AGRI Committee Meeting

    I call this meeting to order.

    I do apologize for the delay. The room had been secured earlier for whatever reason, whatever meeting was in here before, and it does take a while to get the communication devices switched back to transmitting for the purposes of Hansard recording and broadcast.

    We are kicking off our study on Growing Forward, but we want to do a specific study as well on the issues facing the livestock industry right now.

    We're lucky to be joined today by the Canadian Food Inspection Agency, represented by Dr. Brian Evans, who's no stranger to this committee. He's the executive vice-president and chief veterinary officer for CFIA. We have Paul Mayers, who is the executive director of the animal products directorate; and we have Cameron Prince, the vice-president of operations. Thank you for coming.

    With that, you have up to 10 minutes, Dr. Evans, to make your opening remarks.

    Thank you, Mr. Chairman and distinguished and honourable members of the committee, for this opportunity to appear before the committee in support of its very important work.

    My name is Dr. Brian Evans. I am the executive vice-president of the Canadian Food Inspection Agency—an additional role since my last appearance before you—otherwise known as the CFIA, and the Chief Veterinary Officer of Canada.

    As the committee is aware, the CFIA serves Canadians by providing protection from preventable health risks, delivering a fair and effective regulatory regime, sustaining the plant and animal health resource base, and promoting the security of Canada’s food supply and the support for domestic and international market confidence thereof.

    From what I understand, the committee would be interested in five main topics today: food safety, food inspection fees, the reciprocity of US fees, tuberculosis testing in Manitoba, and specified risk material, or SRM, in particular the implementation of the enhanced feed ban.

    I will say a few words about each topic and then certainly invite your questions.

    Food safety is of course the Agency's top priority. For that reason, we welcomed the reaffirmation of the importance of food safety in the Speech from the Throne.

    Factors affecting food safety, such as globalization and consumer demand, are constantly evolving, so we cannot afford to become complacent. For that reason, we are taking steps to adapt our inspection approaches and improve the quality assurance programs of the industry to protect Canadians from unsafe food and products, to cooperate with international partners to improve the safety of food before it arrives at our borders, and to raise awareness among Canadians about food safety.

    With respect to food inspection fees, the CFIA was created, as many will know, in 1997 to be partially dependent on revenues from inspection services. Many of Canada's trading partners also charge fees for inspection programs and services. Each country sets fees in response to its own circumstances, the result of which can lead to differences in relative cost of services paid by competitors. The CFIA's user fees, of course, have been frozen since 1997.

    With respect to TB testing in Manitoba, the CFIA surveillance strategy for bovine tuberculosis in the area of the Riding Mountain National Park includes regular testing of approximately 650 herds of cattle. The current testing plan was agreed to by the Manitoba Cattle Producers Association in September 2007.

    Testing is done to protect the health of livestock in the area and maintain the area's status as TB-free, which is critical to maintaining market access and consumer confidence. Both of these outcomes have a direct benefit for area producers and the Canadian economy.

    We know that producers are seeking additional funding to assemble the herds. The CFIA is providing technical advice to discussions between the industry, the provincial government, and federal departments to explore options.

    With respect to specified risk material and the enhanced feed ban,

It is always better to deal with a problem directly than to hope it will go away. Certainly, the government has worked hard to deal with the impact of BSE in an upfront and transparent manner, and the international community has appreciated and rewarded our efforts.

     Last February, the committee heard how the government ordered the removal of specified risk material, SRM, from the entire feed chain, pet food and fertilizer chains. This enhanced feed ban, which came into effect in July of 2007, is intended to remove upward of 99% of potential BSE in captivity at the top of the chain. This will help us eradicate BSE from Canada within 10 years, instead of over several decades.

    The CFIA worked closely with the industry and with the provinces on the enhanced feed ban leading up to the July 12, 2007, implementation date and beyond. This has resulted in a relatively smooth transition. The CFIA has maintained regular interaction with stakeholders since the implementation. The focus of those discussions have evolved from ensuring a clear understanding of the new regulations to one of exploring alternate processes and approaches to achieve the outcome and reduce the implementation costs to the sector.

    Thanks to the enhanced feed ban and other measures to control BSE, the World Organisation for Animal Health, known by its previous French acronym of OIE, recommended that Canada be recognized officially as a BSE controlled-risk country in May 2007. This designation will go--and has gone--a long way to restoring full confidence in our cattle industry.

    Mr. Chairman, we would be pleased to respond to any questions raised by committee members.

    Thank you, Dr. Evans.

    Just to remind committee members, we will continue until bells ring for votes. This should happen at about 5:30 p.m.

    We'll go to our first round, so Mr. Boshcoff, seven minutes.

    Thank you very much.

    I am going to try to present a case study scenario here about a Canadian distributor.

    Do you remember Malkin's jam in Canada? It has now ceased production.

    We have a small businessman who wants to essentially sell the jam into the United States. He got all the approvals from the food and drug agency, but to sell it in Canada, he still hasn't gotten there yet. It's very interesting.

    Is that enough of a scenario for you to go on, Mr. Evans? I believe it should be.

    So this person is a grocer who actually imports goods from the United States to Canada. When something comes into Canada, you simply put a bilingual label on it, and that's apparently enough. For small businesses who are trying to export....

    He's now been at this close to 10 months, without any kind of support or approval from the CFIA.

    As my first question, what is being done to rectify the barriers for small businesses who attempt to enter international markets?

    The second question concerns the issue of harmonization of packaging standards. Is it on the radar for CFIA? I ask this simply because of his experience with the FDA. They seem to be quite encouraging, as opposed to restrictive.

    Understanding that both governments, Canada and the United States, are trying to streamline our policy with the security and prosperity partnership, what is the status of your cooperation, integration or level with the FDA? What areas of your policy would be impacted by SPP? Are you aware of any food distributors able to sell their products with a singular integrated nutritional information label acceptable to both countries?

    Basically, are non-Canadian distributors subject to the same labelling scrutiny as Canadian producers when they are attempting to launch their product in Canada? That's a topic that comes up in this committee often.

    At the CFIA, what steps does a food product go through before it is registered?

    There are a lot of questions for you there, Dr. Evans. You have about four minutes to answer them.

    We're here to serve.

    If I could, Mr. Chairman, I would request if it would be possible to invite Debra Bryanton from the food safety directorate to join us at the table.

    That's not a problem.

    She has responsibility in areas of food labelling.

    In anticipation of Debra's joining us, just let me iterate at the front in response, and not take up her time, that obviously, from our perspective it is extremely important that we continue to adapt our regulatory frameworks in Canada to be outcome based, not prescriptive, and to provide the opportunities for all business, small or large, to reap the economic rewards of the safety of the Canadian food inspection system.

    We feel also very much that with the work that is being done under SPP in collaboration--and I'll ask Debra to speak to that specifically--we are in fact making progress towards harmonization. But we also recognize that within Canada, as CFIA we have a shared responsibility in that Health Canada sets standards for nutritional labelling. It is our role to enforce. So it will be equally important that in our discussions with FDA this is not a single-agency discussion and is a broader government of Canada approach.

    Debra, can I ask you to speak.

    I don't know the product specifically, honourable member, but it's jam, made from good Canadian strawberries.

    Thank you, Mr. Chair.

    All foods in Canada are subject to the Food and Drugs Act and regulations. In addition to that, we also have trade and commerce legislation that does apply to specific foods in Canada. So under the Canada Agricultural Products Act we do have a range of regulations that cover various food products, primarily oriented around those that are grown and manufactured in Canada.

    The jam that you're speaking of is covered by the processed product regulations, and there are provisions in those regulations that relate to jams as well as other processed fruits and vegetables.

    I'm not aware of the plant that you're referring to, but there is provision to be registered by the CFIA to be inspected for the purposes of interprovincial and international trade. Certainly, if you leave us the name of that company, we'd be happy to follow up on that.

    The provisions are not overly onerous and they are equivalent to those in the FDA. The FDA does not have trade and commerce legislation, so they don't have a lot of preregistration requirements related to products going into that country. So at times it's not surprising that FDA is willing to accept a product solely on the basis of our food and drug legislation and not necessarily looking at the additional provisions of trade and commerce.

    On nutrition labelling, all food safety and labelling provisions that apply to Canadian manufacturers and products also apply to imports. In the case of nutrition labelling, there are some slight differences between our nutrition panels, and this has been a point of discussion between Canada and the U.S. for a number of years and continues to be through working groups under the NAFTA.

    With regard to the security and prosperity partnership, there is a range of food-related issues that have been identified for discussion with FDA and our counterparts in Mexico as well. One of the initiatives we are currently looking at relates to fresh fruit and vegetable safety, because industries and governments in all of our countries are looking at means to enhance produce safety. So that has been a focal point of attention.

    With the announcement of leaders recently in Montebello, we are also looking at initiatives relating to import product safety. So there's a great deal of close cooperation between CFIA and the Food and Drug Administration in the U.S. We do a lot of work together, a lot of food safety investigations together, and we cooperate on food recalls as well.

