EVIDENCE

[Recorded by Electronic Apparatus]

Wednesday, April 24, 1996

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[English]

The Acting Chairman (Mr. Calder): We'll get the show on the road here, gentlemen. I apologize for the delay.

Ladies and gentlemen, we have in front of us Larry Lenhardt and David Reibling from the Canadian Organic Advisory Board.

Gentlemen, please go ahead and give your presentation. Do you have any handouts in English and French, or is it just an oral presentation?

Mr. Larry Lenhardt (President, Canadian Organic Advisory Board): It is just oral. And we have a copy of the directory mentioned a couple of days ago. We'll present it to the committee.

The Acting Chairman (Mr. Calder): You'll both be making a joint presentation, then there will be questions -

Mr. Lenhardt: I'm doing the presentation. Between us, we'll answer your questions.

The Acting Chairman (Mr. Calder): Okay then, proceed.

Mr. Lenhardt: Thank you, Mr. Chairman.

The Canadian Organic Advisory Board is to represent, through membership, all the certifying bodies in Canada. It works with provincial identities administering the organic definition within those provinces.

We're called Canadian Organic Advisory Board, COAB in short. COAB is not a certifying body. It is to be an accrediting agency in partnership with Agriculture Canada and Agri-Food Canada.

COAB's directors are from all the provinces. From each province we have a primary producer. I'm the primary producer from Ontario. David Reibling is the certified organic processor.

Moving to processors, we have a list of what we call sectors. Within those sectors we have the certified organic processor, organic retailers, organic wholesalers, consumers, a representative from sustainable agriculture research, a director from environment, a director from the federal government and a representative from conventional agriculture.

The last representative is rather interesting. You'd be surprised to hear the organic board does have a conventional agricultural director. We think that's one of the firsts in the industries we represent.

Export and interprovincial trade come under federal jurisdiction. However, there are some challenges we face in COAB because of this. Primary organic products and value-added organic products are estimated at $50 million last year in Canada. But there is no official record available.

Organic standards have been used since 1985 in Quebec and 1986 in Ontario, where there were 10 primary producers certified, one of whom is to my right. We estimate in 1995 there were 300 certified organic producers in Ontario. We estimate certification began in 1988 in Saskatchewan and 1990 in Alberta. There are approximately 1,000 certified organic producers and processors in Canada. Again, there is no official record.

Remember, there is a difference between membership in a certifying body, which I'll identify as a CB at some point in the future, and membership as a certified organic producer, or processor, wholesaler or retailer within this certifying body. So membership has two parts.

Since 1989 the organic industry has wanted to establish a working Canadian definition in harmony with accepted international protocols. At that time, some CBs chose not to be involved. This was during a process we called the Canadian Organic Unity Project. Today, some CBs still choose to not actively support COAB.

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The U.S.A., through the national organic standards board, and the European Union members are like us in Canada. They are discussing what we are doing, and in very much the same way as we had this discussion here today.

Some countries, though, in the European Union have their regulations further advanced. As an example I would use SKAL in the Netherlands. SKAL operates for the Dutch government.

Canada has the opportunity to lead here in North America by establishing the proposed and amended regulations with standards outside the regulations. Standards outside the regulations will allow modifications to be made more easily to those standards.

A three-year phase-in period from the effective date of the regulations is desired to allow all parties, members, certified members in the CBs and the CBs time to comply with the regulations.

The industry has, in the last three months, worked together to remove some of the barriers that existed. Not all, but most CBs are now supportive of the Canadian Organic Advisory Board, yet particular details remain to be worked out.

So far the development of the standards and the regulations has been at minimum cost to the federal government. Expanded trade in the domestic and the world markets will enhance this and allow both large and small organic practitioners to compete globally and, we believe, to compete more effectively and efficiently at the local market.

COAB working with the federal government, with federal accreditation and with the CBs, is an interesting concept. COAB will administer the regulation and the standards in partnership.

As the market expands, the existing monopolies and price differentials will decrease. Organic trade would dramatically expand, especially with the federally recognized accreditation.

Our production system will thus be in a position to service that consumer-driven demand for organic products.

The organic industry has evolved from a number of small-scale producers. I could also tell you its history can be personalized to those small-scale producers. We see their situations will in fact be enhanced by increased local demand for organic products and by the economy of scale that comes with it and that comes with production units requiring their products. The small-scale producer will not have his or her integrity destroyed.

The size of a production unit does not determine organic definition. Size has a direct relationship to the production unit's ability to pay the cost.

COAB has established a working committee we've called the small farm exemption committee to explore this and bring this to a favourable conclusion.

In conclusion, I would state that without regulations and standards, Canada will become a dumping ground for any self-declared organic product. This will happen if we do not have a Canadian accreditation program in place.

Thank you, Mr. Chair.

The Acting Chairman (Mr. Calder): Thank you very much.

[Translation]

Mr. Landry.

Mr. Landry (Lotbinière): I would like to thank the witnesses for testifying before the Committee on Agriculture and Agrifood.

I have a question for Mr. Larry Lenhardt. Food grown with biological products will carry the ``Canada organic'' stamp. But if there is also provincial legislation to that effect, how should be proceed with harmonization? If exporters want to indicate at all costs where their products were grown, will they have the right to use both the ``Canada organic'' tag and the ``Ontario organic'' tag or the ``Appellation contrôlée Québec'' designation?

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[English]

Mr. David Reibling (Certified Organic Processor Representative, Canadian Organic Advisory Board): The way we're proposing the standards, yes, they will be able to identify where the product was produced, in what province, as well as using the federal logo, providing they're accredited by COAB.

[Translation]

Mr. Landry: Will there both a federal and provincial logo on the same product?

[English]

Mr. Lenhardt: I would think that is a choice the producer or the processor would make. They can use the Canada logo with or without their certifying body's logo. I would think it would be dictated to them by the market they propose to serve.

We don't have a yes or no answer to that.

[Translation]

Mr. Landry: Fine. Thank you, Mr. Chairman.

[English]

The Acting Chairman (Mr. Calder): Mr. Hermanson.

Mr. Hermanson (Kindersley - Lloydminster): Thank you, Mr. Chairman.

Thank you, gentlemen, for appearing before the committee.

I'll start off by being fairly blunt and indicate that as a member of Parliament I've had a lot of communication from people and organizations in the organic industry who are not very happy with COAB. Unfortunately I wasn't able to be here for the last meeting, but apparently Dr. Patriquin from Dalhousie was here and had some critical comments. We heard from Mr. Beauchemin from Quebec, who is even on COAB now but wasn't entirely happy with what had happened. We've had communications from producers in British Columbia, Alberta, Saskatchewan, Quebec and New Brunswick who are not happy with the way COAB was established and do not feel COAB adequately represented their concerns or promoted the direction they wanted to see the industry head in.

There was concern about the lack of consistency in the way the COAB board was put together. In some cases provincial governments made the appointments; in other situations the members of COAB were elected by producers, but perhaps not all the producers were aware of or involved in the elections. It seemed as though there was some selection involved, according to some of the people who communicated with us, as to how COAB directors were elected by the producers in some of the provinces.

There was a concern that COAB and the department were promoting a package of regulations that hadn't been adequately vetted through the industry. In fact, when they did see it, they felt they saw it too late and that there were parts of proposed regulations they could not support. They felt COAB was not open to hearing that criticism.

In light of all of these criticisms, what's your side of the story?

Mr. Lenhardt: First I have a question. Was the correspondence received prior to February 18?

Mr. Hermanson: Of this year?

Mr. Lenhardt: The answer really doesn't matter.

I suggest, sir, that since February 18, since the annual general meeting in Vancouver, the industry has come together to answer within itself the questions you've raised.

As to consistency of election, in Ontario we elect on a rotational basis. I was placed in the position a year ago because the agency second on the list declined and it went to the third. In some provinces it goes back to the comment that some CBs, as COAB evolved prior to this year, chose not to be involved. You could say some of them put their heads in the sand and thought it would go away. So if they're not part of the collective action, they're outside, and you can get all this disagreement or disharmony.

I'd answer your comments by saying, as I said in the presentation, I think that has been minimized. In fact I'd go on record as saying most CBs are in harmony, like a brother-sister relationship - an older brother and a younger sister, a family relationship. Yes, there are still going to be growing pains, because we are basically grassroots. The membership is based from the CBs up. We are not wanting or desiring to be heavy-handed and coming down on ourselves.

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Mr. Hermanson: Okay. You have stated that COAB would be an accrediting agency, not a certifying body.

Mr. Lenhardt: Yes, sir.

Mr. Hermanson: Has COAB already done some accrediting even prior to the -

Mr. Lenhardt: We have run two pilot studies to find out what we're getting into. At times, it's like having a tiger by the tail.

At the moment, we have put all future work on accreditation on hold until we can bring up our regulations - our procedures more than regulations, but that's part of it - so they become transparent and in hard copy.

Mr. Hermanson: Okay. You also made a statement that COAB and these regulations have to be in place to prevent Canada from becoming a dumping ground for organic products. How do you argue that would happen, when currently there are already international certifying bodies, like OCIA and OVONA, that have to provide the same standards across international boundaries? That seemed to be rather boastful. How do you back that up?

Mr. Lenhardt: There's no problem with those agencies, because they are committed. What I said in the presentation was ``self-declared''. As an example, if you were in excess of a product below a certain boundary, or across the border and exporting, you could have it exported into Canada because you said it's organic. We can't say anything because we have no authority to ask you about what basis, certifying body, or protocols you are using.

The world trade is a reciprocal-type arrangement with all the certifying bodies in the world. A number of them are listed in this IFOAM directory. With them, there is a relationship that prevents that from happening. That's because they have a reciprocal arrangement with known standards.

Mr. Reibling: In trade laws, you can't put higher standards on imports than those you have for your lowest standard within your country. Therefore, there would be no standards for organic. It would be a wide-open ball field.

Mr. Hermanson: Some of the criticism I heard was that the proposed regulations set the standards too low right now. In fact, we would be seeing so-called organic products of lesser quality coming into the country with this proposal than are currently coming into the country.

Mr. Reibling: The standards right now are trying to accommodate everyone across the country. They've had to be lowered somewhat to accommodate everyone.

Mr. Hermanson: Isn't that more likely to increase the dumping a product into Canada rather than lessen it?

Mr. Reibling: Not really. I think we have a pretty fair standard now. The criticism is coming from groups that don't want to see this thing happen because it will erode their position in the world marketplace. There will be a lot of guys recognized in that process, whereas only they are now recognized in the marketplace. This will bring anybody who is accredited under ``Canada Organic'' up to the same level.

Mr. Hermanson: Now, say a group of farmers want to declare that they're organic growers, but for some reason they do things somewhat differently from what is recognized by COAB and by the regulations. If these regulations are put in place, then they cannot even use the word ``organic'' in describing that product even if they use a little ``o''. Is that the result of this, or is it just that they can't use the term ``Canada Organic'' as a stamp on their product?

