency?

On the human resources side, the lessons are quite interesting. We concluded that in the creation of the agency, if we could be a separate employer we would have an ability to organize our human resources regime to meet our mandate better. By being able to bargain collectively with our workers, we could improve our relationship with them and have a much simpler human resources regime from a collective bargaining point of view.

• 1010

In fact, I'm pleased to report that progress has been made even since the Auditor General's report was done. We formerly had 37 bargaining units spread over nine unions. Through an application on consent to the Public Service Staff Relations Board, we now have four bargaining units and two unions. So all of the agency staff who are not in management are in one of the two unions, and we're collectively bargaining with them now. We've completed one of these already, and two of the bargaining units have even decided to join, so in future years we will have two unions and three bargaining units. This is a very successful improvement over the collective bargaining system we formerly had.

In terms of our experience being a separate employer outside the Public Service Employment Act, which you talk about, here it means that instead of the Public Service Commission being responsible for staffing, the staffing is done by the agency itself. We made a decision to defer that movement for one full year, for the first year of the agency's operation—not that we were doing a lot of staffing—and all staffing was left to the Public Service Commission during that time to give us time to develop our own staffing regime.

That changed as of April 1998, and since that time we have adopted and tabled in Parliament with you our statement of core values that we will respect, which enhance the principles of merit, fairness, equitable treatment, etc.

I have to tell you I'm very pleased indeed and surprised at how well this is working out. All of the people who were given the opportunity to join the agency were given two-year job guarantees and told they didn't have to come to the agency if they didn't want to. Everyone came. So we have remarkably congenial employment arrangements at the moment. People are pleased with the human resources regime we have, and we continue to learn as we go how to better manage our human resources services. Our people are clearly our greatest strength.

The Chair: Madam Barrados.

Ms. Maria Barrados: Mr. Doering is quite right. We were encouraged by the agency to come in and do this lessons learned report, and it has actually been useful to other people working on agencies in government.

On the human resources front, that poses a number of interesting questions. One of the comments we make in the report is that the implementation of the new human resources regimes took much longer than anticipated and was more complicated than anticipated.

It wasn't clear to us the extent to which the agency was in a position to fully utilize its new powers. It is very clear they made some really interesting initiatives and good progress on the bargaining side, but there are a number of questions that remain in terms of what powers they will use on the classification and job evaluation side. They do not have to use the systems in the government and they have chosen to use the government systems, so they are not using the new freedoms they have there.

The second part of the freedoms they have on the human resources management side is they have their own staffing regime. In other words, they are not under the supervision of the Public Service Commission. What is important here is their own statement of values, which they have done, and the adherence to those values. Again, this is something that needs monitoring and attention because it is new and they have just started on it. But this is a big move out from under the Public Service Commission regime. It is something that merits watching because, as you all know, the Public Service Commission is there as an agent of Parliament to ensure that the merit system is being used in the employment of people and in staffing.

The Chair: Thank you very much.

Madam Minna.

Ms. Maria Minna (Beaches—East York, Lib.): Thank you, Mr. Chairman.

I want to ask about the good manufacturing practices for foods, which have voluntary reporting under the Food and Drug Act. I'm not sure whether many people even know that. I wonder how that's working. Are there any problems with regard to the requirements, quality, or good manufacturing practices? Do you have any updates or insights on that?

• 1015

Dr. Karen Dodds: Is your question dealing with the standard-setting part or compliance?

Ms. Maria Minna: Both. Both in terms of the standards, are the requirements adequate, and is the compliance working? Are you able to monitor the quality through that process? Is it working?

Dr. Karen Dodds: From a standard-setting point of view, Canada has had a voluntary code of practice for a number of years. Again, this is something that was developed with different stakeholders in place over the years.

By far the vast majority of industry have always complied with that. They know that it's only good business to produce good and safe food.

From Health Canada we have proposed to formalize good manufacturing practices in regulation. The major intent in doing so was to move the system towards more of what's known as a HACCP-based approach to ensure that in requirements there are such things as written documents and others.

Those have not been brought to bear yet. There's still discussion with both the agency and the industry on that issue. I will ask Ron to talk about compliance.

Mr. Ron Doering: As far as I know, this system is working quite well. I'm not aware of complaints by either consumers or industry in this regard.

Different commodities are expected against different kinds of standards. The good manufacturer practice has primarily been used in the area of non-registered facilities, bakeries, for example, where there isn't federal registration of the plant and a daily inspection.

