[Recorded by Electronic Apparatus]
Tuesday, November 5, 1996
.0907 
[English]
The Vice-Chairman (Mr. McKinnon): Good morning, ladies and gentlemen. Your esteemed chair is in Toronto this morning, or elsewhere, and I've been asked to chair the meeting today. I've been waiting for this moment for two years, since my election as vice-chair, just so I can control who says what and when.
So Mr. Easter, you can get to the back of the line.
Mr. Hermanson (Kindersley - Lloydminster): Life was pretty boring when you were a backbencher.
Mr. Easter (Malpeque): Remember who your friends are.
The Vice-Chairman (Mr. McKinnon): That's right.
We are dealing today with consideration of Bill C-60, the Canadian Food Inspection Agency Act, and we have as first presenter this morning Mr. Patrick McGuinness, who is representing the Fisheries Council of Canada.
We welcome you to our group, sir. We have a maximum of one hour, so if you wish to make your presentation, questions will emerge thereafter.
Mr. McGuinness, the floor is yours.
Mr. Patrick McGuinness (Vice-President, Fisheries Council of Canada): Thank you very much, Mr. Chairman and members of the committee.
I have submitted my presentation, but I do have extra copies if extra copies are required.
[Translation]
We're sorry for not being able to provide a French version of our submission due to a lack of time.
[English]
I thought I'd start off by giving a bit of background on the fish and seafood industry.
Basically, we're an international industry. We export 80% of what we produce, to seventy countries worldwide. We're the fifth-largest world exporter. We used to be number one. We've slipped to number five mainly because of the decline in our groundfish resource in Atlantic Canada, but also because of Pacific salmon resource declines in the Pacific.
Also important is that we are the tenth-largest import market in the world. Many of these products and species we import are products and species not available from Canadian production. In fact, what we're finding now, particularly in Atlantic Canada, is that many of our processors are importing primary-produced groundfish products for further processing here in Canada, for distribution in Canada and export throughout the world. Similarly, in our Pacific industry our salmon canning industry is also importing considerable amounts of raw frozen salmon from Alaska.
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The other point of introduction I want to make is our industry was the first industry in the world to implement a mandatory food safety program based on the HACCP risk-based assessment model.
In summary, the point I want to make in the introduction is we're an export industry and an import industry. Our industry and the Department of Fisheries and Oceans inspection agency have a leading-edge reputation throughout the world regarding the implementation of risk-based food safety management programs.
With respect to Bill C-60, I thought I'd highlight some of our main concerns and observations.
The first point is on the preamble. We believe the preamble is seriously flawed. The objectives of the preamble make no reference to what should be one of the main objectives of this bill and this agency: the delivery of a cost-effective food inspection service. That is not identified in the objectives. We find that quite strange, particularly when the movement towards this single food inspection agency was prompted by the March 1996 budget of Finance Minister Martin, where he said, and I quote, ``the agency will realize significant cost savings''.
This objective of a cost-effective food inspection service should be clearly spelled out in the preamble, and our feeling is that concept should permeate the following clauses of the bill.
The big concern and fear of the fish industry with respect to this movement to a single agency is that developing this agency will be a mechanism, a vehicle, to simply download onto industry, through cost recovery, what is considered to be a rather outdated, high-cost food system.
Our feeling is that cost recovery has a legitimate role to play in the evolution of public policy when market forces are in play, when clients have a choice to purchase or not purchase the service, or when they have alternative services to purchase. In food inspection that's not the case. Market forces are not in play. Our industry and the agriculture industry are legislated, and we must use the inspection service in order to stay in business.
So we feel that somewhere in this bill you need a third-party check and balance mechanism to do two things: assess the cost-effectiveness of the agency and vet the fee structures and cost recovery initiatives of the agency.
In many instances food inspection needs to be re-engineered, not have its cost structures downloaded. Our industry, as we demonstrated, has to be internationally competitive, and equally, government infrastructures and services must also be internationally competitive.
The next one I'd like to draw your attention to is subclause 10(2), on the advisory board. It's inadequate and it's not democratic. Basically that subclause is saying the advisory board is to advise only on matters referred to it by the minister. We feel the advisory board should be allowed to review issues that a majority of its members agree need to be reviewed. In essence we're suggesting subclause 10(2) be recast to have that advisory board be more a board of directors.
The next one we'd draw your attention to is subclause 11(4), on the role of the Minister of Health. We certainly agree with the intent of this subclause in the sense that the Minister of Health is responsible for establishing the health standards and for ensuring that Canada's food inspection system is a safe system. But we want to note there has been considerable progress in the last number of years in discussions among the Department of Fisheries and Oceans inspection service, Health Canada and Agriculture Canada to determine the role of Health Canada officials in inspection.
We've come to an agreement, through memoranda of understanding and so forth, that the role of the Health Canada inspector is to audit the performance of the inspectors, whether it's a Fisheries and Oceans inspector or an Agriculture inspector. Through that formalized type of structure, we've been able to end duplication of two government agencies inspecting the same plant.
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So all we're drawing your attention to in subclause 11(4) is that hopefully the wording is tight enough that we do not see the re-emergence of duplicate inspections.
We recommend, as is currently the case, that the new inspection agency actually enter into a memorandum of understanding with Health Canada as to how in fact they are going to fulfil their responsibilities under subclause 11(4). We think it should be, as now, basically auditing the inspection agency, not in fact going back out into the plants and having reduplication.
Regarding clause 12, we support very strongly a separate employer. As we move into the 21st century, the agency will need that type of flexibility.
Clause 16, on choice of service providers, we strongly support. We think there's good opportunity here for the private sector working very closely with the agency. We think there's great opportunity in terms of certifying private sector labs to do much of the inspection activity.
I bring to your attention that we understand in the U.K. the inspection agency there has actually contracted out to the private sector to implement some of the actual plant inspections.
So clause 16 is very important to keep in. It's part of that check-and-balance mechanism that I think will be required for the agency.
On subclause 24(2) we're recommending a bit of a rewording. Instead of ``not to exceed cost,'' it should say ``not to exceed reasonable cost.'' As we've mentioned previously, market forces are not in play here. By having ``reasonable cost'' as opposed to ``cost,'' here again that's addressing some of our check-and-balance requirements.
The issue we're addressing here is, first, sometimes in an inspection agency's response to an issue you will get into an overkill situation; that is, the inspection service that is provided and the activities that are undertaken are more in keeping with the response to a political situation rather than the action required on a scientific, risk-based assessment.
The other concept here in terms of why we think ``reasonable cost'' is the appropriate point is this whole debate between what's the public good and what's the private good. Food inspection is a combination. The activity of food inspection is, to a certain extent, providing the public good to all Canadians in terms of the safety of their food; but there is no question that it also provides to a particular industry or a particular company a benefit. So what we're saying is that in introducing the concept of reasonable cost in this section, we would hope that the reasonable costs that are assigned to the individual companies or industry are related to that portion of the service beneficial to the company or the industry.
The next section we draw your attention to is subclause 26(11), which deals with consultation. We feel that this subclause needs more -
Mr. Easter: There is no subclause 26(11).
Mr. McGuinness: Okay, right. I think it's subclause 26(1). Thank you very much.