Mr. Reibling: They can't use the term ``organic'' in any way, because it'll erode the whole thing if somebody can get close to it and not really measure up.

Mr. Hermanson: Don't you think it might have been wiser to put a special stamp on, like the CSA trademark? If you want that trademark, you have to go through COAB to comply with the regulations. This is rather than being so heavy-handed as to say you can't use the word ``organic'' whatsoever.

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Mr. Lenhardt: I don't think we've said you can't use the word ``organic''. The term is usable within the province. To cross a provincial border, it would have to meet a Canadian definition. We're suggesting that it meet federal accreditation so that everybody will be playing with these standards, which are in compliance and in harmony with international standards.

The standards we're proposing are basically the standards that are used by 42 certifying bodies currently in Canada, just bringing them all up to a federal level.

Mr. Hermanson: After the love-in you had in February, what percentage of your organic producers do you believe are now supportive of COAB? Give me ballpark, round, figures. Is it 60%, 20%, 80%?

Mr. Lenhardt: I would think that we're at 76% or 77%. That's a guess. There is no way to track it. Our motions need a 75% majority to pass, and we're approaching that for one critical issue. It is in that ballpark.

Mrs. Ur (Lambton - Middlesex): When you were naming your board representatives, I found it interesting to have the conventional farmer on board. Maybe you can give us information on how productive that is. I'm sure it's an excellent viewpoint to have within the board.

You made another statement, asking the Reform member whether that was before or after February 18. Maybe you can expand on exactly what has been taking place.

What is the power mandate of COAB if you find someone in non-compliance with your accrediting or your regulations?

Mr. Lenhardt: Our conventional farmer has a bit of a basis in history with another organization we're involved with in the province. Once they found out that the organic people on their board walked and talked the same language, the disharmony evaporated. So the COAB board asked two Canadian national organizations to appoint a director. One accepted and is currently on the board.

To be brutally honest on that, he went skiing on February 18, which was our annual general meeting date, where all the directors met for three rather intense days.

To define how intense it was, or how brutally honest - and this can be supported independently by two gentlemen behind me, who will be your next speakers - a motion was made, a recorded vote of all directors as I've described. I said, if you vote for this motion, then the term ``organic'' will be in free fall. We voted for the motion; it passed.

The industry was meeting downstairs in a convention centre under the Canadian Health Food Association and the Organic Trade Association. Within three hours the motion came back to the floor to be repealed so we could go into a protected term, if you want to call it that, on ``organic''.

On your third question, about mandate and power, I don't know the answer to that. Currently, under federal regulation, for a product on a shelf in Ontario, if there's a question about it, the federal department will go in and ask the label holder how they are defining it to that label.

I have no aspirations to become an ``organic cop'', if I can phrase it in that way, in the future. I don't think COAB wants to have that function. I think the mandate is in the agreement with the certifying bodies and by review of the application, by the certification, and by the accreditation processes we propose to put in place. I don't think there's going to be much police action.

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Mrs. Ur: Do you want your standards or your regulations to apply as well to, say, farm gate sales and organic producers? Do you want one rule for all, or if you just sell at the farm gate you really don't have to be a part of the process?

Mr. Lenhardt: We would like one definition for everybody, but our small farm exemption is looking at what they have to do to meet the definition within the province and what they have to do if they wish, as one of the groups that was previously before you - the one with 35 members, who were concerned about local sales.... Their locality and their local sales go across a number of borders. So we think there has to be a Canadian definition that everybody adheres to. Whether they adhere or whatever is up for grabs. It's evolving.

Mrs. Ur: So you're telling me they would have to abide by the rules but not necessarily, say, pay a registration fee.

Mr. Lenhardt: We would think they'd pay membership in the certifying body, but they would be exempt from the costs that certifying body has for the accreditation process, or they would pay a portion of it. We've struck a three-person committee to look at that. We don't know the answer yet to that.

Mrs. Ur: Thank you, Mr. Chairman.

The Acting Chairman (Mr. Calder): We'll start the second round at five minutes per. Jake.

Mr. Hoeppner (Lisgar - Marquette): Thank you, Mr. Chairman.

Welcome, gentlemen. Looking at the advisory board to the organic growers, is your mandate similar to the advisory board of the Canadian Wheat Board?

Mr. Lenhardt: I don't know the answer to that.

Mr. Hoeppner: You don't know the answer. Is either of you gentlemen actually a farmer or a producer?

Mr. Lenhardt: We both are.

Mr. Hoeppner: You both are. Okay. I saw a recommendation made to the U.S.-Canada trade panel on grain marketing. It was very negative because of the Wheat Board involvement in the organic production and sale of their products. How do you stand on that?

Mr. Lenhardt: Can I ask another director of COAB behind me to answer that?

Mr. Hoeppner: I can ask the gentleman later on.

Mr. Lenhardt: Okay.

Mr. Hoeppner: I'll defer that.

Mr. Lenhardt: Please. I don't know the answer to that. I'm not a wheat producer. Talking to one of the board commissioners of the Wheat Board...it hasn't evolved to where it sees the organic wheat as a marketable quantity for it to handle. I would say, if we could put this over time, that it will, because I think we're going to have that market share to market through it. If you're asking me whether COAB supports going against the Wheat Board, we don't do any of that. That's not our function.

Mr. Hoeppner: My concern is that I've seen machinery and how the Wheat Board does operate on exporting grain and in the organic products in wheat and barley. You have to go through the buy-back. The buy-back is so undefined and so irregular that I can see why producers are very concerned about whether this is still going to be under the regulation of the Wheat Board. If I were an organic producer, I'd fight it left and right, because if there was a buy-back in that they were guaranteed to get their money back.... But I know the American processors have told them point blank that it's costing us 75¢ a bushel on this grain, which we never recover. Why should it be?

Mr. Reibling: I don't think it's a function of COAB to get involved in the marketing end of it. We just want to guarantee that the product was grown under these conditions.

Mr. Hoeppner: But don't you think you would have more support for your organization if you took a stand on that?

Mr. Reibling: Personally, I don't think so -

Mr. Hoeppner: No?

Mr. Reibling: - because we have a mandate not to get involved in marketing.

Mr. Hoeppner: Okay.

Mr. Reibling: We're only accrediting and guaranteeing a production system. At this point, I don't see COAB getting involved in that. That's more of a local thing.

Mr. Hoeppner: By reading the letters that I've got on this issue, I think some of the producers fear that the Wheat Board will become involved in the regulations of growing some of this product.

Mr. Reibling: I'm a farmer from Ontario, and we don't get involved in -

Mr. Hoeppner: Oh, that's different for sure.

Mr. Reibling: - the Wheat Board, as we do in the western provinces.

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Mr. Hoeppner: I'm always looking at and thinking of the west. I forget we have another part of the country. Sorry about that.

Some hon. members: Oh, oh!

Mr. Hoeppner: I'm not a big enough football fan, or I would have become accustomed to supporting both sides.

Mr. Lenhardt: Well, if you were an organic producer, that's part of the criteria to get into this.

Mr. Hoeppner: Thank you, Mr. Chairman.

The Acting Chairman (Mr. Calder): Mr. Collins.

Mr. Collins (Souris - Moose Mountain): I'd make a point to my friend opposite.

If you have documents you'd like to provide us with so we'd all be not in the tunnel of darkness but in the light, if you provide them, these gentlemen and all of us will know we're reading from the same verse of the Bible.

Gentlemen, I want to thank you for being here.

That's the same answer I got from a lady who was here before: you're not into that element of the business. I think that's right. If you start stretching out, pretty soon we're going to wonder what your function is and what your role is. I respect that.

But, Mr. Chairman, a moment or two ago a couple of people with them were going to give a response. If it's acceptable, I would like to hear if some of the people with them at this time would like to give an additional response to a previous question.

A voice: They're the next speakers.

Mr. Collins: Are they next?

The Acting Chairman (Mr. Calder): Yes, they're next.

Mr. Collins: Oh, okay.

With regard to the process we're going through, are you comfortable with the process we have in place?

Mr. Reibling: It's evolved to a comfort level of late. There's been a lot of difficulty having all the CBs understand, really, what the function of this organization is. That's where some of the problems have come in. The CBs don't understand that this is an accreditation.

In talking to fellow processors across the country, we've heard them say several times that they don't need another certifying body. Once I explained to them that this is not a certifying body but a scheme being worked on internationally for accreditation for moving the product from country to country, they warmed up to the idea quite quickly.

Mr. Collins: You talked about a level or a benchmark they were going to use. Were you picking the lowest watermark? What gradient did you use to say this is going to be an acceptable level that we would all come in at?

Mr. Reibling: There's been representation in this process from right across the country, and it was in a dialogue with this representation that we arrived at these standards.

Mr. Collins: That's not the lowest common denominator.

Mr. Reibling: Not necessarily.

Mr. Collins: You're suggesting that level could be somewhat higher than what might be my perspective of where you were going?

Mr. Reibling: Yes.

Mr. Collins: All right.

Mr. Lenhardt: Mr. Collins, there's a movement internationally to go to a one-year free-from. That scares me, because that means I could load up my land, wait a year and have so much nitrogen as a nutrient available that I could call it organic.

So internationally we've chosen a three-year free-from period. Why three? I put it down this way: it's a nice number and it works. It's accepted internationally. Some of the CBs choose five. But to choose one is going to more than the lowest common denominator in a free-from period.

I have another point. When a certification body sends its inspectors out to the producer or the processor, most of them have a regulation in the contract with the inspector that the inspector cannot have consulted or traded in the product. With the CB I represent, we make sure that is absolutely carried out.

That also goes back to the question raised about marketing. COAB, by choice and design, is not in the marketing business except to market the accreditation so the consumer knows what they're buying, so the small-scale producer doesn't have to spend five minutes, two minutes or a longer time trying to convince the buyer that his or her product is better.

The Acting Chairman (Mr. Calder): Mr. Hermanson, do you have a question? We have a tight schedule here.

Mr. Hermanson: I'll be really quick. These are short questions with short answers.

How many organic producers are there in Ontario?

Mr. Lenhardt: There are somewhere around 300 certified organic producers.

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Mr. Hermanson: And how many are certified organic producers?

Mr. Lenhardt: I can't track those who are not members of a CB. Of the CBs operating in the province, we've never got together and said, I have so many and you have so many, so we have this many in the province. In Ontario, there is currently no mechanism or way of sharing by which we can do that.

Mr. Hermanson: How many COAB directors are there from Ontario?

Mr. Lenhardt: I'm the primary producer. I live in Ontario. Mr. Reibling's the processor and lives in Ontario.

Mr. Hermanson: Are there any other Ontario COAB -

Mr. Lenhardt: The retail director is from Toronto. The Agriculture Canada director lives on this side of the river.