    Thank you, Ms. Bryanton.

    Monsieur Bellavance, sept minutes, s'il vous plaît.

    Thank you, Mr. Chairman.

    I thank you for your statement.

    There have been many changes at the borders since our last meeting. The Americans, in particular, have just implemented much more rigorous inspection standards for the E. coli bacteria. There was a case in Alberta and, as usual, Americans have been quick on the trigger and have imposed some standards.

    This makes me think—and I would like us to talk about that—of the whole matter of non-reciprocity between Canada and the US as far as various safety standards are concerned for our animals and our food products.

    For example, I would like someone from CFIA to speak about those inspection standards for the E. coli bacteria. As far as I am concerned, the reaction of our Minister of Agriculture has been very lukewarm. He said he was very disappointed by the implementation of those new safety standards by the Americans, but his disappointment does not do anything for our producers.

    Why do we not implement standards as rigorous as theirs in order to make US producers angry with their government so that they will begin to ask why they are having problems at the border where it would be more difficult for them to get their products through? We never react in this manner. It is always the same thing: Americans impose their standards and we accept the consequences. I have strong reservations about this, just like our producers.

    This brings me to the issue of the specified risk materials, or SRMs. I have heard it said that it costs about $40 per head to our producers to dispose of these materials. We have nothing against improving our safety standards in Canada, we understand there have been problems with BSE and we certainly do not want to hide our heads in the sand. However, from what I understand, when Americans send us their cattle, they do not have to meet the same standards relating to specified risk materials. There is a double standard there. Once again, we do not ask of the Americans what we ask of our own producers. We force our producers to bear an additional cost with those new standards but what is being done with those SRMs? I have heard talk about producing biodiesel with them but there is still nothing concrete. So, they have to be buried. Something will have to be done with that.

    Mr. Evans, are SRMs dangerous for public health and safety? If so, why do we accept what is coming from the US? If not, why do we impose those standards to our producers?

    Dr. Evans.

    Thank you, honourable member and Mr. Chair.

    Let me begin by addressing the fact that we very much believe and support the reality of the SPP initiative. In fact, our desired outcome is an integrated border that provides for benefits for both countries.The imposition of measures at the border--measures that thicken the border or that increase costs and reduce competitiveness--I don't believe is consistent with the approach we are trying to take to the Americans to ensure that our industry has access to U.S. markets and to ensure that the safety and quality of Canadian foods, in Canada and the United States or any other market, is recognized as ranking as good as, if not better than, food produced anywhere else in the world.

    Let me start on the E. coli circumstance and the introduction of measures on testing at the Canadian border. Coming out of the three leaders' summit in Montebello, there was a clear commitment made by all countries to look at enhancements to food safety. Within the North American context, this was further iterated in the Speech from the Throne, which we strongly welcome.

    In that regard, in dealing with E. coli specifically, it is important to note that measures being introduced for testing of Canadian product entering the United States are also being followed by measures by the United States to test beef products, beef trim used in hamburger, from all countries that export to the United States. That will be phased in, as we understand it from our U.S. colleagues, starting in January.

    So in fact they perceive the measure that's specific on E. coli as being one that's not targeting Canada but is part of a broader strategy and one that we ourselves have been investing time and analyzing in terms of a comparable approach, again, because we want to secure the North American marketplace. We do not want this to be an opportunity for the United States to impose additional restrictions on Canadian packers and processors, or food retailers in fact who would be importing beef products from other countries, and use this as another reason to segregate or differentiate product. Our view is that the product is safe. It has a market, and that market should respect the safety of that product.

    On the issue of specified risk materials, I would point out that, yes, the challenge in terms of the measures that were adopted in Canada in advance of measures by the United States...we are fully cognizant there were costs associated with that. We have worked, not only in terms of our previous presentations, on ensuring that regulations were not prescriptive but rather were outcome-based, and subsequently, to their implementation, are working forward with an industry advisory group that has looked at alternative approaches that could be followed to achieve those same outcomes as provided for in regulation. That group will be presenting to the Beef Industry Value Chain Roundtable in December for consideration of adjustments in those measures that would reduce some of those additional costs.

    Furthermore, we were made aware earlier this week that the Food and Drug Administration has moved forward to submitting their proposed new rules on SRM for animal feed to OMB in the United States. So we look forward, at the point that it is posted by OMB, to have a full understanding of the scope of those measures, as they would be applied in the United States.

    Having said that, with respect to the safety aspects, no animal feed, obviously, can enter Canada unless it meets our domestic standards. Imported animal feed from the United States has to meet the requirements of Canadian standards for feed. Similarly, on the issue of live animals, U.S. animals that would enter Canada would be subjected to the slaughter and inspection requirements in Canada, including the removal of all SRM from the human food chain, and parallel to that applied to Canadian animals. So the SRM, as it relates to the feed issue, is not a direct human health consequence because they are managed through processes of removing SRM at slaughter of animals.

    On the handling of the SRM in Canada, there are multiple pathways currently in place that deal with incineration and with deep burial of the product. As you've indicated, industry is continuing to invest in innovation and technology approaches that would find alternate uses for the product, including biofuels and other types of products. I think these are areas that merit us ensuring that the material that is being taken out of the food system is disposed of in a way that prevents it from coming back into the food system in any inappropriate way.

    The lessons that have been learned internationally around control of this material were a large part of our regulatory approach in managing SRM removal from animal feed to ensure it could be done in a way that was environmentally sound, had the support of industry to ensure there was a high degree of compliance, and that the measures could be verified and enforced.

    Dr. Evans, your time has expired.

    Mr. Miller.

    Thank you, Mr. Chairman.

    To Mr. Evans, Mr. Prince, and everyone, thank you very much for coming.

    Our record on food safety around the world is second to none. I know that the CFIA has had a big part in that. We thank you for that.

    It doesn't matter whether it's government, one of our agents, or whatever, there's always room for improvement. You're probably aware that we passed a motion unanimously here on Monday to ask the minister to review all inspection fees charged by the CFIA. I think that's something we should do from time to time.

    Basically, my goal when I suggested this motion was to try to address the real competitiveness deficit our producers here have, especially in the livestock industry, compared to their U.S. counterparts. For example, a Canadian exporter pays for inspections and certifications to get his animals to the U.S. Then the American importer faces basically the same fees.

    Now, this really throws it out of whack, especially when I find out that the fees paid in the United States actually go to the American cattlemen's beef board, which I presume is equivalent to our Canadian Cattlemen's Association. So the producer groups are able to collect in the States to help fund it.

    I'd like you to comment on that issue alone. I have some other examples, but I'd like your initial comments on review of the fees.

    Thank you.

    We are cognizant of the motion the committee has brought forward. We have already commenced an analysis of the inspection fees in circumstances, as applied by CFIA, in order to allow the minister to be informed and respond to the committee in the most responsible way. So that work has been initiated, and we thank you for providing direction in that area.

    As I've tried to stress, we are very cognizant of the significant economic challenges that are being faced by the livestock sector at this time. On the competitiveness elements of that, we have an enormous sense of respect and pride that in spite of these economic challenges, the vast majority of producers in this country remain at the forefront of stewardship in food safety, animal care, and producing livestock of top quality. In spite of these challenges across all the various sectors, whether it be pork, beef, poultry, or others, the reality is that producers in Canada are stewards of animal health and animal care in this country. We applaud them for their continued devotion to that. I think it speaks well of them and helps us in our efforts to continue to give them an advantage in domestic and international markets.

    As I indicated at the outset, when the CFIA was created in 1997 there was an expectation on the part of Parliament that we would derive a percentage of our operating revenues from the recovery of inspection fees. It is my understanding that is still the expectation.

    There has been a moratorium in place since 1997. The fees at that time were introduced to try to recover approximately 30% of our cost of delivery of inspection programs to industry. That recovery is still being done at the level of 1997 dollars, although our salary and overhead costs are no longer in that ballpark. So the overall percentage aspect of that has certainly challenged us in order to continue those services. In all honesty, in spite of the economic challenges of the industry I don't think we've been increasingly contributing to a non-competitive circumstance through our fee structures.

    It does merit a review to ensure that where fees are being charged, if there are opportunities to find alternate levels of service delivery and alternate mechanisms to deliver that service by a third party in a more cost-effective or less costly way than it can be delivered by government, then we are certainly advocates to move in that direction.

     I'm looking forward to the results, recommendations, or whatever that come out of that review.

    In the March 2007 performance report, there was mention of discriminatory practices and unnecessary barriers to Canadian farmers. They're mentioned as being a key risk. I think it was worded “strategic outcomes”, but basically I take that to read there's a feeling that they are impeding CFIA's work in some way. I would like you to comment a bit and maybe give us a specific example of what you see there and what you're doing to overcome that.

    Also, I was interested in your comments on initiatives that standardize food safety standards. You seem to be in favour of that, and maybe you could comment on how we achieve that.

    Again, thank you for the question.

