:
I wanted to make sure the section on marketing choice was read into the record from the last time. I assume it has been, so we have that for the amendment.
There was a second issue that we had. Mr. Easter quotes Dr. Fulton, but he doesn't give a balance here. There is another expert who has been quoted, and that's Dr. Rolf Penner, so I would like to move a second amendment. In a commentary published last summer, “Dual Market Denial”, on July 26, 2006, Penner wrote, “The odds of successfully transitioning the CWB into an open market setting are extremely high.” I would like to have that added as an amendment to the paragraph that begins, “In November 2006”.
Third, we have a comment that needs to be made. I think there has been some misinformation left about the possibility of the board operating successfully with marketing choice. I just need to point out that in 1993 farmers were free to market their barley directly to the U.S. or through the Canadian Wheat Board for 40 days. I understand that there was more barley marketed in those 40 days than had been marketed in any year prior to that, and the board was able to make the adjustment. It did that and moved into that marketing choice environment very successfully.
Fourth, I want to point out to the committee, as I did before, that this is an incredible waste of our time. The ballots have already gone out. Farmers have received them and are actually mailing them back already. It's far too late for this motion to come forward now, and it's inappropriate. I don't assume that the Liberals are going to vote against it, but I would ask my colleagues in the Bloc and the NDP to consider the fact that this is irrelevant and that we really need to vote against it.
I want to add a third amendment, and that is that we take out the recommendations and replace them with: “The committee recommends the following: That the Minister of Agriculture and Agri-Food be commended for a balanced plebiscite question.”
:
I have just one other point that certainly confirms the remarks in the task force report that a dual market is not possible, and it confirms Mr. Fulton's statement that without the single desk, without the monopoly, the board is certainly powerless.
This morning in the House, the made this statement. For once we got some facts from him, and I'll quote him in full:
Mr. Speaker, the member should be embarrassed, he really should.
--he was talking about --
He was the minister in charge of the Canadian Wheat Board. He knows full well...that if we have choice the single desk is not in place, because by definition it cannot be.
We finally have it on the table, Mr. Chair, that if there's choice, there is no longer a single desk, and that is not what the ballot says. The 's own words confirm the fallacy of the questions that the has put forward in a plebiscite.
I'm absolutely amazed that the government side on the Standing Committee on Agriculture and Agri-Food would accept the contempt that the is showing for this committee—which has reported to the House and directed the House, with the House of Commons voting and supporting this committee in that recommendation to the House—by stating that the minister be allowed to bypass what this committee has recommended in terms of a vote.
Be that as it may, those are the facts. I will say I am pleased that the was finally direct this morning and said what really is the fact: that the single desk and the open market cannot exist as one.
Thank you.
:
Thank you, Mr. Chairman.
This is an issue that has no bearing on my riding, and it has no bearing on Mr. Easter's riding. But I'll tell you the one thing we both have in common. We want to look out for farmers.
When the Wheat Board issue about choice came up, I can remember talking to the minister at the time. My only wish that I wanted to make sure of here was that, number one, farmers had that right to choose for themselves, that they had a plebiscite. That's happening now, on barley anyway. The other was that the questions be concise.
I totally disagree with you, Wayne, when you say the questions aren't clear. How much clearer could they be? One states that you keep it the same way, the second one gives you choice, and in the other one you're totally opposed to it. How much clearer? It's as clear as a glass of water, in my opinion, Mr. Chairman.
This is nothing short of partisanship. Let's get on with it. The vote is happening out there. I understand that the ballots are coming back in, so let's cut out the tomfoolery and get on with it.
Good afternoon. I'm Kathleen Sullivan, the general manager of the Animal Nutrition Association of Canada.
ANAC is the trade association that represents manufacturers of livestock and poultry feeds across the country. Our members represent approximately 90% of the commercial feed manufactured in this country. We also own and operate the feed industry's HACCP program, FeedAssure. FeedAssure is a feed safety certification program that was developed specifically for the Canadian feed industry. It was the first feed industry HACCP program in North America, and one of the first in the world.
We very much appreciate the opportunity to meet with you today to provide feedback on the status of the enhanced feed ban that is scheduled for implementation this coming July 12.
In 1997 Canada introduced its first feed ban, a set of regulations that ban the use of ruminant meat and bone meal in all ruminant feeds. Last summer the Canadian Food Inspection Agency announced new regulations that would expand on that and ban specified risk material, dead stock, and downer cattle in all animal feed, including pet food, and in fertilizer. These changes are designed to provide additional controls against BSE by addressing the risks associated with ruminants inadvertently being exposed to materials that contain ruminant meat and bonemeal.