Regarding subclause 26(1), on consultation, we think a more formal structure for setting fees is required. Basically what we're saying is when there is a fee proposal coming forward from the agency we think it should be pre-published in the Canada Gazette, part I. We think the advisory board or, as we suggest, the board of directors be commissioned to review it. Also, we think the Auditor General of Canada should review it regarding fairness in terms of the public good, private good type of issue, and also the cost-effectiveness related to the fee proposal.
The Vice-Chairman (Mr. McKinnon): At what point in time are you recommending that be done?
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Mr. McGuinness: Well, basically the way I would see what happens in terms of an agency going forward with a fee proposal. If it's for a particular industry, obviously the agency itself should be talking with the industry associations that are involved, leading members of the industry, and so forth. But once they've had those discussions and come up with some proposal, then at that point their first action should be the Canada Gazette, part I, because regardless of how good an association is, regardless of how good the advice it gets from its leading members, when you have in our industry a thousand individual plants, there are a thousand individuals who feel that in terms of any costs that are going to occur, they should be consulted.
Basically, you have to cover that request. You can't do it manually, you can't do it physically, so the Canada Gazette, part I, is probably the only tool we have to do that, and that should be done at an early stage.
In terms of the Canada Gazette, part I, I think Canada is under an obligation internationally. My understanding is that in our agreements in the World Trade Organization and NAFTA, Canada has identified the Canada Gazette, part I, as the official mechanism, if you will, of consultations with third countries concerning any fees that are about to be imposed on imported goods. I think, therefore, that you actually do have a legal obligation to refer to the Canada Gazette, part I, in the document.
Clause 32, annual audit, is one the committee should really focus on, because we feel this is the section under which we can maybe address the check-and-balance mechanism regarding cost recovery that we think is important. I'm sure this committee will hear again and again that this was going to be the biggest bugbear with respect to this bill.
We're saying that the Auditor General should be performing not only the normal type of audit on issues that have been identified in clause 32, but we are recommending that two new subparagraphs be added to that, one to the extent that the Auditor General would be required to provide an annual report regarding the cost-effectiveness of the agency supply of its services.
The second subparagraph we think is required is in relation to the fixing of fees, that the Auditor General report three aspects on those fees: one, the cost of the service that is being provided - in other words, the cost to the agency of actually providing the service it is requesting a fee for, or fee increase for; two, the percentage allocation of that cost - of that cost, how much of it is for public good and how much is basically for private good, that is, beneficial to the companies that are benefiting from that service in terms of the sale of their product either in Canada or internationally; the third aspect we think is particularly important is that the Auditor General should also report on the comparative cost of the service in other countries.
If you get those types of professional, third-party types of assessments of a fee structure, I think you've then got a debate in which you don't get into the acrimony we often get into at a point in time when the government is trying to increase fees or introduce fees.
The two final clauses we draw your attention to are more related to the fish inspection system. One is clause 55. Basically, this section would repeal the ability in the Fish Inspection Act for us to have an appeal mechanism. All we're saying is that we as an industry object to clause 55 if the agency itself is not going to develop its own appeal process.
I must admit we looked through the bill and we couldn't find where the agency itself was going to take up or formalize an appeal process. We do have that currently in the Fish Inspection Act. We think it's absolutely vital. We spent the last three years improving it, and it's a way of bringing industry and the inspection service together. If you don't have a good appeal system, if you don't have an appeal system that has confidence both in the inspection service and in the industry, you are going to continue to undermine the cooperative spirit in which we all must work.
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The other clause is clause 56, whereby it's proposed we now give fish inspectors additional powers of seizure. Right now they can seize fish and containers. Clause 56 suggests they should also have the ability to seize other things. All we're saying is that we need to find wording to put limitations on that wording, ``other things'', to avoid overly punitive actions by inspectors. As you can appreciate, many of our companies are integrated companies owning deep-sea harvesting vessels, plants, and so forth. Expanding this clause 56 to ``other things'' without any limitations puts in jeopardy considerable assets, well beyond a lot of fish or seafood that may be in question in an inspection issue.
One other point I want to make to the committee about the fish and seafood industry is that we are a resource industry. Fisheries management decisions affect the activity of our plants and also affect the workload of fish inspectors. The allocation of a resource, the timing of a fishery, when it's opened and when it's closed, affect the intrinsic quality of the fish and such issues as decomposition.
In the current system, with fisheries inspection as part of the Department of Fisheries and Oceans, the fish inspection system is currently in the loop in the DFO management consultations and decisions which are made. With the new agency, with fish inspectors moving out of Fisheries and Oceans and moving into an independent agency reporting to the Minister of Agriculture, they are going to be out of that loop.
There's obviously no change here for the agriculture industry. There's still a one-window type of operation for them. They're still dealing with an inspection agency that reports to the Minister of Agriculture. With fisheries, it looks like a change to us. It is a change for us. We're saying we believe as we move into this new agency, taking fish out of the Department of Fisheries, out of that loop of fisheries discussions on fisheries management and policies, the agency will need and should have, and we recommend it have, a formal direct link to DFO.
Basically, here in Canada in the fishing industry and with the department we're moving towards an integrated, holistic approach to fisheries policy and management. In that respect input from the marketplace, from industry, and from inspectors is required by the Department of Fisheries and Oceans and the Minister of Fisheries in order to make the right decisions to optimize the fish resources of Canada.
In summary, there are two big issues here. We need a checks-and-balances mechanism for cost recovery and the setting of fees. We've outlined some suggestions, particularly for clause 32 and about using the Auditor General. The other big issue is we are concerned about our fish inspectors moving out of the loop. We would like to see the agency develop and be structured so that loop can be, if you will, rejoined, so there would be direct input by our inspectors, along with the industry, along with DFO fisheries officials, in making good fisheries management decisions for Canada.
Thank you very much for your patience today.
The Vice-Chairman (Mr. McKinnon): Thank you very much.
I'll start with Mr. Landry for any questions.
[Translation]
Mr. Landry (Lotbinière): I would like to thank the witnesses who have appeared this morning. I would like to ask them several questions.
Are you able to provide me with the percentages related to exports and imports?
I understood that you were not comfortable with subclause 10(2). Could you give me more details on how this subclause 10(2) could be improved in order to better serve your interests?
These are my two questions for now.
Mr. McGuinness: Thank you very much for these questions.
Our industry is exporting 94% of its production here in Canada. This percentage is more or less similar for each province. For Quebec, the percentage is almost the same, which is 84%.
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[English]
For other provinces, British Columbia is probably somewhere in the order of 60%, and Newfoundland is probably about 90%.
In terms of imports, what we're finding is that we now import somewhere in the order of$1.3 billion worth of fish and seafood annually, and I would say the survival of the processing industry in the province of Quebec is almost totally dependent on imports at this point in time. They've done a fantastic job on the groundfish in terms of importing cod and groundfish from various parts of the world, bringing them into the Gaspé region and having them dried and salted. Using a Gaspé cure that they have developed, they get a premium price for that product in countries such as Italy and Greece and so forth.
As I say, the bottom line is that although we are an export country, a lot of our players and industry are also importers in the sense that what we're trying to do is provide to the Canadian marketplace - and also to the marketplace in the United States - a full range of fish and seafood products. And as you can appreciate, you have a limited range of species in your own waters, if you will.