    Let me address the latter part in terms of standardization. I think it's absolutely essential in the world today. We are in fact trying to manage as best we can a real global food supply in terms of shelf-ready product, in-time delivery, perishable product, as well as expanded supply chains on the part of various industry sectors, to provide consumers the types of products they are seeking. Obviously that is a constantly changing dynamic. It forces us to adjust and, as part of continuous improvement, to review and revise our inspection approaches both within Canada, before it gets to our border, and at our border.

    On the aspect of trying to move to common food safety standards through science-based standard setting at the level of Codex Alimentarius under the FAO in the United Nations, Canada is a significant contributor along with Health Canada. We think this is a very important element, because with this globalization of food supply we will never fully inspect and test our way to food safety. It will be incumbent on all countries to embrace common scientific-based standards in their production systems that are auditable and verifiable in order for them to be eligible to get into our market. We have an obligation to make sure these science-based standards are sound, that they are commonly agreed and adopted, and more importantly that they are commonly implemented and verified.

    Could you refresh me on the first part of your question, honourable member?

    I talked--

    Your time has expired, Mr. Miller.

    If you don't mind, Dr. Evans, we'll move on.

    We will come back to the resource issue.

    Mr. Atamanenko, please clean up our seven-minute round.

    Thank you very much for being here, and thanks for all your hard work.

    I want to follow up on what Larry asked with regard to the inspection fees. The pork and cattle producers I talked to this week are in a real crunch; that's something we all know. They're telling me there's going to be people in two months who may not be able to continue their operation. Is there not a way to get a short-term fix to waive these inspection fees at the abattoirs and the borders to at least give our folks a level playing field at this point in time?

    It's my understanding and their understanding that the Americans don't have these fees. They're being hammered by the dollar and other aspects. Is there no way we can at least waive these fees to make it a little easier for them?

    Thank you, honourable member, for the question.

    Certainly there are processes arising, both from the motion of this committee and in advance of that the directions received from the federal, provincial, and territorial ministers to address this issue in concert with Agriculture and Agri-Food Canada. In fact we are looking at the mechanisms that could try to minimize costs associated with our current activities at the same time as CFIA continues to provide sustainable services.

     Again, currently the revenue generation component constitutes about 10% of our operating budget. I've tried to describe the evolution to try and adapt our inspection systems as we continue to provide the support to our industry that will allow them to succeed internationally, whether it's the investments in surveillance, in disease control programs, or the investments in the registering and approval of slaughter houses and the effects there.

    We are looking as earnestly as we can at opportunities with the department to try to figure out programming that would offset those direct costs to the producer and industry sectors in this country. We hope to be able to elucidate recommendations in that regard in the shortest time possible for consideration of this committee and at the same time ensure that we can continue to deliver the full range of services necessary to sustain public confidence in the inspection systems we are delivering.

    Do you have a timeline as far as specifically the inspection fees at the abattoirs and border are concerned, a timeline so these folks can know maybe when this will be resolved in the short term?

    I personally was not at the ministers meeting in Toronto. I can certainly come back to you with a timeline on that. We'd be pleased to do that.

    Thank you.

    My second question is in regard to the SPP. One of the criticisms from those people opposed to this is that, in trying to reach harmonization, we lower our standards. In other words, if we have a higher standard, and in this case, the Americans, who have all the clout, have a lower standard, we adopt their standards, whereas somewhere over in Europe they have standards even higher than we have.

    How do we go about getting a standardized system so that we can ensure, in Canada, we have a program of safety and of inspection that really meets the top-quality standards? This is a question that many people have.

    If I could, Mr. Chair, I would ask Paul Mayers to respond. In that particular area, I think Paul has the background and vision that would be helpful to the member.

    Mr. Mayers.

    Thank you very much, Mr. Chairman.

    You raise an extremely important point as we think about the issue of standards, and harmonization in relation to standards. As Brian noted in his opening remarks, our first priority is consumer protection, and that does not change in our discussion around harmonization of standards. So the issue in the context of harmonization of standards that becomes important is understanding from a science perspective what standard provides an appropriate level of protection, and working with other countries to define that standard that will deliver the level of protection we all seek.

    As Brian has noted, an important element in that regard is to work within the international context. The international standard-setting body for foods, Codex Alimentarius, is an important venue, and Canada, as Brian noted, is extremely active in that venue in this regard. Our interest in harmonization is not seeking the lowest common denominator but seeking the right standard, based in science, so that we can then deliver the consumer protection that Canadians would expect, so that we achieve two things, efficiency in how we operate the regulatory system and confidence in that system—confidence for Canadians as well as confidence for the industry that is regulated.

    Thank you.

    You still have some time left.

    I'll just touch on SRMs. One of the concerns in my area is the effect of this policy on rural municipalities, who are often asked to bear the brunt of disposal. In many cases, they don't have the facilities, or the particular disposal facility or unit isn't equipped for this, or it's not mandated. We're not talking here of large slaughterhouses that are getting these facilities built or working on them.

    Is there some kind of funding available through infrastructure or through the agriculture department, specifically to regional districts and municipalities, to cope with the problem of SRM disposal, apart from the other money that's been set aside in the federal-provincial agreement?

    Mr. Chair, in order to respond to the member in the most appropriate way, I would ask Freeman Libby, who I think has appeared before, to talk about the implementation of the SRM food ban and the negotiations with the provinces and the department around providing that level of support.

    Not a problem.

    Good day.

    We're talking basically about the small abattoirs and the small producers in rural parts of Canada. There are a number of things we've tried to do. One of the things they are allowed to do is that if they have enough land on site, they are allowed to bury right on site. They do not need permits to do so. It's deemed to be a very minimal risk. That's why we made that decision.

    On the second front, as in some parts of Canada we have small abattoirs where they do not have appropriate land on site on which to bury, we've tried to work with the industry on that aspect. What we've come up with there is a policy where, if they have land not adjacent but non-contiguous to the abattoir, they can also bury or compost that product on site. The only difference is that they would need to have a permit by regulation to do that, but the permit is free of charge. There's no cost for that permit.

    On the funding side, basically the only funding I know of is the federal-provincial funding of $131 million, $80 million coming from the Government of Canada. The provinces are using that in various ways across Canada. A lot of them are putting it into the small rural abattoirs, trying to help them as much as they can, and also some of the producers. They're either providing bins for them to do it or they're working with the renderers to try to have it picked up at a decent cost. But outside that, right now that's the only funding I know of that's in place.

    Thank you.

    Time has expired for our first round.

    We're moving to our second round of five minutes, please, starting with Mr. St. Amand.

    Thank you very much, Mr. Chair, and thank you, lady and gentlemen, for your presentation this afternoon.

    Just following up on what Mr. Bellavance was asking, the information that I and others around the table have been provided is that on a weekly basis, some 4,000 metric tonnes of specified risk material are necessarily disposed of in Canada. It strikes me as being a gargantuan amount, and I know, Mr. Evans, that in your earlier answer to Mr. Bellavance, you touched on the process. So my questions are coupled.

    How safe should the citizenry feel that the deep burial process, for instance, is fail-safe? Second, relative to other countries, particularly the countries within the European Union, is our process as modern, as efficient, as cutting-edge as theirs? Or are we somewhat behind the Europeans in the area? And last, vis-à-vis the federal government's role and the exploration or the research into the potential of using SRM as a biofuel, what, if anything, is the federal government doing by way of incentives to the private sector to advance that ?

    Thank you for the question.

    At the outset, I may not have been as lucid as I should have been with respect to other avenues of use of this material. One of the areas we have been actively pursuing with industry, of course, has been.... With the removal of SRM from the top end of the feed chain, one of the ways of managing not just the SRM element but the meat and bonemeal, which would previously have been considered prohibited material, is to work at the international level to try to adjust the international standards to allow for recovery of some of that cost, and recovery of some of that product, by being able to use meat and bonemeal from which the SRMs were removed prior to its manufacture. We have been successful in respect of certain markets that very much value that type of product for use in their own production systems.

    So we have been able to assist industry in finding new international markets for some of that feed material, which would not be at risk for BSE because the SRM has been removed from that as part of the production system. We're working towards having the international community recognize that more broadly with the hope of continuing to expand that opportunity.

    As far as the environmental safety of disposing of SRMs goes, again, as a scientist, I will tell you that there are still many questions about BSE and this class of diseases--prion-based diseases--that we do not have all the answers to. Certainly, from the evidence that has been accumulated since 1985, when the first cases in Europe were identified and Europe itself experienced the challenges of managing the diversion and disposal of that level of feed, we have yet to identify, with respect to BSE, that there is, in fact, environmental contamination that would allow for the spread of the disease between animals or humans.

    It's important to recognize, again, further to Mr. Libby's comments, that where disposal is followed, the disposal is not simply a case of having land and being able to bury it in that spot. Again, the disposal sites are subject to environmental assessment by the provinces to ensure that there is no leakage and that there is no contamination of groundwater associated with disposal in those locations. So again, at the provincial level and at the environmental level, we are mitigating seepage that would cause concerns in other areas, and it is, in fact, contained there.

