[Recorded by Electronic Apparatus]
Tuesday, May 14, 1996
.0905 
[English]
The Chairman: I call this meeting to order.
Just so that we know where we are at with the meeting this morning, we only have the room until 11 a.m. The committee has a couple of agenda items to deal with at the end - the report on the organic food discussions, the regulations that we had, and the budget for the Washington visit. We will end the meeting at 10:45 a.m., and we will have to adjust ourselves accordingly.
Dr. Morrissey, that is no reflection on the importance of the sector of the department and the industry that you represent. I will turn it over to Dr. Morrissey, Assistant Deputy Minister, Research Branch, who can introduce the other officials with him this morning, and then we'll go to the members for questions and comments.
Dr. J.B. Morrissey (Assistant Deputy Minister, Research Branch, Department of Agriculture and Agri-Food): Thank you, Mr. Chairman. I prepared some opening comments, but I'm in your hands as to whether you'd like to hear them.
The Chairman: Please go ahead.
Mr. Morrissey: Thank you, Mr. Chairman, for the opportunity to appear before you today. I'd like to introduce Dr. Gordon Dorrell, who runs the research programs in western Canada. Dr. Yvon Martel does the same job in the east and also runs the Central Experimental Farm at this time of transition. Margaret Kenny looks after the control and registration of biotech products in agriculture, in case members have questions in that area.
Mr. Chairman, I'll focus my opening comments on the three areas that I understood the committee was particularly interested in - biotech products and their regulation, biotech products and their labelling, and bST.
Since the budget issues are covered in the main estimates - in other words, the cuts we took in 1995 - and the status of the matching investment or partnership program are also covered in the main estimates, I won't cover those in detail in the opening remarks.
[Translation]
First, the new regulations for agricultural products of biotechnology. The regulations concerning the assessment of agricultural products of biotechnology for registration are expected to come into force in late 1996. They will continue to ensure that before a new agricultural product of biotechnology is registered for general release, adequate notification is provided and an assessment of the product's safety is conducted.
This approach is consistent, we believe, Mr. Chairman, with that laid out in the government's response to the review of the Canadian Environmental Protection Act.
.0910
Agriculture and Agri-Food Canada will continue to work closely with our federal colleagues in Environment, Health and Fisheries and Oceans, as well as interested stakeholders, to develop guidelines which will assist product developers to provide the appropriate information with respect to human and animal health and environmental safety.
We will seek to develop the best mix of rigour in regulation and clarity in guidelines to allow for the use of new, scientific knowledge as it becomes available to regulators.
[English]
The second issue on biotech is the labelling of novel foods derived through genetic engineering. In 1993 and 1994 the government carried out workshops on labelling of food from biotechnology. During these workshops, several principles were agreed to by the majority of participants. Included in these principles was the recognition that mandatory labelling should be required if there is a heath concern - for example, allergenicity or significant nutrient or compositional change in the product.
Producers should be able to label their products as being derived or not derived from genetic engineering, and mandatory blanket labelling of all food products derived from genetic engineering, it was agreed, would not provide consumers with meaningful information and should not be required on a mandatory or blanket basis. These principles, Mr. Chairman, are consistent with proposed by our major trading partners, the United States and Japan. They form the basis of a proposal that was released for public comment in December 1995.
The department will participate in the Codex Alimentarius meeting, which is taking place in Ottawa right now. Canada will participate in these discussions with international partners by presenting the progress that has been made to date in Canada. The Codex meeting will provide more insight into the direction that the international community is considering, and provide further input, we hope, into Canada's position.
[Translation]
Finally, a few words on bovine somatotropin. Health Canada continues in its evaluation of bovine somatotropin, under the authority of the Food and Drugs Act. As you know, they have sought additional data from the companies seeking a license to market the product in Canada. Health Canada has given no further indication if or when they might issue a notice of compliance for this product.
The Department continues to facilitate discussion with the provinces on issues relating to labelling, and milk marketing, which will need to be addressed should Canada approve the product.
Mr. Chairman, members, thank you.
[English]
The Chairman: Thank you, Dr. Morrissey.
We will begin with 10-minute rounds. Mr. Reed, Mr. Chrétien and then Mr. Hoeppner.
Mr. Reed (Halton - Peel): Thank you, Mr. Chairman.
Dr. Morrissey, I think we all recognize that research has been the foundation for the great strides that agriculture has made over recent years. I was just listing some of the things that have been so important in the past, things like materials handling, understanding of soils, energy utilization, plant and animal breeding, disease control and many others. A lot of these developments have reached a point at which the gains made in the next 20 years may be less than they have been in the past.
I think the real window of opportunity now is in the area of biotech and the research that is going on there. What we seem to have to deal with in the public domain is a fear of the unknown that's generated when we talk about novel foods that are developed through biotechnology. But if you extrapolate the argument a little bit, biotech is largely an accelerated development that perhaps takes place naturally over long periods of time in evolution.
.0915
So I would go on record as stressing the importance of biotech research. Please enlarge on just what you're doing and what Agriculture's position is vis-à-vis biotech development.
Dr. Morrissey: Thank you, Mr. Reed. My sense is that you're quite right. Since the Malthusian prediction in about 1798, when Malthus told us that food production was going up in a straight line but population growth was going up in an exponential curve, we have somehow managed to stay ahead of population growth.
Malthus was half right - the population did go up in an exponential manner, but food production went up in a parallel manner and managed to stay ahead. My sense is that we probably are into diminishing returns on the known technologies - that isn't a criticism, it's simply a normal process - and that the new technology that's out there is biotech.
Our ability to harvest the benefits of biotech while minimizing the risks would probably be exactly as you've described - a function of our ability to deal responsibly with consumers and ensure they have the information to make an informed decision. There's a writer called Yetton who says that an implementable decision - meaning one the country will allow you to implement - is a function of the logic multiplied by the acceptance.
My sense is that the science community is fairly comfortable that biotech has significant benefits that can be developed while controlling the risks. The big question, as you've said, is fear of the unknown. It's the acceptance side of the equation.
Will we get acceptance from the public or will it be like irradiation of food? The scientific community and the World Health Organization have said that at the levels proposed it's safe, but the public has said no, thank you.
In terms of the approach being taken within government, cabinet has twice decided that the existing legislation governing the registration of biotech - in other words, the safety and efficacy evaluation - would be done by those acts of Parliament that currently have powers to evaluate any animal or plant product being released into the environment.
So the department of human health, for example, which currently regulate vaccines that are registered and released - if they're developed by traditional means, Health has the act that allows them to call for information and do the assessment, and then accept them, refuse them or accept them with conditions.
Cabinet has said that since the legislative powers are already in place, you can assess for safety whether it's developed by traditional means or any other means. There wasn't a need for new acts of Parliament for living animal things in Agriculture, in human health and in Fisheries and Oceans, or living plant things in Agriculture and Fisheries, and aquatic plants or forestry.
So that decision was made twice. The same acts of Parliament would be used and the same administrative agencies. A department that registers a human vaccine would register a biotech vaccine.
We're at the stage in Agriculture where Margaret's shop has put out guidelines to the community which say that if you want to register a biotech product, here are the rules you need to comply with the existing act. We're at the stage where we're putting out detailed regulations on the release of a product into the environment. From an agronomic point of view, is it safe? From an ecological point of view, is it safe? We would call it an agronomic assessment or an ecological assessment. Environment Canada would call it an environmental assessment. It's exactly the same thing. Is it safe, plant or animal, to release it into the environment?