From a risk point of view, it has been generally felt that so long as there was an occasional audit of these facilities, this would be adequate. This is what was done before. The agency was created, and it is basically the process we're following now.

On the other hand, for other commodities such as meat, for example, if the meat is crossing a provincial or international boundary, that facility must be registered. With the registration comes a standard of permanent hands-on, organoleptic poke-and-sniff, post-mortem, anti-mortem inspection of the whole thing. There's always a vet there, and there are always three inspectors on the line, etc.

So depending on the commodity, the type and level of inspection differs. There we have to work hard at making sure we can justify this on some basis of risk assessment. That has been the practice historically, and it is the practice we're continuing to use now.

Ms. Maria Minna: Thank you.

The Chair: Mr. Elley.

Mr. Reed Elley (Nanaimo—Cowichan, Ref.): Thank you, Mr. Chair.

I think it would be most helpful—I know it would be for me and perhaps for other members of the committee—to go back to the exchange you had with Mr. Myers about the hog producers.

Perhaps you could take us through a scenario. Mr. Myers was suggesting that there were some who injected antibiotics close to a shipping date. How would you catch that sort of thing, and when you did catch it, what would you do?

Mr. Ron Doering: A recent case of antibiotic residue in pork actually occurred in Manitoba about a year and a half ago, as I recall. There it was actually picked up by the commercial operator. For both trade and human health reasons, this is simply not acceptable. Within the province of Manitoba, for example, this stimulated them to work on a comprehensive program of on-farm HACCP. It was on the farm where this was occurring, where there is very little federal presence.

If in the course of our audits we determined antibiotic residue, steps would be taken to enforce the laws as they now stand. I'm not an expert on this, but under the Health of Animals Act there are provisions to take adequate steps. The plant itself that would be buying the product would be a key part of the enforcement mechanism there. The market will determine that if people are not complying, they don't want to buy a product from those producers.

Mr. Reed Elley: What kind of penalties would a producer expect to face if he was indeed found to be doing this? How do you prevent this from happening again? Is it a slap on the wrist? Are there severe penalties for this sort of thing?

• 1020

Mr. Ron Doering: To tell you the truth, sir, I'm not aware of this coming to our attention and a prosecution having been done. I'll get back to you on it, but I do not know off the top of my head—

Mr. Reed Elley: I think there's a growing concern in the country about genetically altered foods, antibiotics and other chemicals that are being put in our foods, and whether it's sort of a hypothetical thing that is grabbing the imagination of Canadians or not. But I think there's a concern out there. At some point I would think that Canadians are going to want to know what your agency is doing about this and what kind of enforcement there is.

Mr. Ron Doering: Thank you. You shifted there. On genetically modified, for example—

Mr. Reed Elley: Yes, that's another thing.

Mr. Ron Doering: —it depends on where it's happening. We pull registrations, for example—not all the time, but it certainly happens.

In the past year we determined that a plant was not living up to the standards that we require of them to meet regulations under the Meat Inspection Act. We simply warned this plant—in this case it was in a western province—“If you don't improve to meet these very high standards under the Meat Inspection Act and regulations, we'll pull your registration.” They didn't fix it, we pulled it, and they're out of business.

It depends on the commodity, frankly, in terms of the enforcement and compliance mechanism. In the case of retailers, for example, we charge people on a very regular basis and take them to court. We have dozens and dozens of court cases. The most recent string of them related to olive oil in the Toronto area. This is a serious regulatory role that we play in terms of pulling registrations and taking people to court.

Indeed, there's a point I forgot to make reference to. One of the difficulties in this performance measurement stuff that we're doing is what the Auditor General is speaking of. The fact of the matter is that because we're a regulatory agency, it's very hard to take some of these indicators that are ordinarily been developed for ordinary service organizations providing service. How long did you wait for your passport? If it used to be seven minutes and now it's five, that's easier to measure. It's a lot harder to measure the kind of soft judgments, to hard-measure the soft judgments, we're making on a regular basis in terms of enforcement and compliance, particularly when many of them are dealing with very complex scientific application of things.

The Chair: Thank you. Mr. Doering, since you raised the topic and I have a particular interest in it—I've been following it for a while—I'm going to ask you a question by piggybacking. There is no pun intended.

Voices: Oh, oh!

The Chair: This is on Mr. Elley's question about the kinds of fines that you have whenever you do prosecute.

Now, on the example you cited, which appeared in one of the Toronto papers, about the olive oil, you have been doing some investigation, and it's most welcome. The fines are in the range of $5,000 to $10,000, and I think you had one where it was a little larger.