    As I said, all evidence, in terms of composting and other approaches, seems to continue to support the fact that, unlike scrapie, and CWD in elk, environmental contamination is not a factor in further spread or transmission of the disease at this time. Obviously it's an area of research that we're very active in and will continue to monitor.

    With respect to the EU and the relativity of our measures, certainly our feed ban was designed recognizing some of the challenges and shortcomings experienced by other countries. Our feed ban is not as broad as the European Union's, which prohibits all animal proteins from being fed back to animals. Ours goes only so far as to prohibit specified risk materials from being fed into animal feed. So other types of animal proteins are still eligible to be used and do provide some salvage value and cost return to producers at the point of slaughter that the producers in Europe would not have access to.

    In terms of the integrity of the control measures, in terms of the delivery of the system, in terms of the quality of the surveillance being conducted, we are on par with the European Union, and that has been the basis under which we achieved controlled-risk status by international recognition and peer review.

    With respect to SRM incentives for biofuel production, again, I would ask the committee to perhaps consider having Freeman come back to the table. Alternatively, it may be an area to pursue directly with the department.

    Again, we at CFIA do not provide funding. We do not have grants and contributions authority in this area that would allow us to make those investments, but we are cognizant of the fact that agriculture is involved in the programs. In order to have all the factual information, I would perhaps suggest that you raise the question with departmental officials when they appear.

    Mr. St. Amand, your time has expired.

    To follow up on what Lloyd was just saying, Dr. Evans, on the issue of SRM disposal, has there been any funding that has gone to different research projects on incineration or on using SRMs as a source of heating or energy production on-site for a facility?

    Yes, in effect, the $131 million also supported, at the provincial level, the ability to fund that type of validation study and research. In addition, from the health perspective, some of the honourable members would recognize that one of the other institutions that was established in Canada was a research group called PrioNet, in addition to the Alberta-based Prion Research Institute. Both of those receive federal funding, and this is one of the areas they are pursuing, both with research in Canada and internationally on disposal and deactivation of prions, including SRM material, through various processes.

    The committee will recall from one of our previous appearances that there is a company in Canada with technology for alkaline hydrolysis, as well, which is continuing to be validated and which is extremely promising for commercial application.

    Thank you.

    Mr. Storseth, five minutes, please.

    Thank you very much, Mr. Chair--and if you're done with my questions, then I can ask them.

    Thank you very much, Mr. Evans.

    You talked a little about standardization, or your colleague talked about standardization, and using the proper science to base this on rather than the lowest common denominators. Are you satisfied that we've achieved this based on science at this point in time, or do we have more work to do with this?

    If I may, honourable member, by “this” you're referring to food safety standards?

    Yes, food safety standards in terms of the conversation we were having earlier.

    Okay, thank you very much for the question.

    Paul.

    Thank you very much.

    I certainly wouldn't characterize the work as done. In fact, within the work that Canada does in Codex Alimentarius, we participate in a broad range of committees in Codex Alimentarius that look at issues from food safety and nutrition to issues of maximum residue limits for chemical contaminants and additives.

    We recognize that the food industry is not static. The issues facing the food industry aren't static. Therefore the issue of standardization continues to be important. We recognize in Canada that we continually run into issues when different countries' standards aren't aligned.

    Right now part of the challenge that the pork sector faces is the issue that China takes a different view around a veterinary drug that Health Canada has authorized in Canada, has established the maximum residue limit for, and the fact that pork exports to China are impacted by this is an issue of concern to the Canadian Food Inspection Agency. So we engage China around that discussion and we have been working in Codex Alimentarius to establish an international maximum residue limit that is, in our view, an important example of the value of standardization.

    So by no means would I characterize the work as being complete. However, the work that has been done has yielded real value in terms of allowing, through standardization, that predictability on the part of Canadian exporters that products produced that meet Canadian standards will be acceptable in other countries in terms of our imports. We will continue to work in that regard, because we see it as important.

    I think predictability and stability are among the key aspects of any industry. If we are looking to open markets in other countries and help out both our pork and livestock industries, it's going to be very important that we work through this and we work through it with organizations such as this.

    Dr. Evans, you mentioned the 99% eradication of BSE. I'm jumping around a little here because I have lots of different topics. But when it comes to the enhanced feed ban, the 99% eradication of BSE, you must have some documentation or study that would prove that. Could you submit that to the committee? I'm a new member; if you've already submitted that, I'd love to see it for a first time.

    I'd like to know how the implementation process is going in regard to the enhanced feed ban and if you could comment a little about the implementation process. Also, you mentioned follow-up consultations that you've done. Could you comment on these consultations, on who they've been with, and the results you're getting back from these groups?

    Thank you very much for the question.

    Let me begin on the issue of the statement that was made. The statement said that with the current restrictions we have in place, we are removing upwards of 99% of known infectivity for BSE from the food chain. So in terms of those tissues that are defined as specified risk materials--brains, spinal cord, eyes, various other nerve bundles, tonsils, and certain parts of the small intestine--the cumulative work of research suggests that although there may be micro other elements in the animals that we will still find with additional research, the materials that we have defined and are removing cover about 99-plus per cent of all known infectivity. And in removing that, again, as we said, we have done the modelling and we would be pleased to share with you and the committee the modelling work that has been done and previously published in various fora around the timeline projections of having moved to that level, how that decreases the eradication time period. So we will be pleased to provide that to you and the committee.

    With respect to implementation and update and further discussion around the work of the industry and governmental working groups in terms of the assessment of the impacts and suggestions, again, with the permission of the chair, I would ask Mr. Libby to come back to the table, if that's possible.

    The time has expired.

    I apologize for that.

    We can always return to that. I think we have lots of time on the agenda for today.

    Monsieur Roy, cinq minutes.

    Thank you, Mr. Chairman.

    Good afternoon, Mr. Evans.

    Good afternoon.

    I am not satisfied with part of your answer and I would like you to clarify. You said that there is reciprocity with the US about the specified risk materials regulations, which would mean that they are implementing the same regulations as us. Have I understood correctly?

    If Americans do not implement the same regulations as us and if they do not dispose of SRMs in the same manner, that gives a competitive advantage to their producers. In effect, if they do not implement the same rules, their costs are probably lower than ours and their SRMs still have some commercial value, which is not the case in our country. This would mean that our producers are at a disadvantage in relation to their American competitors. Furthermore, in the US, some SRMs can still be used to produce animal feed. It might even happen that some of that feed ends up in Canada. Am I right or not?

    I would like to make sure we have a very clear understanding on the issue. In 1997, when the original feed bans were brought in between Canada and the U.S., they were deemed at that time to be equivalent, but in fact the U.S. had certain exemptions in their feed ban that we did not provide in Canada. So our feed ban with the U.S. in 1997 was in fact somewhat more restrictive than that of the U.S., and that had the support of the industry of the day.

    With the amendments that were introduced in 2006 and came into force in July of this year, in fact, we went further down the road than the U.S. had gone at that point in time. I was making reference to the fact of two points.

    One fact is that, in light of our requirements, U.S. feed is not eligible to enter Canada unless it's produced under the same requirements to meet Canadian requirements. That has not changed. So they are not able to export feed to us unless they have instituted parallel measures.

    The other point I was making to the committee was that we were notified earlier this week that the U.S. has gone forward now at the FDA level to their Office of Management and Budget, at the centre of the U.S. administration, with a proposal on further enhancements to their feed ban that would bring them either closer in line with us or move them somewhat closer to where we have gone. We don't have the specific provision to that and we will get that at the point that the OMB posts that proposal on the website for public consideration.

    That is...

    So they are not where we are, but they have now moved to propose a rule that we will assess in terms of the relevant—

     This means that Canadian producers have been disadvantaged in relation to American producers since the coming into force of those Canadian standards. We might get a more level playing field soon, in the next few weeks. I have your answer to my question.

    My other question relates to the disposal of SRMs. You have said two things. We have invested money to bring our slaughterhouses to standard. Of course, this disposal requires additional work and additional equipment in the processing plants. It also means that the costs related to those upgrades have been transferred to the producers by the plants through price reductions.

    Have we provided help to the producers for this adjustment? A producer disposing of those specified risk materials in a burial site has to assume a rather high cost since the work is not done free of charge. We are talking about trucks transporting 4,000 tons of SRMs each week, which is a lot, and operating such sites is very costly. So, our producers are also disadvantaged at that level. Have they received any help from the Canadian government?

    Let me back up one moment on the SRM requirement.

    Again, it was recognized going in that there were economic analyses done as to the impact on the sector, what it would cost per animal and how those costs would be distributed across the chain. That was part of the gazetting process. Although there was not unanimity around the overall outcomes of the feed ban, nevertheless there was very strong industry support and consensus that this was a necessary step in order for Canada to both achieve recognized controlled status, to manage the disease in the most effective way, to maintain domestic and international confidence, and to regain international market access.