With respect to subclause 10(2), we feel the government, the minister and the president of the agency should be a little more forthcoming in the 21st century. They really shouldn't be afraid to have their operations and their manner of doing business reviewed by a board of directors. If this is in fact going to be a private agency, if these people are going to pride themselves on moving into a new approach to food inspection, and if they want to appear to be more akin to the private sector, why not incorporate a structure in the private sector that has proven over time that is very beneficial? That is why we call for a board of directors that will not only look at issues that the minister wants looked at, but which will look at the operation and at the performance of the senior executives in terms of their ability to provide safe food to Canada, in terms of their ability to manage and operate an efficient organization, and in terms of their ability to deal with the human resource challenges that this agency is going to face, both domestically and also in terms of its performance in regard to its support in our international aspects and so forth.
So our recommendation is that it should be structured along the lines of a board of directors. We think it is a significant flaw in the bill.
Thank you very much.
The Vice-Chairman (Mr. McKinnon): You have one more minute if you wish to use it.
[Translation]
Mr. Landry: It is suggested now to regroup all food inspectors and to give that responsibility to the government. I agree with you concerning the setting-up of a structure like a private board which, according to me, could make us save money. I know very well, for having seen some departments or other authorities which have privatized certain services and made enormous savings, that it was much more costly before when they were under the government's responsibility. I believe that your structure of a private board would be the best solution. I must tell you that I have a bit of difficulty living with subclause 10(2) as it is written.
This was only a comment. If you have other opinions, I would be willing to hear them.
[English]
The Vice-Chairman (Mr. McKinnon): Mr. McGuinness, please give a very brief answer if you don't mind, then we'll turn to Mr. Easter next.
[Translation]
Mr. McGuinness: Thank you very much for your comments. We agree on your suggestion and position. Thank you very much, sir.
[English]
The Vice-Chairman (Mr. McKinnon): Mr. Hermanson, and then Mr. Easter.
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Mr. Hermanson: Thank you, Mr. Chairman.
Thank you, Mr. McGuinness. Your presentation has been excellent. You're certainly well researched, and I appreciate the comments you have made.
I agree with just about everything you have said this morning. I think your comments regarding the advisory board are very appropriate. I think you've hit the nail on the head that the government does seem reluctant to place trust in the industry and in the board, whether it be an advisory board or a similar body they set up to work with, monitor and support industry initiatives.
I want to deal with the three proposed responsibilities for the Auditor General that you mentioned in regard to clause 32. You said the Auditor General should report on cost-effectiveness, and he should report on the cost of service. You then said he should report the allocation between public and private good, and that he should also provide a comparative cost for service in other countries. I think those are again excellent recommendations. I'd like to hear from you what you think the percentage of allocation should be between private and public good. What should we be shooting for in this inspection agency?
If you have the knowledge, I would also like you to comment on whether or not you've looked at the Pest Management Regulatory Agency, which seems to be in need of these guidelines as well. It's a parallel case to the single Food Inspection Agency. It's an agency that was set up by the government, but it seems to be far too large and it seems to be passing on huge costs to the industry, rather than trying to reduce costs to the industry.
Finally, looking at the proposed budget for this single Food Inspection Agency, how do you feel these costs compare to those services in other countries?
Mr. McGuinness: Thank you very much for three excellent questions. Unfortunately, I have poor answers to at least two of them.
On the pest management issue, unfortunately haven't looked at it, nor has our industry. I apologize for that, but I really have no comment on that.
Mr. Hermanson: I would just say that it's an agency that justifies your concerns with regard to this agency.
Mr. McGuinness: Thank you very much.
On the public good and private good issue, it is an issue that is percolating, developing, and the opinions are all over the map. Industry doesn't have the residue of all opinions on that. There are obviously some good individuals from both the fisheries department and the agriculture department who have pondered this issue. I don't think we're going to come to any resolution of that just simply by having industry and the inspection agencies debate it.
On this whole issue of private good and public good, I do believe this is an opportunity for a public policy forum, some sort of think tank in which we can get academia, if you will, to play a role. The big issue for industry in the last three years, I would say, has been this movement to cost-recovery. In fact, I saw statistics in which a cost-recovery bill that has been collected by the government was equal to the amount of money the government is getting in the GST. It's a big number, it's a hidden number, it's an unusual number.
Mr. Hoeppner (Lisgar - Marquette): That's what harmonizing does.
Mr. McGuinness: Harmonizing - that's right.
But certainly in certain of these issues, it's fair ball. For those issues where the market forces are at play, it's fair ball. But in industries such as fisheries and agriculture, where the market forces aren't at play and where we're legislating, there's a big concern that we have to address this private good and public good. I guess my only suggestion here is that we start thinking of having it as a public policy issue, one that we can have the academic world look at and comment on. In other words, we almost need third-party involvement in order to resolve what is emerging as a fight between industry and government.
Certainly the public good aspect of the food inspection system is quite considerable. Every Canadian out there believes he or she is paying quite a bit of money so that industry both in Canada and worldwide is checked to ensure the food they're eating is safe.
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So the public good aspect of the cost of food inspection, in our view, is quite considerable. As to whether it's 10% or 20%, we think we have to get into rigorous discussion, rigorous debate, to try to move forward on that.
About the budget of this agency, our biggest concern, as I said, is cost recovery, and the big problem we have in the fish industry is that, as I mentioned earlier, we moved into a HACCP-based inspection system whereby fish inspectors are auditing our plants, which have a mandatory health and safety system in place, auditing that we do have our critical control points in place, we are monitoring them, we are taking corrective action - that in fact our plants are in control and our plants are the main responsibility in providing safe food. As a result of that system our fish inspection agency has been able to reduce its budget by 23% since program review started - 23% in fish inspection in the fisheries.
If we look at agriculture, it has reduced its expenditures by 10%. So you can appreciate we see a juggernaut coming at us. We're concerned that some of this cost reduction that has to occur on the agriculture side will move over into fisheries through cost recovery and we'll have an unfair share of the burden of the delays in agriculture in getting on with cost recovery. That's also why we feel we need these checks and balances, we need this third-party auditor, for fairness, so if in fact that's happening we do have a referee to say, hey, our fish inspection agency has already reduced by 23%.
We're already incurring cost recovery on fish inspection. We don't want to be burdened further.
Our view is that obviously the budget is going to go down over time. Our feeling is that we'll have to be looking at the U.S.A. and Europe for comparison purposes, and it's hard to say where we are in terms of the budget. We're probably now in line with Europe, but they also will be going through restructuring their costs of food inspection, I think. The U.S.A. is already moving to HACCP in agriculture, as we have in fish. They are also introducing a mandatory HACCP program in fish in 1997.
So it's going to be a moving mosaic, or a moving target, and what we're saying is that the Auditor General should be tasked with the responsibility of keeping a snapshot on that movement. We think the cost of food inspection worldwide is going to be reduced as people realize the real responsibility in delivering safe food is having responsible food processors, it's not necessarily the food inspector out there playing cop on the block. That's system doesn't work. We know it doesn't work in fisheries, and we've moved to a new system.
The Vice-Chairman (Mr. McKinnon): Mr. Easter.
Mr. Easter: Thank you, Mr. Chairman.
I too injoyed your presentation, with the exception of the section on subclause 10.(2), which Elwin seems to agree with. I disagree strenuously on the point about a board of directors. I think we have to make up our minds whether we want agencies in the public domain or in the private domain. I don't think you can mix the two. There's certainly a feeling by Reform and quite a number of people of let's get the government out of government. I believe agencies controlled by the government are your last stop against the market out there, and what people with economic influence, or even political power, can do to you.