.0920
As you are probably aware, Environment Canada, through the Canadian Environmental Protection Act, also has enabling powers over new substances. They were designed for chemicals, as I understand it. But in the law a new substance is a new substance, whether it's a living substance, biotech, or a chemical substance such as a chemotherapeutic agent. So Environment Canada is using those enabling powers to also draft regulations on biotech.
Margaret has been working closely with Environment Canada to ensure the previous decisions of cabinet are implemented within these regulations. Previous decisions of cabinet said the regulations under the environmental legislation would be safety net regulations. In other words, they would fill gaps -
Mr. Reed: They would be a backstop.
Dr. Morrissey: Yes, they would be a backstop in cases where there was a gap or a new organism that wasn't covered by anybody else's legislation.
We're optimistic. Right now it looks as though, at least at the working level, we have agreement with Environment Canada that Environment Canada will go forward with a set of safety net regulations. We will go forward with a set of specific regulations applied to agricultural commodities and we would have, as we understand it, an exemption from the environmental regulations. In other words, Environment would write into their regulations that Agriculture and Agri-Food Canada's regulations meet the requirements of Environment Canada.
The chapter is unfolding, I guess. The final chapter hasn't been written. I will appear before the Standing Committee on Environment on Thursday of this week with a panel of officials from each of the departments having a role to play in regulation of biotech. This will include, for example, Industry Canada, Health Canada and so on.
My understanding is that the environment committee is holding hearings on opening the Canadian Environmental Protection Act. The previous hearings the environment committee held and the previous recommendations made to cabinet a year or so ago recommended the whole registration process for all biotech products be included in the Canadian Environmental Protection Act and their administration be in Environment Canada.
Mr. Reed: It would be my hope that the research and the development of biotech would not be hampered in any way.
The alternative, as Malthus put it, was an annual hunting season on the poor. If you read some of his writings, you find he even wrote a hymn during his lifetime. The last verse was: ``God bless the Lord and his relations, and keep us at our proper stations. Amen.''
I'm speaking for myself, and I hope for members of this committee, when I say it seems to me biotech development, in terms of food production for the future, is the next big window. And if we do anything to impede this we're doing it at our own peril, not only from the standpoint of our ability to compete with other nations around the world but also in terms of our ability to provide leadership in this development.
Dr. Morrissey: I think you're quite right, Mr. Chairman. If you look down the road at the big technologies coming over the horizon, I see only two. One is the implementation of computers on a large scale and the other is biotech. My sense is unless we behave responsibly in biotech, and by that I mean do good science but also do good work in gaining public acceptance, we may miss an opportunity.
Industry Canada did a survey about a year or two years ago on Canadian attitudes to biotech. The results were almost what you would predict from textbook psychology. What they found was Canadians said we're in favour of harvesting the benefits of biotech. They said, however, we would like to get the benefits while minimizing the costs. The interesting thing was the costs were not the costs to the nation but the costs to them personally. They were doing a personal evaluation of benefits versus costs. It really wasn't surprising. They were saying that as with any new technology, there are costs and there are benefits. Let's try to maximize the benefits and minimize the costs.
.0925
So my sense is consumers have an open mind on it, but we have homework to do.
Mr. Reed: I wish you well with it, then.
The Chairman: Thank you very much.
[Translation]
Mr. Chrétien.
Mr. Chrétien (Frontenac): Welcome, Mr. Morrissey.
I would like to talk about labelling. I would like to draw a parallel with the maple syrup industry. Canada produces 90% of the maple syrup and the use of small formaldehyde pills within the maple trees is prohibited. These pills prevent holes from drying and makes it possible to cut the holes in the trees immediately after Christmas and to continue tapping into April.
However, this is prohibited. We know perfectly well that they can be bought under the table at a very reasonable price. Of course, they come from the United States where they are frequently used. Last fall, I witnessed a few seizures in my own region because we are at the very heart of the maple syrup producing area. This may slightly increase the cost to maple syrup producers who would like to obtain them.
I'm saying this because I want to draw a parallel with rbST. I am quite aware - I heard this again on the weekend - that some dairy producers, especially those near the American border - can obtain rbST injections. I'm getting to the labelling.
It would be idealistic for the Department of Health to authorize a labelling system in Canada. The use of rbST is prohibited even though some are already using it, but if we were to make the use of rbST legal... I visited my friend Wayne Easter's farm, one the biggest farms on Prince Edward Island. I don't see how a producer, even a very big producer, could own two milk coolers, one for milk produced for rbST and one for natural milk, especially if once you have used rbST, everything has to be labelled rbST.
Can you imagine having two sets of milk trucks on Prince Edward Island, one for milk produced with rbST and another for natural milk? Transportation costs would surely increase. The processing plant would do one batch of milk with rbST and the following day they would have to clean everything in order to process a batch of natural milk.
Canadian consumers have a right to obtain consumer products...
Mr. Chairman, I think that your colleagues are not even being the least bit polite. If I were ever that impolite, I would hope that someone would tell me.
So, do you not think it would be idealistic to establish a labelling system for products such as rbST?
Mr. Morrissey: No doubt a two-tiered system of collection and processing would be more expensive than one system. This is what has happened in the United States, especially in the State of New York, where your team travelled to study bovine somatotrophine.
.0930
That is what we've heard and saw when we went to the State of New York. At first, the people we met had not wanted to set up a two-tiered system of milk collection and processing, because they wanted to avoid the extra costs.
But solely, a few small processors, like the Burns in the State of New York among others, began thinking that they could carve a niche out for themselves on the specialized market, that is a niche for milk that had not been produced with bovine somatotrophine. They therefore began signing contracts with producers who were not using bovine somatotrophine.
So, one after another, competitors started doing the same thing to protect their share of the market and finally, at least in that part of the state of New York, the market was being supplied with milk produced traditionally and milk produced with rbST.
Large stores such as Wegmans, the equivalent of a large supermarket here, told us that they did not intend on selling two kinds of milk because it was too complicated. However, the consumers were interested and in the end they did offer the product. Wegmans took a cut of about 10% on milk not produced with rbST, but the product still acquired 1 to 1.5% of the market. That is a small part of the market, but they offer that service to their clientele. They told us that it was not to make a profit. They wouldn't have done that with another product that only held 1.5% of the market, but the consumers were interested.
I would like to speak briefly about how milk is collected and processed. The Burns' plants, that we saw, use the same system that we have here for casher milk. They have contracts with some producers to collect the milk first thing Monday morning when the trucks are still clean, and when the plant is still clean from the weekend clean-up. Processing is still done according to the market's standards, and it is only the morning milk, or perhaps the morning and the afternoon milk or the milk of the first two days that is used. After that milk has been collected and processed, then the plant is used for regular milk. This entails additional costs, but those costs have been minimized.
Mr. Chrétien: I'm still quite confused. As you know, children under 18 years of age supposedly cannot obtain tobacco products. Tests have been carried out in my region and I can tell you that a child of nine years old can buy a pack of cigarettes.
Thus, I am concerned that we would be punishing the natural milk producers. An increase of 10% was mentioned for New York, for example, for milk that does not contain rbST, whereas good milk should be the milk that is being marketed.
It would make sense if we couldn't meet the demand, but we have to slow down our milk producers who are constantly exceeding their quotas. Supply is not low, on the contrary. We could therefore easily go over 10%.