That comes after somebody has already made about $2 million and $3 million worth of sales. You apparently don't have the authority to pull the product off the shelves, apparently you don't have the authority or the will to put the supplier out of business, and the product is back on the shelf.

Now, that's a concern for two reasons, and I want you to correct my perception. First, I think when Dr. Dodds mentioned human safety and nutritional impact, the fraud that you're investigating has to do with people looking for loopholes under the labelling act, and selling canola oil as opposed to olive oil, extra virgin, pure and whatever. Those who buy product for its nutritional impact as well as for its gourmet value may be getting shortchanged, but also from a human health point of view they're not getting what they expect to get. How are you protecting their interests?

The second question is, if the amount is so low, and you're selecting certain suppliers but not the big distributors, one of whom happens to be the Lieutenant Governor of Ontario, are you actually doing the consuming public a service?

Mr. Ron Doering: On the first question, sir, thank you for giving me an opportunity to speak to this. We don't set the fines. We take people to court and the judges set the fines.

In terms of our ability to take this product off the shelf, we certainly have that ability. We have the ability to do mandatory recalls. This is a power Canada has that the United States doesn't have. Indeed, when Mr. Glickman met with Mr. Vanclief not that long ago, one of the comments he made was that the Americans wished they had the kind of powers the new Canadian Food Inspection Agency Act gives the agency.

• 1025

So we can do mandatory recalls. In 1997-98 alone, either through a cooperative arrangement or otherwise, we did 204 recalls. This is rather a significant achievement that we don't get a lot of attention for. There was a lot of work. The largest single recall—

The Chair: Just so we clear misperceptions, they don't have to do it with olive oil. You only had five cases.

Mr. Ron Doering: No, there was a recall. I'll get back to you about whether it not it led to a recall in terms of these prosecutions.

But in addition to being taken to court, of course, in addition to the fines, they also suffer the penalty that if they try to sell the product again, we will seize it and charge them again.

But another approach that could be helpful here is to get a handle on the actual chain. I and a number of our officials, who are experts in this field, met with the international olive oil organization that tries to protect the integrity of the product—so if you say something is 100% virgin olive oil, it in fact is. There's been quite a change in the attitude on this issue in the last six months, I can assure you, Mr. Volpe.

The Chair: That's very reassuring, because you will probably recall the several cases of olive oil samples I sent to your office. But I'm happy that—

Mr. Ron Doering: Didn't we react, sir?

The Chair: As I said, I'm really pleased to hear that. Now I say that for all members around the table, because it appears that sometimes a humble member of Parliament can bring some attitudinal impetus to some agency action.

Mr. Ron Doering: Yes, sir, and we're very helpful in terms of enforcing—

The Chair: I want to tell everybody around the table that this opportunity is available to every member of Parliament who has an issue.

Well, now you've taken the powder out of my rifle here, and I'm going to hand it over to Judy Wasylycia-Leis.

Ms. Judy Wasylycia-Leis: You're a hard act to follow.

The Chair: Theirs or mine?

Ms. Judy Wasylycia-Leis: Yours.

The Chair: Oh, okay, thanks.

Ms. Judy Wasylycia-Leis: I'd like to come back to some of the points I raised earlier, and get some further clarification with respect to inspection capabilities. Would it be reasonable to request that you provide the committee with a breakdown of inspection staff by region and function, comparing the pre-1996 levels to the present levels?

Mr. Ron Doering: I'd be pleased to provide that, madam, thank you.

Ms. Judy Wasylycia-Leis: Great, thank you.

The Chair: Would you do that for the committee, then, so we would all have it? That goes along with the other couple of questions that were raised earlier. The usual procedure we follow is that you submit it through our research or through the clerk, to the attention of the chair. Then it gets distributed.

Mr. Ron Doering: Thank you. It's simply a matter of updating some material we already had done for the Standing Committee on Agriculture, and we'll be pleased to get that to you.

Thank you.

Ms. Judy Wasylycia-Leis: I'd appreciate that, because what I've been hearing in the field and in my own province is that in the present system there has been a significant reduction from the old days, when it was part of the department. I think we need to clarify the accuracy of that.

My second question relates to the rBST issue, and I know, Dr. Dodds, you said it's very hard to detect rBST in products. My question is, since there is no real way to check for this hormone in by-products of milk coming in from the States, is it safe to conclude that just about every by-product—cheese, milk, ice cream, or whatever—could possibly have rBST in it?