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Compare this particular agency to the agency in the public arena. You are audited by the Auditor General. The minister has to report to Parliament and all parties before parliamentary committees can question the operations of that agency. You do not, although it's assumed you do, get that same kind of constructive analysis and criticism with a board of directors. What do we know about what's happening in Cargill Grain or McCain or Irving? We know very little.
Mr. Hermanson: What about the Wheat Board Advisory Committee?
Mr. Easter: The Wheat Board is in fact audited, and as you know, Elwin, the Wheat Board Advisory Committee is elected.
Anyway, on that point I disagree with you.
As to your points on clause 32, concerning the Auditor General, I would like to think some more about providing an annual report on the cost-effectiveness. I think that's a good approach, because even many of us around this table are worried about cost recovery and where it leads, in the final analysis.
You will hear promoters of cost recovery talk about user-pay, but there's another term I like to use from time to time, and that's benefactor-pay. I find in my industry, at least - the farming industry - that the farmer could be asked, as could the fisherman or the fish processor, to pay for a service that, yes, that particular sector of the industry uses, but the benefit is actually to the ultimate consumer out there. How do you get at that?
So I wonder if you might expand a little bit further on how you see the Auditor General coming to some decisions in terms of that cost-effectiveness. How do you get at it?
The Vice-Chairman (Mr. McKinnon): Mr. Easter, having used half your time in asking the question, we'll allow the -
Mr. Easter: Well, I have three more questions, Mr. Chairman.
The Vice-Chairman (Mr. McKinnon): Yes.
Proceed, sir.
Mr. McGuinness: Thank you very much for the question.
The approach of benefactor-pay is a good moniker for what we're saying about the public good and the private good.
On cost-effectiveness, what the Auditor General could do in that respect is look not only at how that service is provided in other countries and the cost of that service in other countries, but also at what's inside Canada. They could look for a benchmark or target, they could look for duplication and they could look for areas where labs have been consolidated and where people have taken opportunities to certify private sector labs and so forth.
Cost-effectiveness is obviously going to be a new area for review, but they could be looking at comparing the agency with general good business practices, if in fact it's setting itself up as a business, and at trying to come to some conclusions, using as a benchmark the cost of those services in other countries.
At the end of the day, as fish processors, we want to ensure that our international competitiveness is not undermined unnecessarily by costs in our inspection services that are higher than those our competitors worldwide are experiencing. If we can be assured of that, that's our first level of test.
If we can demonstrate excellence in government and in fact be providing a better service at less cost than our competitors, then we are in keeping with Canada's objectives, because at the end of the day, we are a country of exporters. That should be one of the objectives of this agency.
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On subclause 10(2), as I say, we suggest a board of directors, but I think at the minimum we would ask that if it's to be an advisory board, at least the advisory board itself have the option that if there is a majority of members who want to review an issue, the chairman has the option to say yes, this is an appropriate issue for us to review. The way the legislation is written now, they don't have that option.
So certainly we'd like a board of directors, but even keeping it inside, as you say, as an agency responsible with an advisory board to the minister, we think in regard to the wording there that we can keep with that concept, but we also do think it needs improvement.
The Vice-Chairman (Mr. McKinnon): That is noted, sir, on that aspect.
Mr. Easter: On the appeal process under the Fish Inspection Act...?
Mr. McGuinness: Yes.
Mr. Easter: I'll have to look at that.
Can you give us an example of what situations that appeal process would be used under, and how often did you use it?
To be honest with you, I'm not familiar with it. It's an interesting concept, and if it worked well under the Fish Inspection Act, maybe it has to be considered here. But give us some examples of when it's used.
Mr. McGuinness: That's a good question. Basically what has happened, as I've mentioned, is we have a mandatory quality management program where each plant has its own system of managing its food safety. We have hazard analysis; it identifies the hazard in their plant, establishes a critical control point, ensures that critical control point is monitored against the food inspection regulations, and if it's out of variance, it has to report that and do corrective action. Then the inspectors come in and audit how well that company is managing its program, and make observations, and so forth.
At the end of the day, the plant itself is rated on how good of control it has. Is it an A plant or an excellent plant, a good plant, a satisfactory plant, or a failed plant? Then if you are an excellent plant, you benefit, because in terms of your export certificate you only have to have, for example, one in ten signed by a food fish inspector - if you're satisfactory, every one.
So the bottom line is that at the end of the day there can be discrepancies or disagreements between how the plant feels their plant is operating, the reports it's identified, and how the inspector rates it and at the end of the day rates the plant, which then of course has direct economic impact.
So if there is that disagreement, we have an appeal system whereby the company can write to the area director of inspection and say I disagree with this assessment of the operation of my plant and these are the following reasons. Then that appeal is heard.
What we've also incorporated is that then on that appeal there's a decision made and a summary description of the issue and a summary report of the decision. That goes out through a system, both to fish inspectors throughout Canada and to the industry, and then it's for us to, if you will, absorb that issue and then try to have... Whether it was a decision taken in Moncton, New Brunswick, and it has a particular issue, it also should affect the system in Corner Brook, Newfoundland.
So what we're trying to do through the appeal system is have that transparency but also, very importantly, to ensure that across Canada fish inspection and the rating of plants, the rating of what's a deficiency and how you go about it, has a consistent approach. Because one of the real problems we have in fish is that the Newfoundland fish plants feel that their inspectors are tougher than the fish inspectors in New Brunswick or in B.C., and somehow they're all in cahoots and whatever.
By having that appeal system in there, having it transparent, having the results available to the fish inspectors, having the results available on a confidential basis to the fish industry, first it tries to take away that mystique of interregional rivalry, and also, at the same time, it helps us keep educated and constantly improve our system. In other words, was the final decision the right decision or not?
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The Vice-Chairman (Mr. McKinnon): I thank you, sir.
Mr. Hoeppner, you're next on the list.
Mr. Hoeppner: Thank you, Mr. Chairman.
It's a pleasure hearing your presentation, sir. I agree with a lot of it.
I was really astounded when I heard that we are importing $1.3 billion worth of raw product. Does this product come in frozen? How is it imported?
Mr. McGuinness: It's $1.3 billion in total imports, which includes value-added products and the full range of fish and seafood you see on Canadian shelves. A certain portion of that is basically being imported, quite a bit of it in, say, groundfish in terms of frozen fish, headed and gutted, for further processing in Atlantic Canada or in the Pacific as our own domestic resources in certain species have declined.
So that $1.3 billion is the total. It would include, for example, fish sticks and fish portions - the full range of fish and seafood products.
Mr. Hoeppner: You don't have a breakdown of what is raw product and what is not.
Mr. McGuinness: I do have a breakdown, but not here. I can follow up on that and send it to you.
Mr. Hoeppner: When this raw product does come into the country, I imagine it has been inspected - or do you have to reinspect it?
Mr. McGuinness: If it's raw product, if you will, or frozen product going into a plant for further processing, and that plant has a mandatory quality management program, it does not need to be inspected by Fisheries and Oceans. Part of that mandatory program is that once that product is brought into the plant it's identified in the current system as a critical control point. It therefore has to be inspected by the plant.
