On behalf of the Canadian sheep industry, I would like to thank the committee for its invitation to speak to you and address some of the challenges our sector faces. So thank you.
The Canadian Sheep Federation is a national not-for-profit organization that represents over 11,000 Canadian sheep producers. Established in 1990, the primary responsibility of our organization is to set national policy for the sheep industry. Our mission is to work closely with all levels of government and industry-related organizations, both domestically and abroad, to further the viability, expansion, and prosperity of the Canadian sheep industry. To that end, the Canadian Sheep Federation is pleased to take this opportunity to share with the Standing Committee on Agriculture and Agri-Food the challenges the sheep industry faces as a result of interprovincial trade barriers, and the opportunities that exist to eliminate these barriers.
In May 2012, the Canadian Sheep Federation sent a letter to the Minister of Agriculture and Agri-Food, the Honourable Gerry Ritz, supporting the proposed amendments to the Meat Inspection Act that promised a movement towards streamlining and simplifying the requirements for federally inspected processing facilities. There have been positive changes to regulations since that time, and there remains a need to continue reforming the existing system and examining opportunities for minimizing barriers to interprovincial trade.
The news of a less onerous recognition system for federally inspected abattoirs was promising for the sheep industry. We are a sector that sees 70% of its animals processed in provincially inspected facilities, and only 30% processed under federal inspection. To provide some perspective on this, I would point out that Ontario processes 53% of Canadian-born lambs, with over 90% of those processed and handled through provincially inspected facilities. This means that 48% of Canadian-born lambs have to be consumed in Ontario and remain unavailable to the rest of Canadian consumers.
The challenge for the sheep and lamb sector is in fact infrastructure. In 2014, there were only 10 federally inspected facilities in three Canadian provinces with the capacity to process sheep and lamb. Despite encouraging processors to attain federal inspection, we have been repeatedly told that it's not only the cost of making the transition from provincial to federal accreditation, but also the cost of maintaining it. Two Ontario processing plants that endured the transition from provincial to federal inspection subsequently closed and filed for bankruptcy. With large national grocery outlets reluctant to carry meat products from provincially inspected plants, given their interprovincial distribution system infrastructure, there is a genuine need to address how Canadian lamb is going to make it to Canadian consumers. Despite Ontario's overall processing capacity, the shortage of federal processing, along with retailers' reluctance to carry provincially inspected product, means that even Ontario consumers don't have access to Canadian lamb. A lack of federally registered kill facilities and the inability to move provincially inspected product between provinces limit the productivity and profitability of the Canadian sheep industry.
Limitations imposed by the current meat inspection system affect more than just the processing sector. Producers in provinces without federally inspected establishments are required to either direct-market to a much more limited customer base, or ship live animals to provinces with larger processing capacity. For some producers, the additional cost incurred in transporting sheep and lambs across several provinces can equate to 10% of the animal's value, which significantly impacts producers' profitability. Provinces that have the land base and capacity to expand the ewe flock lack the ability to move product out of the province, and they lose profitability in moving live animals to provinces with the greatest retail demand. Likewise, the cost of producing sheep and lamb in provinces with major consuming metropolises is ever-challenged by rapidly increasing land prices.
The recently released domestic livestock movement demographic study commissioned by the Canadian Food Inspection Agency suggests that, on average, over 30,000 sheep and lambs are shipped from western provinces to eastern Canada annually, and in some years that number is over 50,000 head. With interprovincial transport times for live animals easily exceeding 48 hours, animal welfare concerns can keep some producers from being able to market directly to abattoirs or through auction marts that service provinces with high processing capacity.
Nova Scotia provides a pointed example of how Canada's meat inspection system is failing Canadian producers. The Sheep Producers Association of Nova Scotia, in one of our member provinces, has worked extensively to produce and market premium Nova Scotia lamb to consumers. As industry marketing efforts have driven up demand for this local product, customers look for premium Nova Scotia lamb on grocery store shelves. However, with maritime grocery distribution centres located in different provinces, and no federally inspected processing facility in Nova Scotia, producers cannot get premium Nova Scotia lamb into major retail outlets and in front of Nova Scotia consumers.