Mr. Hermanson: Are there three or four from every province?

Mr. Lenhardt: There's one primary producer from each province. The sector reps come from wherever they're found.

Mr. Hermanson: Are all the primary representatives on COAB now elected?

Mr. Lenhardt: To my understanding, yes.

Mr. Hermanson: Are all of the other ones appointed, then, or are they elected by the industry as well?

Mr. Lenhardt: I'll use David as the example. He's here as a processor rep. It evolved that he became the rep. It wasn't an election. The sector isn't organized. The organic retail and the organic wholesale are appointed from the Canadian Health Food Association.

Mr. Hermanson: In your case, how many people met at the meeting at which you were elected? I'm just wondering how extensive this was. Was it close to all 300 producers?

Mr. Lenhardt: Then only director not in attendance was the conventional, who was newly appointed the previous week.

Mr. Hermanson: So there were about 300 votes.

Mr. Lenhardt: No, the votes are based on the directors.

Mr. Reibling: I think you mean from the province.

Mr. Hermanson: Yes, it's to put you in as a director of COAB from the province of Ontario.

Mr. Lenhardt: It's a rotation in the province of Ontario. We rotate between the certifying bodies in terms of whose term it is. That's done by agreement.

Mr. Hermanson: So how many people made decisions to put you on the board, then, on COAB?

Mr. Lenhardt: The certifying body that was in place declined, so it automatically moves to the next in an alphabetic list. It's by agreement in the province.

Mr. Hermanson: So it's not really an election. You weren't really elected, then.

Mr. Lenhardt: It was not an election for the primary producer in Ontario.

Mr. Hermanson: What's COAB's annual budget?

The Acting Chairman (Mr. Calder): This is your last question.

Mr. Hermanson: Okay.

What's the budget, and what is the source of the funding? Is it all industry funding, is there government funding, or is it both?

Mr. Lenhardt: The proposed budget is from somewhere around $85,000.

Mr. Hermanson: That's for all of Canada.

Mr. Lenhardt: Yes, sir. Half of it was a foundation grant, and we are seeking to raise the other $35,000. If you're volunteering federal money or provincial money, we would be pleased to be the recipients.

The Acting Chairman (Mr. Calder): That'll be on the record.

Mr. Lenhardt: Thank you, Mr. Chairman.

The Acting Chairman (Mr. Calder): David, Larry, thank you very much for coming here today. We've really appreciated your insight. We'll see what happens in the future.

I would like to invite the people from the Organic Verification Organization of North America, please. OVONA would probably be the acronym for this, and with us are Dr. Dan Hara and Ken Dyck.

Good afternoon, gentlemen. Please go ahead and make your presentation.

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Dr. Dan Hara (Organic Verification Organization of North America Inc.): Thank you, two of us are here. I'm an economist representing OVONA in Ottawa. Mr. Ken Dyck is on the board of OVONA, and he is both a producer and processor.

OVONA itself is a certifying body, and I think people understand what that is by now. We have membership in Manitoba, Saskatchewan, Ontario and Quebec. You heard previously from one of our Quebec members, Mr. Raymond Lamoureux.

It has substantial interest. Particularly, our members export a lot of organic grain and seed. OVONA, as a certifying body, meets international standards. It's consistent with the International Federation of Organic Agriculture Movements, IFOAM, and meets the standards set by the independent organization of organic inspectors.

We're on the list provided by Foreign Affairs Canada to the European Union as official certifying bodies. We've also gone to considerable investment and expense to have ourselves accredited directly into the European market so that OVONA-certified producers are able to export throughout the European Union.

Our presentation is supported by three documents, which I understand will be circulated to you later. We have a short piece directly addressing administrative principles that we think should be followed in regulation, and we've appended to that our submission to Agriculture Canada on the regulations that you have in front of you. Some of you may have already received that circulation previously. The third document is our letter to the minister, with appended faxes and letters of support from other organizations.

In making our presentation, we would like to draw a distinction between the regulations you have in front of you, which were circulated last fall, and events that have taken place in the industry since. There has been something of a coming together. There are still outstanding issues.

I will be speaking to the regulation you have in front of you, which is the last official position from Agriculture Canada.

Mr. Dyck will be elaborating on our concerns and speaking to some of the changes. Ken is a newly elected member to the COAB board, effective from that February meeting you heard about.

To begin with - and I'll probably conclude with this statement - our highest priority as OVONA is to continue operating without a disruption to our business. At the moment we have a working system that's working for our members and ourselves.

When the regulations came out, they came as quite a shock. We had not heard much from the COAB organization for the two years since it was rumoured to be created, initially on an ad hoc basis. We learned about the specifics of the regulation and that it was being circulated at a U.S. conference on organic. That's how we received notice. Then action was immediately implemented when we looked them over.

So we were not consulted at all on that document you have in front of you. Of course, we've submitted since, once we learned about it.

Related to our key concern, the way that document is written now it would put us out of business for at least a year, quite literally. If it was enacted tomorrow there would be a major difficulty.

In the regulations, the first provisions take control of the word ``organic''. As a result, you cannot use the word ``organic'' under those regulations unless you are already an accredited certifying body. Of course, very few are accredited now. Some are under a trial program under COAB's ad hoc existence, but OVONA would not be.

Even under the best circumstances, with inspections and delays, we would have to expect a year before we would be able to operate again. So the regulations represented a direct threat to our trade and investments and to our members.

We investigated more thoroughly and discovered that not only were we not consulted in that consultation process, but many other folks felt the same way. As a result, we submitted a collection of faxes and concerns not only on our own behalf, but on behalf of others who passed it through our Ottawa offices and to the minister.

Further investigation beyond the consultation process also revealed a concern about who COAB is now. Looking at the membership and elections - and this is more detailed in our submission to Agriculture Canada - there were irregularities, some ad hoc appointments, and in one case an unfortunate incident of one director apparently representing to another organization that they couldn't participate because perhaps they weren't accredited yet.

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So it made us concerned, as a body outside the organization at that point, that there could be potential abuses. It wasn't clear whether it was intentional abuse or not, but we did not know whose power we were being put under, the way the regulations were there. So that was a concern. And of course it's a basic commercial advantage. Not only would we be put out of business for up to a year, but there were people - competitors - who were already accredited and thus would have through regulation an advantage during that period, one that we felt would unjust.

Looking at the regulations themselves, they were also poorly written in many respects. There was, for example, no transitional strategy. If you look at the regulations, they would just suddenly become enacted, so there was no period under which someone could qualify and so on and still maintain production, as we would like to do.

We asked both Agriculture Canada and COAB representatives whether there was any transitional plan for phasing in. There was certainly no written document. There was some general indication of an expectation that the current group, which we did not fully know and about which there were some concerns about, would suddenly become the official COAB body under the regulations. So we had those concerns.

There were also technical concerns with the provisions. Again, we won't go into details, but the document in the technical sense was still very much in draft form. In fact, in a recent meeting in Vancouver there were still two days' worth of committee wordsmithing going on and still many unresolved issues following that.

To describe a couple of the problems with it, one is the issue you've just heard about: the requirement to become 100% organic if you're going to be organic at all. This, for example, would require livestock producers who wish to produce organic field crops to convert to a livestock operation, which is something not necessarily feasible for many producers.

We also thought it was ill-advised to take control of the word ``organic'' itself. There already exists general provisions under labelling regulations where someone using ``organic'' has to keep records and be a member of a group body to monitor itself. Going beyond that, though, the organic community has a lot of concerns within itself beyond mere profit, and there's a lot of dispute. When we're talking about dealing with small producers and so on, taking that word away from them and saying this is now a government word is a very controversial act.

Our members are quite active and can live within a regulatory set, but we thought it was ill-advised in general to take control of the word ``organic'' itself. So we objected very strongly to the regulations as they are in front of you, and we try to make that clear.

The next thing to really address is what we would like to see in the way of a system, and for that we can outline some of the general principles.

I think we approve of the objective. Canadian exports of organic foods and the domestic market can benefit a lot from a clearly identifiable standard that can become more well-known, marketed under and recognized. That's not to say that we don't already have individual standards, such as a bonus standard, out there with that function, but it could be improved with a national standard.

The key to success in establishing such a standard, though, is broad industry support, and that among other reasons is why we have a little bit of trouble with the divisive issue of taking control of the word ``organic''.

In establishing a national standard we think cooperation is very important, cooperation both in the administrative sense and in the regulations. So, for example, the standards we set should accommodate those that are established in both British Columbia and Quebec, the two provinces that have internal organizations.

We also think there shouldn't be any double burden placed on the individual producer. You shouldn't have to pay for a COAB inspector as well as a COABC. inspector. Any documentation that is used to accredit oneself with COABC. should be eligible or admissible to be submitted to COAB and dealt with if COAB is established.

Similar cooperation should be allowed for IFOAM and so on.

As for the federal role, I think it's important to step back and realize first that there's an existing system now that does work well, although it could work better with the national standard, and also to recognize that the industry itself, without government help but with enough cooperation, could establish on its own such a national standard under a clearly recognized voluntary system. You'd have a clearly recognized label.

.1635

If that is communicated and established with the consumer and if that has value to the consumer, then it will support itself. The consumer right now has some difficulty choosing among certified bodies or even understanding that system. One label, privately established or cooperatively established by the industry, could provide or serve that function and still have the virtues of a voluntary system. Good standards take over, and that is quite possible on a private sector basis.

The main reason for federal involvement and federal mandating of such a standard has to do with experts and our relationships with our trading partners, and here's where our organization is quite concerned. There is a potential requirement by the countries that anybody exporting be accredited by their nation, that is, a nation-to-nation accreditation relationship. That isn't actually in place in yet. It's been an imminent possibility and some people would say a rushed possibility, but it's been like that for many years with both the European Union and the United States.

Other countries are having similar problems as Canada is having in coming to agreements on standards, so we believe there's not that much of rush, but there is a possible eventuality that the international consensus will emerge around nation-to-nation accreditation. If that's the case, we would like Canada to be ready and in a position where we can again continue smoothly in business. Any implementation of a federal structure, though, should recognize that the international community may not choose to go nation to nation, and that function may not be necessary.

If we talk about our general vision, at the federal level we see that there's a specific general standard for ``organic'' in the current labelling requirements under labelling regulations. We see that, and we would see a federally mandated voluntary standard around a label, which would establish itself through the virtues of its quality and its market presence. We think that would serve most of the requirements.

If individual provinces decided to enact more stringent legislation controlling within their borders, that would be a provincial decision, but at the federal level our first choice is a voluntary system. This is an ongoing issue in the industry.

Beyond that, and whatever we choose, we believe there should be a transition period for the federal role. If we have federal regulations, there should be a transition period of three years. During that period, certifying bodies that are not yet accredited would have a chance to apply and become accredited to conform to the standards, while still being able to operate while their application was pending.