In United States, they can afford this luxury because they are ten times bigger and consume ten times more than we do. The problem lies with the 10% in the United States that produced ten times more than we do. Here, the milk will cost anywhere from 20 to 25% more, perhaps even 100% more, and the cost will be so much more that consumers will have had enough and will wind up buying milk from cows that have probably received an rbST injection.
.0935
Mr. Morrissey: Mr. Chrétien, I'm not sure that the question pertains to the increased milk production, given that we have a quota system in Canada. Was that the question?
Mr. Chrétien: Yes, something like that. My friends in the dairy industry would like nothing better than to keep three or four more cows in their barn, because they have a lot of room. You should know that it's the last cow that is profitable, and not the first. Since they are on a quota system, they have to respect their quota when in fact they could easily increase their production by 10% over an 18-month period. They would have no problems doing this.
We don't need to make supply difficult. I agree that we need good milk, that we should improve it if needed, but I think that we're at the top, our milk is known as being the best in the world. Its quality and purity are recognized. It is taken from the cow and brought to the processing plant or to the dairy in record time now.
Mr. Morrissey: It is important that we bear in mind Canada's current legal position with respect to bovine somatotropin. As far as I know the Food and Drug Act is the only avenue we have to ban the use of bovine somatotropin in Canada. According to the law, bovine somatotropin could be banned only if the evaluations conducted by Health Canada officers indicated that it constituted a health risk. If there is no health risk, the Government must certify this product, regardless of whether or not more milk is required. In order to change this, we would have to change the laws of the land.
Mr. Chrétien: When you refer to health, are you referring to human and animal health?
Mr. Morrissey: Both, Mr. Chrétien.
Mr. Chrétien: Thank you, Mr. Chairman.
[English]
The Chairman: Thank you, Mr. Chrétien. Mr. Hoeppner is next.
Mr. Hoeppner (Lisgar - Marquette): Thank you, Mr. Chairman. Welcome, ladies and gentlemen.
I'm going to start with something I caught on Mr. Reed's question. How are you going to get around the year 2000 with your computers?
Dr. Morrissey: That's a very good question. I'm not sure.
Mr. Hoeppner: I know some companies are working desperately to try to avoid that big problem.
The Chairman: Could I have a point of clarification. I lost something here.
Mr. Hoeppner: All the software cannot handle the three zeros. When we get into the year 2000, all the data is not transferable.
The Chairman: I hope Dr. Morrissey can solve that, because if he can, he's going on to even greater things.
Dr. Morrissey: I was going to ask if I could clarify what the year 2000 meant, butMr. Hoeppner's just done it.
For us it means that if you have in one column 95, 96, 97, 98 and data on the number of cars or pay cheques or salaries, for example, if you are working forward to see what a 4% pay raise will be in the year 2001, unless you've entered the year as 1995 when you start to add and subtract with years that are over 2000 - for example, if you put in 95, 96, 97, 98 and 99 the next two digits are 00 - it looks to the computer as though you're going back to year zero, back to year 01. It starts to give you numbers as if you were back in about 1900. You could end up getting a pay cheque that might have been suitable in 1900 rather than in the year 2000.
Mr. Hoeppner: That would help the deficit, wouldn't it?
The Chairman: You're always so practical.
Dr. Morrissey: So much for the problem. What's happening on the solution within Agriculture Canada is that a group of users and designers of those programs is working to try to resolve the issue. In effect, in my own little programs I've simply gone in and said everywhere you see 99, replace it with 1999. It's easy on small programs. The committee is doing that on little programs. People are replacing it themselves.
.0940
On really big programs like WordPerfect and Lotus that every one of us here uses, the companies themselves are either coming up with solutions or they will probably go out of business and some other company will replace them.
On the big company side, we'll probably have commercial solutions. The biggest problems we've perceived within the department are big departmental programs. There's a departmental committee working on it. Some of the work will be done inside to convert. Some will be done by contract. It's a huge problem for everybody.
Mr. Hoeppner: I didn't realize it was as huge as it is, although I know some companies are spending multi-millions trying to resolve this issue.
That brings another question to the fore. When we look at our 1996-97 estimates, if we want to double-check how this thing has worked out through the Auditor General's report, there is a time gap. How do we cross-reference it?
I was looking at the Wheat Board. The Auditor General's report for 1995 is using 1993-94 financial figures from the Wheat Board. How can we ever catch up if there are any irregularities or if there are cost overruns or whatever? It almost seems like a nightmare to try to correlate the estimates and the Auditor General's report.
Dr. Morrissey: Mr. Hoeppner, I also have the same difficulties, and to me it's almost catch-22. In fairness to the main estimates people who are trying to implement the suggestions that committees such as this have made, they've put three sets of figures in here now.
They've put in the main estimates, which are what Parliament votes at a point in time. They've put in the actuals, which are what you actually spent last year and the year afterwards when the books were closed. In other words, you may not have spent everything you were given. They've tried to bridge the gap by putting in a column called forecast.
For example, for the 1995 year that closed out in March 31, 1996, when they closed the books or when March 31, 1996, passed, they put in forecasts. They said this is what has been spent as of March 31, 1996, but all the bills haven't come in. For example, if you bought a car on March 31, 1996, you probably have thirty days to pay. So that won't be paid until the next financial year.
There are really three figures: the main estimates are what you are allowed to spend; the forecast occurs in the twelfth month and is what you think you're going to spend when the books are closed; the actual is what you've truly spent at the end of it.
The reason I think it's a catch-22 is that you now end up with three sets of figures. It's very hard to square in your mind which one of these figures you use. You go back over the years to make sure you don't make a mistake by using main estimates in this year and actuals in that year and forecast in a third.
What I've done myself is go into the pieces of the main estimates I'm particularly with and prepare a table that lists all three of those columns - the mains, the forecast and the actuals - and perhaps a fourth set from the Auditor General. I doubt if it's a fourth set; I suspect it's actuals. I list those three columns together. I actually have them here in my own book. I find the differences are really very small.
For example, in our case, main estimates are usually a million higher than we actually spend. They put you in jail if you spend too much. So you have to keep a little cushion for the last few days. They are usually just under the main estimates. The variations aren't that big. So I myself always use mains to mains, which means I'm comparing apples to apples consistently. Even though there might be a half a million or a three or four million deviation if you're dealing with a big budget, it's not that significant. At least you're sure you're accurate when comparing apples to apples.
Mr. Hoeppner: I was looking at the Wheat Board because of long-term and short-term liabilities. That brings me to the next thought, and this is quite prevalent at the Morden research station. We're getting quite a bit of private investment into the research area.
How do we deal with some of these issues to find out whether we are really getting value for our money where we have public funds and private funds in a research project together and where we really don't have the whole picture in the estimates?
Dr. Gordon D. Dorrell (Director General, Western Region, Department of Agriculture and Agri-Food): Mr. Hoeppner, we try to keep the private contributions separate. The matching initiatives, for example, are accounted for separately in what we called specified purpose accounts, which are in addition to the main estimates.
.0945
In terms of value for the use of facilities, the best we can do is demonstrate some of the outcomes from it whether they're in the form of varieties or something that has an intellectual property attached to it as it turns into royalties that accrue back to the Crown. But the accounting is kept quite separate, and that isn't a problem.
Mr. Hoeppner: I'm running into the problem with some of the grain farmers on the check-offs, which are probably going into all kinds of different research. They have no input into how it's spent and it's hard to gather what value they're getting. Are we wasting our money here by doing this? I'm getting quite a bit of static over the way it's done. There's no check valve or no way to satisfy these people - your money is being invested wisely and this is what you're getting for returns.