ANAC supports the enhanced feed ban. We believe quite strongly that a full ban is the simplest and most workable solution to further address the risk of cross-contamination in feed mills, and the only way to eliminate the risk of cross-contamination on farms.
We have been pleased to work with our industry partners and also with government officials on this initiative.
Throughout this process, ANAC has been a leader in its support for the new ban, and we will continue to be leaders in ensuring that the ban is implemented by July 12 of this year. In mid-March, for example, ANAC will launch a new website that features a communication campaign for commercial feed mills, educating them on the enhanced ban and reminding them of their commitments under the original 1997 regulations. Our material will include an educational component as well as interpretation bulletins on technical aspects of the new regulations. We hope this will be of use to our suppliers and also, very importantly, to our customers.
Through this enhanced feed ban, Canada has signalled its intent to eradicate BSE in as short a time as possible, and it is therefore imperative that the government and industry stand by the July 12 commitment. Having said that, it's also very important that this committee be aware of the extraordinary challenges that lie before this industry--and my colleagues here--and also government between now and July 12.
The enhanced feed ban is, in short, an immensely complicated initiative. It requires the active participation of the federal and all provincial governments across this country. That includes CFIA and Agriculture Canada and also the provincial ministries of agriculture, environment, and in some cases even health. It also requires a very high level of federal and provincial coordination, particularly in the areas of financial and other supports to industry.
The new regulations will also affect many different sectors: cattle producers, dead stock collectors, renderers, packers, feed manufacturers, fertilizer manufacturers, and the list really does go on.
In order to segregate SRM, as required under the new regulation, packers and renderers will need to invest in and execute significant infrastructure changes to their organizations. In addition, the ban will create the extraordinary challenge of addressing SRM disposal, as I'm sure many of you have already heard before. SRM will essentially, after July 12, have no value, but it will require that industry and government create and execute an effective disposal system.
In addition to making infrastructure changes and changes to procedures in virtually all industries, industries will also need to coordinate the timing of their respective activities to ensure that SRM is completely out of the supply chain by July 12. This is a very important point. If we want SRM off farms by July 12, we need it out of feed mills well in advance of this date, and this in turn will require that packers begin segregating SRM earlier still. All of this will need to be coordinated largely on a voluntary basis, because the regulations really come into effect for every industry on that July 12 deadline.
Recognizing these challenges, the Canadian Meat Council and ANAC commissioned a situation report on the enhanced feed ban, which I believe the Meat Council has tabled with the committee. This report was developed with input also from the Canadian Cattlemen's Association and the major rendering companies, including Rothsay, which is represented here today.
The report describes the practical realities of the feed ban, including the range of issues that need to be managed by July 12. First and foremost, the report recognizes the need for a staged implementation of the ban. For planning purposes, we have collectively recommended that SRM-free meat and bone meal be available for sale to feed mills by May 1 of this year. This will allow 11 weeks for SRM to clear through the supply chain and be cleared off farms. But this also means that packers and renderers and all disposal solutions need to be sorted out and in place before May 1, which is less than 11 weeks from today.
I want to be clear that we stand ready to do what is necessary to meet July 12. But it is impossible for industry to meet the deadline without swift government action to provide the necessary support. The situation report that we've prepared outlines the need for action in four key areas.
First is the confirmation and delivery of capital funding for plant equipment and transportation. For plants to build the infrastructure to segregate SRM, significant capital investment is required. In 2006 the federal government confirmed $80 million as part of a federal-provincial cost sharing agreement, but to date none of that money has flowed to industry in any province. Given the time needed for equipment to be ordered and infrastructure changes to be made, that funding needs to be delivered as soon as possible.
Second, we require clarification around specific regulatory and technical criteria in all the industries affected by the regulation. To adopt the procedures and requirements in the new ban, all our industries require some clarification from CFIA, and it's critical that we have that in place as soon as possible, so we can begin implementing the ban as effectively as possible.
Third, we still need to sort out short- and long-term solutions for SRM disposal. Disposal capabilities may very well be the biggest challenge in implementing the new ban. It will take time to build and to permit the permanent disposal infrastructure. Given this, there's no doubt that short-term or transitional measures will have to be put in place by July 12 and even before that, for May 1. Beyond the short term, we will also need to work together, industry and government, to identify long-term alternatives for disposal of this material.