Dr. Karen Dodds: As I said, when you're looking into setting policy and standards in inspection, you try to select your control measures for where they're going to have the most impact. If you are lacking an analytical method, you don't put into place a program that relies on an analytical method for its impact.

In the case of rBST and product coming in from the United States, people should be quite clear that rBST is permitted in the United States. It is not something that farmers in whole find useful; it depends a lot on the practices in the farm. My understanding is there is a very small part of the whole milk supply in the United States that is from rBST-treated cows. I think it's well under 10%. So it certainly wouldn't be a good assumption to assume all milk products from the United States contain any residue.

Ms. Judy Wasylycia-Leis: So you'd say about 10% of products coming in from the States might have the rBST?

• 1030

Dr. Karen Dodds: Again, less than 10% of total milk production is from cows with rBST. Of total milk production, my understanding is that most of it goes to fluid milk. Again, I don't believe fluid milk is imported into Canada, only some dairy products, so at each stage it would be diminished.

Ms. Judy Wasylycia-Leis: With respect to the general issue of rBST, given some of the evidence presented to the Senate committee around the need for a much more significant body of research, why don't we take this issue off the agenda? Why is it still there? Why don't we put it aside and continue to do the research, but not leave this understanding that it's before us until such time as it's supposedly proven safe, when there are so many questions now and so many uncertainties?

Dr. Karen Dodds: I think the position of the department in its review of rBST has been made clear at several stages. It's not approved in Canada. As long as there are any outstanding concerns that haven't been addressed, it will not be approved in Canada. There are now two external panels examining the issue, one convened by the Canadian Veterinary Medical Association looking at animal safety and animal efficacy, and one convened by the Royal College of Physicians and Surgeons of Canada looking at human safety. They are doing an independent review to determine whether there are significant gaps still and whether there are significant concerns, and we expect those reports within a month. Then it is the department's decision. The department will review the reports and determine it. But I think the department has been very clear that, if there are any concerns remaining, it will not be approved.

The Chair: Thank you, Dr. Dodds.

Ms. Judy Wasylycia-Leis: Is my five minutes up already?

The Chair: Yes. My, how time flies. We're having fun, Judy.

Ms. Judy Wasylycia-Leis: Can I get back on the list?

The Chair: You can always get back on the list.

Grant Hill.

Mr. Grant Hill: To the assistant auditor general, you did make note that the transfer of corporate resources for the Canadian Food Inspection Agency was difficult. In fact, you noted that an outside accountant who had been hired to aid in the process didn't play a significant role. And from those comments I'd like to ask the agency why not? Why would you hire somebody to look after the transfer of corporate resources and then not use that individual? It doesn't make sense to me.

Mr. Ron Doering: Could you tell me where the comment is, Dr. Hill?

Mr. Grant Hill: It's page 12-16 of the Auditor General's report. They could probably dig it up faster than I can.

The Chair: Would somebody from the Auditor General's office care to comment first?

Ms. Maria Barrados: Our issue in raising this was that the accountant was used in helping to find the matrix that defined the programs and the program elements for transfer, but the real difficulties in the transfers were with the corporate overhead. Since a lot of the corporate overhead functions are shared and multi-tasked, that was much more difficult in terms of deciding how much was to go to the agency, how much was to stay in the department, and what was a reasonable allocation of resources. We just commented on how it was done, and for us it was a lesson learned in that kind of situation. It would be useful to develop that kind of matrix and formula and agree on it right up front as you're going into this form of amalgamation.

Mr. Grant Hill: Specifically, if I might, there is mention of an outside accountant hired to aid in the process who did not play a significant role. And that seems inconsistent with a department that's keen and trying to go through a process very quickly.

Mr. Ron Doering: This relates to paragraph 12.50, sir, that OFIS, which I led, hired an outside accountant to review the figures on the transfer. This was to determine to what extent the corporate services and the corporate assets that the parent departments had were being fairly transferred to the agency.

I'll give you an example of what we mean by this. It was very clear, for example, in the case of Agriculture Canada, that all of the resources that were part of the food production inspection branch would go to the agency. What was not clear is what percentage of the corporate resources at Agriculture Canada would also go. For example, in terms of the communications branch, which was separate, would we get half, would we get 40%, or would we get 60%? If you took a look at the corporate services related to finance and administration, what would be the percentage? Agriculture's argument would be that if there were five people doing this and 40% of the department was leaving, you'd get 40% of the resources, in theory. Of course, Agriculture would say it couldn't cope with what it had left, and that by having people leaving, the department wouldn't actually have the same kinds of savings.