Dr. Dorrell: Mr. Chairman, perhaps I can add a bit to that. If you're referring to the wheat and barley breeding check-off, as you know, that is managed by the Western Grains Research Foundation, which is essentially a consortium of producers, the main public organizations in western Canada.
They put forward a proposal, a 10-year plan, that the universities and AgCanada responded to with a business plan as to how they would deliver over a period of time. They have time lines in there. The research organizations have to submit annual reviews to the foundation each year. At the five-year point of this first go-around there will be a major external review to see what progress is being made and also assess value for money.
You must realize this is topping up an already fairly full pipeline. It's really putting extra pressure on the system to move it through the pipeline faster. So the producers in the west, in essence, have inherited a full plant breeding pipeline and they're just pushing it along faster.
I'll give you an example. This past year was the first full year of funding. AgCanada has credited the variety that came out of Winnipeg this year as being part of this process. The royalties from that variety will be shared with the farmers through the Western Grains Research Foundation. That variety had been in the pipeline for nine years.
It's a continuous process. Based on the way the money was split up, the Western Grains Research Foundation on behalf of the farmers clearly recognized which of the research organizations had the best track record. That's where they put the majority of the money.
Mr. Hoeppner: Will some of this information be made public to the farmers so they can take a look at what the dollars are doing? If the foundations and the government know it but the farmers don't, it still doesn't help me very much.
Dr. Dorrell: Each year the Western Grains Research Foundation has to send out an annual statement of progress to each of the permit book holders. They'll be doing that this summer. In addition, each of the organizations that receive money really are essentially obliged to put information out to the producers so producers understand where their money is going and are getting value.
All our research stations in the west are putting information out like this on a regular basis.We can always do more, though.
Mr. Hoeppner: I know communications are going to be very important if you want to have farmers go along and cooperate in this fashion and I think it's very valuable that it be done.
The Chairman: To emphasize that, Mr. Hoeppner, I suggest you say to the producers that those organizations getting the check-off money should ask their questions to them. As Dr. Dorrell has said, they do have the reports, etc. The producer money is not going into a black hole. It's going into an organization that is directed and makes the directions to Western Grains Research Foundation. They will have the answers.
Mr. Hoeppner: The information isn't out there, but if it's coming it will help. As you know, farmers usually start asking questions when they see the dollars missing.
.0950
The Chairman: Mr. Easter.
Mr. Easter: Thank you, Mr. Chairman, and welcome to the witnesses.
I want to come back to Mr. Chrétien's point earlier on bST, but before I do, I have a specific problem related to P.E.I. and the issue of labelling. I think you're aware of it.
It seems some P.E.I. potatoes were packed together in bags with the Monsanto NewLeaf potatoes and there have been some complaints from consumers. I wonder if you're aware of this. Where is this problem? It really relates to not being labelled.
Dr. Morrissey: Perhaps I will make a preliminary comment on this, Mr. Chairman. Then I'll ask Margaret if she has further information.
Right now the laws of Canada, as I understand them, have permitted the NewLeaf potato. This is the Monsanto potato resistant to Colorado potato beetle with incorporation of the B.t gene. Health Canada has permitted it into Canada for human consumption.
As a consequence, because it's been approved for safety reasons under the existing labelling requirements, it is not considered false or misleading to package this potato just like any other potato. So unless there was something false or misleading on the labelling - unless they said it was a grade A potato and in fact it was a grade B potato - I know of nothing illegal about mixing it with any other potatoes.
Do you have any additional comments, Margaret?
Ms Margaret Kenny (Associate Director, Biotechnology, Strategies and Coordination Office, Food Production and Inspection Branch, Department of Agriculture and Agri-Food): No. I would just reiterate that in their review Health Canada found the NewLeaf potato to be as safe and nutritious as a normal Russett Burbank potato, and so for that reason there was no special labelling required.
Mr. Easter: I guess the problem relates to the same situation we'd run into - only not as big,I guess - if we had rbST.
I've met with Monsanto, and they have a good product. Health Canada has approved it, you're correct. But when some potatoes are mixed in with other potatoes, there's a perception out there. The big factor when consumers buy food products is in fact perception. This is a problem with the NewLeaf potato.
I'll move from that to the problem of rbST. I think, Dr. Morrissey, you outlined a situation in which some stores and some milk processors are in fact selling milk labelled as non-rbST or natural milk.
We have a bigger problem in Canada in the way our milk system operates. There are two questions related to this. Where are we at the moment in terms of Health Canada's review of rbST? Secondly, is the department or anybody in the department or Health Canada doing any monitoring of what is happening in U.S. dairy herds?
I've heard all kinds of stories - good, bad and indifferent. There are stories of herds on rbST having endless problems, and other stories of herds on rbST having no problems. When rbST started in the United States, at first the pharmaceutical companies were pushing the fact in terms of the numbers of vials of product they were selling. They won't give out this information now. You can't get it from them.
So we'd like to know if there's more use or less use as this product is on the market longer. If there is less use, then it certainly implies to me that farmers are having problems with their herds over the longer term. I'm wondering if there's any monitoring by the department of the United States herd situation and United States consumer reaction.
Third, the National Dairy Council tabled a proposal with this committee and with the government. The proposal basically said that if it comes on the market they want to do a marketing system and they want the promoters of the product, the pharmaceutical companies, and the users of the product to pay those extra costs for the system. The council does not want the extra costs to be spread out over the whole industry.
I wonder if the government has thought about those proposals and what's the response to it at this stage?
.0955
Dr. Morrissey: Thank you, Mr. Easter. I will make one or two comments and then ask Margaret if she has additional comments.
My first comment is the Food Chemical News, published in the United States, has put out at intervals reports from the U.S. government agency involved. These reports indicate the numbers of problems reported concerning health-related reactions to bST in dairy herds. The numbers I saw most recently indicated there were a number of deviation reports that came in from farms. However, the conclusion of the U.S. agency was they weren't of a nature that caused them to reopen the file on bST. In other words, they were the kind of reports considered to be normal events from a dairy farm.
In terms of the sales of bST in the U.S., I do not have recent data. I've seen some data, but it's older. So I don't think it's worth sharing.
On the issue of the users of bST paying the additional costs, again my sense is there is no legislation I know of that could force free individuals to pay those costs. If this were to be done, there would probably - unless I'm mistaken - have to be legislation introduced in the House to impose those obligations on people.
Do you have any additional comments, Margaret?
Ms Kenny: In terms of Health Canada's progress on this file, we are told by Health Canada that they are satisfied with the human safety of the product, although they do continue to monitor the literature. They are doing further study on the animal safety aspects of the product and they continue to monitor the events in the U.S.
Mr. Easter: My last question is on the biotech regulations and your earlier remarks. You're working closely with Environment Canada, Health Canada and Fisheries and Oceans. Historically, Canada has looked at health issues quite differently from the Americans. Basically we have looked at the health and safety factors perhaps more forcefully than the Americans. They're willing to accept more risk in the system. At least that's my assessment of the situation. Canada is a little more stringent.
In biotech, how do we compare with the United States in terms of our evaluations versus theirs? Are we moving to accepting some risk as the Americans do, or are we maintaining the status quo and remaining more forceful on the health side and on the safety side?
Dr. Morrissey: Again, I will make an opening comment, Mr. Chairman. Then I'll ask Margaret if she has additional information.
My sense is that efficacy testing is the principal difference between registration of almost all products, whether they're human vaccines, animal vaccines, medical devices or pesticides. The biggest difference between Canada and the United States is that in Canada efficacy testing is taken into account as a condition of registration.
