AGRI Committee Report
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In June 2002, the Standing Committee on Agriculture and Agri-Food released its report, Labelling of Genetically Modified Food and its Impacts on Farmers. The Committee's efforts and report are both timely and helpful in contributing to government and public understanding of many of the issues related to the labelling of genetically modified foods.
The recommendations contained in the report are consistent with the goals of the Federal-Provincial-Territorial Framework Agreement on Agricultural and Agri-Food Policy for the 21st Century, which was signed in June 2002. This agreement has set the stage for the implementation of the five-year Agricultural Policy Framework, a national agreement focussed on the long-term profitability of the sector, and is aimed at ensuring that the Canadian agriculture and agri-food industry is the world leader in food safety and quality, environmentally responsible production, and innovation. The Agricultural Policy Framework as a whole seeks to make certain that farmers and the agricultural sector have the tools to be responsive to consumer and market demands.
In the Government response to the Committee's third recommendation, on segregation and tracking systems, there is specific linkage to the Agricultural Policy Framework.
The Committee recommends that the government continue to develop a standard for the voluntary labelling of food derived from biotechnology. That standard should use a narrow definition of GMOs, as proposed in the draft standard produced by the Canadian General Standards Board.
The Government is committed to providing continued support for the development of a voluntary labelling standard for biotechnology-derived foods.
The proposed National Standard for Voluntary Labelling and Advertising of Foods That Are and Are Not Products of Genetic Engineering, currently being developed through the Canadian General Standards Board (CGSB) process with support from the Government, deals exclusively with the labelling of foods produced through the use of recombinant DNA and other closely related techniques – that is, those foods falling within the narrow definition of biotechnology.
Progress towards an agreed-upon voluntary labelling standard is being made. The approval and publication of the final standard could occur by early 2003.
Health Canada and the Canadian Food Inspection Agency (CFIA) share accountability for food labelling policies under the Food and Drugs Act. Health Canada's responsibilities derive from its mandate for health and safety issues, while the CFIA is responsible for protecting consumers from misrepresentation and fraud concerning food labelling, packaging and advertising and for prescribing basic food labelling and advertising standards.
Health Canada is responsible under the Food and Drugs Act and Regulations for food labelling dealing with health and safety matters. Where Health Canada pre-market safety assessment of a biotechnology-derived food indicates a significant nutritional or compositional change, or the potential for safety concerns such as the presence of an allergenic component that can be mitigated by labelling, Health Canada would require special labelling to alert consumers. The Committee's report addresses an issue of consumer preference rather than one of health and safety.
Food companies may label food on a voluntary basis as to whether or not their products have been derived from biotechnology, as long as the label is not misleading or deceptive, the claim itself is factual, and all other regulatory requirements have been met. Voluntary labelling approaches have been taken previously in other food categories such as halal.
Both the Royal Society of Canada's Expert Panel on the Future of Food Biotechnology in its report Elements of Precaution: Recommendations for the Regulation of Food Biotechnology in Canada (February 2001) and the Canadian Biotechnology Advisory Committee in its report Improving the Regulation of Genetically Modified and Other Novel Foods in Canada (August 2002), have indicated their support for the Government's voluntary approach to biotechnology-derived food labelling.
The Committee recommends that the government intensify research into the benefits and risks to human health and the environment of agricultural products derived from biotechnology, and bring forward a public information program.
The Government agrees that research related to agricultural products of biotechnology, health and the environment is essential to ensure that products of biotechnology continue to be properly assessed.
Canada has a rigorous, thorough and science-based regulatory system that ensures the products of biotechnology in the marketplace are safe for humans and the environment. To ensure the continued integrity of this system, the Government is developing scientific research strategies in order to be in a position to anticipate and address future issues, particularly in areas related to long-term human and environmental health.
In Budget 2000, the Government allocated $30 million per year specifically to boost the Government's capabilities and capacities for regulating products of biotechnology. A portion of this funding has been directed towards research to generate additional scientific knowledge, which will provide the basis for addressing regulatory challenges by facilitating timely policy development and product safety assessments, a strengthening of pre-market review capabilities, and inspection and post-market monitoring.
The Government's response to the report of the Royal Society of Canada Expert Panel on the Future of Food Biotechnology noted that several departments including Health Canada, the Canadian Food Inspection Agency (CFIA), Environment Canada, and Agriculture and Agri-Food Canada (AAFC), are building on existing knowledge by undertaking research on the human health and environmental impacts of agricultural products of biotechnology. Examples of initiatives include:
The Government also recognizes the importance of a public information strategy. For example, the implementation of the proposed federal research strategy on the ecosystem effects of GMOs would include a specific component for mechanisms to disseminate results of these studies. Currently, the public is able to obtain (in web-based or paper formats) information about the potential risks and benefits of agricultural products of biotechnology. This includes decision documents for GM crops and derived foods, and livestock feed approved in Canada, as well as baseline data on Canada's crops, soils, and ecosystems.
The information products resulting from the Government's commitment to increasing transparency and providing more information to the public will be part of a coordinated program designed to complement and enhance existing government sources of information.
The Committee recommends that the government assess the additional costs, particularly for farmers and consumers, of implementing segregation and tracking systems, which are necessary for the labelling of GM foods, and report to the Committee and the House of Commons.