Finally, we need to clarify short- and long-term support for disposal operating costs. Even if disposal options are available, we do anticipate that the cost will be prohibitive and will certainly have a significant impact on small processors and on dead stock pickup. To effectively achieve SRM disposal and keep the processing sector viable, it may be necessary to subsidize a portion of these costs.
A report was delivered to the Minister of Agriculture, to Agriculture Canada, to CFIA, and to every province across the country in early November. Since then we have seen a great deal of movement. We were very encouraged that in late 2006 CFIA established a task force to oversee coordination of the enhanced feed ban. We view this as a very positive development and we commend CFIA president and senior vice-presidents for taking leadership on this file.
Under the task force chair, Freeman Libby, the task force has set out a clear workplan and a plan for overseeing the ban and for coordinating with provinces and with industry. While ANAC is confident in the task force's ability, it's also clear that time is working against them. Even today, none of the federal-provincial funding agreements have been signed that we're aware of, and only one province, Alberta, has confirmed the details of its capital support program to industry. This makes it challenging for industry to implement the necessary permanent changes, particularly around SRM disposal.
It is increasingly clear that permanent SRM disposal infrastructure will not be in place across the country on July 12, let alone May 1, when we expect feed companies to stop purchasing the product, and if SRM-free material is not available on May 1, many feed mills will just stop using meat and bone meal altogether, making the disposal issues even more complicated. On July 12, feed mills will have no choice, obviously, but to stop using the product.
We're particularly concerned that SRM segregation and disposal must be made a priority, and if SRM disposal systems are not put in place, the entire feed ban will be placed in jeopardy.
Thank you very much.
:
Good afternoon, and thank you very much.
My name is Jim Laws, and I'm the executive director of the Canadian Meat Council here in Ottawa.
The Meat Council is Canada's national trade association of federally inspected meat packers and processors, established in 1919. The red meat processing and packing industry of beef, veal, pork, and lamb is the largest food processing industry in Canada, with total sales of $15 billion. Our industry employs over 45,000 people and is a major exporter of Canadian food products.
Our beef slaughter members include both large and smaller companies such as XL Foods, Cargill, Tyson, St. Helen's, Ranchers Beef, Levinoff-Colbex , Abattoires Z. Billette, Gencor, Delft Blue/Écolait, and Bellivo Transformation. They have invested millions of dollars in expanding slaughter capacity since BSE by almost 45%, from 75,000 to almost 110,000 cattle per week.
These companies, which represent almost 95% of the beef processed in Canada, are all federally inspected under the Meat Inspection Act of Canada. Veterinarians and inspectors are present in all establishments, and they follow strict rules under the meat inspection regulations and the manual procedures. Strict quality control measures are followed to provide safe and wholesome meat products to Canadians.
The Government of Canada published its proposed ruminant feed ban rules in the Gazette part I in December 2004. At that time the Canadian Meat Council and our Canadian Cattlemen's Association colleagues expressed our concerns that the proposals to amend the ruminant feed ban were not in step with those proposed by the United States. Specifically, Canada proposed the removal of all specified risk materials from animal feed, whereas the United States proposed a shorter list of risk materials to remove from older animals and from dead animals.
On June 26, 2006, Canada announced that it would indeed go forward with the full list of specified risk materials banned from all animal feed by July 12. The government also announced that it set aside $80 million to work with the provinces to assist industry's implementation of the plan. As of today, the United States of America has not yet published its final rule.
For animals less than 30 months of age, in terms of specified risk material, this can mean as little as two to three kilograms of specified risk material, the weight of a distal ileum. For animals greater than 30 months of age, the total weight of specified risk material can be as high as 40 kilograms per animal. The estimates vary widely based on factors such as the weight of the cattle and the ability of the packer to extract SRM with minimal additional tissue.
With over three and a half million head of cattle slaughtered every year in Canada and the capacity to kill over five million head, the volume of SRM that needs to be segregated and disposed of in an environmentally safe fashion is staggering. This involves a lot of commitment from the industry in terms of considerable changes in plant infrastructure, purchase of dedicated trucks, and investment in short-term and long-term disposal options for raw and rendered specified risk material.
The Canadian Meat Council members are very concerned that seven months have passed since the announcement of the new rules and only one province has announced the details of its program funding criteria. We had hoped the provinces would contribute an additional $50 million under fed-prov 60-40 funding agreements for this important animal health initiative that the meat processing sector is faced with, bringing the total funding to $130 million.