For example, the product must do what it promises to do. If it's a fertilizer, it must in fact assist growth in some significant way. If it's a vaccine, it must protect against some disease.
In the United States they tend to not do efficacy testing. Down there it is considered primarily caveat emptor or buyer beware.
On the health aspect, my sense is that the countries are not significantly different. You may get differences of interpretation on a given product. But my sense is that in the long run the United States will not put an unsafe product on the market. If they have an unsafe product, they'll take it off the market. And Canada is in pretty much the same position.
Ms Kenny: Yes. In fact, very often we did have input from U.S. regulators and certainly stakeholders on the very development of the regulations and guidelines we are working with to assess the safety of these products. I don't think we could think of any example right now where the U.S. and Canada have evaluated the same product and come to a different conclusion.
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Dr. Morrissey: Mr. Chairman, could I make an additional comment on this?
My sense is, from the comments I hear quite often from farmers in Canada, that the perception of greater leniency in the United States may be generated to a degree by the fact that the United States is one of the world's big markets. So quite often they may get a product, let's say a pesticide, for example, or a new biotech product, as much as two or three years before other countries, including Canada. So there's a perception here that it's allowed in the United States and it's forbidden here. It's often not a function of safety; it's a function of who gets the data first to evaluate.
The Chairman: Mr. Chrétien.
[Translation]
Mr. Chrétien: Mr. Morrissey, I would ask you to please open your Estimates, Part III, to page 10 of Chapter 2, in French.
I would like to hear your opinion on the research stations in Canada. So that I have a clear understanding of things, could you tell me in which region, and more specifically in which province, do we find the two research centres indicated just under the heading "Ottawa Centre Experimental Farm" and identified by the abbreviations ECORC and CFAR? Where are these two research stations located?
Mr. Morrissey: They are both located here, at the Experimental Farm.
Mr. Chrétien: Here, in Ottawa?
Mr. Morrissey: Yes, that's right.
Mr. Chrétien: Last fall, I received some complaints from various groups in Quebec who told me that research that was traditionally done here in Ottawa, research primarily done on corn, was being transferred to Guelph. This created a great deal of uncertainty. You are probably aware that we have closed down or are about to close down three research stations in Quebec, namely the one at La Pocatière, which isn't the smallest, one in L'Assomption and the third whose name I can't recall.
Our fear is that the research centres are getting farther and farther away from Quebec. When you're far from these research centres, far from the decision-making centres, you may very well be the second or even the last to benefit from the research conducted.
Does the Department of Agriculture intend to concentrate research in the Guelph region to a larger extent. I realize that a very dynamic university and a great deal of expertise is located there, however, research must not be conducted only in this region alone.
Could you also tell me, in terms of a percentage, the proportion of the agricultural research budget that is earmarked for Quebec?
Mr. Morrissey: I could make a few opening remarks, if I may, and then I will ask Yvon Martel to provide greater detail.
First of all, Mr. Chrétien, you are quite right: we are reducing staff at the Experimental Farm here in Ottawa, from 855 to approximately 315 positions. Two hundred and forty-five positions, give or take a few, will disappear but the other 365 will be allocated to the regions, and to Quebec, for instance.
Secondly, corn research will not be shut down at the Experimental Farm and started at Guelph; it will remain at the Experimental Farm and the agricultural potential of the Experimental Farm will change drastically. When 855 people were working there, this was a national resource and the knowledge was shared right across the country. This is no longer possible with 315 people. We will be concentrating specifically on cereals and oil seeds for Eastern Canada, namely Ontario, Quebec and the Maritimes. Corn research will continue at the Farm and the centre will serve Quebec.
Corn research has not been transferred to the University of Guelph. Some Farm employees will now be assigned to conduct research on food. Some individuals will be sent to St. Hyacinthe and others will go to Guelph.
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As far as the competitiveness of Guelph is concerned, the people from this university that Laval University is very competitive in horticulture. They are seen as being very strong, very competent and very dynamic. Perceptions are somewhat divided.
As for budget cutbacks and Quebec's share, the 1995 budget called for 91 positions to be eliminated in Quebec, however 52 positions, positions coming primarily from the Ottawa Experimental Farm, will be transferred to Quebec. Therefore, when you assess the size of the pie that Quebec has in terms of staff and money, in the area of research, it receives 11.9% of the staff before the 1995 budget cutbacks. After the budget cutbacks and taking the transfers into account, 14.8%, more or less 15%, of the staff is in Quebec. This means that Quebec's share of the pie rose from 12 to 15%, an increase of 25%.
In addition, instead of serving ten provinces, the Experimental Farm, will now have a mandate to serve the three eastern regions: Ontario, Quebec and the Maritimes. Fifteen percent of our staff will remain at the Experimental Farm. Quebec's share will be more or less one third of 15%, namely 5%. Therefore, in the future, Quebec will have 15% plus one third of what remains at the Experimental Farm, for a figure of 20%.
Quebec's agricultural GNP is 16.4% and this province will be receiving 20% of the research budget. Quebec's agricultural GNP combined with its food processing - because Quebec has a sizeable food processing sector - is approximately 20.5%. When it comes to research, I think that we must take both agriculture and the food industry into account. Quebec's production is about 20% and the staff allocated to this province will be approximately 20%.
Is there anything else, Yvon?
Mr. Yvon Martel (Director General, Eastern Region, Agriculture and Agri-Food Canada): I would like to specify that two and not three Agriculture and Agri-Food Canada research centres will be closed in Quebec.
Four out of the 18 research centres existing in Canada will be located in Quebec. We make an effort, particularly in the case of Quebec, to consider the entire food processing process, from the soil to the table, when we decide where to locate these centres. There will be a research centre on soil and feed grains located in Sainte-Foy, a horticulture centre in Saint-Jean-sur-Richelieu, an animal centre, which will serve all of Canada, in Lennoxville and the largest food processing centre in Saint-Hyacinthe.
The distribution of these centres puts Quebec in a very good position to have access to the new cost sharing program whereby half of the funding comes from the private sector, or the program announced by the department and the minister.
Mr. Chrétien: You have given very complete answers to my questions.
We could perhaps turn to page 12 of chapter 2 in the French text, where references made to inspection and regulation expenditures which will be decreased by approximately $70 million between 1994 and 1998.
This leads me to talk about Mad Cow Disease. For the benefit of our witnesses, Mr. Chairman,I would like to recall that we here in the Bloc Québécois have been very circumspect about Mad Cow Disease. Proof of this lies in the fact that we did not ask any questions in the House, specifically because we did not want to give a false picture or create any misperception about beef coming from our cattle.
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However, I recall very clearly that the minister said that there had been no cases of Mad Cow Disease except in December of 1993. Three weeks ago, I learned that in January of 1996, this infamous and generous Mad Cow Disease was detected in wapitis or deers in the West.
I am talking about this issue here because this should not become public knowledge, although the sitting is not in camera. By wanting to cut back or rationalize in such a key area as food inspection, I fear that we are going to become lax and that we are going to have to pay astronomical amounts of money later on as a result.
In other words, with a reduction of $70 million, can Canadians be assured that we will continue providing food inspection services that are as good as what was done in the past?
Mr. Morrissey: First of all, I must say that Mad Cow Disease control is not part of my mandate. My colleagues from the food production and inspection group, headed by Dr. Olson, are responsible for this sector.
This being said, from what I know, the disease detected in this Western Canadian dow is what we refer to in English as a wasting disease.