Marketing under the COAB label could occur, but it would not have a monopoly on Canadian exports during that transitional period. We don't see an immediate monopoly. During that period, COAB could also apply for direct accreditation of itself within the European Union and within the United States. This would lay the groundwork for the other possibility where we don't go nation to nation, in the event that it's not necessary.

In terms of the final principle, in addition to the transition period, which is closest to our heart, we believe there should be consultation on a revised set of regulations. That consultation shouldn't just be within the COAB directorship, it should be to individual certifying bodies. It should go back; the kind of consultation that didn't happen with the set you have before you should happen. Individual certifying bodies should be consulted.

Just to preface Mr. Dyck's remarks, recently there has been a move to accommodation in the industry. Out of that fuss raised last fall, there's been a turnover in membership and some shifting in leadership within COAB, including the election of one of our members for Manitoba, Ken.

Among the motions that were passed recently was a motion to take up with Agriculture Canada a three-year transitional period to ensure a level playing field. There was also a motion to have a relationship with the provinces that involved harmonization of the regulations to accommodate them and a shift from controlling the word ``organic'' to controlling the words ``certified organic''.

The issue of control within provincial borders and the degree of compulsion that's involved is unresolved and unclear. I think it's unclear even comparing the resolutions that were passed to the remarks of our president, Larry. What happens when there is no provincial jurisdiction? Can you ship within a province using certified organic?

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There was a sense at that meeting that COAB actually wanted to control that too, because if they didn't, they couldn't control imports in the same way. So that issue has yet to be fully fleshed out, and those options are still to be fully defined.

If we do go ahead with federally regulated or mandated COAB, there is another final issue we should talk about that has been raised previously, that is, that COAB is under-resourced. You've heard the complaints. I think Robert Beauchemin was very strong on this, that the degree of development of the standards was insufficient. He turned it around to the level of resourcing COAB was experiencing.

It's no accident that COAB's budget is small while at the same time it copes with a very important issue. As you know, producers receive very few pennies out of the dollar that ultimately the consumer pays. Now, it's right that the producers be the ones who set the standards for organic in this area. At the same time, the producers have a very small portion of the total value added. All the people who are going to benefit downstream in the production, such as the members of the Canadian Health Food Association, are all are waiting for the standard, but the producers themselves don't have the resources and the capital, especially under a federal public regulatory system, to set this up. The consultation requirements that should happen under federal regulation, and we believe should happen, are nevertheless expensive, and it's difficult for them to proceed. So there is a resourcing problem, one that we would think government has a role in helping to address.

We think a label on a voluntary system, especially, could be self-sustaining, but for that initial start-up cost, especially under a public process, I think the producers require some assistance.

I've covered a lot of points. I'll turn now to Mr. Dyck.

Mr. Ken Dyck (Member, Organic Verification Organization of North America Inc.): I have only three points to make besides Dan's. They're probably in tune with Dan's.

First, in terms of OVONA, we've developed our own market. We have our own standards. We have a book here. These are our organic standards. We've developed a marketplace in the last eight to ten years at an expense to us. It has cost us $50,000, probably more, to develop this marketplace. We just want to make sure we have time to recoup our funds before joining COAB.

We believe in principle in COAB. We believe if we can ship overseas and if we can have a single identifying mark that will ensure quality and guarantee that it is an organic product, we can be successful. We can cooperate right across Canada. We can trade interprovincially and we can trade internationally, import internationally, using the same standards. We see that it's going to come in the marketplace.

We have a concern with our standards being outside the regulations of COAB. We have a concern about this, because the market is ever-changing. We are bound to market changes. If our consumers say to us one day that they don't want any more of our sunflowers because they do not want them any more, we have to react accordingly. If a new product is developed to be able to control a disease that is acceptable organically, we have to be able to put that on our user list. If another product becomes non-acceptable, we have to take it off our list. We have to get it down to our producer level right away. We can't wait for a three-year evolvement if we had to gazette it, put it in the regulations, and go through a government process. It would take too long. We would lose the marketplace immediately. That is one of our concerns.

I wanted to address something here about our standards. You were referring to whether we are the lowest common denominator. As a member of COAB, we're not going to be the lowest common denominator. If other standards are in place, you can put both stamps on your package. If OVONA's standards are higher than COAB's standards...and they're not, they are pretty close to the same. There's not very much difference in the standards. I know there are a heck of a lot lower standards out there in the marketplace. You can put both stamps on there to ensure that you have the highest stamp available. You're not going to lose your accrediting agency. Your CB is still there in existence. COAB is there just to monitor the CBs to make sure what they're selling or what they're mandating is truly organic, and that's the idea here.

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If a CB voluntarily wishes to export, and they have that choice, they can use the Canadian organic standard. Our biggest concern is that we're able to wait so we can have an opportunity to recapture the funds we spent developing our marketplace. Other than that, we support COAB.

The Acting Chairman (Mr. Calder): Thank you very much, Ken and Dan.

Before I open it up to questions from the members, the information Dan was talking about was in English only, so as soon as it's translated it will be handed out and delivered to your offices.

Secondly, we have four more presentations, which will be done by teleconference. In the interest of time, I wonder if I could get general consensus from the committee members to keep both rounds of their questioning to five minutes.

Some hon. members: Agreed.

The Acting Chairman (Mr. Calder): Great.

Monsieur Landry.

[Translation]

Mr. Landry: My question is for Mr. Hara. You said you tried to get certified on the European markets, but it was in vain. Why didn't it work?

[English]

Dr. Hara: One of my faults is perhaps speaking too quickly, and I'm afraid we've miscommunicated. We are fully accredited in European markets. We were successful in doing that. We used the existing provisions with a European sponsor organization, and as a result our members have complete access to European markets.

[Translation]

Mr. Landry: In your presentation, you said there was duplication in the inspection of organic products. What should the government do to solve this problem?

[English]

Dr. Hara: I'll take the example of where an existing provincial organization is in place. We hope the standards COAB sets will be harmonized with those. When such an organization is in place, we hope COAB will take the role of verifying the accreditation process in that province by that provincial body, then accept the documentation provided to the provincial body at the federal level and then accredit them federally. So we see cooperation with the provincial bodies, where they exist. That would be our preference.

The Acting Chairman (Mr. Calder): Mr. Hermanson.

Mr. Hermanson: Thank you.

Thank you, gentlemen, for appearing. Because our time is limited, I'll ask a couple of general questions.

The department said it wouldn't go ahead with the gazetting of these regulations until there was general consensus in the industry. We got that commitment from the department. Are you comfortable with that assurance? I sense you have some general agreement that this process, this regulatory regime, can be okay if it's done correctly. Are you comfortable that everything is under control and that this will all come out okay?

Mr. Dyck: I believe it's coming together. I'm not saying it's perfect yet, but it's coming together, as long as the government recognizes that it's a different industry. If we were to throw regulations at the organic producers, a lot of the smaller ones could not afford to be there. They would not be there because of the cost of doing the certification.

When we say certification, it means we document everything. If you buy something at the store, it has a lot number on it so you can trace it right back to the farm. You can go right back to the corner of the farm on which it was grown. That's certified organic. Some of the small producers on the side of the road can't afford to do that. If they don't want do it, they can sell it off. These are things we have to accommodate. As long as we can accommodate those people, I think we'll be fine.

Mr. Hermanson: Is part of that the issue I brought up earlier: you don't want to see the little word ``organic'' as the criterion for organic; you want to see a trademark stamp of ``Canada Organic'' or something like that?

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Dr. Hara: That's correct. If we can answer specifically in terms of the regulations, we're comfortable that things are coming together with COAB, but the acid test for us is the transition period. For that COAB has passed a resolution, which it is going to take up with Agriculture Canada.

Less important, an an area we disagree on still but we can live with, is that COAB has made the compromise in moving from controlling organic to controlling certified organic. The position of the COAB majority - and it's a 75% majority - is still for a control basis, though. We would prefer, if we had our first preference, a voluntary standard, but we could live with the other if we had the transition period of three years.

Mr. Hermanson: Why was there a lack of consultation? Was the tie-up in the older COAB, before it was rejuvenated, or was the problem with the Department of Agriculture? Why was there not proper consultation? I heard that in your statement, Mr. Hara.

Dr. Hara: Maybe I should take the heat on that one, because it requires speculation.

I think what happened is we had this very widespread consultation process called COUP some years ago, the Canadian Organic Unity Project. Out of that was a committee forum to carry it forward: very well-meaning, hard-working dedicated people, and at the same time under-resourced. I think they became more close and close-knit as time went on, and that consultation they were bringing back to the community didn't happen. We don't wish to criticize the individuals, but the consultation didn't happen.

Mr. Hermanson: Mr. Dyck, you are on COAB.

Mr. Dyck: Yes, I am.

Mr. Hermanson: Were you elected? I have to find out how this works.

Mr. Dyck: You could call it that, in a sense. There are three organizations in Manitoba. One is OVONA, one is OCIA, and the other is OPAM. We had a meeting with OPAM, a meeting with OVONA, and a meeting with OCIA. We had the representation from Manitoba. Their past-president, Alex Scott, was from OPAM. It was OVONA's turn to have representation. We asked for volunteers on the board of OVONA. I put my hand up to volunteer, and it was my turn to go at it. I'll tell you, not many hands went up.

Mr. Hermanson: Do you recommend that there be some changes in the way COAB directors or board members are selected? It seems rather odd. I've never been able to get a handle on how this happens. It seems as if it's a real ad hoc system.

Mr. Dyck: No, the people are interested. We all have a vested interest. The people who are on the board have a vested interest in it. We have a five-member board group for OVONA, for example. We had discussions around the table and I volunteered. It was instead of a vote to have somebody put the hat on. It's the same as if someone nominates you to be president of the board and you accept it; so be it.

Mr. Hermanson: It just seems as if the guy back on the farm, growing the organic product, doesn't know who his representative is and why they got there. I'm starting to think I understand why.

Mr. Dyck: All the people have been aware of my representation. We had a discussion with OPAM before OVONA.... It was OVONA's turn, but we had a discussion with OPAM before it even happened.

Mr. Hermanson: So the however many hundreds of organic growers there are in Manitoba would know you are your COAB rep; they know that and they know how you -

Mr. Dyck: I would hope all of them do.

The Chairman: Mr. Collins.

Mr. Collins: Thank you, Mr. Chairman. I'll come back to the other one in a minute.

Dr. Hara, one of the things you mentioned, and I started to write it down, is that the regulations are poorly written. Do you have an example?

I sit around meetings where some of the folks around here would like to wordsmith for hours. I don't have the time. I don't want to be impolite, but by God, I think some people would build empires wordsmithing at government levels, and maybe at your level. What I would like to know specifically is what would you identify here as something you have a problem with?

Dr. Hara: We have detailed some in our submission. Let me identify the major ones.