• 1035

What the accountant did was to get a better handle on how much departments were spending as they could be attributed to the activities that the agency was going to be carrying out. In fact, frankly, regarding this comment that the outside accountant who was hired over CEUs did not play a significant role, it was because the accountant was originally set up to get a handle on the actual numbers. That contract ended, and then, through a process of negotiation with the respective deputies, the resources were divided up in a way that everybody was reasonably content with. The outside, separate accountant was no longer working for us at the time this was done. We didn't need him. This was done by consensual arrangement.

I am pleased and proud to report that all three deputies and the agency ultimately came to a consensus on what a fair allocation of the corporate resources would be. If we hadn't been able to, that accountant perhaps would have been brought back. Or maybe we'd have had to go to some kind of Treasury Board mediator or arbitrator or somebody like that to figure this out. You can understand the complexity. The department wants to keep these corporate resources, and we want our fair share. But we worked it out by consensus, which is why he wasn't used more.

The Chair: Last question, Grant.

Mr. Grant Hill: There's one other thing that you said. When I asked you about the savings of money, you said about $44 million had been saved. In response to another individual, you went on saying that cost recovery had brought in about $45 million. If I was a farmer listening to that comment, I would say that I, as a farmer, have now taken on what used to be a taxpayer responsibility. You said those funds were not in fact from cost recovery but from other savings. You're talking about one room versus another room. It seems inconsistent to me to say that we've saved $44 million and have taken $45 million out of farmers' pockets, yet those two don't match.

Mr. Ron Doering: Thanks for the opportunity to clarify this. This isn't complicated. Fortunately, while I'm not a specialist in some of the more technical veterinary matters, I know this file very well.

Prior to the creation of the agency, the various government departments, under pressure from Treasury Board and other initiatives, and on the recommendation of the Auditor General—he said over and over again that you should be charging companies, industry and others when they get a benefit from the taxpayers—felt we should be getting into this business. As I recall, many people thought this should happen. Also prior to the agency being created, a variety of cost recovery initiatives were increased.

There had been cost recovery in some forms of inspection since the seventies and eighties. This was increased during the early nineties through program review. By 1995-96, again prior to the creation of the agency, the combination of what Fisheries and Oceans collected in inspection services, coupled with what Agriculture collected, amounted to around $46 million. In other words, cost recovery at that time, through the fish inspection system and through the variety of programs that Agriculture delivered, brought in $46 million. Most of this was not from the farmers, of course; most of this was from meat plants, processors and so on. In the case of the fish inspection organization, they'd been doing this for a very long time for the thousand plants that process fish in Canada.

Then the agency came along. The argument was that if we were going to consolidate these programs into one agency, surely we could be more efficient. We could have a single regional structure. We could have a single communications function. We were only doing material for one minister's office rather than four, so couldn't we be more efficient in the course of doing that? The actual savings to the Canadian taxpayer, that $44 million—which only occurred in this year—came from the efficiency initiatives that we took in terms of consolidation of staff and rearrangement of a whole variety of activities. Members of Parliament desired to get a more efficient system. We said we'd do that, and we did it. So these are unconnected completely.

Mr. Grant Hill: That answers my question. Thanks.

The Chair: Maria Barrados, did you want to comment on that?

Ms. Maria Barrados: It's just a comment on where the Office of the Auditor General comes from on cost recovery.

We don't set the policies on cost recovery. When we do our audit work and there's a government policy that says there should be cost recovery, our audit work is looking to see how departments and agencies are implementing that policy.

• 1040

The Chair: Thank you.

Ms. Minna.

Ms. Maria Minna: Thank you.

I just want to get back to the issue of antibiotics in animals, and so on.

I understand you test residue. I guess you do spot-checks of some. I'm wondering how intensive they are. There are so many farmers across the country—hog producers, cattle, chicken, turkey, whatever. Do you spot-check farm by farm? Does a farm get spot-checked once a year?

I guess what I'm concerned about is there's been a great deal of talk, and obviously antibiotics are being used more and more by all farmers to prevent...and maybe sometimes they see a flu coming on with the cattle, or one animal becoming sick. They might just inject every one yet again just to make sure it doesn't go across. But how do we really find out? How intensive is this? I want to know if we're really getting at it. And when you do get it, what happens?

