PACC Committee Report

Pursuant to Standing Order 108(3)(e), the Standing Committee on Public Accounts has the honour to present its

FOURTEENTH REPORT

The Standing Committee on Public Accounts has considered Chapter 25 of the December 2000 Report of the Auditor General of Canada (Canadian Food Inspection Agency: Food Inspection Programs) and has agreed to report the following:

INTRODUCTION AND BACKGROUND

Created in 1997, the Canadian Food Inspection Agency (CFIA) is the entity responsible for all federal food inspection programs, animal health and plant protection activities. The Agency is the result of the merger of the food safety and inspection programs of three departments: Agriculture and Agri-Food Canada; Health Canada; and Fisheries and Oceans Canada. This consolidation was motivated by the need to better coordinate federal food inspection programs and to facilitate a more uniform and consistent approach to safety, quality standards and risk-based inspections.

The Agency regulates the food industry through two types of food safety legislation. All foods produced or imported into Canada are covered by the Food and Drug Act, which derives its authority from powers of federal criminal law. Certain commodities (e.g., dairy products and eggs, fresh and processed fruits and vegetables, various meats such as beef, pork, poultry and fish) are also covered by other Acts, which derive their authority from powers of federal trade and commerce. To process and distribute these commodities domestically or internationally, Canadian establishments must register with the Agency. As such, establishments that trade in these commodities are known as “federally registered establishments.” All other food establishments are referred to as “non-federally registered establishments.” The Agency is also responsible for the administration and enforcement of the Consumer Packaging and Labelling Act which applies to selected food products that are imported, sold or advertised for sale in Canada.

Food safety and inspection activities in Canada are shared with the provinces, territories and municipalities. Given the shared responsibility for food safety, mechanisms must be in place to ensure effective and well-coordinated partnerships. Furthermore, participants must have a clear understanding of their respective responsibilities and activities. The Agency and its provincial and territorial counterparts participate on a number of cooperative and coordinating committees.

Food inspection programs verify whether food products meet national or foreign standards for safety, quality, handling, identity, processing and labelling. This is accomplished either through the registration and inspection of establishments; or through the inspection and grade monitoring of products in registered and non-registered processing establishments, at importers’ premises and in retail establishments. Recently, the focus on government auditing of industry activities has increased. The Agency also participates in emergency food recalls and investigates food-borne illnesses.

The Public Accounts Committee considers it vital that the Canadian Food Inspection Agency ensure that all its programs and activities are effective in protecting the health and safety of all Canadians. The Committee believes that to achieve this goal, the Agency must ensure that all its programs are well designed, appropriately structured and properly implemented. As a result, on 1 November 2001, the Public Accounts Committee met to consider the testimony of witnesses on matters regarding the food inspection programs of the Canadian Food Inspection Agency. Representing the Office of the Auditor General of Canada were Mrs. Sheila Fraser (Auditor General of Canada), Mr. Douglas Timmins (Assistant Auditor General) and Mr. Neil Maxwell (Principal, Audit Operations Branch). For the Canadian Food Inspection Agency, Mr. Peter Brackenridge (Vice-President, Programs), Ms. Sarah Kahn (Director, Animal Health and Production Division) and Mr. Greg Orriss (Director, Bureau of Food Safety and Consumer Protection).

OBSERVATIONS AND RECOMMENDATIONS

The audit focused on the Agency’s food inspection programs, and sought to determine whether these inspection regimes were satisfactorily designed, structured, organized and implemented to achieve their safety objectives. The examination only covered the CFIA’s food inspection activities and programs. Good progress on a number of fronts was observed but slower progress was also noted in the areas of compliance and enforcement activities and in the management of the “non-federally registered sector.”

To verify compliance to legislation, the Agency engages in various inspection and investigation activities of food establishments. In cases of non-compliance, several options are available to secure the correction of problems by the establishment’s management. Usually, compliance action consists of informing establishment management of the non-compliance problem and setting a deadline for its correction. If
the problem persists, more serious action can be applied or, if warranted, enforcement action is recommended. Enforcement actions include shutting down production, detaining or seizing the product, or revoking the establishment’s registration or licence until the problem is corrected.

The audit found that the Agency did not take full advantage of compliance mechanisms. In a review of a sample of inspection files on establishments that had either recalled food or been prosecuted in the past two years, cases were found where compliance actions were insufficient to achieve timely correction of the problem either because of limitations in the legislation or failure by the inspector to take more serious compliance action. The Auditor General stressed that these findings do not necessarily apply to all compliance activities across the Agency, but is concerned about the high proportion of identified cases with compliance problems.

Based on the examination results, more attention to managing compliance activities is needed. The Agency uses program audits to evaluate the effectiveness of its compliance activities. However, since the merger, the Agency had some difficulty in integrating the program audit functions, and had only managed to harmonize them in 1999. Furthermore, at the time the Auditor General’s report was tabled, the Agency had yet to complete three pilot audits. The Agency has recently taken steps to improve the quality and consistency of the enforcement activities by providing training to all inspection staff. While acknowledging the measures already taken by the Agency to strengthen its compliance and enforcement activities, the Committee proposes the following recommendation:

RECOMMENDATION No. 1

That the Canadian Food Inspection Agency strengthen its program audit function to improve the effectiveness and efficiency of compliance actions. That the Agency prepare an action plan on this initiative together with an implementation timetable and present the results achieved against performance targets in its performance report to Parliament for the period ending 31 March 2003.