As far as I know, this is not at all the same thing as Mad Cow Disease, but perhaps it comes from the same family of diseases. I am not certain of what I am affirming here, but I am quite certain that we are not talking about the same disease.
[English]
It's not the same disease. It's a wasting disease, so we're dealing with
[Translation]
another kettle of fish.
[English]
The Chairman: Mr. Chrétien, it's my understanding as well that there is a difference between the two diseases. The initial reaction in the press, when the infected animals were found - it was seen to be similar, but on further examination there is a difference.
It might be worth while - as Dr. Morrissey says, it's Dr. Olson's field - to ask Dr. Olson for a quick explanation on that, to get a one-page explanation and get that around to committee members as quickly as possible. Would that be of value to committee members?
Mr. Calder (Wellington - Grey - Dufferin - Simcoe): I think so.
The Chairman: Okay, then we'll ask the committee to do that.
Thank you, Mr. Chrétien.
We'll go to Mr. Hoeppner, Mr. McKinnon and Mr. Pickard.
Mr. Hoeppner: Thank you, Mr. Chairman.
Your part III estimates - chapter 2, page 29 - deals with departmental services provided by the Canadian Grain Commission. That's pretty well static, at $6,544,000 for three years. It's figure 15, departmental services provided by the Canadian Grain Commission. As you can see, it's pretty well static in your estimates. Then I look at departmental funds for informatics, training and translation, and it jumps drastically from $2.9 million to $9.8 million. Could you explain that, Dr. Morrissey?
The Chairman: Just prior to that, Mr. Hoeppner, this is corporate management and services, and Dr. Morrissey is head of the research branch.
Mr. Hoeppner: I figured that probably fit into the corporate management, or doesn't it?
The Chairman: Dr. Morrissey, I have my doubts.
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Dr. Morrissey: My sense of this figure, again with the codicil that I'm outside my area of expertise.... I believe the budget for capital items could be used for cars or computers, and I think some capital money is included - in fact, capital money may be the source of that money. A couple of years ago I think about $5 million of capital money was set aside for one or two major pieces of computer software. Two items come to mind. One is a program to automate a lot of personnel functions, called PeopleSoft, and the second was upgrading the lines for the electronic highway connecting offices across the country. That may be why there's an increase. I think it's a one-off expenditure of about $5 million over a few years that was added to the original amount of money. The numbers seems to square, Mr. Chairman.
Mr. Hoeppner: Okay, thank you.
In chapter 2, page 31, it mentions something about a revolving fund and the Grain Commission, and in the preamble it says it has to do with research. Why is there such a carry-over by 1998-99? This is coming out of farmer's pockets as far as the Grain Commission service charges are concerned. You go from $778,000 to $1,000,606 as far as surpluses are concerned.
Dr. Morrissey: Again, I'm beyond my area of competence. It may have nothing to do with the research branch and the research that we would do. It might have to do with marketing research in the Grain Commission. I simply don't know. It could have to do with the kind of research that Keith Tipples let out within the Grain Commission itself, looking at the quality of grain to meet market demands.
Do you have any thoughts on that, Gordon?
Dr. Dorrell: Mr. Hoeppner, I too am only speculating, because this is the Grain Commission. The research arm of the commission, the grain research laboratory, does fee-for-service work for outside customers, and it may be increasing.
Mr. Hoeppner: Where would we get that information, because it would be interesting -
The Chairman: Mr. Hoeppner, the Grain Commission will be before the committee in June, if you want to ask them those questions.
Mr. Hoeppner: I'll make a note of that, Mr. Chairman.
I would like to go back to the dairy business. I'm sorry Mr. Easter left, because he's the expert on that. I was visited at my office by a gentleman who was moving organic barley from Alberta to an organic dairy in Oregon. He was telling me about all of the hassle he's getting at Canada customs.I was astounded at the price this organic dairy was paying for that barley. Is there really such a demand for this organic milk? Do we have any organic dairies in Canada? Are we tracking them to see what the benefits are?
Dr. Morrissey: From watching programs like Market to Market in the U.S., there seems to be a significant market for organic products in the U.S., and it seems to be growing. The information I've picked up in places like Market to Market is that there's a significant margin on certain organic commodities in the U.S. For example, grains being produced and shipped into the eastern U.S. or the west coast seem to have a significant margin.
In terms of organic dairy milk in Canada, I haven't any first-hand information. Perhaps Margaret does. What I do know is that in Europe - in Denmark, as far as I know - they are marketing something under the publicly known name of Økomælk. So it looks as though they have a range of products in places like Denmark. I think Sweden also has Økomælk, and I understand that it is an organic product, but I'm not certain. This is all material that I'm picking up in public media like Market to Market.
Mr. Hoeppner: I was astounded when I saw what that load of barley cost to deliver to this dairy farmer. If that is the case, why are we not going in that direction of adding value to our industries? You don't need the research or the chemicals in organic farming, and if there is such a demand for that product, we should be pushing it.
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Dr. Morrissey: I have two comments in response. One is a general comment on the focus of research and how it's changing. Gordon might have some specific comments on what producers in British Columbia are doing, particularly the greenhouse industry and the moves they are making toward organic farming or close to organic farming.
In travelling across the country and looking at research projects in research centres, my sense is that the focus has changed over the last few years from producing greater quantity to better quality. By quality, I mean that it may be traditional quality where you're producing more protein, for example, but it's also more quality back into the environment, such as the aquifers in British Columbia, for example. A lot of the work now is not in making sure the appropriate amount of fertilizer goes in to save cost, but in making sure the appropriate amount of fertilizer goes in so that it does not leach into the aquifer underneath. So there is a significant shift from quantity to quality, but quality in both the environmental and the product sense.
Dr. Dorrell: Mr. Hoeppner, we're not doing much on organic culture per se, but as Dr. Morrissey points out, there is lots of indirect activity. For example, for years we have stressed integrated pest management, where it's a combination of biologicals and chemicals, and in some cases we've moved away from having to use chemicals. For example, in some greenhouses you can now release micro-pests that go after and destroy damaging insects.
One of the largest greenhouses in British Columbia is now using biological control exclusively in their greenhouses, and that was work that we did. Interestingly, they started out not to produce an organic product but to produce a safer environment for their pickers and workers, and they now have the secondary benefit of producing cucumbers and tomatoes in a pest-free environment.
You're probably aware that in the Okanagan there is a sterile insect release program to control the codling moth. The hope is that eventually you'll get to a point where you don't have to use pesticides after the fruit is set. So there is an awful lot of activity going on, and people are beginning to see opportunities to add value to their product using this technology.
Mr. Hoeppner: Dr. Dorrell, how is your control of leafy spurge working, either by technology or by insects?
Dr. Dorrell: That program has been going on for a number of years. We've introduced specific insects that attack leafy spurge, which is a very difficult weed to control. We've introduced pests that attack the roots, the stems, the leaves and the seed set. These have been tested in Europe to make sure they're not going to attack anything else, and then they're brought into quarantine in Canada and tested. Finally, when they're found to be safe, these insects are released. The insects are slowly spreading, and you've probably seen some of the sites.
Mr. Hoeppner: I've saw a test spot at the Morden research station, and that's why I was asking.
Dr. Dorrell: It is successful. It's a joint effort by Canada and the United States. The bugs are on both sides of the border.
Mr. Hoeppner: Customs isn't bothering them?
Dr. Dorrell: There were a number of people coming north and collecting them and taking them.