The limited ability of producers to get Canadian lamb into mainstream retail outlets means that domestic demand is met largely with imported product. The Canadian sheep industry currently supplies less than 50% of the sheep and lamb consumed in Canada, demonstrating the tremendous capacity for industry growth were it not, in part, for the current limitations on domestic trade. Moreover, Canada's changing population demographics promise to further increase demand for sheep and lamb products by Canadian consumers. Canada's population growth is expected to come predominantly from immigrants originating from south and southeast Asia, the Middle East, and Africa, creating an unprecedented demand for new types of food which are different from the traditional food offerings in major Canadian grocery stores, in particular for sheep and lamb products. According to CIBC World Markets, about 70% of spending growth in the next decade will come from visible minority groups.
The combination of population growth and shifting consumer demand indicate that there will be a growing demand for lamb in Canada in the coming years. This is an opportunity that the industry needs to be able to capitalize on in order to ensure its long-term viability and profitability. However it remains a challenge to get Canadian product into major retail grocery chains and in front of consumers.
The Canadian Sheep Federation asks that the committee consider an innovative national meat inspection system which would preserve Canada's high standard in food safety and satisfy the expectations of both our domestic and international markets while eliminating the superfluous red tape that restricts the capacities of processors servicing up-and-coming sectors. Likewise, a renewed inspection system should continue to support regional processors that provide local and customized services to farmers and consumers alike.
The Canadian sheep industry is uniquely positioned to experience tremendous growth that will allow it to capture greater domestic market share. Regulatory red tape impedes industry growth, and Canada's current meat inspection system fails Canada's sheep farmers and Canadian consumers alike.
From a sheep industry perspective, meat inspection in Canada is broken, and those who are paying the price are producers and consumers. The role of government and federal policy needs to be one of supporting Canadian farmers and Canadian agriculture. Eliminating barriers to interprovincial trade and opening the domestic market for sheep and lamb will support the viability, expansion, and prosperity of the Canadian sheep industry as it meets the ever-increasing demand from Canadian consumers.
Thank you for your time. I appreciate it.
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Thank you, Mr. Chairman and members of the committee, for the invitation to be here to present on behalf of the Canadian Federation of Agriculture.
My name is Ron Bonnett. I'm a beef producer from northern Ontario, and I'm president of the Canadian Federation of Agriculture. The Canadian Federation of Agriculture represents, through its member organizations, more than 200,000 farm families across Canada, and we promote the interests of Canadian agriculture and agrifood producers to ensure the continued development of a viable and vibrant agriculture and agrifood industry in Canada.
The CFA supports the goals of reducing barriers to interprovincial trade and recognizes the need to eliminate unwarranted barriers to interprovincial movement of goods, investment, and labour to reconcile standards. Harmonizing standards across Canada would enhance the ability of Canadian farmers to serve the needs of the domestic food market as well as the export markets that so many farmers depend on.
We also believe that these goals must be pursued in a manner that recognizes the diverse social, cultural, and economic characteristics of the provinces, and respects the diverse marketing requirements of the various sectors of Canadian agricultural production. We have heard concerns raised by farmers across Canada about the number of differing standards and regulations across the country that hinder or add unnecessary costs to those who wish to market their products outside of the province. This is especially true in cases where farms are located in areas that abut other provinces. These barriers include differing transportation regulations, which can include everything from truck weights, dimensions, and tire sizes, and things like differences in standards for animal housing, new management regulations, and the variance in disease-prevention regulations between provinces.
In the case of animal production, differences in provincial meat inspection, which have been outlined by my colleague here, have a significant impact on livestock and poultry farmers, as many retailers won't purchase products from provincially inspected plants. This includes products produced in the province and products that go across provincial lines. In addition, we've heard from food processors about a number of regulations that are different across different provinces.