Another area of concern was found in the Agency’s management of the non-federally registered sector. This sector refers to establishments that produce, process, distribute or import commodities that do not require federal registration.[1] Establishments in this sector are also subject to inspection by provincial or territorial authorities. Given the number of establishments (estimates vary between 5,000 to 100,000 firms depending on who’s included) and the variety of commodities produced in this sector, its management can be quite challenging, because without registration, the Agency cannot be certain of the existence of all the establishments operating in the sector or assess all the potential risks. Although the Agency has to a certain extent assessed specific product risks, the Agency has yet to evaluate the overall risks associated with this sector in order to determine the level of resources needed to properly manage the risks.

The Agency does not believe that executing an overall risk assessment of the non-federally registered sector is a reasonable or practical option, given the large number of establishments and the complexity of identifying and evaluating the potential hazards and levels of controls found in the sector. Also, because the Agency shares responsibilities for this sector with other levels of government, it believes that the implementation of an overall risk assessment is further impeded by legislative and constitutional constraints. Nonetheless, the Auditor General believes that the Food and Drug Act provides enough powers to allow for a variety of different inspection approaches. The audit also observed that consultation and coordination between the Agency and other jurisdictions participating in the non-federally registered sector was limited.

The Committee is concerned about this divergence of opinion between the Agency and the Office of the Auditor General regarding the practicality of undertaking an overall risk assessment of the non-federally registered sector. The health and safety of all Canadians is of paramount importance and it is essential that all reasonable efforts be taken to ensure that all risks and hazards to food are properly assessed in order to enable the Agency to effectively and efficiently manage the non-federally registered sector. The Committee thus proposes the following recommendations:

RECOMMENDATION No. 2

That the Canadian Food Inspection Agency, in consultation with the Office of the Auditor General of Canada, engage in discussions with its provincial and territorial counterparts to identify and develop a satisfactory method to carry out a proper overall risk assessment of the non-federally registered sector. That the Agency present the result of these consultations in its performance report to Parliament for the period ending 31 March 2003.

RECOMMENDATION No. 3

That the Canadian Food Inspection Agency engage in discussions with its provincial and territorial counterparts about their respective roles and responsibilities in managing the non-federally registered sector. That the Agency report the results of these discussions in its performance report to Parliament for the period ending 31 March 2003.

The audit report noted that the Agency should develop a more strategic approach to managing imported commodities, especially in the area of inspection programs. The treatment of imported commodities depends on whether these commodities are covered under trade and commerce legislation or under the Food and Drugs Act. The Agency has already undertaken certain projects designed to improve the management of imported commodities. It has also recently tabled Bill C-80, the Canada Food Safety and Inspection Act, in the House of Commons, to ensure a more consistent legislative treatment of imported commodities. The Committee is interested in these developments and makes the following recommendation:

RECOMMENDATION No. 4

That the Minister of Health table, in Parliament, the Agency’s status report from various initiatives related to the implementation of an overall strategic approach pertaining to the management of imported commodities, including the requirements of Bill C-80 should it become law. That this progress report be tabled no later than 31 March 2003.

The Agency has made progress in the management of its human resources but still needs to improve its succession planning to deal with retirements and departures expected in various essential occupational categories. The Agency has recently developed a number of recruitment initiatives, including a long-term university recruitment drive for veterinarians and other key occupational groups. It also instituted a national biotechnology recruitment campaign as well as various other initiatives to attract, train and retain a dedicated and competent workforce. The Committee acknowledges the Agency’s recent efforts and thus makes the following recommendation:

RECOMMENDATION No. 5

That the Canadian Food Inspection Agency provide in its annual report, its report on plans and priorities as well as its performance reports to Parliament, information on human resource management matters and challenges facing the Agency, particularly on current and future human resource requirements by occupational groups, the progress of various recruitment and training initiatives together with information on results expected and achieved. That the Agency commence reporting this information in its performance report for the period ending 31 March 2003.

The Agency indicated that it was continuing to make progress on the implementation of the Hazard Analysis Critical Control Point (HACCP) based approach to food manufacturing quality control and safety. It is expected that HACCP-based systems will likely become essential for food producers and processors to enhance their competitiveness and market access. According to the Agency, the HACCP is already being used in federally registered processing plants in the area of meat, poultry, eggs, dairy products, fruits and vegetables, and is mandatory in all federally regulated fish processing establishments. The Agency is consulting with industry and other stakeholders with the goal of implementing mandatory HACCP in all federally registered meat and poultry establishments. Nonetheless, when the audit report was completed, the Agency had yet to develop a formal strategy for the implementation of the HACCP. This leads the Committee to recommend the following:

RECOMMENDATION No. 6

That the Canadian Food Inspection Agency develop a more formal strategy for managing the implementation of the Hazard Analysis Critical Control Point approach. That the Agency present a progress report on its implementation in its performance report to Parliament for the period ending 31 March 2003.

CONCLUSION

The Committee acknowledges the Agency’s efforts and current initiatives to address the outstanding issues relating to the management of the federal food inspection programs. Much progress has already been achieved but much still remains to be done. The audit revealed two areas requiring particular attention: the Agency’s compliance and enforcement activities, and the management of the non-federally registered sector. Given the Agency’s commitment to protect the health and safety of all Canadians, it is of paramount importance that all efforts be undertaken to correct both these serious weaknesses to the federal food inspection programs. The Committee fully expects to see progress on both these fronts.

Pursuant to Standing Order 109, the Committee requests that the Government table a comprehensive response to this report.

A copy of the relevant Minutes of Proceedings (Meeting Nos. 30 and 39) is tabled.

Respectfully submitted,

JOHN WILLIAMS, M.P.

Chair