So that type of checking in our system has moved to the responsibility of the plant where in fact the plant is part of the mandatory system. If it's just being imported by an importer without any direct connections with a plant, then it's subject to a random possible checking. The Department of Fisheries and Oceans has to be notified of the importation, there's a $50 fee for the notification, and then the importer is advised as to whether he has to detain that product to be inspected by Fisheries and Oceans or he has been approved to enter it into the distribution chain.
Mr. Hoeppner: I always think back to the big tuna scandal, and how that ever could have happened. This is what interested me when you said you were bringing in raw product to process. I'm sure you have to take all kinds of precautions to not get tainted product.
Mr. McGuinness: Right.
Mr. Hoeppner: As well, have you ever kept track of what your actual inspection costs would be compared with operating costs? I imagine you don't pay for all these inspection fees, but you will sooner or later.
Mr. McGuinness: In terms of inspections by Fisheries and Oceans, I think the budget now is $25 million. I think the cost-recovery element is about $6 million on top of that. So fish inspection in Canada is about $31 million, of which I think we're paying $6 million.
Mr. Hoeppner: So there's still a big chunk to come if you're going to go completely to user fees.
Mr. McGuinness: Now you appreciate our concern.
Mr. Hoeppner: Can you handle that, I wonder, and stay competitive?
Mr. McGuinness: The thing is, we've dropped from the number one exporter to the number five exporter. We're an industry the financial report will show is marginally, if at all, profitable. An additional $25 million is not in the industry at this point.
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Because we are an international industry, to a large extent our prices are dictated by the international marketplace. If fish inspection is going to cost another 10¢, the marketplace is not going to pay the 10¢. The only way we can stay alive and pay that 10¢ is through introduction of new technology, replacing labour with capital, and things of that nature.
So it does have an impact. You always adjust, but the manner in which you adjust is basically to try to survive and try to figure out how you can absorb the mandated extra 10¢ when you don't have 10¢ in profit margins.
Mr. Hoeppner: I'm wondering about this importation of raw product. Has it had something to do with the devastation of our ground fisheries that you've had to supplement your processing plants with imported product? Do you see that changing if our ground fishery is rejuvenated?
Mr. McGuinness: Definitely, particularly in groundfish and Pacific salmon. With the decline in resources we've had, our companies, which always were international companies, but mainly international exporters, are now becoming really international, in the sense of importing frozen blocks of groundfish for further processing in Canada.
As our groundfish rebounds, certainly we feel that will subside. There's no question you are better off buying fish as close to the water as possible for intrinsic quality reasons and for food safety reasons. There's an inclination to do that.
The problem we've had in the marketplace is that where we've lost a lot of quantity is in cod, and the marketplace right now has found very good substitutes in Alaska pollock and various forms of hake products, which have a significantly lower price. We are now supplying that product to world markets. Whether we'll be able to purchase cod products from Canadian fishermen at that low price is questionable. So the reduction in that type of supply or importation will not be as great as...
The Vice-Chairman (Mr. McKinnon): Mr. Hoeppner.
Mr. Hoeppner: Do provincial guidelines or standards also affect you?
Mr. McGuinness: No. That's the big difference between us and the agriculture industry. If you're in the fish industry, you're generally an exporter. You're either exporting out of the province or exporting out of the country. At that point you fall into the gamut of federal responsibility. So the provincial government role in the fish and seafood industry, for processors, in food inspection and all that sort of stuff, is minimal.
The Vice-Chairman (Mr. McKinnon): Mr. McGuinness, might I say to you I think you've raised enough issues that maybe we need to bring back the departmental officials and check on some of the concerns you have raised. I'll be making that suggestion to our people here today.
Secondly, I think you've raised some very interesting concerns about the public good versus the private. On another occasion I would be interested in hearing your definition of the public good, but we are running out of time today. If you would like to think about that and send us your opinion of a definition, and perhaps even your criteria for assessment, we would like to have them.
Anyway, I thank you very much. I think we all agree you've come with a very well-researched position and we're receiving the benefit of those labours.
We'll take a one-minute break.
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The Vice-Chairman (Mr. McKinnon): We will resume our deliberations.
On behalf of the committee, it's a pleasure to welcome the executive director of the Canadian Aquaculture Industry Alliance, Sharon Ford.
Madam, we have a limitation of 11 a.m. for this room, but we'll try to hear all the questions as well as your presentation.
I ask all persons to be brief and concise with their questions, particularly Mr. Easter, who has the lengthiest questions of our group.
Some hon. members: Oh, oh!
The Vice-Chairman (Mr. McKinnon): The floor is now yours, Madam.
Ms Sharon Ford (Executive Director, Canadian Aquaculture Industry Alliance): Thank you, Mr. Chairman. I'll try to keep my comments brief.
Thank you for inviting me here this morning. I appreciate the opportunity to speak to you on behalf of the Canadian Aquaculture Industry Alliance as you study Bill C-60.
Unfortunately, I do not have copies of my speaking notes this morning, but I will provide copies within the next couple of days in both official languages to the clerk and they will be distributed.
I want to start by giving you a brief overview of the Canadian aquaculture industry. It started on a major commercial scale in Canada less than twenty years ago and is now going on in all provinces in Canada as well as the Yukon Territories. Species farmed include salmon, trout, char, tilapia, oysters, mussels, clams and scallops, and other new species are being researched.
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The aquatic farming sector is organized into regional producer associations, with national associations in service sector areas such as feed manufacture, veterinary services, and research. CAIA is the national federation of all of these organizations.
Aquaculture represents many benefits to Canadians. The first and foremost is job creation. In less than 20 years, over 5,200 people have become employed in this industry across the country, and 90% of these are in rural areas. These are full-time, year-round, well-paying jobs, and they employ a significant number of youth in an expanding industry.
The current economic activity is around $300 million in production, supported by an equivalently valued service sector. It is a higher-valued commodity in New Brunswick than potatoes, and it is British Columbia's largest agrifood export. It is also a sustainable industry. It increases the productivity from our aquatic resources, growing more food in far less space than we have been able to do before.
It accounts for 17% of the landed value of seafood now in Canada, while occupying under 1% of our near-shore non-Arctic coastline, and utilizing under 1% of DFO's expenditures. It contributes to rural communities. It provides product for traditional fish plants to extend processing seasons. It provides the critical mass necessary to keep small communities functioning, and it provides a business opportunity and source of fish for native communities.
CAIA supports the formation of the Canadian Food Inspection Agency. This agency's mandate includes not only food safety and inspection, but plant and animal health programs as well.
We support it for the following reasons. We believe it will lead to improved food safety through the full implementation of the HACCP system in Canada, from the seed to the consumer. It will bring synergy in services by sharing expertise in food safety across all commodity groups. It will bring efficiency and administration and delivery in food inspection and animal health and plant health inspection services.
However, CAIA is concerned the legislation has excluded two services that are essential to food safety and animal health in our business. The first of these is shellfish monitoring programs for food safety purposes, and the second is fish health and quarantine and inspection services. I'm going to describe to you first the shellfish monitoring program.
In addition to food plant inspection, a critical element in shellfish food safety requires the product be harvested from waters that are free of biotoxins, bacteria, and other contaminants. The federal government has two pieces of legislation that are pertinent to this. Under the Fish Inspection Act, it is an offence to process shellfish unless they are harvested from waters approved by the minister. Under the Fisheries Act, there are management of contaminated fisheries regulations, which provide the mechanisms to designate what approved waters are for shellfish food safety.