Another area that needs to be addressed is the standardization of farm data. Provincial regulations vary considerably, and having a robust baseline of information across the country is necessary to compare different approaches used by provinces, to gauge their impact, and to develop appropriate policy responses. One example may be the information on investments of corporate entities, foreign ownership, and other land data that could benefit an understanding of what is happening in the industry.
As mentioned, CFA supports the goal of reducing or eliminating unnecessary burdens on interprovincial trade in agriculture; however, we also believe there should be legitimate exceptions that would be recognized. This could include measures to protect animal and plant life, protection of the environment, and consumer protection.
The one other area of concern that must be addressed is having measures in place to support the supply management system for dairy and poultry producers in Canada. Under the supply management system production is managed at the provincial level and interprovincially, and rules are needed to make sure that this is in place. The agricultural chapter within the Agreement on Internal Trade has recognized that nothing in the agreement shall be construed to prevent the provinces from adopting or maintaining measures relating to supply management marketing systems regulated by federal and provincial governments and provincially regulated marketing boards that are not technical measures. The sector has asked that the statement be further clarified, given the vagueness of the term “not technical measures”, so that measures supporting supply management are exempt from the dispute settlement process contained in the agriculture agreement on trade.
While federal, provincial, and territorial ministers responsible for trade approved an interpretive note addressing these issues, we have not seen the written text of that, and it has not been made public. We are therefore seeking the assistance of this committee to make sure that the interpretive note is available to those sectors that would be impacted prior to its being ratified.
In 2006 the Senate banking, trade, and commerce committee did do an examination of interprovincial trade; however, no report was issued. But from the information that we've been able to gather, they had a hard time finding real details on what is impacting trade, and they had a hard time as well quantifying what the impact would be.
In summary, we think the goal of reducing unnecessary barriers to interprovincial trade would enhance the ability of Canadian farmers to serve the needs of the domestic food market, as well as position them better for export opportunities. We recommend that the committee do a thorough assessment of the mechanisms and regulations in place that may hinder interprovincial trade in agriculture while keeping in mind that there may be some legitimate exceptions to this rule.
Secondly, we would recommend that the committee assist us in making the interpretative note to the AIT public so that Canadian supply-managed sectors can be assured that the measures supporting these sectors are exempt from the dispute resolution process.
Thank you, and I look forward to your questions.
I'll just pick up where I left off, and again I apologize. Brevity has never been my forte in any way, shape, or form, so I'll try to do it faster.
What we would like to see and what we have been working toward is finding some revisions to the temporary foreign worker program that help access that seasonally very specific skilled labour, but that isn't the only solution. Total reform of that program won't help do it.
The other part is how we find skilled workers, how we train skilled workers, how we invest in them, and how we get them interested in the sector. That, I think, will continue to be a challenge because certainly there are so many other opportunities out there. And farming isn't always the highest paying or the easiest of those, but there certainly are people interested in doing it.
We've worked with the Canadian Agricultural Human Resource Council in developing an occupational standard for the sheep sector. We do that not only to define what we need as an industry for different levels of employees, but we're hoping that feeds into educating and training at a career level for those who have an interest but are not sure where to get started or how to get started.
I have to throw this out here, being from this area, that it's a little disappointing to see things like agricultural career colleges being closed, not ones that provide bachelor's and master's programs—not that there's anything wrong with those; I have a couple of those—but on-the-ground, hands-on, skilled certificate-level programs. How do we train that sector if we don't have that educational background in place?
So part of our piece, working with CAHRC, is to create some descriptions of what the jobs are in the hope that it feeds into academic institutions and training institutions, to say, “If you're interested in this sector, this is what you need to know, and not only what you need to know but what the opportunities are”.