The Government agrees that both the Government and the agriculture and agri-food industry must understand the costs and benefits of investing in segregation and tracking systems given the increasing pressures to put such systems in place.
The Government believes that the development of a voluntary labelling standard, in combination with federal-provincial-territorial programs which support industry-led cost assessments of traceability and identity preservation systems, is the best solution to addressing market issues and demands. Industry's decision to label rests on a commercial assessment by each company as to whether investing in systems is wise based on buyers' requirements and willingness to pay. By their nature, these are complex, subsector-specific assessments that need to be made on a company-by-company and a product-by-product basis, and governments are not well placed to make them.
Acknowledging this, Federal, Provincial and Territorial Ministers of Agriculture noted the importance of providing support for investment in such systems, and agreed in the Framework Agreement on Agricultural and Agri-Food Policy for the 21st Century (June 2002), to provide funding and technical support for development of traceability and identity preservation systems along the agri-food continuum to the retail level. A voluntary labelling system will allow commodity organizations and companies to do their own analyses, make their own business decisions, and develop their own strategies based on their buyers' (and ultimately consumers') requirements.
To help facilitate a consistent approach, AAFC has engaged a team of Canadian academics to develop a model for the evaluation of costs and benefits of identity preservation, segregation and tracking systems. This work should provide an analytical framework for all industries in Canada, including those producing biotechnology-derived foods. The framework is expected to be available in early 2003.
A number of companies and industry associations have already moved forward with segregation and tracking systems. Some of these efforts have been private initiatives. Others, such as that of the Canadian Cattle Identification Agency, which requires tagging of every beef animal by farm of origin, are national efforts being undertaken with the support of governments.
Agriculture is moving increasingly towards the use of segregation, traceability and identity preservation systems in specific sectors, in response to regulatory requirements and buyer demands worldwide. Under the Agricultural Policy Framework, the Government will continue to support industry-led initiatives in a federal-provincial-territorial context.
The Committee recommends that the government assess the trade implications of mandatory versus voluntary labelling of GM foods, and report the results of this assessment to the Committee and House of Commons.
The Government agrees that there are significant trade implications associated with mandatory labelling, and does assess these on an ongoing basis. Our assessment is outlined below.
Canada's long-standing food labelling policy has been to require labelling where safety concerns, such as allergenicity and compositional or nutritional changes, are identified and can be mitigated through labelling. In addition, the policy permits manufacturers to label food as biotechnology-derived or not biotechnology-derived on a voluntary basis, as long as the label is truthful and not misleading. This approach is consistent with Canada's international obligations.
The WTO and NAFTA agreements contain provisions related to labelling. Members are required to ensure that labelling regimes are not discriminatory and do not become unnecessary obstacles to trade.
Canada has consistently taken the position that mandatory labelling based solely on the method of production (such as genetic modification through modern biotechnology) rather than on the characteristics or performance of the final product, could be used to discriminate arbitrarily against imports, leading to protectionism. In fact, mandatory labelling of non product-related process and/or production method could have negative trade impacts far beyond the food industry, on sectors such as mining, forestry, fisheries, other agricultural products and manufactured goods.
The Government of Canada recognizes that the provision of information to consumers is important, and for that reason, is working in international fora such as the Codex Alimentarius Commission and its Committee on Food Labelling to develop internationally harmonized guidelines on the labelling of foods derived through biotechnology. The Government is also working with stakeholders through the CGSB process to develop a Canadian standard for the Voluntary Labelling and Advertising of Foods that Are and Are Not Products of Genetic Engineering.
Commercial factors are also important to consider in assessing the trade implications of biotechnology-derived food labelling. Mandatory labelling could have a significant impact on Canada's economic and trade interests. While some of Canada's agri-food trading partners, such as Japan and the European Union, have implemented various versions of mandatory labelling, close to 70% of Canada's agri-food exports are to countries that do not have mandatory labelling requirements.
The adoption of mandatory labelling system by Canada could have a significant impact on its trade relationship with its largest agricultural trading partner, the United States (U.S.), which does not support mandatory labelling of biotechnology-derived foods. Canada-U.S. bilateral agri-food trade is valued at $28.9 billion a year ($16.6 billion in Canadian exports to the U.S., and $12.3 billion in U.S. imports to Canada). Not only is the U.S. Canada's largest agri-food export market, but Canadian agri-food industries and markets are highly integrated with those of the U.S. A disjointed approach with the U.S. on voluntary versus mandatory labelling could place both trade and investment at risk.
Furthermore, the increased costs associated with mandatory labelling would place Canadian farmers, food manufacturers and exporters at a significant disadvantage. Mandatory labelling would require all parts of the production chain to participate, regardless of the nature of their products or their customers' preferences.
On the other hand, as food exporters, Canadian agriculture and agri-food companies must be sensitive to a range of constantly changing consumer preferences. There are buyers in international markets who, in response not only to their respective regulatory environments but to their customers' demands, want products to be differentiated based on whether the ingredients are or are not derived from biotechnology.
As indicated in the response to the Committee's third recommendation, agriculture is moving increasingly towards the use of segregation, traceability and identity preservation systems in specific sectors, in response to regulatory requirements and buyer demands worldwide. The Government will continue to support industry-led initiatives in a federal-provincial-territorial context under the Agricultural Policy Framework.