Mr. Hoeppner: That's what I heard, that there was quite a market for them.
Dr. Dorrell: We're also having some success with knapweed in British Columbia. That's a nasty range weed that's very hard to control chemically, and we're having significant success with insects that are attacking that too.
The Chairman: Thank you.
Just to remind committee members, we want to adopt the report on the organic food regulations. We need eight committee members to do that, and there are eight of us here now. So at the conclusion.... In other words, don't go away.
Mr. McKinnon.
Mr. McKinnon (Brandon - Souris): I've been fascinated with the discourse here this morning. I may have some false impressions, but I'd like your comments.
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First, in the area of crop protection, we've had some visits from the institute. They're rather concerned about how we're doing in the area of joint assessment of research data for new products in terms of the registration.
My second question is this. Dr. Morrissey, you've mentioned the efficacy tests as an important component in research in our country as compared to our neighbour to the south. I'm wondering whether or not this is leading us into an area where in the long term we are not going to be as competitive.
I'll give you an example in horticulture. A product may be guaranteed under regulation to have been treated by only two or three chemicals not available here in our country. And therefore we're being shut out of markets because of regulation.
My last question is again related to other comments from across the floor here today. There is the concern about the level of acceptability of science. I have heard about rbST concerns this morning. Also, in the long term, there is a question about whether to some degree this is really what is driving the organic industry, particularly in America where the efficacy issue may be developing a bias against research in the area of crops and other protective devices.
I'll stop there, and if there is any more time I can give you some more questions.
Dr. Morrissey: Mr. Chairman, on the first question, the Crop Protection Institute is concerned that joint assessment of submissions for registration for pest control products is not going quickly enough. Again, it's not my domain. It is the inspection people and it's Art Olson.
Let me simply make a comment. My sense of it is this. The initial hope was the scientific assessment of the same product in two countries by scientists who had been trained in the same disciplines should probably be fairly objective. We could both save ourselves time and money by sharing this work. But because we are both sovereign states, having been given the same scientific assessment you might decide to make different decisions. One might decide to put more control conditions to control risks than the other. But still, the process could be speeded up.
Again, I can't speak for the inspection people. But I was involved in this personally a few years back. My own perception is that following the initial agreements with the United States, CUSTA and NAFTA, when we went down to the U.S. to do joint work with them we really were the ones who were most keen to have this done. When President Clinton became personally involved in assuring that NAFTA got passage, again, my perception was that U.S. officials became much more interested in doing joint work with us.
So my sense is that it had a slow start. I've been distanced from it for some time, but my sense is that it has moved more quickly more recently.
The second question was on U.S. registration. Do U.S. producers have a competitive advantage where they get access to a pest control product first? My sense is probably yes. If they have a product two or three years before us, other things being equal, that's probably to their advantage.
Particularly on minor-use crops where there isn't a sufficient return to a company to invest money in getting the registration, the information I get from our producers is that there is some frustration out there because the U.S. has access to these products and our growers do not.
What we have been doing jointly with the inspection people is that some money in the inspection group has been set aside. The inspection group comes to Gordon, for example, in Agassiz and says would you work with the company who owns this product and do whatever additional work is required in Canada on this minor-use crop protection product to see if we can't get it registered.
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So the short answer that if you haven't got the product, there probably is a competitive disadvantage. Some work is being done to try to get at least the minor-use ones. On the major ones, the joint work, the harmonized registration is probably where we'll bridge the gap, but it's going to take some time.
On the issue of acceptance of science, that goes back to the question Mr. Reed raised earlier. Again my comment on it is twofold.
First, my sense in watching the public's reaction is that all of society's institutions - Parliament, the public service, newspapers - are being questioned and are not being given the unquestioned credibility with society we once had.
The scientific community is no different. I think it goes back to first principles - look at the equation I mentioned earlier - that an implementable decision in society is a function of its logic multiplied by its acceptance.
My sense is that society is reasonably willing to accept the logic. In other words, if the scientific community or the legal community or parliamentary community comes out with a piece of logic that makes sense, the public is relatively willing to study at least the logic side of it. But when it comes to acceptance of it, are their vested interests being helped or not helped by it?
They're now starting to make personal decisions. They're simply a more informed, more educated public, saying they're not going to allow the science community or anybody else to decide the acceptance factor for them. They'll decide that for themselves.
The Chairman: Thank you very much.
So that we can move on, we'll go to Mr. Pickard and Mr. Calder for brief questions.
Mr. Pickard (Essex - Kent): Thank you very much, Mr. Chairman.
This morning you've alluded to several changes that have been occurring on a regular basis in research in Agriculture and Agri-Food Canada. Many of my colleagues and others have questioned what is happening with research.
We're seeing fewer dollars going into research areas. We're seeing a tremendous structural change in research in this country. So the perception may be that because there may be fewer dollars, because there is structural change, because there are centres of excellence, because there are matching initiative investment programs going on, all of the structural change is creating a total new view of where we're heading, how we're doing the job and what the general goals are in doing that job.
Rather than look at how it's affecting Quebec to Ontario or at how the west may be affected in comparison to the east, I would like your broad spectrum of what is happening with research and of what the general direction is. Are we targeting and focusing our research to programs that are important to Canada? Are we doing an adequate job in making certain the research that is required for our thrust into the future is being handled?
Quite frankly, I was amazed at some of the things I've seen going on in our research centres and across this country. I've had opportunity to look at Agassiz, at research in Winnipeg, at research in Harrow. To my mind I've seen some really astounding projects going on across this country.
I feel you are handling this in an excellent way, but I would like your impression as to how you see us moving. There are obviously economics here because of the general thrust of spending and of government spending being reduced. But the question is that research has been the fundamental basis of our progress in the past, today and into the future. Are we handling that properly?
Dr. Morrissey: Thank you, Mr. Pickard. I'll try to run through comments in the order in which you've raised them, and if I miss something, please remind me.
First of all, my sense is that one of the big changes that's taken place in the last hundred years is that we were really the only big player in Canada a hundred years ago. Since then, the provinces have become big players, industry has become a big player, and the universities have become big players.
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So right now, I would say we are one of five players. The international community is one, and there are certain pieces of research we can get from the international community. For example, if swine research is done in Denmark - swine are indoors nowadays - we can adopt that almost as quickly as the Danes can.
The provinces, the universities and industry in Canada are all doing research. So we try not to duplicate but complement what they're doing.
That explains some of the shifts you've seen over the last few years. It's a shift away from being the sole player and trying to do everything to moving into areas somebody else isn't doing, where Canada has a problem to be solved and we're the only ones who can solve that piece.
So these days Yvon and Gordon are on the phone literally every day with our colleagues in the provinces and the universities, where everybody's budget is being cut, asking, say, Norris Hoag in Ontario what it is that they're cutting. They remind them that we just cut A last year and ask them not to cut A, so that at least between us the country's needs are met.
We're doing exactly the same thing with André Gosselin down at Laval in Quebec. For example, we're saying that's a good news story. Yvon and André got together, and instead of both us and André putting up a greenhouse, we both put our money in and we put up one greenhouse. We got a slightly better and bigger greenhouse for the same money.
So all of that is to say that some of the shifts are recognizing that we're not the only players and we have to solve our piece that nobody else will solve.
The second item is that we're asking ourselves more and more critically now if this piece of research is a problem Canada has to solve for itself. In other words, nobody else will solve it for us either outside or inside the country. It's just about the first question. The kind of things we're focusing on are things like cold resistance and precocious crops to sprout early in the year, because we're one of the few northern countries that are located in climates as harsh as ours and have fairly advanced agricultural economies.
