Thank you, Mr. Chairman. Bonjour, tout le monde
The Competition Bureau is pleased to appear today to take part in the committee's deliberations on “Product of Canada” claims. My name is Andrea Rosen, and I am the acting deputy commissioner of competition for the fair business practices branch. I am joined today by my colleagues Colette Downie, deputy commissioner of competition, legislative and parliamentary affairs; and Richard Taylor, deputy commissioner, civil matters branch.
First I'd like to apologize on behalf of Commissioner Scott. Unfortunately, due to other commitments, Commissioner Scott is unavailable to appear before you today.
The bureau is well aware of the concerns raised by Canadians, particularly since last summer, over the labelling of food products and related health and safety concerns. The bureau is also keenly aware that consumers need accurate information in order to make informed purchasing decisions.
It is my understanding that the committee wanted the bureau to appear to discuss our Guide to "Made in Canada” Claims. I would like to state at the outset that the bureau's guide was developed for the purpose of assisting businesses and consumers in understanding how the bureau would likely deal with such claims when discharging our mandate under the legislation that we administer and enforce.
In my remarks today, I will briefly describe the roles and responsibilities of the Competition Bureau generally, its role with respect to labelling and, specifically, our Guide to "Made in Canada” Claims.
The Competition Bureau is an independent law enforcement agency. It contributes to the prosperity of Canadians by protecting and promoting competitive markets and enabling informed consumer choice. Headed by the commissioner of competition, our organization investigates anti-competitive practices and promotes compliance with the laws under its jurisdiction. We also advocate in favour of market forces to government law and policy-makers, as well as administrative boards and tribunals. Competitive markets drive innovation and investment. Innovation and investment drive productivity, and productivity is a vital ingredient of our well-being. Consumers with access to accurate information, who are able to make informed consumer choices between competing products and services, are a key part of this formula.
False or misleading representations and deceptive marketing practices do not achieve these objectives and, therefore, are violations of the legislation we administer and enforce, namely the Competition Act; the Consumer Packaging and Labelling Act, with respect to non-food items; the Textile Labelling Act; and the Precious Metals Marking Act. It is important to stress that the CPLA is administered and enforced by the bureau with respect to non-food items, and by our colleagues at the CFIA with respect to food items.
Each year, the bureau receives complaints from consumers and competitors about anti-competitive activity falling within the bureau's mandate. False or misleading representations and deceptive marketing practices constitute the area where we receive the largest number of complaints—from 10,000 to 15,000 per year. Approximately 25 of these complaints per year relate to labelling issues.
With that context in mind, I will now turn specifically to the bureau's Guide to “Made in Canada” Claims. As I mentioned earlier, it is important that consumers receive accurate information to enable them to make informed purchasing decisions for all products, including those that use "Made in Canada" claims in their promotion.
Generally, legislation administered and enforced by the Competition Bureau does not require businesses to put the country of origin on their products. Where businesses do make claims about their products, including for example that they are made in Canada, they must ensure that their claims are not materially false or misleading, or contravene one or more of the acts enforced by the bureau. For example, if a product is wholly made in country X and it is represented as made in Canada, this would raise an issue under the Competition Act. Moreover, if it is a non-food, pre-packaged product, it may also raise an issue for the bureau under the Consumer Packaging and Labelling Act.
Why do we have a guide? Essentially, it is to provide clarity and predictability to businesses and consumers as to the threshold at which country of origin claims may be considered to be false or misleading by the commissioner. The Competition Bureau publishes an enforcement guide for its interpretation of when “Made in Canada” claims may contravene the statutes it enforces.This guide is intended to help businesses comply with the legislation and to indicate when the commissioner is likely to take enforcement action under the laws she enforces. It is a guide only, and each situation is assessed on a case-by-case basis.
Now, as for the key elements of the guide, the key guideline is the one that states that 51% of the direct labour and/or material costs should be of Canadian content before a product can be designated “Made in Canada” without raising a question under our legislation.