We had a problem with the complete absence of dealing with the transition period. So when I say ``poorly written'', I mean there was a structural problem where an issue about how it comes into being was just not addressed. That's one.

Mr. Collins: Transition.

Dr. Hara: We had an issue with taking control of the word ``organic''. We didn't think people had thought through the consequences of that and the community reaction to that, especially small producers. I don't know whether you would call it a flaw or poorly written, but we had a problem with that.

Mr. Collins: Those are flaws you saw in the structure of this being presented.

Dr. Hara: Then there was the technical document itself. It's still really in draft stage. In fact, we would support moving it out of the regulation and just referring to it and making it the technical standards under a COAB board.

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Mr. Collins: I notice, forgive me, as I listen to you and you go through, it's kind of like the voluntary arrangement. I've a little problem with: I want to be voluntary, you want to be voluntary, and you want to be voluntary. We want some continuity. Is it your idea of what's voluntary, or is it my idea?

We just talked for a moment, and we find this gentleman is on COAB and he has come out of your organization. It appears that some people think it's loose-knit, but how these people have got there is that they are people who are interested in the process and want to have some contribution; otherwise they wouldn't be there.

Remember, I was talking about a measuring stick. What's that benchmark you'd like to see? If we're going to take the lowest common denominator, we can arrive at it pretty quickly. If we're going to achieve a higher benchmark, I think we have to set that.

So how do we overcome the voluntary process and at the same time do the things you'd like to see us do? I'm interested in what Mr. Dyck and these other people say, because I don't think it's a loose-knit body. It may appear that they need some restructuring along the way, but I think they are there with good intentions. Could you simply help us along in this process so that we make the right decisions?

Dr. Hara: The words ``voluntary'' and ``the existence of a standard'' are not opposites. If we have a federally mandated standard, and it could be a very good one - in fact, the industry standards aren't all that different, they can be quite close - the next question becomes, how do we represent that to the consumer and how does a consumer know?

If enough of the industry gets behind it on a voluntary basis so that we've gathered up that support, then it becomes a dominant industry standard. There are many industry standards that have no government mandate but have taken over industries. It just comes from having enough industry support.

In fact, a compulsory standard will often fail if the industry is not willing to support it. If you get grassroots rebellion because we don't want government controlling our word ``organic'', then even if you make it compulsory, you've going to have a big enforcement problem.

Mr. Collins: If I could go back and ask a final question, Mr. Chairman, I understood from Mr. Dyck - and I think both of you have said this - you could live with the process if you could recapture our marketplace or some market that it has cost you -

Mr. Dyck: Yes. We have developed our own marketplace. We have our export credentials already. We don't need COAB, to be quite honest with you. I'm on the COAB board. I'm being brutal here, but we don't need COAB. I don't need COAB to market my products, because I can do it through OVONA. But we can see there's an opportunity here for not just us but for the rest of the people across Canada, because we can have, again, a level playing field.

Mr. Collins: Is the transition you're talking about in dollars or in time?

Mr. Dyck: Lost dollars.

Mr. Collins: How much money are you talking about?

Mr. Dyck: At least $50,000. That's minimum...oh, lost money -

Mr. Collins: I'm just saying, what would the factor be, $50,000?

Mr. Dyck: If we lost our market for one year?

Mr. Collins: Would it be $50,000?

Mr. Dyck: No, maybe $2 million.

Dr. Hara: I'm concerned we may be miscommunicating. We're looking for a three-year transition period.

Mr. Collins: I understand that.

Dr. Hara: Okay.

Mr. Dyck: Let's go back. If COAB came into place right now, and the regulations came in and OVONA could not be certified to export from Canada -

Mr. Collins: I understand.

Mr. Dyck: - we would lose one year's volume of business.

Mr. Collins: Okay.

Mr. Dyck: We have spent moneys already to create a condition where we can export with OVONA stamps to Europe. We've already created that marketplace. We have a substantial investment in there, and that's why we would like a transition period.

Mr. Collins: Okay. Thank you.

The Acting Chairman (Mr. Calder): Thank you, Mr. Collins.

Mr. Hoeppner, please.

Mr. Hoeppner: Thank you, Mr. Chairman.

The gentlemen previous to your testimony said, ``sister-sister relationship.'' That scares me. Sisters grow up and they want different boyfriends or they'll go in different directions, and if they ever pick the same one you have a real fight going. I heard the gentleman, Mr. Dyck, just say we don't need that. I think your relationship is bound for a very strenuous and very disastrous period of time.

Wouldn't you be better to disband all the organizations and have one?

.1700

Mr. Dyck: The problem is that COAB is not accredited to export yet.

Mr. Hoeppner: Why do you need them?

Mr. Dyck: We have to have a unifying standard across Canada. If you see all the accreditation agencies and different regulations that are out there, then you can understand. We have to strengthen our product from Canada.

What it essentially does is this: we will create more customers, and we will have more product that we'll be able to ship out of Canada because of it.

Mr. Hoeppner: Getting to the next point, do you represent different producers, or are they generally the same on both or all three organizations?

Mr. Dyck: There are a lot more smaller producers. From OVONA, I represent a smaller group of producers in Manitoba.

Mr. Hoeppner: But different producers?

Mr. Dyck: No, the same producers that would be COAB's.

Mr. Hoeppner: That makes me wonder again. If you have the different organizations representing the same producers or the same type of producer, why do you need the different organizations. Why not disband and have one?

Mr. Dyck: Because there are several international accreditation organizations that operate right now. There's IFOAM, there's OCIA -

Mr. Hoeppner: Will they be done away with when you have COAB?

Mr. Dyck: No.

Mr. Hoeppner: So you'll still have to deal with them.

Mr. Dyck: Yes.

Mr. Hoeppner: All right, on the other question, you're scared of cost, because we know we're going to a user-pay system.

Mr. Dyck: That's right.

Mr. Hoeppner: Why in blazes did you ever come to government for regulations?

Mr. Dyck: I just got elected to the board; I didn't.

Mr. Hoeppner: You know what the problem is with bureaucracy.

Mr. Dyck: I know that. That's why we're trying to have the regulations set aside from our actual documentation. We're having the regulations set aside so that they're reference only.

Mr. Hoeppner: My bit of advice, and it may not be very good, would be to back out of this whole mess you're in right now and start from the grassroots and do it yourself, because you'll pay for it.

Consumers have been happy with what you've been growing.

Mr. Dyck: Yes.

Mr. Hoeppner: Why are you asking for interference?

Dr. Hara: If I may, we could live with that too, since we've already established our markets.

All we see in the long run, which puts us on balance in favour of having some kind of standard, is the potential necessity of nation-to-nation accreditation. If, say, the European Union requires that Canada name the people -

Mr. Hoeppner: But you said that could be years away. Aren't you jumping on the ship before it has water to sail on?

Dr. Hara: It takes a while, as we've seen, to make these things happen.

Mr. Hoeppner: Thank you, Mr. Chairman.

The Acting Chairman (Mr. Calder): Thank you, Jake.

Dan and Ken, thank you very much for your time here; we've found it insightful. We wish you well in your endeavours.

I'm going to ask for a five-minute break right now while we set up for the teleconferencing, which will be for the next four witnesses. Everybody can grab a quick break while we do that. Thank you.

.1703

.1715

The Acting Chairman (Mr. Calder): Welcome, Marina. My name is Murray Calder. We're looking forward to your presentation.

Ms Marina Buchan (President, Peace River Organic Producers' Association): Thank you for this opportunity to appear before the Standing Committee on Agriculture and Agri-Food regarding the draft organic food production regulations. I speak on behalf of the 34 members of the Peace River Organic Producers' Association, PROPA.

Since 1989, PROPA has been certifying growers primarily in the Peace River bioregion, and it currently has over 50,000 acres in the program in both Alberta and British Columbia. PROPA is also a member of the British Columbia provincial accreditation program, COABC.

PROPA is unique to the COABC program in that it is the only member of COABC that has members from another province, that being Alberta. The reason for this is that it is thought that regional development is important and the Peace River bioregion spans the B.C.-Alberta border. In fact, the agriculture ministries of both provinces of this region cooperate on many projects.

Last fall PROPA lobbied to halt the process of the organic regulations until appropriate consultation with the organic industry could take place. It must be realized that the organic industry is very young and has not yet developed an adequate networking or communications system. While COAB and Agricultural and Agri-Food Canada possibly thought all along that they were communicating with and getting feedback from the entire industry, in fact they were not.

There is concern that the pending program would be so costly that only large players could participate. There was recognition of the need for a small-grower exemption from the organic food production regulations, and COAB passed a resolution regarding such at the COAB annual general meeting in February. I recommend that Agriculture and Agri-Food Canada also should recognize this need.

Whether the proposed program will be one of a voluntary or mandatory nature is also an issue. PROPA supported the concept of a voluntary program until recent discussions with some members of the industry at the COAB February annual general meeting, who suggested that if the program was voluntary Canada could become a dumping-ground for substandard or fraudulent organic products.

This situation would be unacceptable of course, and PROPA does not have the resources to verify if this could be a possibility under international trade agreements.

Another concern, perhaps unique to PROPA's situation, certifying in Alberta as well as B.C., is that while COAB passed a resolution encouraging ``the formation of provincial accreditation organizations under the protection of provincial regulation'', will COAB recognize the Alberta members of PROPA as being accredited as well as the B.C. members? It would be unacceptable if the Alberta members had to undergo accrediting by COAB directly, as proposed in the February resolution, if Alberta does not create an accreditation program.

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Another issue of importance is the question of what enabling legislation would be most appropriate for the organic food production regulations.

It seems this is primarily a labelling issue. It doesn't appear that all the options have been clearly presented to COAB. PROPA would support national organic certification standards and a regulatory program, if that is found to be necessary to facilitate trade and if provincial accreditation programs be allowed to administer the national program, keeping in mind the previously mentioned cross-border issue, and be cost-effective. It is important that the proposed regulations be able to include all legitimate existing players in the organic industry.

In conclusion, I recognize that COAB members have put much effort, at personal expense, into developing organic food production regulations and standards. I appreciate that, but I see that the COAB does not have the resources or the funds to do an adequate job. Considering the growth rate of the organic industry in North America and the fact that a large percentage of the retail sales of organic product in Canada is imported, I would encourage Canada Agriculture and Agri-Food to give adequate support to the COAB in order to create a superior national organic program for Canada.

It would be a shame if Canada, so well positioned to take a sizeable part of the global organic market share, is unable to do so because it has no national organic regulatory programs.

Thank you very much, Mr. Chairman.

The Acting Chairman (Mr. Calder): Thank you very much, Marina.

Mr. Landry, do you have any questions?

[Translation]

Mr. Landry: Yes. Mrs. Buchan, what kind of regulations do you currently have in Alberta?

[English]

Ms Buchan: None, as far as I know.