The policy document under these regulations is called the ``Canadian Shellfish Sanitation Program'', and this policy document provides protocols for doing water survey work and for classification of shellfish growing waters, for both sanitary or bacterial purposes and for biotoxin. DFO is mandated to designate areas and prohibit fishing in closed or unapproved areas, either permanently or temporarily.
The Canadian shellfish sanitation program is currently jointly administered by Fisheries and Oceans, under its inspection directorate, and Environment Canada. Environment Canada is responsible for carrying out the bacterial surveys and for classifying those areas according to water quality based solely on bacterial levels. Areas under this program must be tested every one to three years, depending on level of risk.
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This is an important program for the aquaculture industry, because if areas are not classified or if they miss their survey year, they are automatically closed to shellfish harvest. To be reopened they must go through three years of testing. For aquaculture industries this is very important, because we have our sites in a fixed location. We can't just decide to move down the beach.
It's important to emphasize that these particular water quality classification services that are offered by DOE do not relate to their environmental protection mandate. Although closures result from environmental pollution - i.e., sewage - the water quality program itself is clearly related to protecting food safety.
The other part of the sanitation program is the biotoxin surveillance program, which is operated by DFO's inspection directorate. Closures for reasons of high biotoxin levels are temporary, and areas are reopened when biotoxin levels drop to acceptable levels.
It is CAIA's understanding that the biotoxin surveillance program will be going to the food inspection agency, along with the rest of DFO's fish inspection services, but that the water quality classification will remain with DOE. We are concerned that this continued division in delivery of services will lead to protracted inefficiency in service delivery at the expense of the industry's production in some areas and growth across the country.
Already in 1996 some aquaculture operations were threatened by the withdrawal of these services because of government budgetary cutbacks. The departments had to struggle to find ways to save dollars or work with industry to develop manageable alternatives. Although eleventh-hour solutions were found, the industry needs to be assured that in the future these essential food safety services will be available and that they will be efficiently delivered at a price the industry can afford.
A recent industry-government workshop on impacts of regulations on aquaculture was facilitated by Industry Canada and Treasury Board. It identified the following benefits to industry of amalgamating the biotoxin and water quality services under the new agency: improved coordination of the food safety program; lower compliance costs for the industry; lower costs of administration and service delivery on the government side; and cost recovery eventually, to the cost to industry.
The benefit of linkage to the Canadian Food Inspection Agency is that the agency will include the priority food safety issues under the agency that is responsible for food safety and HACCP programs. This goes back to the concept of HACCP, which acknowledges that food safety doesn't start just at the processing plant door, but starts from the seed, or on the beach, or in the water.
Another benefit will be closer links to the rest of food safety issues, and closer links to an agency that has as an operating philosophy the goal of assisting business to realize production opportunities while maintaining product safety.
For those reasons, we feel that the shellfish monitoring programs - both of them - should be included under the mandate of the new agency.
A second area of concern is that the fish health quarantine and inspection services have been omitted. The federal budget stated that all animal and plant health quarantine and inspection services would be transferred to the new agency. As it now stands, all animal and plant health inspection and quarantine regulations will be included in the mandate, except fish. And the last time we looked, fish were animals.
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It should be noted that the Health of Animals Act, which will be administered by the new agency, doesn't define ``animal'', and as such, by definition, does include fish. However, under the Fisheries Act there are separate fish health protection regulations. These were developed in 1977 in response to concerns that fish released from hatcheries might spread diseases among wild fish populations.
The regulations were enacted when the aquatic farming industry was in its infancy, and therefore, unlike the Health of Animals Act, they do not reflect the needs of a farming business. At the time, the bulk of fish movements were from public fish hatcheries for enhancement purposes.
Moving these services under the agency will ensure that aquatic farming is regulated by an agency that is experienced in farm disease control needs and has day-to-day experience in the management of similar problems in other agriculture production industries.
It will facilitate the inclusion of aquatic animals in future international animal health regulatory agreements negotiated by the new agency. It will provide the aquaculture industry with access to a centre of expertise in risk assessment, in quality assurance and control and in specific disease diagnostic techniques.
It will separate scientific and regulatory functions in fish disease management, with science still acting as a resource in developing control programs. It will increase the profile of fish issues within the agency and within its food inspection programs.
It will substantially increase disease control resources in the event of an emergency situation. It will also increase federal-provincial coordination in maintaining fish health programs, as there will be substantial communication on inspection issues related to the Canadian food inspection system.
It will facilitate consistency in disease control programs across all animal and health production industries. And finally, it will facilitate national consistency in implementation of animal disease control programs through our access to animal health offices, laboratories and ports of entry.
In summary, our recommendation to the standing committee is that the committee amend the proposed legislation, specifically clause 11, to bring in all of the Canadian shellfish sanitation program, including both biotoxin surveys and bacterial water quality classification, and to bring the fish health protection regulations under the mandate of the agency. This will ensure that aquaculture products have the services and tools necessary to meet the same high safety standards as other food products.
Transferring the responsibility will also allow the government to meet its commitment to food safety and improved and more efficient services, at lower cost to both government and industry.
This change can be made easily at this point and will provide lasting benefits for Canada and its aquaculture producers.
Thank you.
The Vice-Chairman (Mr. McKinnon): I thank you very much.
We'll start with Mr. Landry for the questioning.
[Translation]
Mr. Landry: Thank you, madam Ford, for being here. You talked about your concerns related to the shellfish sanitation program and said that it was under two federal laws. I thought it was one provincial law and one federal law, but I heard you talk about two federal laws.
I would like you to explain a little more in detail these two pieces of legislation, since to me, there seems to be conflict or duplication.
[English]
Ms Ford: If this seems complicated, it took me a while to sort through this when I first came into this agency.
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I was talking specifically about two federal pieces of legislation. The first is the Fish Inspection Act. This has a section that makes it an offence to process shellfish unless they are harvested from approved waters. The second piece of legislation then defines what closed waters are, and this is done under the Fisheries Act. I believe the reason it's done under the Fisheries Act is the Fisheries Act gives the government the right to prohibit fishing in certain areas. That's basically what the Fisheries Act does. It says under these conditions, these areas will be closed. So the regulations are the management of contaminated fisheries regulations.
The policy document that then outlines why areas can be closed and how you test to determine whether they're safe for harvesting of shellfish is the Canadian shellfish sanitation program. The provincial government would come in only, as it does with all other food inspection, when a product is moved intra-provincially.
[Translation]
Mr. Landry: A few years ago, people died after having eaten mussels. Which law was applicable at the time?
[English]
Ms Ford: You would have to trace back why there was a failure in the food inspection system. This is one of the reasons we would like to see all the administration for this brought in under the new agency.
You would have to determine whether it was something in the processing plant procedure or whether the mussel had actually been harvested from an area where it should not have been. Or, in the case of mussels a few years ago, some survey work that should have been done may not have been done.
For bacterial reasons, all waters in Canada have to be classified as either open or closed, but for bio-toxins - and I'm not an expert in fisheries services provisions - I believe it's done on a risk-based approach. They test some waters where they think there's a reason or likelihood that bio-toxins will increase, but at the moment they don't test all waters routinely for biotoxins.
So it could be for any one of three reasons, I guess. We would like to see them all linked together under the management of one agency.