There is not just fieldwork. There's management, supervisory, industry-related, spin-off sectors to that. We need to look at how we educate people, how we're going to be able to train people and get them interested locally. If we can't train them and provide them some skills, some understanding, and some appreciation for the work they do, we certainly aren't going to interest them in the sector. Then we have to get them trained up to our industry needs, and we also need to look at those temporary workers who we bring in.
:
That was brevity, Ms. Patterson. Thank you.
I think many of us who have been here for a number of years have heard before many times of the different formats the issue of provincial abattoirs, federally regulated versus provincially regulated, and whether we can keep them local and open, and all kinds of issues back and forth.
You've given us a challenge, quite frankly. You obviously have been asked and have answered a number of times that you don't actually have the answer. It seems that it's a challenge for us to take forward, and we need to actually take a look at this.
Mr. Bonnett, you said that there was a pilot done, and perhaps we need to go back and look at the results of that. Perhaps that'll be in the report, hopefully, that we need to go back and look at that and see what it is, and see how we can take the suggestions about how we actually have a sector that meets the needs of the producers and the processors and a bunch of the consumers. I mean, how do we do that thing? I don't think it's an easy one. It's been a challenge for a lot of us in a lot of different ways.
The standard is being set at a certain level and, unfortunately—and I've said this before in this committee—the problem is that retailers have decided to set the standard, not us. If we set the standard, they'd just have to abide by what the standard is. They're setting a standard and saying, “You meet the standard or else you're not getting in the chain”. Unfortunately, what it means, in your industry at least, Ms. Patterson, is that a lot of your folks are getting cut out of that chain, no pun intended, which is really unfortunate.
I appreciate the input from both in that sense, and I think it's something we need to go back to. As I say, just to emphasize, Mr. Bonnett, I think we need to go back and look at that study and see what came out of it, and see if we can't get our heads around how we manage this. I think all of us actually are on this wavelength about how we manage it. We don't know how yet, it seems, and I think we need to do that.
I appreciate the input from both on that. By the way, I buy as much local sheep as I can find, and lamb products, but I agree it's not easy.
:
Thank you, Mr. Chairman.
[Translation]
I also want to thank the committee members.
[English]
It's an honour to present to you on your important topic of internal trade barriers and the link to growth and competitiveness in the Canadian agrifood industry.
Let me start with a word that sometimes makes Canadians a little uncomfortable, but it's crucial to making Canadian agrifood businesses become or remain globally competitive. That word is “scale”. Of course, the economic concept is simple and well understood, I think, and it's relevant regardless of the starting point, meaning that I think we see many cases of small Canadian food companies that are very innovative and have a great product, but they fail to become medium-sized businesses with a competitive cost structure, because they don't succeed in scaling up.
You may know that it was back in 2006 that Maple Leaf Foods was losing a significant amount of money when it first announced its major new business model for our protein operations, with the goal of changing our cost structure, reducing exposure to commodity markets, and modernizing our plants. Unlike many other companies, we decided to maximize our scale on this side of the Canada-U.S. border. The journey since then has been tumultuous, but we've stuck to the plan, and we have now basically completed the journey of investing over $1 billion in meat processing centres of excellence in Canada.
All of these productivity-enhancing investments and restructuring activities have been carefully calculated to achieve a competitive return on investment. That return is, in almost every case, scale dependent. Unless we achieve per-unit manufacturing and distribution costs, SKU by SKU operating overheads, and plant capacity utilization on par with our domestic, U.S., and global competitors, we would have little future as a proud Canadian-owned company.
The question becomes what governments can do to help and how that links to the theme of your study. I believe the federal government is well aware of the need to close Canada's productivity gap with the U.S. There's lots of evidence in the action plans of government to make clear that the government is trying to solve this, but we never seem to close the productivity gap, even though we are often rated as a top destination for foreign investment. As the Institute For Competitiveness and Prosperity often reminds us, a productivity gap is also a prosperity gap.