The Acting Chairman (Mr. Calder): Thank you, Mr. Landry.

Mr. Hermanson, please.

Mr. Hermanson: Thank you and good afternoon, Marina. If I remember correctly, yours is one of the chapters or organizations that had contacted me with a lot of concern about the regulations as they were coming forward. I sense from your testimony and your brief today that you are more comfortable with where things are at now.

First of all, do you have confidence in COAB, with some of the changes that have been made? Do you feel there is now enough understanding in the industry of what is being proposed that they feel this could come to a positive and successful conclusion? Third, what concerns might you still have that you don't feel are being addressed by COAB or by Agriculture and Agri-Food?

.1725

Ms Buchan: There are several issues, and I believe I touched on most of those issues in my presentation. I'm still not convinced that COAB has been presented all the options regarding enabling legislation. As well, I'm not really convinced that it has to be a mandatory program. It's just that I don't have the understanding or the resources to research that.

Mr. Hermanson: You also talked a bit about some concern about provincial regulations versus federal regulations and about some problem between what may be required in Alberta and what might be required in British Columbia. That was a fairly brief description, and I'm not sure I totally understand what you were driving at. Are there existing regulations in British Columbia and Alberta now that you have to comply with? Why would a national set of regulations pose problems in the Peace River country, where you straddle a provincial boundary?

Ms Buchan: Presently PROPA is a member of the B.C. provincial accreditation program, and we feel we should be allowed to stay under that accreditation program rather than be accredited directly by COAB, even though there is not an accreditation program in the province of Alberta at present.

The resolution that was passed in February directs COAB to take the role of verifying the accreditation process in provinces where there is no provincial regulation. Right now Alberta has no provincial regulation, so I'm requesting that even though some of our members are in the province of Alberta, we continue to be treated the same way as we are under the B.C. provincial organization.

Mr. Hermanson: Am I clear, then, in understanding that the work COAB would be doing in accrediting is already being done by a provincial accreditation body in British Columbia - that there's duplication there?

Ms Buchan: In my mind, that is correct. I would like to see all provinces that have an accreditation program simply and very inexpensively recognized. I think Quebec is also working on a provincial accreditation program. The provinces that have accreditation programs could just be recognized by COAB.

Mr. Hermanson: That would eliminate the duplication. So you would like to see the provincial accrediting agency stay and COAB recognize that, rather than doing away with the provincial agency and just having COAB as the accrediting agency?

Ms Buchan: Absolutely.

The Acting Chairman (Mr. Calder): Thank you, Mr. Hermanson.

Mrs. Ur.

Mrs. Ur: Thank you, Mr. Chairman.

I think, rather than growing pains, we're having evolving pains with this program.

Is Alberta presently working to a provincial accreditation?

Ms Buchan: Not that I'm aware of.

Mrs. Ur: Would that not be beneficial?

Ms Buchan: I'm not sure if it would be or not. I guess it would have to depend on how it was set up.

Mrs. Ur: Why are some provinces vying, then, for provincial recognition and others not?

Ms Buchan: I would say it's a matter of their own personal choice and their ability to organize and realize there might be a need for that.

Mrs. Ur: Is it because you have smaller numbers in Alberta in organic farming, compared to perhaps other provinces, that you find it more beneficial to be with B.C.?

.1730

Ms Buchan: The accreditation program already exists in B.C., and because part of our region is in B.C., they became part of the B.C. accreditation program. Because the region spans both sides, they just allowed the Alberta members to be part of that also.

There was a brief discussion about the possibility of an Alberta provincial accrediting program, but nothing has been done to move in that direction yet. And yes, we are fewer, and that probably has something to do with the reason there hasn't been any movement towards an Alberta program.

Mr. Hoeppner: I'm wondering, Marina, if you could clarify this for me. You were concerned about dumping of organic food into Canada. Doesn't organic food coming into this country have to be certified by either the American organization or the international? How is it possible that they could dump it?

Ms Buchan: This was a concern expressed to me by other members of the industry. I have no way of verifying if that could be true. I know the U.S. Department of Agriculture is developing a national organic program. How all that would work I really don't understand. I have no way of verifying whether indeed these concerns could be realized.

Mr. Hoeppner: It seems to me that couldn't happen if you have an international body already certifying this food - or the American body, OVONA, which is a North American body, is it not?

Ms Buchan: Are you saying OVONA is a certification body in North America?

Mr. Hoeppner: Isn't it?

Ms Buchan: Yes, it is, but it certifies only a portion of the organic product in North America.

Mr. Hoeppner: It just doesn't make sense to me that if they have some sort of certification process, people outside that process could ship it into Canada and claim it was organic. I don't think any processor would buy it, would they?

Ms Buchan: Well, I would hope not. This was just a concern expressed to me. I don't know where it came from or why that concern is there.

Mr. Hoeppner: How do you like marketing through the Wheat Board? Is that a concern to you?

Ms Buchan: I was really hoping that wouldn't come up today.

Most members in Alberta would like to see all grains, all crops, livestock, grains, pulses, oilseeds, registered or looked at as special crops. Most of them would like to be able not to have to deal with the Wheat Board.

Mr. Hoeppner: Thank you very much. That's an honest answer.

The Acting Chairman (Mr. Calder): I'm not sure that was the answer he wanted.

Marina, thank you very much for your presentation. I hope the planting season out there is going a little better in Alberta than it is here in Ontario at present.

Ms Buchan: Thank you, Mr. Chairman.

.1735

.1741

The Acting Chairman (Mr. Calder): Welcome, and I guess it's still good afternoon out in sunny B.C. here.

Ladies and gentlemen, we have Brian Mennell, JoAnn Sandhu, and Daphne Sidaway-Wolf.

Welcome. Brian, if you're doing the presentation, you may lead right into it. We're more than willing to listen.

Mr. Brian Mennell (Vice-President, Certified Organic Associations of British Columbia): Thank you very much for letting me make this presentation on behalf of the organization in British Columbia called COABC, or the Certified Organic Associations of British Columbia. I've brought two people with me. One is our executive director, JoAnn Sandhu, and as you already know, the other is Daphne Sidaway-Wolf, who is senior policy analyst, food standards. Right? I goofed on that one.

Ms Daphne Sidaway-Wolf (Director, Certified Organic Associations of British Columbia): Right. Close enough.

Mr. Mennell: What I would like to do is make the presentation, and if we have time, JoAnn or Daphne will also make a presentation. I will bore you. I hope you don't go to sleep, because I'll read it and I'm used to dealing with my trees, not pieces of paper.

British Columbia's organic industry is based on peer-reviewed certification associations within distinctive bioregions in the province. Currently there are 11 such certification associations in British Columbia, each with its unique certification label to identify certified organic product. Seven of these associations are members of the Certified Organic Associations of British Columbia - we'll call it COABC.

The British Columbia organic agriculture products certification regulation, which is pursuant to section 7 of the Food Choice and Disclosure Act, was established in 1993. The COABC is designated by the regulation to establish British Columbia's certified organic standards and to administer an accreditation process such that the member associations can certify their producer members as meeting the standards.

The provincial program is voluntary in that certified members can choose to purchase the right to use the B.C. certified organic symbol and phrase if it is to their benefit to do so.

COABC also has the mandate to undertake market development, research, and extension activities on behalf of its members. The provincial accreditation program is recognized by the food processing, wholesaling, and retail sectors, as they are increasingly requiring that the organic products they purchase locally be B.C. certified organic.

This situation has resulted in one more association's having just completed the audit process necessary to join COABC and has caused other associations to indicate that they intend to join COABC in the near future. So it is expected that nine out of the eleven certification associations in British Columbia will be members of COABC by the end of the year.

COABC has been delivering the provincial accreditation program for the past three years in a credible and cost-effective manner. The proposed federal regulation and proposed structure of the Canadian Organic Advisory Board, COAB, must provide for the continued role of COABC to fulfil its accreditation function at the provincial level.

.1745

COABC and other accreditation agencies could have their standards reviewed for equivalency by COAB or on behalf of the minister. These agencies could then deliver the national program through existing channels.

However, there are not explicit provisions in the proposed national regulations or the COAB by-laws to allow COABC to be recognized as an equivalent accreditation agency and to administer the national program at the provincial level. This issue has been raised numerous times in the past six months, and it is expected that changes will be made.

Also at issue is the decision to embed the national organic standards directly into regulation. The organic industry is very young. Standards are still very fluid at the international level, and flexibility is needed to allow for rapid industry adjustment. The standards should be removed from the regulations and incorporated into a structure, such as COAB's by-laws, so that adjustments could only require approval by the minister.

COABC has sought clarification from the provincial trade adviser regarding the position that the national program needs to be mandatory because of trade considerations. With respect to exports, he has reviewed the proposed European Union organic regulations and did not find any provisions that would preclude access to certified organic products to that market because a certification program was voluntary.

Discussions with USDA officials drafting similar regulations in the United States also indicates there were no specific impediments in their draft regulations in developing reciprocal arrangements with voluntary accreditation agencies.

A mandatory national certification program is also not needed to regulate imports, since section 5 of the Food and Drugs Act and section 7 of the Consumer Packaging and Labelling Act already provide a means of controlling the misleading use of the word ``organic'' for both imports and domestically produced products. The British Columbia organic industry supports the development of national standards to facilitate the enforcement of the provisions of these acts.

If producers meet the national certification standards and are members of a certification association recognized under the national program, then they should be able to choose to purchase the right to use the national symbol, ``Canada Certified Organic'', similar to the British Columbia accreditation program.

Producers supplying local markets could continue to use their local certification stamp since their certification association would have to meet national program requirements to comply with section 5 of the Food and Drugs Act and section 7 of the Consumer Packaging and Labelling Act for the use of the word ``organic''.

In closing, it should also be noted by the committee that the COABC has not been part of the national process until recently. Our efforts and those of the provincial government to have our concerns addressed continue to be frustrated by the general attitude in Agriculture Canada and COAB. We hope it is not too late in the process to make significant changes in the proposed regulations and COAB by-laws.

Now that I've done it off the paper, I'd just like to summarize and be a bit more natural. To put it in farmer's terms, in British Columbia we have put the horse and cart together and we've been three years down the road. We have an accreditation program in place. We have instituted and updated a set of standards and regulations, and it is working well. That's been shown by the increasing number of certification organizations joining our organization. So you could pretty well say 95% of the organic production is being registered under COABC. Needless to say, the market industry has accepted our program.

.1750

We feel it's very important for efficiency. The peer review process of accreditation is very important. I think it is basically structured throughout Canada. To have it closer to where production is occurring is very important.

Therefore, having provincial accreditation organizations with a relationship with the federal government and COAB is essential, rather than having to have accreditation done by a national group. It's much more efficient and it's also much more beneficial, I think, for the whole industry, because we're afraid we're going to lose a lot of producers through the cracks if we put a high cost on doing the certification process.