The Vice-Chairman (Mr. McKinnon): Do you have further questions, Mr. Landry?
[Translation]
Mr. Landry: You talked about section 11. Could you tell us briefly what elements and what wording you would like to include in that section?
[English]
Ms Ford: I would like to see the agency made responsible for the administration and enforcement of the Canadian shellfish sanitation program and the fish health protection regulations. Ideally, in the long run, we would like the fish health protection regulations brought in under the Health of Animals Act, because that would eliminate duplication between two acts, but for the purposes of this agency, that's what we would like.
[Translation]
Mr. Landry: Thank you, madam Ford.
[English]
The Vice-Chairman (Mr. McKinnon): Mr. Hoeppner.
Mr. Hoeppner: Welcome, Ms Ford.
When we talk about aquaculture, it's fish farming, right?
Ms Ford: Yes.
Mr. Hoeppner: Can you tell me how much of that is fresh water and how much of it is salt water, and what the difference is?
Ms Ford: Approximately 80% to 85% would be salt water; the rest would be fresh water, and it would be trout and some new species such as tilapia and char, which is coming online. If you'd like, I can provide you with a detailed breakdown.
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Mr. Hoeppner: I have a follow-up question on that. You're talking about water contamination. Are you talking about salt-water contamination in the majority of issues, or is it freshwater?
Ms Ford: The water quality issues are related to shellfish. Shellfish is grown in Canada only in marine waters, so it's strictly a marine water situation.
Mr. Hoeppner: That's salt water?
Ms Ford: Salt water, yes.
Mr. Hoeppner: By what I gather, if you have contaminated water, somebody hasn't been doing his job. It's either Environment or Fisheries and Oceans. How can we do something to give these guys a poke in the rib to do their job?
Ms Ford: That's an important issue for our association, actually: the contamination of growing waters by sewage and the fact that this contamination is spreading. We would hope one of the outcomes of bringing the shellfish monitoring programs under this agency is that under the Canadian food inspection system program that's going on right now, the joint federal-provincial initiative to look at bringing together federal and provincial regulations, they would have this as one of their priority areas. They're looking at maybe seventeen areas right now where there's a joint federal-provincial role. We would like to see redress of sewage contamination come in as one of their areas, because it does impact on food safety and our ability to produce food in Canada.
Mr. Hoeppner: I'm wondering how you can get a functioning salt-water fish industry or aquaculture if you can't get harmonization or get provincial and federal governments to agree. It seems to me here is where your problem is. There is conflict because development is provincial, probably, and they would like as much as they can, but also it contaminates water.
I have another question relating to that. If it affects aquaculture and the salt-water industry, doesn't it also affect the groundfish industry?
Ms Ford: On your first point, although sewage contamination of waters is a concern for the industry, I want to point out that in Canada we are very lucky in having miles of coastline that are -
Mr. Hoeppner: Uninhabited.
Ms Ford: Well, the sewage is controlled or there are aren't as many people. Although it's an issue in some of the best growing waters, we do have miles of coastline.
Coastline has to be surveyed regardless of whether it has been found to be contaminated in the past. This is a routine program. To remain open, areas have to go under survey at least once every three years. That's an important point too.
Sorry, your last point was...?
Mr. Hoeppner: It's also affecting the groundfish industry somewhat, probably.
Ms Ford: Right. Shellfish are somewhat unique in that they filter water and they pick up contamination internally that groundfish and salmon and other species don't. So it's not the same hazard. Also, your fish can be offshore. Although it's on the outside of fish and probably in very highly contaminated areas, it can be a problem on the outside of fin fish. It's not generally.
Mr. Hoeppner: When we go to a cost-recovery program, when it's Environment and Fisheries and Oceans not doing their job and you are going to be shouldered with this cost of getting your waters okayed by government agencies, you'll have a tremendous cost to bear. Can you accept that type of cost?
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Ms Ford: Yes, it's a cost. And we will be working actively... We already have some stewardship programs to try to do community-based prevention of the spread of sewage pollution. It is a concern. It does add a cost burden. We'd like to see it resolved.
Mr. Hoeppner: Thank you very much.
The Vice-Chairman (Mr. McKinnon): Mr. Easter.
Mr. Easter: I just want to point out to Mr. Hoeppner that it isn't just the Department of Environment and the Department of Fisheries and Oceans, Jake, where there's a problem. It can't all be blamed on them. We've had some instances in P.E.I. where the infrastructure works program really was beneficial in cleaning up some harbours. So there are other things that can be done. Now we have some harbours that can move into the aquaculture industry that couldn't before because we needed other public policy initiatives to clean up those waters.
Welcome, Sharon. From my perspective, the aquaculture industry is probably one of the industries in Canada with the greatest potential, bar none. If you look at what Chile's doing and other countries around the world... We have tremendous inland waters and coastal waters where this industry can develop and grow. And we are certainly making some moves in this particular act, but I've had a concern for a long time on aquaculture and where it's placed. I'd like your point of view on this. To me, it's misplaced in the fisheries and oceans department because, really, the aquaculture industry is fish-farming. The fisheries and oceans regulations look at the habitat in the seas and at the wild fishery, whereas aquaculture is really concentrated farming, something like Murray and his chickens -
Some hon. members: Oh, oh!
Mr. Easter: - with feeding, keeping records, nutrition, health matters, etc.
I'm wondering if some of your concerns over this particular act and legislation are about what's missing in terms of transferring some of the fish health and quarantine services act, the shellfish monitoring, etc. Could it be solved by moving aquaculture out of the fisheries and oceans department and into agriculture? What are your views on that whole scenario? I don't want to get the fisheries and oceans department mad at you, but -
Ms Ford: You're putting me on the spot.
We do see aquaculture as aquatic farming, and we do see strong links to the services that are offered by agriculture to the farming communities. We also recognize that a decision was made a few years ago that because we farmed fish, we were more linked to fisheries than to land farming, and our mandate is with the fisheries and oceans department right now.
But we are concerned. There has been great difficulty with the department meeting the commitments made under the federal aquaculture development strategy announced a year ago.
We are not concerned so much with jurisdiction as with access to the action and the services that we need. So it makes the question difficult. Yes, in order for this industry to reach the potential that it has, we do need access to the same services and management tools that the agricultural community has and has been fortunate enough to take for granted for quite a number of years. And how that's done exactly...we leave that up to the government to decide. But yes, we do need access to those services.
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Mr. Easter: Sometimes the grass looks greener on the other side of the fence, you know. There are some of us who are farming who are not all that happy with Agriculture Canada and their services either.
A voice: What services?
Mr. Hoeppner: I wonder who.
Mr. Easter: Certainly not me, Jake.
In regard to the costs now, the Environment Canada costs in terms of testing every three years, it's the responsibility of Environment Canada. We certainly don't even look at that in this particular act, and maybe we should. We can look into it. But who covers those? How are those costs covered now? Is there cost recovery for the agriculture industry in that area? Is it covered under the Department of Fisheries and Oceans, or just how are those costs covered?
My last question: Is there any duplication of services now? There's basically, say, three areas in testing water. Is it possible, for instance, out of any port, for there to be Environment Canada going out to do a check on the toxins, DFO going out to do a check on their areas of responsibility, and say a provincial fisheries department going out to do a check on whatever they check on? Is it possible for three boats to be leaving the harbour at the same time and you people being charged for the costs?