So what's the solution? We believe it is to create conditions that allow investors, be they domestic or foreign, to achieve world-class scale. To do so, we must first accept that, frankly, Canada is a sub-scale country, but secondly, we should resist scale phobia. Scale is not a win-lose proposition in an open globalized market economy like Canada's, especially in agrifood. Farms and firms of all sizes and in all sectors can thrive, and many smaller input suppliers will grow in the wake of larger firms with leading brands.
In meat products, while Maple Leaf Foods enjoys leading market shares in certain categories, hundreds of other nimble companies and importers are thriving, constantly innovating and meeting the ever-changing consumer preferences. Sometimes, they even steal our employees.
However, if we are achieving cost competitive scale in sectors like autos, aerospace, and information technology, why not agrifood? Think about Heineken, Unilever, Danish Crown, Godiva, Carlsberg, and the tiny countries that they call home: the Netherlands, Denmark, and Belgium. But with 143 food plant closures in Canada in the past 8 years, and with a rising number of food imports from such global multinationals, it would seem that we need a new strategy with a central goal of scaling up in food as much as we have in many primary commodities.
Of course, scale doesn't come naturally in our large, diverse country. The impediments are great and the case for inducement is high, but surely we can build economic policies that also help our homegrown enterprises that, while large in a domestic context, need to be urgently scaled up to be truly globally competitive.
If any of you are thinking that is an easy statement for a big company like Maple Leaf Foods, I would just simply note that Maple Leaf is only the 17th largest meat processor in North America. We are dwarfed by global players like JBS, Tyson, and Cargill, with whom we compete at home and abroad.
So what are some of the obstacles firstly that government can remove to overcome some of the disadvantages that Canadian companies naturally face in our domestic market? Let me run through just some of them.
Firstly, there are various federal grant, loan, and tax programs. Such programs nearly always favour support to enterprises, foreign investors in particular being the real prize, locating in a rural or high unemployment area with job creation targets, but rarely with a real test to ensure that they achieve the scale and productivity necessary to be globally competitive. Often firms with 50 employees or more can't even apply for such support.
On the other hand, when it comes to supporting large manufacturers in their drive for scale and technology, it seems the majority of that support nearly always goes to the auto and aerospace sectors. Of course, there are very many provincial subsidy programs as well, which again often favour investments in rural locations. But in the meat industry, for example, we often see provinces supporting small regional slaughter plants that, if they are provincially licensed, cannot ship their products interprovincially, and so they struggle to achieve scale efficiencies.
There's also the question of Canadian competition and foreign investment policies, which, obviously, in certain sectors are very restrictive, but not so in agriculture and food. However, I would note that even when it comes to reviewing mergers and acquisitions, our experience at Maple Leaf in acquiring Schneider Foods in 2004 caused the bureau to undertake an investigation of the concentration in the Ontario market for bacon, of course a commodity that is freely traded throughout North America.
With respect to tax policy, we've seen many positive things in Canada with the reduction of corporate taxes, the elimination of capital taxes, the maintenance of the accelerated capital cost allowance, but we also of course have a high degree of variability in tax structures across Canada. There's a lack of a uniform, harmonized sales tax. We have a bewildering array of tax credit programs, which are often designed to favour small firms, and numerous job-killing payroll taxes, all of which increase accounting and tax-compliant costs for larger firms that operate across the country.
Then, of course, there's the regulatory environment. The first area there that I might mention would be regulated marketing, which is obviously an issue we're all familiar with. But regulated marketing and supply-managed commodities have a knock-on effect on processors. A good example would be the Ontario poultry processing industry, a $2.5 billion industry that is characterized by many subscale, inefficient plants, largely a result of the allocation policies that are the essence of supply management.
Food safety regulations are another example where there is a great deal of federal-provincial disconnect or lack of harmonization. However, I would say that at the federal level, the new regulations that we expect soon under the Safe Food for Canadians Act, coupled with inspection modernization, are very welcome. We would urge provinces to align with this federal example.