It's important to remove the standards from the regulations. Also, the last thing is that we have a regulatory framework in place. The control of misuse of the word ``organic'' is already there if there is a desire to enforce it under the acts already mentioned. Therefore, a voluntary program is a much more alive program. Growers will use it if it has meaning to them. So if they have to buy into a program, it doesn't just become a regulation where they have to conform to it. It has to remain active and alive and meaningful. You've watched the destiny of the marketing boards in Canada, where things are regulated.

Basically our response from growers and our producers in B.C. is that they don't want this type of thing. They want to be able to have regulation but have the choice of buying into it.

This the end of my summation, so I'll give you Daphne Sidaway-Wolf.

Ms Sidaway-Wolf: Thank you very much.

The British Columbia government and the Certified Organic Associations of British Columbia have obviously been working together for a number years. We've been watching this process, and we do in British Columbia recognize the need for a national organic accreditation and certification program. But it has to be cost-efficient and it really does have to respond to the needs of both the B.C. and the entire Canadian industry.

There are essentially three delivery options.

One is the status quo, keeping it the way it is with a high-quality program with no national standards. But we do have a risk of consumer confusion.

The second option is a voluntary program. That's one we could support, which is essentially what's being proposed without making it mandatory. This should be a system uniting all the accreditation agencies and certification bodies already in existence. This allows them to work together without replacing them or duplicating them.

Essentially there are four criteria. The program would have to develop and maintain national and international equivalent certified organic standards. These have to be agreed to by the organic industry and they have to meet the international standards.

Upon application of approval of the standards and procedures of an individual accreditation agency, the national body has to delegate the authority to this agency. In other words, COABC, if they were deemed to have equivalent standards, should be able to deliver some sort of national Canada organic program.

Under the voluntary program, it really should be voluntary so those who are already certified under a recognized and equivalent certification agency may use the designation if they see it is to their benefit.

And it has to be cost-effective. One of the really big problems here is that in B.C. our organic industry emulates the rest of the industry. They're usually very small farms unable to bear a $3,000 to $5,000 per year charge for certification, and this is what may happen under a mandatory process.

Now, the third option is something that's just been touched on by Brian. It also may have been brought up by some of the other groups you've heard from today. This is a proposed new mandatory system under the Consumer Packaging and Labelling Act. This is coming at it a little bit differently than we've been approaching it so far. It would again be a national organic accreditation system that could be established to unite everybody under one structured program. It would use existing legislation, the Food and Drugs Act and the Consumer Packaging and Labelling Act. And it would control the use of organic claims at the retail level. Because it's controlled at the retail level and requires certification all the way through the process, this essentially controls organic production, processing, distribution, handling, and anything else you'd care to do with organic products.

.1755

In the Guide to Food Labelling and Advertising, which just came out in March, section 4.2.9 Organic, states:

The use of the term ``organic'', when applied to a product that has not been produced and handled according to the certification requirements of an independent organic certification body, has the potential to be considered misleading and deceptive under section 5(1) of the Food and Drugs Act and section 7 of the Consumer Packaging and Labelling Act.

We would suggest that if the CPLA could be amended to include addition of a reference to organic production standards, this would be the right way to go, because then you could refer to an actual set of standards. These standards would be the ones that have already been developed with COAB and the rest of the industry. There's still a little bit of work that needs to be done on it, but I think essentially COAB and the industry are pretty happy with the standards as they are now, not the regulations and the by-laws, but the actual organic standards, which is the real meat of the whole process.

These could be maintained outside. The Canada Standards Association could look after it, then a body such as COAB could evaluate, on behalf of the Minister of Agriculture, other program standards and administrative procedures for equivalency to the national standards. So on behalf of the Minister of Agriculture, COAB could take a look at everybody else's standards and make sure they met the national standards. If they did, then those people could be either an accreditation agency, as happens in B.C. and will be happening in Quebec, or a certification body, as OVONA, PROPA and the others are now.

This program could be delivered through existing accreditation and certification agencies that recognize equivalent standards with little cost. What we would like to see is a sheet that could be appended to an audit that's done by COABC right now. We could have a little box at the bottom that says you've met our standards, which means you've met the national standards. Tick here if you want to be allowed to use the certified Canada organic designation, or whatever it ends up being called.

If you tick it off, COAB right now is proposing a $10 fee per farm. I can't think that any certified organic grower in Canada would object to paying $10, ticking it off, and ensuring that they meet national standards. COAB was also suggesting a $35 fee per certification agency, with 9 or 11 certification agencies in the future. I don't think that's a problem either.

There are substantial advantages to a voluntary system, as is currently proposed, but we're having a lot of trouble with people seeing that as voluntary. They're worried about this not having effect in other countries, not being accepted, and this sort of thing. From what our trade specialists are telling us, this isn't a problem. Products from COABC can be exported to the European Union and to Japan, as long as we have independent standards that are recognized as being adequate.

This new proposed mandatory system has an awfully big benefit to the consumer. I think this is something a lot of people have been concerned about. If it were possible to investigate this option further, we would have control of the word ``organic'' in Canada. When a consumer picked up something and it said ``organic'' or ``certified organic'', whatever was actually decided upon, it would mean that product had actually met those national standards. As a consumer, I don't really want to be paying for a product that I'm not sure about. If it says ``light'', we control that. If it says ``organic'', we don't really, at the moment.

I should mention that in the Guide to Food Labelling and Advertising that just came out in March, they do describe ``organic'' and suggest that the Consumer Packaging and Labelling Act should already be controlling this. So in fact we're not looking for new legislation. We're essentially looking at a little tweaking of the Consumer Packaging and Labelling Act to allow total control of the words ``organic'' and ``certified organic'' in Canada at the retail level, which should have that effect all the way back through the system.

I prepared these three points and I have a recommendation that we support the further investigation of this proposed new mandatory system based on the Consumer Packaging and Labelling Act, option 3, which would allowing existing accreditation and certification systems to operate and deliver an effective, cost-efficient, and credible national organic certification program. Credibility is really important. If we're not credible, our trading partners won't want to deal with us.

We should support the continued development of the organic production standards and ensure that they're maintained outside the legislation, as Brian was mentioning, so that we can update them easily as market forces dictate. We have to ensure that Canadian accreditation agencies receive fair treatment. We've been feeling a little bit outside the process, and we're very glad to have had the opportunity to come here today.

.1800

We also ask that any further organic legislative work sent out for review to certification bodies and agencies operating in Canada be sent out with enough time. A lot of the members of COABC are farmers. They're pretty busy people, just as is everybody else, and sometimes their time pressures don't allow them to review this. It's pretty gruelling going through some of this stuff, so if we could have a little bit more time it would be helpful.

I'll submit these two pages to you so you can actually have them for your record. Thank you very much.

The Acting Chairman (Mr. Calder): Thank you very much, Daphne, Brian and JoAnn.

Do you want to say anything, JoAnn?

Ms JoAnn Sandhu (Executive Director, Certified Organic Associations of British Columbia): No, Brian has been covering for both of us.

The Acting Chairman (Mr. Calder): All right.

The parliamentary secretary is giving me a bad time here, off to one side. I think he's hungry. He's going to sit here anyway.

A voice: It's dinner time, right?

Mr. Mennell: Make sure it's organic.

The Acting Chairman (Mr. Calder): Yes, we will. We'll force him.

Some hon. members: Oh, oh!

The Acting Chairman (Mr. Calder): Thank you very much for your presentation. I'll open it up to questions now.

Monsieur Landry, please.

[Translation]

Mr. Landry: Mr. Mennell, you mentioned 11 associations at the beginning of your presentation. Could you give us more details? I think there may be some duplication.

How many organic producers are certified in British Columbia, and how many are not certified?

Do you have provincial standards?

[English]

Mr. Mennell: In British Columbia, as with all organic organizations, the development of the organic certification process started out, and rather than using third-party certification or stealing something from the U.S., because the philosophy was for peer review, bioregions were developed. I wasn't party to it, though.

British Columbia is very large, like Quebec. We have a bioregion in the Peace River and we have one in an area called the Cariboo, which is the central interior of British Columbia. We have one in the Fraser Valley area and there are two on Vancouver Island. We also have one that's throughout the province, the biodynamic group.

It's evolved over time. Because our program is voluntary, organizations choose to become members of our accreditation program or the COABC.

This year we have just gone through the accreditation process. We have two levels of audit. Initially the certification group or association that wants to become a member is given a list of materials that they need to show their program will conform to and fit within the provincial program. Then we go through what's called a level one audit, where their organization is audited to see that it meets all the regulations of our program. When it does, it gets approval.

Once the organization is in the program, the level two audit will occur. We do that on a rotating basis. I can't remember the exact details, but not every group is audited every year. Basically each group is audited every third year. They're chosen randomly. We pick one-third of the certified members out of that group. It goes into detail. We don't go onto the farm, but we take all the paperwork pertaining to those particular growers or producers and a review is made, a sort of checklist that all due processes occurred.

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We had seven members, and now we've brought one more member on board and another group has applied for membership. These two groups have been driven by the marketplace. A number of retail stores have said they would like to have their product with the B.C. certified label on it, so it's forced these certification groups to come to COABC to become members.

For many it has been difficult, because one of the standards in our regulation is that during a year we require two visits of the verification officer. This is different from the federal program. It's proved to be a great hardship for a lot of the growers, because in many areas, such as the Peace River and the Cariboo, the farms are very isolated, so it may be two hundred miles to drive to a farm to do an on-site visit. Therefore it's very costly. So a lot of growers have not wanted to participate in the program, because they were just conforming to standards that required one visit a year.

In that light and in with what the standard regulations of Canada are proposing, we have amended our regulation just recently, so we are now just requiring one on-farm visit per season.

Does that answer that question?

[Translation]

Mr. Landry: Yes.

[English]

Mr. Mennell: As to the number of producers, we're in a transition period at the moment, getting the information together for this year's registration. It starts at the end of March, so we don't have all the information from all the producer groups. Last year close to forty members bought into the program. They chose to pay.

To be a member of COABC the certification organization pays $300. Then if a grower-producer wants to buy the right - and it's a contractual arrangement; he signs a contract to use the B.C. certified organic logo - he pays $100 to use that, and it's renewed on an annual basis. If a grower-producer feels it's not worth his while to use that logo, he just uses the certification stamp from his local certification group.

I belong to an organization called OPACK, which stands for Organic Producers Association of Cawston-Keremeos. If I don't want to use the B.C. certified stamp, I just use that OPACK stamp, and it indicates the product meets the B.C. regulations. But because we're a member of COABC as a group, if I sign a contract with COABC and pay the $100, then I can use the B.C. logo stamp, which is owned by the provincial government.

A lot of growers are in transition, but I would imagine there are probably close to 300 members at the moment. We will have that information probably within a month, when all the CBs send in their information.