Beef and veal slaughterers and meat processors have their plans ready to segregate and stain ruminant specified risk material, but because of the considerable dollars that are required to be invested in the required plant and equipment, we have been waiting for the funding details from the provinces prior to committing to any plant improvements.
We have been working closely with the Canadian Food Inspection Agency on the specific rules and processes required to make changes to the manual procedures that will guide and direct our actions to slaughter and process in our facilities. We want to be ready and have all of our process-related questions answered to ensure a smooth transition to the new rules. We also want to clarify those processes to minimize the amount of material that is discarded along with the specified risk material, such as removing the distal ileum only, rather than the entire small intestine.
As Kathleen mentioned, we are very committed to meeting the regulatory deadline of July 12 to segregate specified risk material from the feed supply. The study we circulated to you earlier this week clearly indicates that we need to be ready to supply the feed mills. It indicates to us that we need to be ready by May 1. Our study indicated that full details of the program should have been made available to us by November 30, 2006, in order to make this deadline. Those ruminant feed ban enhancements that removed specified risk material required immediate action, as Kathleen mentioned--capital funding for plant and equipment; clarification on the rules, which have largely been clarified with the CFIA; immediate and long-term solutions for disposal facilities; and disposal operating costs.
As far as we're concerned, this is an extremely serious issue facing the industry. Many countries are expecting Canada to fully implement its ruminant feed ban enhancements by July 2007. Our BSE status at the OIE depends on it. We have already lived through the devastating impacts of closed borders and lost markets due to BSE, which cost our industry hundreds of millions of dollars.
We believe advocating for a delay in the implementation of July 12 is not an option for the Canadian beef industry. Standing back and doing nothing is not an option for the Canadian Meat Council. Most importantly, we must also fulfill the expectations of our customers.
We have sent a letter to the Minister of Agriculture expressing our concerns and requesting a two-year contingency plan that addresses the short- and medium-term disposal options for raw and rendered specified risk material. We have asked to meet with his staff as soon as possible to discuss this issue so that Canada can successfully meet its international obligations and our beef industry can comply with the July 12 deadline.
For example, we understand that some provinces currently are not fully engaged in discussions with the federal government, and claim they cannot participate in, or are not happy with, the funding they have received. We've been told that the funding must go through the provinces. The fact that there are different rules and eligibility criteria in each of the provinces causes us great concern. Ideally there should be one common set of rules applying to all companies across Canada.
Currently these slaughter byproducts are collected by renderers for meat and bone meal. After the feed ban there will be additional costs for disposal. Our options are very limited to us today, including raw SRM disposal. With funding not available through the provinces, the industry is truly in limbo.
With the United States considering opening their doors for Canadian cattle born after March 1999, and with no requirement to dispose of SRM in the United States, chances are that many cattle will go south, putting many packers at a competitive disadvantage. With the July 12 deadline fast approaching and options for SRM disposal being limited, some packers may be faced with having to reduce their slaughter rate to comply with these regulations.
We request that the Government of Canada and the provinces expedite the funding criteria for the $80 million and the $50 million provincial money, as originally allocated for this purpose, so that the industry can move ahead with implementing the regulations in time and with minimum disruption to the marketplace.
Thank you very much.
:
Good afternoon. My name is Kevin Golding. I'm president of the Canadian Renderers Association and president of Rothsay Recycling, one of the member companies.
The Canadian Renderers Association represents Canada's independent renderers. By way of background, the committee needs to draw a distinction between a packer renderer and an independent renderer.
Packer renderers render their own slaughterhouse waste material. These are ruminant-based packer renderers--for example, the two in Alberta: Cargill and Tyson.
Independent renderers service the rendering requirements of the entire protein chain. This includes packers that do not possess rendering capabilities as well as butcher shops, small slaughterhouses, grocery stores, etc. This environmental service is provided for a fee.
Packer renderers do not render dead cattle. The pick-up and disposal of dead cattle from farms, feedlots, and slaughterhouses varies from province to province. Generally speaking, dead cattle remain on the farm, or they are removed and rendered for a fee. Fees charged by independent renderers are offset by the value of finished product produced from rendered raw material and the value of rendered hides in the case of dead stock.
The rendering process works as follows. It reduces and recycles animal waste tissue by high-temperature cooking and evaporation. This process reduces the raw volume by about 50%, and it yields useful finished products. Products produced from ruminant-derived raw material are tallow, and meat and bone meal. These finished products are traded as commodities, with the prices for them changing weekly. Tallow is used for a multitude of industrial purposes, and meat and bone meal is used as a high-protein ingredient in non-ruminant animal feed.