This guideline was arrived at in the context of the realities of the Canadian market. Very often, specialized parts not produced in Canada have to be imported by Canadian manufacturers—and that's overall. Given this reality, it was felt that if the threshold relating to Canadian content were too high, most Canadian manufacturers would not qualify. This would limit the ability of Canadian manufacturers to distinguish themselves from foreign competitors and would deprive Canadian consumers who want to “shop Canadian” from obtaining helpful information. The 51% threshold also took into account the public's perception that the major part of a product should be of Canadian content for it to be called “Made in Canada”.
Over the years, the guide was tweaked for the sake of clarity, to add additional detail or to respond when stakeholders raised concerns. The last significant changes to the guidelines were in 2001.
First, expenditures on overhead incurred by the producer or manufacturer relating directly to the production or manufacture of the goods, and that can be reasonably allocated to the production or manufacture of the goods, may be eligible to be factored into the calculation of whether a product meets the 51% guideline.
Second, goods wholly obtained or produced in Canada are considered Canadian, as long as these goods do not undergo any substantial transformation outside the country, resulting in a new product.
Now, genuine and serious issues such as these are often brought to our attention by our various stakeholders. The bureau always responds to the issue by researching and analyzing it and, where warranted, by consulting with stakeholders. Based on the results, we may adapt our enforcement policy, develop new guidelines, or even seek legislative change if warranted.
With regard to our “Made in Canada” guide, the bureau, to date, has not been made aware by its stakeholders, nor has it come independently to the conclusion, that its current enforcement policy on “Made in Canada” is no longer relevant to the Canadian marketplace when it comes to those matters that are within our legislative mandate. Recognizing that recent events regarding food products have raised concerns in the Canadian marketplace and with the public, the bureau has not been subject to pressures from its various stakeholders to review its enforcement policy. Nevertheless, the bureau will be acting responsively, as it has always done in the past, as exemplified by the Canadian diamonds issue.
Mr. Chairman, the bureau agrees there is a need to have accurate information on product labels, whether for food or non-food items. With respect to the matters within our purview, that is, the labelling of non-food, we are monitoring this issue. As stated at the outset of my remarks, consumers need accurate information in order to make informed purchasing decisions. If it appears there is a need to further update our guide, we will always be open to any suggestions and will follow this committee's deliberations closely.
We would be happy to deal with any questions the committee may have.
Thank you. Merci.
Thank you, Mr. Chairperson.
Good morning, ladies and gentlemen. We certainly do appreciate this opportunity to appear before the committee. My name is Debra Bryanton and I'm the executive director of the food safety directorate at the Canadian Food Inspection Agency. One of my divisions is the consumer protection division. Ms. Carla Barry, the acting director of that group, is here with me today.
We are here today to discuss the CFIA's work regarding “Product of Canada” and “Made in Canada” labelling of food products. As has been pointed out by the Competition Bureau, CFIA does have the responsibility for labelling policy and legislation as it relates to consumer protection in food.
With regard to the current situation, food offered for sale in Canada, whether domestically produced or imported, must meet Canadian food safety standards. Manufacturers and importers are responsible for ensuring that the materials they use, as well as the products they sell, meet all federal requirements.
Canadians have a high level of confidence and trust in foods from Canada and in Canada’s food production system. We do have a world-class reputation for producing food that is good to eat, wholesome, and of a high quality. So it is no surprise that manufacturers sometimes voluntarily label their products with the claim “Product of Canada” or “Made in Canada”, both in their advertising and on their labels. To help promote their commitment to Canadian jobs and the economy, companies often use words or phrases, logos, pictures, or symbols to indicate that the product is of Canadian origin.
Companies can make such voluntary declarations as long as they are true and do not mislead the consumer. These general requirements prohibiting false and misleading information on food labels and advertising are found in both the Food and Drugs Act and the Consumer Packaging and Labelling Act. CFIA is responsible for administering the provisions that relate to non-health-and-safety labelling in these acts.