If you look at Russia, we have traditionally shared research with them, but we have probably given a little more than we've got. Although the Scandinavian countries are technically advanced, they just aren't big farm communities. So the only other country that's really interested in, for example, cold resistance is probably the northern United States. Gordon and Yvon are working very closely with them now. So those are the areas we're focusing on.
The other issue we're focusing on very closely ourselves is whether this is a piece of public work the Crown has to do or whether the private sector can do it and make a profit and we can move our money into something else. That seems to be a shifting horizon.
For example, Mr. Chrétien mentioned corn just a moment ago. Perhaps thirty or forty years ago we bred finished varieties of corn. But when somebody invented a way to produce hybrid corn so the private sector could keep their male lines for themselves and could cross their female lines and say they're hybrid, which wouldn't be true for the future - you have to go back each year and buy new seed - we got out of finished varieties and simply concentrated on lines that were either disease-resistant or had particular cold stress.
That's actually the work the Central Experimental Farm is focusing on now, trying to push corn and soya. We've pushed it as far as Lennoxville in Quebec and we're trying to push it down into le bas St. Laurent and get it down into Prince Edward Island.
The other issue is the mobility of research and development. Certainly, poultry were raised outdoors when I was a child. They scratched around the yard and they were pin money when you took some eggs into town on Saturday. That's become a big industry now. Poultry have gone indoors and hogs have gone indoors, which means the research is mobile between countries because the climate's excluded. Our harsh climate really doesn't matter. If you can raise hogs indoors in Denmark, you can probably transfer the same technology here.
It means we've had to focus on the other side of the coin, on the technologies that are outdoors and are climate susceptible and nobody else will do for us. For example, Gordon's people are doing work in durum wheat, which is only suitable in areas around Swift Current, or the hard reds in other parts of the west. We really can't buy a lot of that technology. So we have to do it ourselves because it hasn't gone indoors.
I have two last comments. One is a point I just haven't been successful in communicating publicly but I think is very important. In biological sciences like agriculture, the advances that were made a hundred years and fifty years ago and two years ago do not stay made. You have to keep reinventing them. It's the sustainable side of sustainable development.
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For example, the strains of wheat resistant to rust that Gordon's people in the west first came up with in the 1920s are only good for a number of years. Then the pathogen, the fungus, starts to adapt, it wants to survive, and it struggles to have its place in the sun. Over a period of years that variety loses its resistance and Gordon's people have to go out and survey the new strains of rust that are coming up and race against time to have a new variety that's resistant.
I don't think it's generally understood in the non-agricultural community that the inventions like rust-resistant wheat simply don't stay invented. If you read the literature, the figure often quoted is that about 70% of agricultural research money is sustainable money. It's purely to maintain the gains we once made in the past and that we're going to lose unless we keep working at it.
The last item is that as we change - all the changes you've described, Mr. Pickard - we have tried to protect the sustainable end of the sustainable development continuum. For example, 10 years ago, roughly 10% of our budget was in resource science - soils, water, germ plasm, air - the base on which all agriculture and food is grown. We now have 20% of our budget in that area.
Cuts have been taken elsewhere, but we've tried to protect that area as we think it's specific to Canada to a large extent and we think nobody in the private sector will do it - generalizing, but generally nobody will - because there isn't an immediate profit from it.
Thank you, Mr. Chairman.
The Chairman: Thank you, Dr. Morrissey, for those excellent comments.
Mr. Calder, we are running shy.
Mr. Calder: Thank you, Mr. Chairman. I'll be quick.
Dr. Morrissey, I can remember the good old days with chickens when I used to camp out with my dad to make sure the ring-tailed animal with the little mask on didn't get more than his fair share. Yes, the industry has changed.
What I see with agriculture right now is the fact that we are a very diverse industry. This book just goes to show that, because there isn't a department of government that agriculture isn't involved in or affected by. It's been a complaint of mine and Mr. Easter's that the cuts Agriculture has seen are one thing, but it has also been affected by the cuts of every other department. That has affected our industry and has cost us.
On research, I'd like to jump in on what Mr. Reed and Mr. Chrétien voiced a little while ago.I wonder how much control we have over our own destiny. When we do research and development, we still have to make sure it's okay with the Department of Health, we still have to make sure it's okay with the Department of the Environment and the myriad of other departments out there.
I wonder just how much control we have over our own destiny. It's a problem I would like to see corrected. I know there's been movement towards it. The PMRA is a good example, because the old way was that we had to talk to Health and to Environment and to Natural Resources. Now that's been consolidated under one agency. That's forward movement.
The other concern is that I feel we are fielding a lot of costs within the producers and there's benefit further on down through value-added that we don't really have any way of recouping. I'd like your comments on that.
Dr. Morrissey: Thank you, Mr. Chairman. Again, I realize we're running out of time. So I'll try to be quick.
I'll make a quick comment on diversification. My sense is that we are diversified and becoming much more diversified - the movement of soya and corn, the almost self-sufficiency in Quebec in small grains that's added wealth to land values in Quebec by their simply being able to grow those things. It's the same in the west. Wheat has been joined by canola, peas, flax, any number of crops now, giving us economic stability through diversification. We're not dependent on one crop and environmental stability, because we've got rotations in there that are much healthier for our soils.
On the question of whether more agencies are involved than in the past in the registration, for example, of an agricultural product, my sense is that Health Canada has always been involved because a traditionally produced crop ends up being consumed as food. Health Canada has always had a role to play in whether or not that product was safe for food. So that doesn't change with biotech.
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I think what is new is Environment Canada's appearance on the screen following the Glassco commission in the mid-1960s and the issue of just about everything in this country as part of the environment.
So where do you draw the line between a product department like those for agriculture, fish and forestry, and a process department like Environment Canada? It really isn't an easy question. If you follow it to its extreme, you would include everything in the country in Environment. If you didn't, you might allow some specialization in departments like Agriculture.
What I think is important in this is that there are about four ways you can organize government, or any organization or company: by product, by process, by place and by people. Having organized by one of those, you've spent your coin. You can't simultaneously organize a different way.
For better or worse, the Government of Canada tends to have organized by product - fish in one department, forests in another, food in a third, and agriculture in a fourth - and they've given all the tools necessary to deliver those products to those departments. So all the processes necessary to do agriculture have been put in Agriculture. You don't have a department of biotech, a process department. You have a product department - agriculture, fish and food - and the processes to deliver, such as biotech, have been put in those departments.
The only suggestion I would leave you with is that when you decide as parliamentarians how you'd like to organize the Government of Canada, simply keep in mind that you can't simultaneously organize in four ways. If you organize by product, then you'll have very clean interfaces by product. You can go to agriculture and get one-stop shopping for your product and all of the processes necessary to deliver. But on a process basis you're going to look messy. You'll have rough interfaces. You'll have the biotech tool in several departments; you'll have the science process in several departments. It can't be done both ways.
The Chairman: Thank you very much, Dr. Morrissey, Dr. Dorrell, Dr. Martel, and Ms Kenny, for your presentation and comments today. You have been very enlightening on a number of issues.
Dr. Morrissey, do you have any closing comments to make?
Dr. Morrissey: No, other than to thank you, Mr. Chairman, and to thank the committee for the opportunity to appear here.
The Chairman: I thank all of you for appearing here this morning.
I would ask the committee remembers to remain. We will now move to an in camera session of the committee.