The enhanced feed ban due to come into effect on July 12 requires separation of SRM from other ruminant waste material. The enhanced regulation requires that the meat and bone meal derived from SRM be destroyed by incineration or containment. Similarly, SRM that has not been rendered must also be destroyed, contained, or composted.
The federal government has announced the availability of funds to facilitate the separation of SRM from all other ruminant material. It is understood that these funds will be allocated among the packers, renderers, truckers, and others involved in dealing with the separation, collection, rendering, and disposal or destruction of the SRM. However, as we've heard, the allocation of funds has yet to be determined. Industry plans to separate SRM are generally on hold until the amount of funds available to each participant in the SRM chain is announced.
At present, members of the Canadian Renderers Association render most of the ruminant waste material generated in Canada, unless it's rendered by one of the packer renderers that I mentioned. Until proper separation can be achieved, most ruminant material rendered by independent renderers will be treated as SRM. The value of meat and bone meal derived from the SRM-free material that is co-mingled with SRM material will be lost. This will result in substantial rendering fee increases, which will not be mitigated until new separate rendering lines are in place to facilitate the separation and value retention.
The problem of SRM varies by region and province. Plans for separation have been communicated to federal and provincial government officials by members of the Canadian Renderers Association and individual company representatives. However, implementation of separation plans, other than interim compliance, will not proceed until individual companies receive funding commitments from provincial governments responsible for administering the federal assistance program.
Unless and until separation plans are implemented, most ruminant raw material currently handled by independent renderers will be treated as SRM in compliance with the enhanced feed ban regulation on July 12, 2007. As Kathleen said, it actually will be earlier than that, as soon as her members stop buying our product.
Loss of meat and bone meal revenue, increased trucking costs, and additional handling fees and land tipping fees will result in substantial rendering fee increases, which will not be mitigated until separate rendering lines can be built to process SRM-free ruminant material. Economic considerations do not support the building of additional lines if the promised capital funding support is not forthcoming.
Although CRA members expect to implement interim solutions for compliance with the enhanced feed regulation on July 12, delays in making federal government funds available to the renderers for necessary capital improvements will increase disposal and destruction costs more than originally contemplated. These costs will not come down until improvements can be completed. In addition, even interim compliance may be impossible in some provinces unless permitting decisions related to landfills are resolved.
I'm going to give you a short status report on each of the provinces or regions in which Canadian Renderers Association members operate.
With respect to Alberta, B.C., and Saskatchewan, interim plans are in place to deal with SRM in these three provinces. The independent rendering company that is currently processing ruminant material in these three provinces will treat this ruminant material as SRM until such time as it's able to separate and add a separate processing line to facilitate the production of meal and bone meal derived from the SRM-free material. The separation and construction of a separate processing line remains dependent on capital funding assistance being given to this company. The independent renderer operating in these three provinces also expects to receive and process SRM material from the two packer-renderer companies based in Alberta.
In Ontario, Atwood Pet Food will be in a position shortly to render the 250 to 300 metric tonnes per week of dead stock, which is in balance with the dead stock currently collected today in Ontario.
Because the government funding has not yet been released, Atwood has not begun construction to accommodate the approximately 160 metric tonnes per week of slaughterhouse SRM material. This material will have to go to landfill in the interim. In the long term, the slaughterhouse SRM material will be disposed of based on the most economical solution: rendered, to landfill, or some other form. As of yet, no equipment, containers, trucks, or trailers have been ordered or purchased to collect or transport any of this material, and no landfills have been approved to receive either the rendered finished or the raw SRMs.
The meat processing plants are in various stages of design and implementation of the changes required to meet the SRM regulation, and it's uncertain whether all the plants can be ready by July 12.
In the Maritimes, despite our company's efforts, there's been very little discussion between government and industry, and we're unaware, at this time, of plans in those three provinces to deal with SRMs.
In Manitoba, since BSE in 2003, ruminant material has been collected from the small abattoirs in the province and taken to landfill. The province has occasionally sponsored a ruminant dead-stock cleanup program, and that material has also been taken to landfill. It's expected that the ruminant material will continue to go to the dump as a long-term solution for Manitoba.
In Quebec, on July 12, SRM could be processed with non-SRM mixed material at a cost of approximately $286,000 a week, or more than $50 million a year. The non-SRM raw material provider will not bear this cost. This company, Sanimax, has gone through the engineering, planning, permitting, and price quotes phases for a dedicated SRM processing line at the Lévis, Quebec, plant. If the provincial-federal agreement with Quebec giving the go-ahead to Sanimax is not finalized within two weeks, a dedicated SRM processing line will not be ready by July 12, let alone by May 1. Sanimax does not believe that all the ruminant slaughterhouses will be ready for July 12.