Mr. Ron Doering: The federal government role historically has not been active on the farm. This is primarily a provincial responsibility. But the pork producers themselves have developed a very interesting.... For example, in the case of pork, there is a HACCP program, where they have received some funding to develop and are quite active in trying to encourage farmers to keep records that could be checked through a HACCP-type system, Ms. Minna.

In terms of the agency, at the processing level, at the abattoir, we're doing both ante-mortem and post-mortem inspections, and we are doing regular audits of residues at that level. When these are found, if they're found—as I say, I don't think people are finding a great deal of it—we have a whole variety of enforcement and compliance methods we can use against the abattoir processor, who of course could then go back and say to the farmer, “I'm not buying this product from you any more if we can't be reassured that you're complying with the law as it now stands”.

The other way these things get into animals is through medicated feeds. We have a feeds program that does literally thousands of comprehensive tests to determine whether or not these feeds have in them what they say are in them. This is an area where we're doing ongoing work, and in fact there's a major consultation under the direction of Dr. McIsaac, working on a broad industry-consumer process to improve the regulation of medicated feeds. There is quite an active compliance with programs, as far as I know, Ms. Minna.

Ms. Maria Minna: Thank you.

The Chair: I know we both have another question. Mine is kind of a general one.

You've said on several occasions, I think three, that our system of food inspection is now one of the safest in the world, and I wonder. While I'd like to be very proud of what we do, because I hear that there are some complaints, what are the criteria you follow in order to answer that question about how safe is safe, and how do we stack up with the others?

Mr. Ron Doering: As I said, Canada has this reputation internationally. Canada is part of the Codex Alimentarius group of food-producing countries in the world. I've been to their meetings. Canada is often set out as a country that is exceeded by no one in terms of the quality of the food supply.

Secondly, ask Canadian industry. Ask pork producers and the large Canadian multinationals, like McCain's and Maple Leaf. One of the main things they have to sell and increase Canadian exports is the international reputation Canadian food has for being safe and wholesome.

The third area where I can state it more specifically is in the terms of the Canadian institutional arrangements. As I say, I've been to the U.K., the EU. As recently as yesterday, Mr. Fischler, the Minister of Agriculture for the EU, recommended in a speech that maybe the EU should be moving towards a reorganized system, more single agency, for the delivery of inspection services.

• 1045

The fact that we have a whole food chain under one agency has to enhance your ability to provide a more seamless delivery of inspection activities. But again, the system's not perfect. There's no zero risk in this business, but we just have to keep on doing the best we can to improve our efficiency and effectiveness. But I can tell you, Mr. Volpe, I'm not aware of anyone saying that the Canadian food supply isn't on a par with the very best. I'm not aware of that. In fact, I hear many comments to the contrary on a regular basis.

The Chair: Madam Barrados.

Ms. Maria Barrados: There's no way I want to question the competence of the work of the food agency or to put doubt in the minds of members, but one of the questions we as an audit office were asking is how good is this and how good is the agency at telling this story in the performance report?

Therein is the real challenge. When you talk to people, you get a lot of comfort from what people tell you, but when you actually see it all written down, there are a lot of issues you would like to see the information on. That's the challenge we have, and it isn't an easy challenge. But there are questions about coverage, such as how far does the inspection go, is everything included, what does it mean when you get these inspection numbers, and how good are these inspections? It may all be there, but I think it is important there is an effort made to put these things in the performance reports.

I agree with Ron Doering that it doesn't lend itself to simple measures. I think this has to be more of what we are calling performance information, a bit of a description and a bit of a story to explain this, because you can't do it in single indicators.

The Chair: I must compliment CFIA, and Ron Doering in particular, because CFIA provides some statistics we have been unable to get from other sources. So at least there's an openness.

Now, the bell we hear is a half-hour bell. We have about another 10 or 15 minutes. I just want to finish this off, if we can. Perhaps colleagues can be patient for a few more minutes.

Judy Wasylycia-Leis.

Ms. Judy Wasylycia-Leis: I wish I had three hours. There are so many question I'd like to ask.

I'd like to start, though, where Maria left off, with regard to antibiotics. I hear what you're saying, Mr. Doering, about the federal government not having a direct role in terms of regulating at the farm. But the federal government has a role in terms of risk assessment, research, and scientific investigation. So on the question of antibiotics, I still don't know what we as a federal government have done to actually research in an in-depth way the impact on human health of this tremendous use of antibiotics in farm animals.