    As I said in my remarks, I think we have seen the benefit of that since the coming into force of the feed ban in July. In fact, we have seen a broader range of products being now accepted internationally for trade purposes. Markets that had been previously closed to Canada have now started to open their markets to Canada. We've also benefited not only on the meat side, but we have in fact achieved significant live cattle exports, some 8,000 head to Russia, exports to Kazakhstan, and exports to other countries.

    Having achieved that, is that relief uniform across the sector? No, it is not. Are we stopping at this point in time? No, we are not. We will continue to do everything possible to restore international market access there.

    With respect to the costs associated with this, the money that was put forward by the federal government, and then cost-shared with the provinces, with provincial investment as well, some of that money was made available to the capitalization for infrastructure adjustments by the packing houses. They did have access to some of that funding to achieve some of the needs they had to meet.

    Again, we also benefited from the reality that this rule in and of itself was not a rule that came into force quickly. In fact, it was the result of almost three and a half years of consultation. We had, I think, on the part of industry, a recognition that they were able, over time, to mitigate some of those costs because it was not an immediate impact. They were able to amortize some of those costs and make adjustments in advance of the rule coming into effect.

     I would be the first to state, as well, that we do recognize that the capacity of the small abattoir versus a large commercial outfit isn't equal, so those have been some of the adjustments we've made by giving an extension for smaller abattoirs to come fully online with some of the parameters of the rule.

     As I say, at the end of the day, this was a rule that, challenging as it has been, has been well accepted by industry. They have worked hard to be in compliance and they have worked hard to implement the rule. We are continuing to work hard with them to continue to ensure that, as their processes can be adapted to achieve those same outcomes with less cost to them or less waste to them, we in fact are moving in that direction for those discussions in December with the round table.

    Thank you, Dr. Evans. The time has expired.

    Mrs. Skelton, you're on.

    Dr. Evans, first I'd like to know how many veterinarians you have in the field across Canada.

    When the agency was created, we had approximately 470 veterinarians working with us. The most recent survey we've done of our staff puts us between 630 and 640. So we have grown our veterinarian cadre over the 10 years of the agency. It represents about 10% of our inspection force.

    How many staff do you have?

    Around 6,500.

    What percentage of CFIA funding comes from user fees?

    It's less than 10%. I can get you the precise number. Our financial officer is here and we can provide that to you.

    I'd be interested in that. I also have some more questions about the performance report, revenue and everything.

    Mr. Chairman, this is Gord White, chief financial officer for the Canadian Food Inspection Agency.

    Welcome to the committee, Mr. White.

    Thank you, Mr. Chair.

    Our cost-recovery fees are in the order of about $56 million a year, and that equates to between 8% and 10% of our budget.

    Some of your categories were underestimated in your performance report. Protecting consumers and the marketplace from unfair practices, you forecast about $2 million—I'm just rounding off numbers here—and your actual revenue was $4 million. Certifying exports, your forecast was $10 million, and your actual revenue was over $13 million. You estimated that, and you underestimated those two. With regard to protecting Canada's livestock, your forecast revenue was $5 million, and your actual revenue was $2 million. And in terms of assessing agricultural products, you forecast $1 million, and your actual revenue was $371,000.

    Could you explain why you have those differences in those four very important sections?

    Mr. Chair, the forecasts are put together some time, as you know, before we come to a conclusion in a fiscal year. A lot of our increases, where we're over on our forecast, are due to incremental volume. Our fees, obviously, haven't gone up, due to the moratorium, but we have incurred more volume, more throughput, through those processing plants. Therefore, our fees do go up with that volume.

    In regard to a couple of the other ones, I don't recognize them off the top of my head, so I'd like to get back to you on those, if I could.

    On the protecting of Canada's livestock, you overestimated on that one. You estimated $5,474,000; your actual revenue was $2,095,000. And on assessing agricultural products, you forecasted $1,078,000, and your actual revenue was $371,000.

    These are two areas that I think are very important, and there's quite a discrepancy.

    Yes, there is. Again, off the top of my head, I can't give you those answers right now.

    If you could get back to me, I would appreciate it.

    Yes, we'll get back to you.

    Just to confirm, you're referring to our DPR for 2006-07?

    Yes.

    Okay.

    Dr. Evans, you mentioned the prions. You said that you have about 99%, models saying that we're getting rid of all these prions and everything in it. You mentioned that you know that prions are spread through animal contact in CWD and everything. Have you done models to prove that?

    Most of the current work we have, honourable member, deals with BSE-specific, because that is an area where there's been obviously much more extensive research done internationally.

    In the case of CWD, Canada, the United States, and Korea are basically the only three countries at this point in time where the disease has been identified. On the level of international investment, although Europe is now making a significant investment in CWD, we don't have the same capacity to model there.

    As I did indicate with CWD and scrapie in sheep, there is a long-standing recognition that the transmission opportunities for that type of prion disease are significantly higher than what we see in BSE in cattle. So as I said, the shedding in the environment--through urine, through blood, at the time of calving or lambing--and the distribution of prions in the tissues of those particular species are different from what it is in cattle.

    Well, I--

    You're out of time, unfortunately, Mrs. Skelton.

    There is one thing I do want to follow up on, though, with Mr. White. We were talking about the fees and the revenues that are generated back. You do have a lot of that in your performance report, but could you get us a detailed list of all the fees that CFIA charges, whether it's export inspections, inspection in packing plants, or inspection of cranberries out on the farm? If we could have that list, I think it would be useful for the committee.

    Mr. St. Denis.

    Thank you, Mr. Chair.

    Thank you to our witnesses for being here.

    I have a short question on fees, and then I'll move to something else.

     I accept that the fees aren't covering your costs, and so on, but I will not involve myself in that debate.

     Is there a distance calculation in the application of a fee? If there is an inspection 100 kilometres away versus 10 kilometres away from where your officials leave, is there a different fee for the distance, the location?

     I'm thinking of one of my constituents, Max Burt, who raised that important issue with me. I may have misunderstood.

    In effect, most of the fees were based on an activity base, not necessarily the time base.

     When the initial negotiations took place with industry back in 1996 and 1997, at the time of the creation of the agency, there was an attempt to look at the relative investment the agency was making on a per sector basis: our overhead costs for surveillance; what we were currently doing in export certification in the beef sector; the level of inspection and overtime we were doing in slaughter plants to meet the commercial demand. At that time, there were sectoral tables that sat down and said, “Well, if this is our relative percentage of your operating cost, then we will figure out as an industry how those fees could be achieved, or how that target could be achieved.”

     In actual fact, it was an inclusive process with industry, where industry helped to define how they felt they could best manage to deliver those fees.

    I appreciate the history there. Basically, a smaller, more rural operation is not disadvantaged vis-à-vis a closer operation to the--

    No, in effect, if it's a--

    It's like a postage stamp; it's basically the same wherever you are in the country.

    That's right. If he's looking for an export document, there's a set fee for that export document based on the number of animals being certified.

    Site visits aren't--

    That is not a factor. Our mileage cost is not a factor there.

    Okay. Thank you very much.

    I was surprised in the last number of weeks by the number of constituents who raised the issue of imports particularly, and their confusion over terms such as product of Canada, made in Canada, 51%, and packaging. I don't want to pick on China, but let's use them as a good example. Could you explain a bit about that, and maybe make our constituents feel better about the situation--or worse, as my neighbour friend here says?

    Thank you, Dr. Evans. That will be my last question.

    It would certainly be our earnest desire to make all the constituents feel much better about it.

    The government policy as it relates to country-of-origin labelling is broader than just a food policy. It obviously reflects the reality that in the past there was recognition for labour costs, manufacturing costs, and other factors that were borne in Canada. They ultimately determined at the government's broader policy level that 51% of the direct costs of getting that product into the marketplace, whether it was the labour costs or otherwise, would determine whether a car is a U.S. car or a Canadian car, irrespective of where the parts came from. It's a much broader policy issue.

    As it's been applied to food--and this is an area that we have agreed to revisit within the scope of the policy--again, there are issues on imported products. For certain classes of product, there are regulatory requirements that the product would have to indicate imported by or imported for. It would have to give information to consumers about whom they could contact them to verify where the product was actually from.

    Again, we have also been looking at what's been done more broadly internationally. We've met with the Canadian Federation of Agriculture, which has made a proposal around a Canadian logo that would define that the ingredients themselves are Canadian-grown. We have started that type of analysis to ensure that we can bring our policy in line with ensuring that consumers have the right to an informed choice and can make the choice they would like to make in the marketplace.

    I could be wrong, but I understand that some of the baby food or apple juice is coming from China. I may have misheard or misunderstood that. In picking up a can of apple juice, right now a consumer can't be certain that it is actually made from apples grown in Canada.

    There are limitations within the current policy. Again, that's what we're trying to address, so that consumers can interpret what that label is telling them in a factual and honest way.

    Okay. Thank you.

    Thank you.

    Mr. Lauzon is next.