Thank you.
:
I'll only speak as fast as I can think, Mr. Chairman.
Thank you, Mr. Chairman, for holding this hearing on the enhanced feed ban and inviting us to advise this committee on the policies we believe Canada's nearly 100,000 cattle producers require.
My name is Brad Wildeman. I'm an elected member of the Canadian Cattlemen's Association. I serve as their vice-president and chair of their foreign trade committee. I am also the president of Pound-Maker Agventures, a 30,000-head capacity feedlot and a 12-million-litre ethanol facility in Lanigan, Saskatchewan.
Along with me is Dennis Laycraft, whom many of you know. He is the executive director of CCA.
I think it's important to begin with the statement that Canada's cattle producers compete in a North American market and that we're part of a long, integrated supply chain. Each piece of that chain relies on the strength and the ability of the next.
While we are supportive of the enhanced feed ban due to come into force on July 12, we also have some concerns. Our colleagues have outlined their concerns in meeting the rigorous demands of the enhanced ban by July. This is further complicated by the failure to date of the federal and provincial governments to work out the agreements necessary to provide the financial incentives intended to assist in making these necessary investments and these operational changes.
All were advised in September 2006 of the urgent nature of completing these agreements quickly or at least ensuring the retroactive eligibility of projects started following July 2006. We know all too well that any measures that slow down their operations will have a negative impact on all cattle producers in Canada. We are already facing very difficult circumstance from losses incurred because of BSE, the appreciating Canadian dollar, labour shortages, escalating labour costs, and the huge increase in feed grain prices driven by government policies towards energy and environment, both in the United States and in Canada. We are told now that we can expect an additional $20 per head for livestock disposal.
Since the finding of the first case of BSE in May 2003, the cattle business has been a challenge. Since that time we have seen just how resilient this Canadian beef industry is. We've increased our slaughter capacity. We've increased our utilization of commercial beef. We've increased our share of domestic consumption and are regaining key export markets. In fact, we were the first country to resume exports after finding a native case of BSE--in one year--and hope to see our North American market return to its integrated pre-BSE state later this year if we're successful with regard to passing and implementation.
In spite of all these gains, the challenges faced by the beef industry in the past almost four years have eroded our competitive advantage over other beef-exporting nations, and we are not without continuing challenges. The industry is still rebuilding, and many of our producers remain in a fragile circumstance. It's critically important that we do not shock this system unnecessarily while we're still recovering. This enhanced feed ban has the potential to do just that if all the parties are not fully engaged in implementing it and complying with it by July 12 of this year.
Today Canada is the largest exporter of grain-fed cattle and beef products in the world. We can compete providing we have a level playing field. While we support enhancing the feed ban, everyone must recognize that it means higher costs for Canadian processors and cattle producers than for our U.S. competitors.
While we hope that over time alternate uses will reduce this cost disadvantage, the stark reality is that they're likely two to three years away. It's vitally important we do not put our industry in crisis yet again. This enhanced feed ban, without further transitional support measures, has the potential to do just that.
Every week Canada slaughters approximately 75,000 head of cattle, with a potential capacity of over 100,000 head. These are sold to beef packing plants in Canada and in the U.S. by feeding companies just like my own. Some are bigger operations, and some are much smaller.
When fed cattle are ready to market, there's a short period of time when they must be processed. Any delay in the time it takes to market fed cattle can cause a backlog in the system, similar to what happened in the early days of the BSE crisis, which resulted in decreased prices for Canadian cattle producers.
Our immediate concern is that if Canadian packing plants are not fully ready to comply with this feed ban by July, they have to either greatly restrict the number and type of cattle they process each day or reduce the number of days they operate. Either way, it will lead to another sharp decline in cattle prices, more cattle and jobs will leave this country, and cattle will be processed in the United States.
Our industry has worked hard to increase our processing capacity, our identification and age verification capabilities, and our global marketing efforts. Cattle producers are also required to play a significant role in implementing changes within their operations to comply with the new feed enhancement regulations. They're preparing to fulfill their specific obligations in ensuring complete implementation of these changes throughout the beef value chain. We must not, however, let our regulatory and government policies push the packing industry out of Canada, or all this effort will be in vain.