There are lots of municipal issues, including restrictive zoning and planning bylaws, which generally discourage or create a great deal of difficulty for the establishment of scale manufacturing industries, particularly in more traditional industries that are perceived to be sources of pollution, noise, or odour.
Then there are all the environmental regulatory issues that are very complex and often duplicative between different levels of government. As one example, we see this with the blue box recycling programs across Canada in the food industry, every one of them different, all highly fragmented, costly, and inefficient.
Of course, we need to encourage the removal of interprovincial trade barriers, but most often these arise not from explicit barriers, but rather are related to the consequences of provincial standards, regulations, licensing, procurement policies, and so on. All of these differences add to administrative costs for national firms. In the area of labour and pension regulation, every province is different. Maple Leaf has 19 collective agreements in its operations in Canada, every one subject to a different provincial labour law.
Finally, what are the inducements, then? If those are some of the obstacles, there are probably four main areas to consider in how we work to address the issue of stimulating corporate investment in scale and productivity. One would be to continue the accelerated depreciation of plant and equipment under tax policy. This has been very effective, but it's only being renewed two years at a time. It takes much longer than two years to move from the conceptualization through to the budget and approval of a major capital investment, so the ACCA should be made permanent.
Targeted loan and grant programs have an important role to play, but they should not discriminate according to rural or urban location, industry sector, skilled versus unskilled job creation, or firm size.
We certainly appreciate the Canada jobs grant, but we have a problem with a shortage of skills and availability of labour, which has been compounded in our industry by the overreaching reforms to the temporary foreign worker program.
Infrastructure needs to be built at scale. For example, the Asia-Pacific gateway, critical to growing our exports to Asia, is a great investment, but has been very slow to come to fruition because of all of the delays in getting individual projects approved.
Finally, we would encourage a national approach to facilitating investment attraction. We recently located our big new prepared meats plant in Hamilton and learned how difficult it is, when you're trying to get support from all of the different economic development agencies in different provinces in Canada, how little coordination there is. This is much different from other competitor countries.
In conclusion, from our perspective your committee is tackling a very important issue. In the current economic environment, food processors must close the competitiveness gap through restructuring and productivity-enhancing investments. However, the the ability to achieve this requires our industry to leverage production capacity and increase the scale of operations. It's only on this basis that we can defend our small home market from nearby U.S. multinationals that enjoy major scale advantages, let alone tackle the booming international markets.
Of course, if we had a small primary agriculture sector, with limited resources—
:
Thank you very much, Mr. Chairman.
For those of you not aware, the Canada Grains Council is the peak organization of grain industry interests, representing producers, crop input companies, grain companies, and grain processors.
Formed in 1969 to coordinate efforts to increase the sale and use of Canadian grain in domestic and world markets, the council has become the leading recognized forum of the entire grain industry in Canada and around the world. We are a pan-Canadian association, with 30 members, with interests across the various crop sectors encompassing cereal grains, oilseeds, pulses, and specialty crops value-chain participants.
The Canada Grains Council's mission is to lead, facilitate, and support policy development and implementation on issues and opportunities that affect all of these commodities and to enable cross-commodity collaboration. Our members include the Canola Council of Canada, Pulse Canada, Cereals Canada, the Flax Council of Canada, the Barley Council of Canada, and Grain Farmers of Ontario, among many others.
The Canada Grains Council members have identified two strategic policy pillars in our work, including trade-enabling market access and enhancing our approach to measuring and communicating on the industry's record on sustainability through the recent creation of the Canadian round table for sustainable crops.
I'm here today to speak to you about some concerns we've raised under our first policy pillar on trade-enabling market access issues in the context of interprovincial trade barriers.
In January of this year, the Canada Grains Council sent a letter to the Prime Minister, premiers, and federal ministers of agriculture and health outlining our concerns with non-science-based regulatory interventions by some provinces on crop sector agricultural products. I believe a copy of this letter has already been circulated to members of this committee for your reference.