Ms Ford: I'll start with the last question first. Yes, that exact situation has happened. This is what is concerning the industry, because the services are separated between two different departments, each of which has its own budget, by the way, but who are both heavily into cost recovery. As I mentioned earlier, services have been threatened. Basically, the industry has been told in certain areas that because there is no money in the budget, essential services will not be provided by the government, and the industry has...
It's a difficult one. It's not cost recovery per se because they don't have the legislation to allow cost recovery. But the industry has had to pick up the cost of certain services at the last minute in order to be able to keep their operations open.
We feel that by bringing the services under one umbrella we will avoid the situation that happened this past summer in P.E.I., where there were three boats going out in the same harbour, each doing water quality sampling, each related to shellfish food safety. We feel that kind of duplication is unnecessary and it hurts not only government budgets but industry when it comes time for cost recovery.
The Vice-Chairman (Mr. McKinnon): The testing is necessary, but the manner in which it's being conducted is unnecessary.
Ms Ford: Yes, exactly. We would not want to lose the testing. We feel that it's an extremely important part of food safety.
The Vice-Chairman (Mr. McKinnon): I only have one more questioner on my roster, and that's Mr. Calder.
I'll come back to you, Mr. Hoeppner, after Mr. Calder.
Mr. Calder (Wellington - Grey - Dufferin - Simcoe): Thank you very much,Mr. Chairman.
Sharon, I had a chance this year to go out to New Brunswick and take a look at aquaculture because I was very interested. I didn't understand it, so I wanted to find out about it. In regard to what Mr. Easter is talking about, I am a poultry farmer, so I know what it's like to have things in a very small space, concentrated, and the problems with disease and everything.
On the farms I toured, I found that the ultraviolet to purify the water... It's oxygenated; it's everything else. It's an absolutely sterile environment these fish are in. I saw 40-foot and 80-foot tanks with anywhere from 500,000 to a million fish in them. This is where I think you're probably talking about a problem with the food inspection department in one, and water inspection in another one.
Is there a problem when you bring the fish out of the controlled environment and put them back out into mother nature? Obviously they haven't been challenged by any disease or anything else like that. Does your industry find that a problem?
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Ms Ford: It can be a problem in that wild fish are a source of disease to farm product. Our experience is that, similar to farming, good husbandry and farm management practices can result in minimal losses due to disease. We do employ such things as vaccination for diseases that are known to be endemic to the local waters.
So vaccination for diseases of major concern have been very effective, and we're working on others all the time.
Mr. Calder: This would probably be one of your big concerns, then, with food inspection and water inspection being in two different departments. In your situation, you would want them in one department, where these people are talking to each other all the time. That would probably be the issue there.
Ms Ford: Exactly.
Mr. Calder: Okay.
I see it as an industry that has a very bright future. By 2020 we'll have to somehow feed 8 billion people. In my own industry, our feed conversions are 1.8 or 1.9 to 1, and your feed conversions are 1.2 to 1. Mr. Easter, with his cattle, would probably just be dreaming about feeding cattle at that rate.
Thank you very much, Mr. Chairman.
The Vice-Chairman (Mr. McKinnon): Mr. Hoeppner.
Mr. Hoeppner: Thank you, Mr. Chairman.
Ms Ford, I've been to Prince Edward once, and I've seen the size of it. Don't you think we could cut our cost recovery quite a bit by eliminating three of those MPs and having one instead of four?
Some hon. members: Oh, oh!
The Vice-Chairman (Mr. McKinnon): Anything else, Mr. Hoeppner?
Mr. Hoeppner: No, that about covers it.
The Vice-Chairman (Mr. McKinnon): Oh dear. That's now political recovery for you,Mr. Easter.
You made reference, Ms Ford, to the eleventh-hour solutions found in passing. I just wondered what those were. Was it the water quality? Was it the bacteria assessment?
Ms Ford: It was on the west coast of Vancouver Island this year. Fisheries and Oceans and the Department of Environment with their water quality programs both came at the industry separately, requesting cost-recovery initiatives. It wasn't exactly cost recovery; as I said, they didn't really have the mandate or a mechanism to cost recover. All they said was, if you don't pay for these services you won't have them, and you won't sell your shellfish.
That was the situation on the west coast. It occurred with both at the same time. The industry was forced to deal with each one separately. This took a lot of our time and a lot of their time. We had to come up with two different solutions to basically the same food safety issue.
The Vice-Chairman (Mr. McKinnon): Since Mr. Hoeppner and I are the closest of anybody here to the west coast, we hear concerns about municipal coastal sewage, or lack of sewage treatment, in some communities out there. As cities are growing on the west coast, particularly in the lower mainland, has this had an impact on the ability of the aquaculture industry to sustain itself?
Ms Ford: There's a concern not so much on the lower mainland, which has been out of production for quite some time, but on Vancouver Island, where areas were clean before, and open. Now the encroaching housing developments along the shoreline and the movement from seasonal cottages to year-round houses has created sewage pollution in some areas. It is creating a concern. We have a number of companies that may have to relocate at some point if we don't find a solution to resolve this.
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The Vice-Chairman (Mr. McKinnon): This is a problem of sewage collection as much as anything, is it not, with some of these very lightly populated but geographically spread-out communities on Vancouver Island.
Ms Ford: They're not so isolated any more. It's changing rapidly. But yes, we think there are solutions to it. It's a matter of creating the will to control it. As I mentioned earlier, members of our industry are actively involved in stewardship programs to try to address the sewage pollution in key areas.
The Vice-Chairman (Mr. McKinnon): Right.
Mr. Easter.
Mr. Easter: On the question of services that are essential to the aquaculture industry, what's your suggestion on how you get around that? I know of cases with federal Fisheries and Oceans in P.E.I. where we've had the industry volunteer to cover some of the costs - not to pay for cost recovery but to pay some of the costs to keep certain services going. The year before last I think we had 261 aquaculture operations that couldn't get their permits reviewed, so couldn't get an operation, because of cutbacks within the Department of Fisheries and Oceans. It was ludicrous. There was a saving of about $70,000 on staffing to go out and do that job and the potential loss to the industry in production was $1.8 million. It was reversed this year, but we lost a year's production. It was just a matter of going out, surveying the sites, and doing them. But if you get on the health side, as you say, where you're not reviewing water quality or whatever and you could lose three years, then you have a real problem.
Do you have any suggestions on...? If it's air traffic controllers, for instance, we don't allow air traffic controllers to go on strike. There are those kinds of things. How do we ensure government agencies provide essential services?
Ms Ford: I'll speak just from the point of view of aquaculture. I think the lead agency for aquaculture has to have a clear economic mandate. In other words, it has to have a mandate beyond just conservation and protection of fish. It has to believe it has the responsibility to support businesses and to provide the services businesses need in order to operate. It's a commitment to economic development or economic activity. We feel Agriculture clearly has that under the agriculture acts. We feel it is less clear with Fisheries and Oceans.
How you bring that accountability in is a very valid question. We will be making a presentation on the Federal Fisheries Act. It will address that to some extent under the Fisheries Act when the committee sits.
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The Vice-Chairman (Mr. McKinnon): There being no other questions, I would like to add my thanks to you, Ms Ford, for your presentation and your delicate assessment of how government and industry should be working together. I think that was well done in the closing remarks. Thank you very much.
The meeting is adjourned.