Many of them have shown a great deal of growth. One group in the north Okanagan had fifty members last year, and when I was talking to their certification committee chairman, he said they were probably going to have a 25% to 40% growth in application for membership this year. But you have to remember those people will be in transition for three years.

[Translation]

Mr. Landry: Lastly, I want to know if there are provincial standards in British Columbia.

[English]

Mr. Mennell: Yes, we have them, and in trying to get our message across, we have spent quite a bit of time and money sending them out to all the known certification groups across Canada. We feel it's very important that this be a program from the bottom up. It has to be driven by the community and by the provinces, with the federal program being the overseer.

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If you look at all the different organizations that have tried to run programs on the federal level, the only people who benefit are the Air Canada and Canadian airlines. Most people will bail out of it and try to avoid the process, because it's just too costly to administer.

What we're trying to encourage is that it will stay within the province and be just a process of review so that everything will be consistent across Canada.

We should have prepared and sent you copies of this. We could send the committee copies so they can see it. Unfortunately, we've just made a lot of renovations to it, and they haven't been enacted yet.

We had a recent board meeting at which we made changes, and they're changes for the good. We've taken a lot of the things that are in COABC.

We felt our audit committee wasn't transparent enough. We didn't have a consumer on it; we just had a retailer on it. We also were using our board of directors as the producer members on the audit committee. We've made it so that will be removed and we'll go out into the organic community and get producers who have been nominated from their certification groups.

Does that answer your question?

Mr. Landry: No. Thank you very much.

Mr. Hermanson: Thank you, Brian, Daphne, and JoAnn. I appreciate your presentation.

I am concerned about the way you describe COABC. Its function appears to be basically the same as that of COAB. Am I correct there?

Mr. Mennell: That's right, and we've been writing this for three years. It's been in place for three years. We're saying that it's working effectively and efficiently and that we don't want duplication.

Mr. Hermanson: That's what I thought.

The federal government is going to a user-pay scenario, or cost recovery, for the Department of Agriculture, which basically means that all the services provided to producers by the federal department will be paid for out of producers' pockets, as far as grading and standards in almost every sector, and even food inspection and safety of our foodstuffs, are concerned. So what having a COABC plus a COAB means is that there's going to be duplication and your producers are going to be paying twice for the same service.

In your presentation you've said that you want the provincial accrediting agency to continue and just be recognized by COAB, but in fact if COAB exists and COABC exists you're paying for both of those agencies and it's going to increase the cost to B.C. organic producers.

If there is a federal accrediting body, why do you feel it's so important that you maintain your provincial one? Why is it that the provincial body can do a better job and you would have more confidence in that?

Also, if there is no alternative to having the provincial body, why do we need a COAB? You'd think all provinces would be looking at it in the same way and would want the Department of Agriculture only to recognize the work done by the provincial accrediting bodies.

Mr. Mennell: I think some form of COAB is necessary. We're a federal country, and there has to be some consistency for international trade for Canada. What we're saying is that maybe COAB could be the keeper of the standards, so they would make adjustments for standards.

We're a bit nervous when we look at the process and how COAB has functioned historically. It has not functioned in a transparent way.

In B.C. we've felt very isolated from that process. We have continually said that in our representation 95% of the grower bodies have not been represented for the last four years. Only within the last several months have we become involved in the process.

I don't know if this statement holds true right across Canada, but I think the principle of organic certification in Canada is peer review. So the nearer you get the process to where the product is being produced, the more credibility it has, and I think it becomes more efficient to carry out the function of accreditation as well.

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I think B.C. is a big enough province to be able to get the diversity of conditions and geographic problems so that we have the transparency and the integrity to be a valid process. I'm afraid you're making the assumption that COAB should exist as the sole accrediting agency. We feel we should have that same right at a provincial level and go through the federal minister, whether or not we have to go through a review process done by COAB. It should be a paper process, much cheaper and much more efficient than what is proposed. Canada is too big to have COAB's proposal.

We're afraid that a lot of growers are just going to fall out of the system. The irony is that I'm speaking for a certification group that has only eleven members, and we ship about $4 million to $6 million of product out of the country. But most groups have very small producers who want to belong, who want to be a member of the process and who are willing to pay to justify their existence, but when it gets prohibitive they will fall through the cracks and the whole industry may collapse before it even gets solidified.

Mr. Hermanson: I'm still not clear on how you see the relationship between COAB and your agency. Are you suggesting more of a reduced role for COAB than is currently proposed and a continuation of COABC in its role as it now exists, or do you see a change in the role of COABC? There's another thing I'm not clear on: is COABC mandated by provincial legislation? If so, what is the position of your provincial government regarding this mandate and the formation of a national accrediting agency?

Mr. Mennell: I think the position has been expressed by Daphne, who is a senior policy analyst for the food sector for the Ministry of Agriculture. They've been very supportive. In fact, JoAnn sits here because the government has made an allocation of funding for a two-year period with the understanding that we're going to try to become a self-sufficient, motivated, self-driven industry that will fund itself.

We're looking at COAB carrying on with the function of making changes to national standards. It would carry out the function of being an accreditation agency for certification groups that, in those provinces that don't have provincial systems or groups of certification bodies that don't have...I don't think there are any other accreditation systems in Canada at the moment, but if they were to arise COAB would carry out the function of perusing that process to make sure it conforms to the Canadian standards under the regulations. It should be a much cheaper job.

Ms Sidaway-Wolf: Mr. Chairman, may I try to address that question for just a moment?

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We're trying to suggest that we need legislation run by the federal government. It could be the Consumer Packaging and Labelling Act. It was proposed at the end of the Canada Agricultural Products Act. We need standards outside the legislation. COAB or some other agency - but I think everybody's pretty happy with COAB - could work on the standards. This is the Canadian Organic Advisory Board, and it is national.

This would involve COABC and other group certifying bodies that exist already. We have to keep in mind that COABC is an accreditation agency that accredits certifying bodies. A lot of other organizations operating in Canada now are certifying bodies. We, COABC, are the only accreditation agency in operation in Canada right now.

We would propose that there be legislation referring to the standards looked after by COAB in cooperation with the organic industry. From this legislation, the Minister of Agriculture, or COAB as its responsible partner, would evaluate the standards of COABC, the table filière or whatever develops in Quebec, and then COAB. These essentially would be the same standards.

Then COABC would have its own certifying bodies underneath it. These certifying bodies would meet the COABC standards, and the COABC standards would match the national standards.

If somebody in B.C. wanted to be certified, they would go through their certifying body and then COABC. COABC would be checked for equivalency of standards by COAB acting on behalf of the Minister of Agriculture. The table filière would have the same rights to have certifying bodies under it.

COAB could look after those people who have no accreditation agencies. Just because some provinces don't have them doesn't mean they need to create their own systems, though it wouldn't be a bad idea if we had an accreditation agency in each province and they would all match their standards to at least meet the organic standards at the national level.

There would be no duplication. COABC would do their audit, have their papers and ask if we want to be allowed to use ``Certified Canada Organic''. Then we'd check it off and send the $10 in to COAB. That would give COAB operating money. They would still look after the standards and they would still be involved.

That's the proposal. I'll just leave it there if you think anybody wants to look at it again.

The Acting Chairman (Mr. Calder): How would funding work for that?

Ms Sidaway-Wolf: COABC operates right now on a voluntary basis. The funding is about $100 a year for each grower and $300 a year for each certification body. There could be some sort of system where if they wanted to use the ``Certified Canada Organic'' designation, they would take part of the $100 and ship that to whatever organization is running it, perhaps COAB for convenience's sake.

Mr. Mennell: We feel it has to be a live, active, market-driven process. By putting a value on the label and paying a fee for it.... In British Columbia we have to create a market presence of ``B.C. Certified Organic'' to motivate the growers to pay up and get involved and on board with the program.

Rather than regulating it and saying you have to do it, we're saying we have to make it a system that is so valid that the marketplace requests it. From that we generate our momentum. It's happening. As I said, two new groups are joining because of that. The retailers have said they want to use the ``B.C. Certified'' label. In turn, the government has been very supportive. We've had some help with market promotion of the label, market promotion of organic product. It has been of benefit to drive that situation.

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The Acting Chairman (Mr. Calder): Mr. Hoeppner, please.

Mr. Hoeppner: Welcome to the committee.

I have two quick questions. First, do you grow any organic grain in British Columbia?

Mr. Mennell: I grow tree fruits, but we have a listing of about 50,000 acres under the COABC program. A lot of that is in the Peace River, and it is grain.

Mr. Hoeppner: You know, you B.C.ers are all the same. When I come there to visit, it can be raining cats and dogs and they're still trying to tell me it's the best weather in the world. In the organic industry you're telling me you have the horse and the cart; you have the best. But I would suggest you're missing one ingredient in that cart, and that's the Canadian Wheat Board. How would you respond to that?

Mr. Mennell: I can't respond. I don't know anything about it. Philosophically, I would respond that I don't like controlled marketing.

Mr. Hoeppner: Good answer. It's lucky you don't know anything about it.

Ms Sidaway-Wolf: JoAnn might risk her neck here.

Ms Sandhu: Mr. Hoeppner, identifying a grain as certified organic does not really impinge on any of the marketing activities of the Canadian Wheat Board. The Canadian Wheat Board can still use that certification in their marketing operations and still regulate the marketing of that product in the export market.

This is just identifying a product. It's not regulating a product in terms of marketing. We have certified organic chicken producers as well.

Mr. Hoeppner: I know the Canadian Wheat Board does not market organic grain, but they would like to get involved somehow. I was wondering how you felt about that.

Ms Sandhu: It's a two-way process. Maybe the Canadian Wheat Board has to get a little educated on how certification processes for organic products work, because I think there is a lack of understanding of that process at the Canadian Wheat Board.

Mr. Hoeppner: A good answer. Thank you very much.

The Acting Chairman (Mr. Calder): That was a sort of set-up. You see, my background from Ontario is as a poultry producer. Jake's on one side of the fence on marketing and I'm on the other side. I would even go so far as to stress the fact that my chickens grown in my computer-controlled barns would experience less stress than an organic chicken would.

Ms Sandhu: Ultimately it's always for the consumer to decide.

Mr. Mennell: I'm market driven. I decided about eight years ago this is the way to go, because to me it's a marketing advantage. I have a philosophical.... I grew into the philosophy, but I started out with a market orientation. We can deal with semantics and philosophies, but I think every individual will have their own view on that.

Mr. Hoeppner: Can you see now what I mean by being Manitoban? The east figures we aren't there and the west doesn't know we're there. So how do you make them aware?

The Acting Chairman (Mr. Calder): Thank you very much, Jake, for your words of wisdom.

Daphne, JoAnn, and Brian, thank you very much for your presentation. We found it insightful and informative.

The meeting is adjourned.

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