Some of the information suggests this is very serious. The CMAJ article talks about the link between the use of antibiotics and the evolution of mutant strains of common bacteria, such as salmonella. We also have reports from your own department showing over 5,000, almost 6,000, cases of salmonella in the last year. Who is doing the research, and why, then, is that not determining what happens at the farm level by virtue of aggressive action on the part of the federal government?

The Chair: Ron.

Dr. Karen Dodds: Ron's going to turn the mike over to me, because the role of research and the initial role of risk assessment, policy, and standard-setting with regard to this issue would rest with Health Canada.

As I said, this is an issue we've been active on for the last two years at least. Looking now at food production, members should be quite aware that there's a big, broad issue of antibiotic resistance. Most of what has been expressed as a concern in human health really is related to human use of antibiotics. That is where we now see an impact, with issues about people coming to a hospital or acquiring an infection that can't be treated. It's human use of antibiotics. There is still no out-and-out evidence that agricultural use of antibiotics has a direct impact on human health.

• 1050

But Health Canada certainly has felt it's an issue that must be addressed. We don't want to wait until all the evidence is staring us in the eye. So we are taking steps to work with individual stakeholder sectors to ask what it is we can do, where it is that we need more research, where people will agree to take action before they have the specific evidence in front of them. As I said, we already started discussions in June of this year to find out what some of the issues are.

As an example, looking just at surveillance, this involves looking at veterinary isolations of different bacteria, food isolations of different bacteria, and human isolations of different bacteria, and testing them to determine if the bacteria have resistance patterns so that we can continue to track and see what's going on. Are the antibiotics that these organisms are resistant to ones that are used in human medicine or ones that are used on the farm? If there is not a direct correlation, are there structural similarities that are leading to issues?

One of the areas we are really looking at is what we call prudent use policies. This is to start taking action before there is explicit evidence in front of us, and this will require a lot of discussion with primary producers and the people who prepare veterinary drugs so that we can come to a resolution on some of these issues. We're just starting. We don't know what the impacts will be of this policy review, but we will do what we can.

The Chair: Ask a very brief question, please, Judy.

Ms. Judy Wasylycia-Leis: I'll try.

We used to operate on the basis of the precautionary principle, where if there were some doubt, we would take action until it was proven safe. What I think you're saying is that until it's proven to be safe, we will allow these antibiotics to be used at the farm gate.

My question is to Maria Barrados. In terms of the statements made in both reports about the ways the department and the agency have yet to go in terms of putting in place proper risk assessment and reporting mechanisms on toxic substances—and I assume we can include in that things such as biotechnology, antibiotics, and hormones—and given the statement about the lack of preparedness for a possible outbreak of some human disease based on these uncertainties, what's an appropriate timeframe for this government and consumers to be expecting to see these mechanisms and measures in place?

The Chair: I don't know how you spell “brief”, but for the witnesses to whom you've directed the question it's now z-e-r-o for time left. Do you want to try to answer that very, very briefly, please?

Ms. Maria Barrados: The only thing I could add briefly is that we feel it's very important that the agency itself and Health Canada in its own reporting set out the expectations in terms of what they can do. We can't set that as the auditor. If they lay that out fairly specifically, then members can look at it and discuss with them whether it's reasonable, because they have to look at budget, capacity, and at balancing the other things they have to do.

The Chair: Dr. Dodds.

Dr. Karen Dodds: I just wanted an opportunity to clarify. Indeed, we do not wait until there is a crisis in front of us. We do act in a precautionary manner. This is why the department has taken steps over the last two years to work with stakeholders to address this issue.

The Chair: Okay. I have two last brief interventions, and I think we can get them in before we have to hustle away.

Madam Caplan.

Ms. Elinor Caplan (Thornhill, Lib.): Thank you very much.

I've been listening very carefully, because this is an area that is relatively new for me. I was listening and thinking about it both as a consumer and as someone who represents consumers. I think Canadian consumers want to know that food is safe in Canada. I don't think they think a lot about it when they go into the store to purchase something, because they have a confidence that someone—I would say “someone”, and if they were to think about it, they'd probably realize that it was Health Canada—has a large role to play, although sometimes there's a provincial role to play as well, in ensuring that food products they purchase are safe.

• 1055

I heard this morning that there are a lot of emerging issues, and while what you've told me that I can report to my constituents is that Canada is amongst the best in the world when it comes to food safety, we're also preparing to meet the challenges of the future, because we recognize that there are all kinds of things that are changing in this world.

Is there anything else you want to tell us this morning about that preparedness or issues that are emerging that on behalf of consumers we should be aware of? I think the role of this committee is also to give us information that would be helpful in understanding what we should be doing in planning for the future.