In short, we're asking premiers to commit to work towards the adoption of a federal-provincial agreement on recognition of federal regulatory approvals related to the crop sector.
The productivity and international competitiveness of this multi-billion dollar sector is highly dependent upon timely and uninterrupted access to agriculture and food inputs and technologies that have received regulatory approval and are commercially available in other grain-producing and exporting countries.
Examples of these inputs and technologies include seed of crop varieties exhibiting agronomic and end-use performance traits that have been developed and registered for commercial production; licensed crop protection products that include seed treatments, herbicide, fungicide, and insecticide to provide the highest possible quality harvests while ensuring food feed and environmental safety; and food additives and processing aids used in the primary and further processing of commodities such as cereal grains, oilseeds, and pulse crops.
These inputs in technologies undergo pre-market evaluation and licensing registration by Canada's federal departments and agencies, including the Pest Management Regulatory Agency, Health Canada's food directorate, the Canadian Food Inspection Agency, and the Canadian Grain Commission, and are scientifically demonstrated to be safe for intended use in terms of food safety and environmental impact.
One of the foundations of Canadian agriculture and a key competitive advantage for Canadian farmers is our world-renowned science-based regulatory system. Many nations are envious of our system, which provides both rigorous science to protect the health of Canadians and the environment, and a predictable, timely system that gives farmers and industry the tools they need.
The foundations of this system, however, break down when provincial governments, who do not have the research capacity of the federal agencies previously noted, start imposing regulations that contradict and override federal regulatory decisions. This creates unpredictability in Canada on what jurisdictions should regulate on which issues, potentially leading to both a patchwork of regulatory approaches across provinces, unnecessary and costly duplication between the federal and provincial governments, and regulatory approaches by some provinces that appear to be grounded in perception rather than science.
A clear example of this is currently under way in Ontario where the Ontario government is imposing an arbitrary perception-driven restriction on neonicotinoid seed treatments for corn and soy seeds, in contrast to the cautious science-based approach taken by both PMRA at the federal level in Canada and the Environmental Protection Agency in the United States.
This will have far-reaching and very negative effects on farmers, forcing them either to go back to using older outdated pesticides or to source their seeds from outside Canada. It also sends a terrible signal to international investors that, notwithstanding Canada's science-based regulatory system, significant risks are involved when investing in Canada due to provincial intrusion into federal regulatory jurisdiction. Moreover, it distorts trade across provincial lines, hampers innovation, and hurts our farmers. In our view it's bad public policy, and it could be prevented with an agreement between the federal and provincial ministers to respect federal regulatory jurisdiction.
A similar distortion has been taking place for some time now in the context of provincial and local bans on urban use of pesticides. Notwithstanding the fact that PMRA performs rigorous evaluations and re-evaluations on all pesticides, we see politically driven pesticide bans at the provincial and local levels in Canada that hurt investment, distort trade, and send a clear signal to international investors that Canada is not in fact completely science-based in its regulatory decisions. Again, this stems from a lack of federal-provincial co-operation on regulations, more specifically a failure by some provinces to respect federal jurisdiction and expertise in the regulation of food, feed, and the environmental safety of agricultural products.
Farmers and industry are rightly concerned that these intrusions from provincial and local governments will become more frequent and even more disruptive, and the recent action of certain provinces is proving these fears to be accurate.
In conclusion, the Canada Grains Council believes that the federal government has a leadership role to play in removing this potential to have trade-distorting and duplicative regulation brought in at the provincial level. Federal regulatory agencies have the obligation to regulate and enforce Canada's national food, feed, and environmental safety measures, and we believe it should include ensuring that provincial governments do not casually sweep aside the science and risk-based determinations on agricultural products that are the foundation of market assess to these tools across Canada.
Thank you very much for your attention.