    Thank you, Mr. Chair, and thank you for being here, Dr. Evans.

    Just to follow up on a question from Ms. Skelton, you mentioned that you had approximately 600 veterinarians on staff.

    We have 630.

    Okay. Of those, how many would be CFIA permanent employees? What would the ratio be there?

    That number, 630, is for veterinarians employed by CFIA.

    Are they employed basically full time?

    Basically that's the case. There are two.... Some of them are permanent; some of them are term, so they'd be hired for a year.

    Do you contract other veterinarians as well?

    We do on occasion. When veterinarians in charge of isolated plants go on holidays, we have retired CFIA veterinarians who are available to come in to work.

    Actually, a minimum of 600 veterinarians are on staff at CFIA working full time, basically.

    Yes.

    Okay.

    Mr. Chair, I might be sharing my time with my colleague Mr. Miller, if I get some quick answers.

    My constituents, especially my agricultural people, say that we really produce a great quality of food--probably the safest food in the world. Is that a fair statement?

    That statement is an accurate reflection of the commitment from the producer through the processor to the retailer and through the government oversight. It is an accurate statement that Canada has made the investments and that our food is second to none.

    The next comment they usually make is that the problem is that imported food does not have to meet the same standards our food does.

    Again, I might ask Paul Mayers to assist on this one.

    Any food entering into the marketplace in Canada has to meet the same standards, whether it's imported into Canada or produced here. Under the Food and Drugs Act it is an offence to introduce non-wholesome food, whether it's domestically produced or imported food.

    If beef were coming from another country, would the SRMs have to be treated the same way as our SRMs?

    Yes. In effect, the SRM requirements have to be removed for beef to come into Canada from countries that are in the same categorization of health status for BSE as we are.

    So I can go back to my constituents to say that you are producing food on a level playing field and that the imported food is meeting exactly the same standards as the domestic product?

    As far as the health and food safety standards, the requirement is that we enforce those same standards on imported product as we do on domestic. Now, the overhead costs to the sector could be borne by what the overhead costs are in the country to produce that food, and that could be different.

    Maybe what I should do is just turn it over to my colleague here, Mr. Miller. He has a pressing question that he has to ask.

    He doesn't really. I do have some questions, but....

    Why has he been poking me in the back, then?

    Well, I was just going to ask a follow-up.

    I'd just like you to clarify this, Mr. Evans. You seemed to imply there, when Mr. Lauzon added...that any food coming in, yes, it did, but you categorized that by saying if they're under the same BSE stipulation.

    I guess the question is that American beef coming in obviously does not come under the same SRM standards as ours. Is that not correct?

    No, in effect, for the meat to be imported for human consumption, it has to meet the same standards. They have adopted, as far as human food, the same SRM removal policies in all animals slaughtered in the United States. They remove the same SRMs from those animals at slaughter as we do in Canada.

    Okay.

    Is there much time left, Mr. Chairman?

    One minute.

    Maybe I'll just take my time back....

    Carry on. Sorry about that, Guy.

     I'm a new member on the committee.

    Actually, in your report you mention facility inspections, that Canadian facility inspections have to be inspected annually. The audits are annual. The Canadian importers are done a minimum of every three years, the American manufacturers every three years, and other non-Canadian manufacturers a minimum of every four years.

    There's quite a discrepancy there. Who are the others?

    Do you want to address that, Mr. Mayers?

    I'd be pleased to address the question. Thank you very much.

    I think the difference is one of terminology. All foods sold in Canada must meet the standards of the Food and Drugs Act and its regulations. The issue of the oversight in relation to foods is indeed different. Domestic producers of food are subject to CFIA oversight in a way that imports are subject to meeting the standards but their producers would not be inspected physically by CFIA in the same way that a domestic producer would. The standard is indeed the same. The nature of the oversight is different. We would react and respond to imports in different ways mechanically from how we would domestic producers, because we have the ability to inspect domestic producers, while for certain imports our focus would be on the food products themselves as opposed to the producer.

    Thank you.

    Thank you, Mr. Lauzon.

    Before I turn it around to any other member for second questions, I want to ask a few questions of my own.

    I am a member of Parliament from Manitoba. I'm getting lots of calls about confusion around rule 2 and the tuberculosis test and the requirement for Manitoba. Specifically, we're still considered somewhat different from the rest of Canada, even though we haven't had a TB outbreak from Riding Mountain in the domestic herd since 2003. We do have a zone set up with aggressive testing in that area. As you mentioned, there are 650 herds getting tested there every year. I have one of those herds that get tested every fall.

    My concern is that we are being discriminated against in Manitoba. I want to find out what the CFIA position is and what message you carried forward to USDA when they were developing rule 2.

     Thank you, Mr. Chair, for the question.

    When rule 2 came into effect, or the proposal around rule 2, the initial intent of rule 2 was to reinstate measures that were in place prior to May 2003. So there were no provisions within rule 2 specifically that dealt with tuberculosis. And as you've indicated, the status of Manitoba changed in that interval between 2003 and November 19 this year, when its status was regained as a TB-free area.

    Prior to May 2003, as a result of the Riding Mountain circumstance, the U.S. at that time required that any animal that had been resident in Manitoba was subjected to TB testing even after it left.

    In the lead-up to rule 2, adjustments were made to in effect drop that requirement, so the U.S. shrunk that requirement to say only animals coming either directly from Manitoba or that had been resident in Manitoba during the 60 days immediately prior to their export. They did drop the “any time in a lifetime” scenario, which was quite difficult to--

    For 2003, before the board shut down, only cattle coming from zone 23 and 24 around the park required testing--

    Correct.

    --not the entire province.

    Correct.

    The U.S. has done two things. First and foremost, at the time of the negotiation of the rule, there was agreement that the TB testing at that time would not be applied to steers or spayed heifers, that they would provide an exemption for those animals and provide exemptions for young animals over five days of age but less than four weeks of age because the test is not an effective intradermal test in that age group of animals.

    Subsequent to that, as I say, they did take the decision because...in the original proposal following the rule, they were going to apply it broadly to Manitoba. They agreed to bring it back to the 60-day or direct-origin. And they did inform us over the weekend that they were further reducing the restrictions on TB testing. In fact, sexually intact animals moving to a feedlot in the United States, and then to be slaughtered at less than 30 months of age, now are also exempt. So they've added another category of exemption, and now only sexually intact animals for breeding purposes are subjected to testing.

    So the requirements have been reduced over the past 72 hours. We have amended the health certificates and notified industry and accredited vets accordingly.

    In parallel, Mr. Mayers and Mr. Prince were in the United States and met with the senior U.S. officials around re-achieving Manitoba's free status. They have made a commitment to us that they have started a review of their CFR-quota federal regulation requirements on TB tests, not just for Canada but for all countries. They anticipate coming forward in 2008 with a revised CFR, and they have committed to us that their review of Manitoba's free status will be expedited in that process.

    So we hope that we can continue to bring pressure to bear to have that done as quickly as possible.

    Thank you very much. That is good news.

    And next year you'll win the Grey Cup.

    No, we'll win the Grey Cup this weekend--and the Vanier Cup.

    Mr. Boshcoff.

    A point of speculation there.

    My question deals with the national abattoir system. Although we keep hearing perhaps too frequently that abattoirs and processing plants are gearing down production or stopping altogether, I have a project in the Rainy River district that has been in debate stage for many years. They've finally decided, because of the difficulties and the onerous conditions for a federally inspected abattoir, to go with the provincially inspected abattoir. And the issue comes down to how there can be such a vast difference that a cooperative organization would decide it couldn't meet the federal standards, which I understand are almost exactly the same as all the provincial standards. But the costs and the other things impacting them mean now they can only sell their product in Ontario as opposed to Manitoba, which is much closer than many of the other larger markets they would want to be able to compete in.

    My question is what are we doing to each other when we can't as a nation...? Do people think the national standard is so vastly superior to the provincial standard, which it can't be? Clearly you can't throw the carcass on the sawdust floor, so why are we still debating this? Why can't we do these types of things?

    The goal of a national meat standard in this country is a goal that we still actively pursue. But I'll ask Mr. Prince to address your question.

    Thank you for the question. It's a very good one.

    The federal requirements are based on interprovincial trade and on foreign country requirements. So there are some things in those federal plants that are done because it's a requirement of the U.S., or Japan, or so on.

    When it comes to trade interprovincially within Canada, that is something we have been working on. Paul Mayers has been a lead on this in working with the provinces.

    There has been a lot of work done in the past decade working on what's been known as the national meat code. The objective with the national meat code is to establish a national standard for abattoirs and meat processing plants that all provinces could implement.

    The ultimate goal here would be to have provinces and their meat inspection systems start to harmonize, meeting this national standard. The ultimate goal, on the basis of that, would be to allow interprovincial trade based on that national standard. In other words, we could have abattoirs that wouldn't necessarily meet all the requirements for export to the U.S., Japan, or whatever those myriad requirements might be, yet they would meet a national standard, and by virtue of doing that, would be able to trade interprovincially.