Mr. Ron Doering: That's a very interesting question, Mrs. Caplan.

Boy, talk about a shortage of time. I could talk to you about that for a long time.

I think the main thrust of what we were trying to say is that Canada does enjoy a very high standard of food safety. Another criteria, Mr. Volpe, that I forgot to mention is that there is a fair bit of polling data on this, the fact that Canadians do enjoy a high confidence in our food supply, much higher than the Americans—same kind of poll, same kind of question. So that's another indicator of where Canadians are.

This is not a basis to be complacent. I'm with you on this. I'm not saying good, we can all relax now, go home and not work hard. Indeed, with the new emerging pathogens we have—some of the main ones, for example, we didn't even know existed 20 years ago. No one had discovered E. coli 0157:H7 until 1982, I think it was. So the extent to which many of these viruses go from animals to people—these are all major new forces.

The fact that we have a lot more food coming into Canada than we used to in terms of imported food, the fact that a vast majority of Canadians now are buying it outside the home in processed kinds of ways, in packages, so they have less control over it themselves—there are many factors that mean we can't afford to be complacent in terms of being really vigilant about the quality of the Canadian food supply.

The two things that I think we've done already to help in this regard are to clear up the overlap and duplication and make sure Canada has the best regulatory arrangements we can have. This is why Canada took the rather interesting historic step to create a single agency for all inspection, pasture to plate, at the federal level.

The other thing that's required is to do a much better job of working with the provinces, because we clearly have a shared jurisdiction there. As I say, I think we've made remarkable progress in this regard.

The third thing is to get a real good handle on our own regulatory system itself. To do that, we need to take the 13 pieces of legislation the agency now has and work through to what extent the law itself should be modernized and consolidated. There's been a major consultation nationally on this. There's a high consensus on the part of consumers and industry to consolidate the Canadian legislative base, so that when we have not only the best regulatory system, but the best legislative system, we can take the final step, and that is to really get a handle on much of this regulatory work that has built up over the years in a kind of patchwork way.

The agency has responsibility for the enforcement of 46 sets of regulations. They would fill most of these tables at the moment.

To the extent that we can modernize, consolidate, make them better, be efficient, be effective, we should do that. That's the third leg of our reform of the Canadian food inspection system, Mrs. Caplan.

I'm with you completely. There's no basis for complacency now. We have to keep working to deal with these kinds of new emerging problems.

Dr. Karen Dodds: I would love to respond as well. Again, obviously the first level of action when an issue is new is to look at whether we have a policy, a standard, because the agency enforces our policies and standards.

I really appreciated the way you phrased this: “Is there anything else you would like to tell us”, again looking at you as a cascade system. People must realize that we're science-based organizations, both Health Canada and the CFIA, specifically the health protection branch. Science is an ever-evolving area. We must continue to evolve as the science evolves. There are new issues as this area of food, food production, microbial disease—all of this is changing. It's a global marketplace now, and we must always be moving to address that.

We do have a finite amount of resources. That means we must always be moving our resources to address what is the most pressing issue at the time.

• 1100

On the safety of the Canadian food supply, one indicator to me is that when consumers shop in stores in Canada, I've never seen one hesitate and think about safety. They simply pick the product up, put it in their grocery basket, and walk away. If ever you have visited third world or developing countries, you have a very different attitude if you're consuming or buying food. I think that shows the level of confidence Canadians have in their food supply, and obviously we're extremely concerned that they continue to have that kind of confidence in the system we have.

The Chair: Mr. Myers.

Mr. Lynn Myers: Madam Caplan actually asked my question, because I too was interested in the challenges, both in the short term and in the long term.

Let me say, as a producer and a consumer of food, I'm very heartened by what I hear today and what I understand is taking place, because I think the kind of thing we're talking about in terms of confidence that Canadians have in the system, not only the agency's role but Health Canada's role as well, is not misplaced. In fact, we can be very proud of what we have. So I congratulate all of you who are involved in that, because this is fundamental to who we are and how we operate. I can tell you that's very, very important, and I thank you for that.

The Chair: Thank you very much, Mr. Myers.

Madam Barrados, to you and your team, I know we're going to see you again on Tuesday, and I think probably the atmosphere might be a little livelier, judging from what I saw today. But it was very instructive. Thank you very much.

Ron, to you and your team as well, thank you. It was a most instructive meeting.

Dr. Dodds, thank you as well.

The meeting is adjourned to the call of the chair.