We are supportive of at least a two-year transitional program, along the lines advocated by the Canadian Meat Council, while we push forward with the investments and new technologies that will eventually reduce this burden. In the longer term, the competitive impact of this policy needs to be carefully monitored, and further programs may be necessary to offset competitive disparities that may well persist.
We ask for your support in the creation of transition measures to ensure the timely and non-disruptive implementation of the enhancements to our feed policy. This issue reaches outside of federal jurisdiction right down to municipal waste disposal that's already been described. We have seen in the past how this kind of situation can drag out the decision-making process endlessly. This time, Canada's beef cattle industry cannot afford this type of delay. We critically need the federal government to take the lead on this issue, pressing the provinces where needed, and ensuring that Canada is ready.
In closing, when it comes down to it, we are really representing the whole industry with the same message.
Thank you for this opportunity to speak to you. We'll be pleased to answer questions.
:
Let me reread...for example, I'll use Alberta, which is dealing with the largest amount: “The independent renderer operating in these provinces expects to receive and process the SRM material from the two packer renderers.” So West Coast Reduction, which has a rendering plant, will build another line. But as they've said, and this is from their notes to me, “Separation and construction of a separate processing line remains dependent on capital funding assistance being made available to the company.”
So they are not going forward. They've done the engineering, they're getting ready, but this a substantial capital investment. They aren't going to do that unless they have that capital funding. For them to be ready, I don't think it's realistic to build another line that quickly.
I said in Ontario, Atwood is moving ahead at certain levels, but they're stopping because they're not going to handle the rest of it. From the standpoint of things like disposal, we've definitely been in touch with a variety of landfills, but that takes time. Some we haven't got approval for, and some will take the rendered product as opposed to the raw product. The raw product is the guts and the bones, pretty messy stuff. The rendered product is the powdered material, a little easier to take to a landfill.
The other concern is, even if you had the approval to take the raw material to the landfill, how quickly would somebody in that jurisdiction say they don't want this stuff anymore, once they get a little taste of that material coming into their jurisdiction?
Does that make sense?
:
In Ontario, possibly there will only be 160 tonnes of specified risk material. But if I could, I'd just follow up on what Kathleen said, because it is important.
First of all, her members could essentially enact the ban from their perspective today, because they're the purchasers of the product. They don't have to buy it. They're not affected whatsoever, except for their involvement in the chain, and they're responsible.
From our perspective, on May 1, if we're not ready to go.... I'll give you the example of our Dundas plant. It's located near Hamilton. Right now, the Dundas plant handles approximately 5,000 metric tonnes per week of ruminant-based raw material. It's important to go back in time to when BSE hit. All the large rendering plants segregated their plants at that time. It used to be that whatever the material was—pork, beef, chicken, or whatever—it all went to the closest plant. When BSE hit, we split the plants, which is one of the reasons we're in a difficult situation now, because there are no extra plants around, so to speak.
I'll give you the Ontario example. Our plant in Moorefield, north of Guelph, is a non-ruminant plant. It handles pork, poultry, fish, etc. The plant in Dundas handles all ruminants. That plant handles about 5,000 metric tonnes of ruminant material—bones, guts, etc.—per week. Of that, our estimation is that about 400 metric tonnes are SRM. Some of that will be handled by the dead stock, which is right now being picked up by Atwood and then comes back through the Dundas plant. We'll handle that. We're working with them on that. For the 160 tonnes, they're not ready to go on that and that may have to go to landfill, if we can find a landfill.
The issue we have on May 1 is that if we're not ready to go there—and I'm just using Ontario as an example—all that volume at Dundas could be specified risk material.
:
I would say this, Mr. Steckle. Of all the countries in the world that have had a BSE occurrence, to date there are only two countries that have not implemented a full feed and food ban, and that's Canada and the United States. We're going to--certainly that's expected--and the U.S. hasn't.
My second point would be that if you look at the international review committees that looked at our BSE and appropriate structures, the last of their recommendations is that we should have this feed enhancement in place. So we've done that.
Third, it's a very critical component of our submission to OIE for controlled risk status, which will start to open up some of these markets. We hear from CFIA--and I don't like to speak for them because I don't want to misinterpret this--that many of these markets that are closed to us are waiting for us to have a meaningful and full feed ban in place. That's why we support it.
We have the same concerns as you've echoed, and I think you've articulated them very well. We have this problem of wanting a full food and feed ban enhancement because we need international markets, yet we still need to be competitive with a country we live beside and compete against every day for meat and cattle that isn't going to do that. Perhaps they don't feel they need to because of their market power and dependence on international foreign trade. Perhaps they think they don't need to go there. Perhaps there's some sort of naiveté, I would say, on their part, that they're not convinced they really have BSE. I think you hear some of those things.