    There is a lot of momentum on this file at the moment. We're working very hard towards that goal and we'll keep you posted on it.

    That actually gives me good cause for optimism as they proceed, because they're essentially ready to start dealing in realities.

    The question was also raised earlier about the same standards. I want you to try to clear this up. Perhaps it's now an urban legend, about the mushrooms from a foreign country that had a high formaldehyde level, and that the CFIA simply raised the level to deem them acceptable. It could have been an issue that was raised in this committee, actually.

    Are you familiar with this? You can say yes or no to that one.

    But the bottom line is that under those categories that our own producers want to know about--labelling, inspections, environmental pesticides, site purity so that we know it's not coming from a former nuclear dump, those kinds of things--you said very clearly, and I appreciate how succinct it was, that our standards for production and import standards of production are the same.

    So can we assume that the labelling of any product coming in would be the same in Canada as it was in the country of origin?

    Madam Bryanton.

    Thank you.

    We do on occasion find formaldehyde in mushrooms. Formaldehyde is a naturally occurring chemical, as well as being a chemical that at times is used in various manufacturing processes, not necessarily in food manufacturing processes.

    If ever we do find any level of formaldehyde in a food product, we do request a health hazard assessment to be conducted by Health Canada. Health Canada will look at the product, the consumption of the product, and the distribution of the product in making a determination.

    They also do seek to set tolerances that relate to these products. And in setting tolerances, they do take into account international standards as well as their own research in setting those standards.

    You referred to an urban legend. I'm not aware of any situation where we have changed a standard to accommodate an import. But there are occasions when standards are revisited on the basis of new scientific information and new evidence. So if a standard is changed it would be because of new science; it would not be because of an import issue or a domestic issue.

    Thank you very much.

    Thank you.

    Monsieur Bellavance, s'il vous plaît.

    Thank you, Mr. Chairman.

    I would like to come back to the issue of SRMs. Could you tell me, yes or no, if the regulations require that anyone producing, importing, distributing or selling livestock feed has to keep records during 10 years with the following information: the name and address of the clients, as well as a description of the feed, including quantities and ingredients? Is that in the regulations?

    There are record-keeping obligations associated with the regulations, but for that level of precision, I'll ask Mr. Libby to respond, please.

    Yes or no, do they have to keep records during 10 years? Are you in a position to answer this question?

     On record-keeping, yes, I can talk about that.

     Basically anybody who controls SRM, whether they transport or produce it, has to keep records of the amount of SRM for a period of 10 years, the reason being that the period for mad cow disease to come about is roughly seven to ten years from the date of infectivity.

     So we've worked with the farming community, we've worked with the rendering plants, we've worked with anybody who does deal with SRM on the most simple way they have to keep these records. It's not an overbearing requirement. Basically, they just have to have a good account of the amount of SRM that's been produced.

    I believe this is a very heavy burden for our producers. You know that farmers have to prepare mixtures of meal and feed for their animals several times each day. Each time, they will have to record in their books the mixtures they have prepared, with all the details, even though, as you know, farmers have many other things to do with their time.

    Are you saying that they will not have to do that?

     I'm talking strictly about the SRM, and not about the creation of the feed for the animal. There's no SRM produced in the feed; the feed is another story altogether. We're just talking about the maintenance and the control of the specified risk material that a farmer would produce on his farm.

    They already had to keep their records for a period of two years anyway, so the only difference as of July 12 is that the records now have to be kept for 10 years rather than two years. So there really isn't much of a difference as far as the records to be kept are concerned, except for the period of time.

    I am aware of that but each farmer will have to record that information, especially the quantities and ingredients used to feed his animals, and he will have to keep those records during 10 years. There are 80,000 farmers in Canada. I am quite sure that your Agency does not have the capacity to visit each of those farmers to check if they have kept those records or not.

    I find this totally absurd because it is a heavy burden for the farmers and I wonder why we imposed that on them. You are telling me that there are standards at each step of the chain, which I understand, but I do not understand why they had to be forced to keep those records and I wonder how you will be able to audit that in any case.

    I guess I'd better clarify a little bit too, because you're talking about two separate things. The SRM is one thing, the creation of the feed another.

    When you're talking about keeping track of the ingredients in whatever, that's going into the feed program. Those are the requirements of the feed program under the Feeds Act, which is totally different from the SRM.

    So I'm not sure where you're going. You want to go towards the feed, which is: the farmer has to keep track of the type of feed he's producing on the farm and is feeding to his ruminants.

    Is that where you're going?

    I am saying that you require that records be kept since July 12. These new regulations relate to specified risk materials. It says, and I have the text before me:

    It doesn't exist? But it's from your Agency.

    I'll turn this one over to Paul, because it is a feed issue, not an SRM one.

     For clarification, the regulations that came into effect on July 12 addressed a number of issues, including issues related to feed. Those requirements that you have quoted relate to those who produce feed and distribute feed. They are required to keep records in relation to that distribution because those records are extremely important and valuable in any investigation of an outbreak.

    When we are investigating an outbreak, it's important to be able to look back at inputs that might have contributed, in the result of a contamination event, to impacting the health of animals. Those requirements, however, are different from the requirements of record keeping for producers as it relates to their controls of SRM. There are different issues between the important requirement that if you produce and distribute feeds, you are required to keep records as to the feeds that you have produced as well as their distribution. And you are correct in terms of the time requirement around their keeping of records. But the important distinction that my colleague was speaking to is that the requirement is different from the requirement on producers or, frankly, on anyone who handles specified risk material, to keep records as to the volume and nature of the materials they have disposed of.

    Mr. Mayers, I want to follow up on André's question. We're talking feed mills; we're talking about retail outlets; we're talking about renderers who produce meat and bonemeal that may enter the retail feed industry chains; the trucking companies that may haul these products. On top of being part of the system of tracking this information when you guys do tests, are they audited on an annual basis or on an ongoing basis, in some way, shape, or form, by CFIA?

    They are subject to audit. Perhaps my colleague Mr. Prince would like to speak to the specifics around the auditing. But certainly they are, indeed, subject to audit, as are all those involved in the chain of distribution of product.

    In leading up to the implementation of the feed ban on July 12, we developed an audit policy and an enforcement and compliance policy, and we consulted broadly with the industry so that everyone understood exactly what the rules of the road would be in terms of compliance.

    A few years ago, additional resources were provided to CFIA for the feed program, as a result of the BSE crisis of 2003, and those resources are available to audit the various links in the chain in SRM. In particular, with renderers handling SRM, we've gone to a 24/7 inspection presence there. So we have a whole audit plan in place to look at all the aspects of SRM handling. In fact, records are reviewed to make sure that record keeping is in place.

    Your time had expired, André, so I was only trying to get a little more information for the entire committee's purposes.

    Mr. Atamanenko, you're on.

     I'm going to try to get two questions in here.

    You mentioned that steps are being taken to protect Canadians from unsafe products. I'd like to know what specific steps and if that involves more staffing, more inspections.

    Second, a little while ago, an article appeared in, I believe, Le Droit stating that CFIA is one of 17 departments slated to have—or perhaps has had--a cut in the budget of 5% or 10%, something like that. The article also went on to write about the fact that there are now fewer inspectors, that there was more self-regulation in the industry. In other words, the gist of the article was that our food supply really isn't safe because of this proposed budget cut. I'm wondering what specific steps are taking place, then, and if that means more staff.

    Is there any truth in the article?

    I'll try to address the last part. We are not aware of any budget cuts being imposed on the Canadian Food Inspection Agency at this time.

    CFIA was one of the first group of 17 agencies and departments assessed under the new expenditure management system developed by the government, under what's known as strategic review. The intent of that process was to look at reinvestment of the bottom 5% of programming into other areas where we believe risks could be better managed. From our perspective, it was never the intent of strategic review to be a cost-cutting exercise. We've not been informed of any reduction in our budget in that regard.

    As CFIA we do know, and it is in our performance reports, that over the next several years we will see a decline in our overall funding. This is as a result of specific tied funding that is sunsetting. These were part of submissions approved previously for defined periods of time to deliver certain activities, some of it BSE-related, some of it AI-related, for which activities have been concluded. That money is scheduled to come out of the budget.

    We are continuing to do the appropriate assessments, from a management accountability framework, to report on the deliverables for the investments the government made there and to make the case, in appropriate circumstances, as to whether some of that programming should continue. To the best of our knowledge, we have not been informed of a cut.

    With respect to your question on food inspections, as I say, we do undertake, on an ongoing basis, imported and domestic food. There are residue monitoring programs that look for chemicals, microbiological hazards, heavy metal contaminants, pesticides. These are applied on an ongoing basis, and these programs are adjusted based on the reality of globalization, an assessment of where products are coming from, and what's going on in those jurisdictions.