The reality for us is that we have to go there. We've all bitten the tough bullet to say yes, we have to get this done. If we said the implementation date is July 12, 2010, I think we'd be here in February 2010 telling you how imminent this issue is. It seems that this deadline is finally starting to drive some movement. We're the industry that has to get it done.
We're here to say we're ready to go, but tell us what the rules are. Tell us whether we can start while you get some of this done and not disqualify ourselves. Once we have that, then how much of the $80 million is left for some of these other issues? We simply don't know any of those things, because we don't know how much is going to spent on capital or how much will be ready for operational and transitional programs.
Here we are. We are waiting to move, anxious to move, committed to move, but we are unable to move.
:
I was just going to reiterate some of that. We can absolutely be ready for July 12. In fact, we're going to have to be largely ready for May 1. We know from our conversations with the largest packers in the country that they'll be ready even for May 1 to segregate their lines.
The real issue, though, is that we're going to have to be very creative about where we put all this stuff come May 1, or July 12, and all the time in between. Part of the conversations that have to take place with the provinces aren't just about the $80 million and signing federal-provincial agreements, it's also speaking with each of the provinces to ensure they're having the right conversations with their landfill operators and with all the different disposal outlets. It could actually be that come July 12, or even before, we have to store this material somewhere until we really do have a viable disposal mechanism.
We'll be ready. It just won't be as pretty and as clean as we would like it to be, if you will. We certainly won't have the permanent infrastructure in place. Even then, we're really going to have move heaven and earth, and we're going to have to have all the right conversations take place in all of the provinces across the country with all of the industries so this can work.
From the beginning we said, when we did our report, that the challenge here is largely a coordination exercise. Where it really falls apart is that we're trying to coordinate disposal of a product that has essentially no value. We like to pretend that markets will take care of themselves, but we're talking about garbage. It's waste product, it has no value, and if you have to pick it up, in fact it starts to have negative value.
How do we make sure all the right people are having the conversations? That's where we've been trying to put pressure on the provincial government, the various departments in the federal government, and those conversations are going to have to take place every day certainly for the next 12 weeks. And even then, there's no doubt that we're going to have to store some of this material somewhere.
:
The federal government has a lot of authority through various acts, whether through CFIA, whether through some of the federal-provincial agreements, and it's not unknown for the federal government to basically take charge and put the money out. Money has been expended before, and a bill has been sent to the provinces. Maybe that's what we ought to do in this case.
What I'm wondering is if we, as a committee, were to decide to call an emergency meeting for a Wednesday, Mr. Chair, who would be the players we'd have to call? Basically on this issue somebody has to take charge. I've been involved in federal-provincial negotiations, and I'm not blaming the federal government by any means. You can say this one's to blame, and that one's to blame, and years pass.
I really think we're at a point here, because we don't want our international credibility.... We have some authority as a committee, and I would suggest that if we knew who the key catalyst would be to move this thing along, whether it's the federal or the federal or the president of CFIA or whoever, we should ask for an emergency meeting and say, look, get your act together; it's got to happen. Whether we ask all the players.... For that matter, we can subpoena people from the provinces, if we really want to, as a committee.
We cannot miss that deadline. It's that simple.
:
I'll take the first stab at it.
I think a lot of us have looked at that opportunity, but I think there are a couple of things that are yet unknown. First, how much of this product will be available? And of course, that's fully dependent on what kind of segregation we're going to be able to achieve, what the regional differences are going to be, and where the location of those specified risk materials will be. That's the first thing.
Second, we're unaware of the chemical characteristics of some of this product until we understand what's in the mix. So that's the second thing.
And third, we're not exactly sure what the cost of it is.
So those are the other things. My other comment would be that if we extract it for biodiesel, or if we use it for biodigestion for thermal generation in electrical production, for example, that doesn't eliminate the problem; it doesn't get rid of all the byproduct. There's still considerable byproduct left. You're only taking the oil-fat portion out, remember, so you're still going to have this. Will we have degraded the prions appropriately enough so they can be disposed of in other manners?
There are a number of questions that need to be answered. We think it's certainly an honourable and appropriate thing to be researching and putting a lot of effort towards, but I'd argue today that these are unknown things. And to have private industry adopt it with all its unknowns is simply not going to occur. So that would be my answer.