    It's informed by findings in other countries as well. Again, we try to cooperate with the EU, the U.S., and certain key trading partners. If they have found issues in imported food, we try to redirect resources to make sure those issues are not occurring in Canada as well. As we talked about earlier, it is a system that has to adapt to the dynamic nature of the food supply and the system that's operating globally.

    Within Canada we are actively looking at trying to take the reality, as I said earlier, that one cannot inspect and test one's way to food safety. It is important that industry has good quality assurance programs in terms of whom they procure ingredients from and how they manage hazards and risks within their operating programs.

    Under our legislation it is mandatory in certain programs for an industry to have a hazard analysis critical control point plan that governs how they receive product, handle product, and how they produce, review, and test product. We are involved in looking at those third-party processes to see where they augment and complement the regulatory process and where we can give due recognition for where industry is able to demonstrate the safety outcome that would not necessarily merit government having to impose that cost on industry.

    I'm going to ask one other question. I hope I have enough time.

    With respect to the national meat code, in British Columbia small farmers have really been hit by the meat inspection regulation. In other words, the farmer can no longer slaughter and sell to a neighbour for consumption.

     I'm wondering if that is a national standard. I found through some research that there is another province, specifically Nova Scotia, where that is not the case. I'm wondering if the regulation in B.C. was as a result of your organization, CFIA, saying this has to be in place. Or has each province been able to decide how they're going to handle selling at the farm gate? Do you see this as a threat to our food safety if a small farmer kills a cow and sells it to me, providing I don't resell it?

     Do you understand what I'm getting at?

     I can comment on the B.C. situation. That was a provincial initiative. They did tighten up the standards, there's no question, which meant that some on-farm slaughter is no longer permitted. It does mean that there will be some additional plants coming under inspection. In fact in the province of British Columbia, the CFIA delivers the program, so we will be taking on some additional plants that come under that B.C. meat inspection program.

    The provinces are evolving their meat inspection programs across the country. Ontario has a fairly new meat inspection act, which is very close to B.C.'s--not exactly the same--and other provinces are looking at that.

    This links back to my earlier comments about a national meat code. It's an evolution. Provinces are moving forward, and B.C. and Ontario are at the forefront of that initiative. There is a federal-provincial committee working on this. All provinces are very aware of this, and they are working generally towards a common goal.

    Thank you.

    Mr. Storseth.

    Thank you very much, Mr. Chair.

    Just for clarification for the record, the $131 million arrangement is a federal-provincial agreement, right, in regard to the enhanced feed ban? And that money is basically distributed to the provinces with maximum flexibility so that the provinces can decide whether it's a local municipality that they would like it to go toward, or...but it's predominantly within each provincial jurisdiction, correct?

    That's correct.

    The enforcement of the enhanced feed ban, who's that left to?

    The Canadian Food Inspection Agency.

    Is the Canadian Food Inspection Agency encountering any difficulties in enforcing this program across the country?

    We've been working very closely with the industry, working well up to July 12 and since the July 12 implementation date, and the industry certainly fully understands the ramifications of the implementation, both internationally and within Canada. What we did is we sat down and developed an enforcement strategy based upon cooperation, compliance, and education, knowing fully that we were going to encounter some problems.

    Basically the way we've approached it is that when we do find non-compliance, we have to react. That is our responsibility; we have to react. But what we've been doing with the industry is that when we find non-compliance, we ask how do we get them into compliance as easy as possible with them, as cost-efficiently as possible for the industry, so that we won't have that problem again.

    Have we found problems? Yes, we have found some problems. We have an approach where we go from a situation where we would issue warning letters right up to prosecutions. It's a graduated approach. As we're going down that road, right now we're at the starting blocks, so to speak. When we do find the problems, we get the compliance in place, and then if we have to we'll issue a warning letter or take appropriate enforcement action.

    I want to emphasize that the industry has looked at this very seriously, and there has been very good cooperation on behalf of the industry right across Canada, from coast to coast.

    From the discussions we had in the spring with some industry representatives, such as the Canadian Cattlemen's Association, it's my understanding that they were working very closely with CFIA and were actually promoting the enhanced feed ban so that we could secure export of our market to the United States and other countries.

    Have we received--and I don't know how to word this politically correctly--the same cooperation from the provinces across the board? I mean, there's been a holdup, and there's been a letdown in the process somewhere, and I'd like to identify where that is. If it's not with the industry, one would tend to believe, with a federal-provincial agreement, that it must be with the provinces then.

    Again, I think it is safe to say that some provinces were better prepared than others. That's also a reflection of the ability of individual provinces through their treasury boards and their budgeting processes to make sure they were able to provide the supplementary funding in a timely manner to the industry.

    Again, as you've described, in order to achieve maximum flexibility on the part of the provinces to work either with municipalities, the private sector, or other organizations to achieve the control of the SRM, in many of those provinces the timeliness of signing those agreements was not uniform, because again they were doing their own internal consultations of how they wanted that to be achieved.

    But to the best of my knowledge, and I certainly would expect Libby Freeman to confirm, all of that money has been disbursed out at the federal level. Again, because it was administered through Agriculture and Agri-Food Canada, I would certainly encourage that you may want to have more directed discussions with the department that administered the program, because we at CFIA provided advice, but we were not in charge of the administrative arrangements.

    There's still time left, if Mr. Miller wants it.

    Yes, if I could.

    Mr. Evans, I would like to go back to the performance report of March that we didn't really get to. There's a statement in there that says discriminatory practices and unnecessary barriers--barriers is a key word--to Canadians farmers are mentioned as a key risk to CFIA's capacity to achieve its strategic outcomes.

    I'd like you to speak to some of those barriers, but there's something else I want to quote. There's the issue of the total removal of APHIS, the Animal and Plant Health Inspection Service, which gives exemptions from inspection for exported fruits and vegetables grown in Canada. I would take it that, basically, if there's an exemption given from the fruit and vegetable side, could that same exemption be given to the livestock side of it? Is that one of those barriers that you referred to?

    Also, there's another statement in the report that mentions that insufficient authorities could impede the effectiveness of CFIA. I'd like to hear what necessary authorities you believe the CFIA is lacking.

    Thank you.

    The reference to barriers there is a reflection of the fact that we are cognizant... Again, the CFIA inherited 13 acts and 40-plus regulations when it was created in 1997. Some of that legislation is quite dated. Some of it is quite prescriptive, written in a different time, when risks were different from what they are today.

    We're very cognizant of the efforts of this committee in its cross-country meetings last year with industry groups about regulatory burden. There is the reality of the report of the Canadian Federation of Independent Business that there is a need on the part of CFIA to try to further adapt its regulatory approaches to ones that are less prescriptive and more outcome-based, and that reduce the burden on producers and individual enterprises, particularly small business enterprises.

    The current minister is a former champion of the paper burden reduction exercise. He's made it extremely clear to the agency that we will be held to a very high standard in that regard. We have initiated programming to make sure that we can meet the paper reduction burdens the government is looking for.

    The issue around risk speaks to the fact that if the regulatory burden forces people to try to find ways around the regulations, then we're not achieving the regulatory outcome. That in itself creates risk.

    I'll stop you there--

    Your time has expired.

    I think this is important.

    It had better be.

     It is.

    The way this reads to me, Mr. Evans, and what I'm afraid of here, is that by the mentioning of the barriers that exist for agriculture producers, it's almost written as if that goes against what CFIA is trying to do. So in essence they'd be butting heads, which isn't what we want to see.

    Am I right in that presumption?

     I believe the report was intended to portray the reality that we have made previous attempts to modernize some of the legislative tools. We have authorities in certain areas, for example fish, that we do not have in fruits and vegetables. That's the nature of the acts and regulations we inherited.

    Part of our effort is to ensure that we have the appropriate suite of tools that would allow us to effectively manage risk across all the commodities in an equitable and fair way. That goes back to our statement of wanting to have an equitable and fair regulatory regime that does not impose an undue burden, but backstops the ability of the program to achieve its safety outcomes for Canadians and in animal health and plant health.

    Where we say we have insufficient authorities, that's a reflection that we have non-uniform authorities. We can take certain actions to detain or prosecute under certain legislation, but we can't do it under other legislation. So we're trying to be consistent in how we deal with risk, and risk across these commodities requires that we have a uniform set of tools to do that.

     Our efforts will continue to focus on working with the committee and other departments and agencies around town to try to ensure that regulatory reforms achieve those outcomes.

    Thank you, Mr. Miller and Dr. Evans.

    Monsieur Bellavance.

    In fact, we may end on this. I just want to understand. Producers will have to keep records of their livestock feed, of what they use to feed their animals. Is that true or not?

     If they're not distributing, I am not aware that there is an obligation under the regulations to keep records on what they are feeding. I can certainly commit to review the regulatory requirements and inform the committee in that regard so we can be absolutely clear on this point.

    If you would provide that to the committee, I'll make sure we circulate to all members what regulations apply on the farm.

    I want to thank everybody from CFIA for coming today. It was very informative. We had a great discussion.

     I'll entertain a motion to adjourn from Mr. St. Amand.

    The meeting is adjourned.