As for what “Product of Canada” and “Made in Canada” mean today, our guidance to the food industry and information to consumers on how we interpret legislation relating to consumer protection are included in our Guide to Food Labelling and Advertising. Through that document, CFIA provides guidance to industry to better enable it to comply with the law.
Currently, the guidelines for the labelling and advertising of products of Canadian origin recommend that two basic criteria be met before manufacturers use Canadian origin statements. As with the guidance used by the Competition Bureau, these include the criteria that the last substantial transformation of the goods must have occurred in Canada, and that at least 51% of the total direct cost of producing or manufacturing the goods is Canadian. If these criteria cannot be met, companies may take the opportunity to make other voluntary statements about Canadian content; but these must be qualified with more specific and accurate claims, such as “Roasted in Canada” or Distilled in Canada” or “Packaged in Canada”. These guidelines are used by the Canadian Food Inspection Agency to help companies comply with the laws that prevent false and misleading representations about the Canadian origin of food.
When assessing voluntary “Made in Canada” or “Product of Canada” claims, CFIA takes a case-by-case approach, because we do balance all factors, taking into account the nature of the food product and consumers’ expectations that may relate to that product.
We do recognize that Canada's food supply is increasingly global in nature and that Canadians are seeking clearer information about the foods they buy. In October 2007, in the Speech from the Throne, did make clear the commitment to enhance the safety of foods and products imported into Canada and to provide information necessary to assist consumers in making informed decisions.
Further to that, on December 17, 2007, the did announce Canada's food and consumer safety action plan. This is a comprehensive set of proposed measures that will make Canadians safer by legislating tougher federal regulation of food, health, and consumer products. The action plan also includes a commitment to review the government's current policies on “Product of Canada” and “Made in Canada” claims on food labels and in food advertising. More information regarding these initiatives can be found on the new website, Healthy Canadians, at www.healthycanadians.gc.ca.
Furthermore, in the budget of 2008, the government did deliver further action on this commitment by identifying $113 million for the action plan to ensure that food safety systems evolve to meet some of these new challenges of the global market, and to provide clearer information to Canadians.
So we are taking active steps to review “Product of Canada” and “Made in Canada” labelling policies. We will be looking to that further. Any further action relating to the action plan will appear on the Healthy Canadians website.
In closing, we would like to thank you for allowing us to be here today. We would certainly welcome any questions you may have concerning CFIA's work in this area.
The chair has, I think, basically outlined the concerns that we have. I guess I should say, in the beginning, that we understand that your job is to administer the laws that you have been given. If the law doesn't give you the authority to deal with a situation the way we want it dealt with, that's not your fault. So I don't want you to think we're blaming you for the problems.
But to be quite direct, the farm sector has pretty well found the Competition Bureau, forever, to be absolutely useless in dealing with the concerns that farmers face on the farm input side. KAP, for instance, did a study of fertilizer costs, and they went to the Competition Bureau, but they might as well have walked around the block for all the help the Competition Bureau was to them. So the concentration in the industry and its impact on input costs is a real concern for the farm sector, as we feel there's potential price collusion, but because it's on the input side it seems hard to deal with.
Now, we made a recommendation about this in our June 2007 report. I don't know whether you've seen it, but we can give you a copy. We basically said that we're concerned about the domination and concentration in the agrifood chain, and we made a recommendation—and I guess the second point is perhaps the most important— that the government introduce a general administrative monetary penalty provision for abuse of dominance in any industry, which would encourage businesses in most industries to comply with the Competition Act. We felt that the Competition Act, the way it was—because something has to be almost criminal—should be changed. We suggested that the “government decriminalize the discriminatory and predatory pricing provisions in the Act in order that these practices receive a full hearing on their likely economic effects” on the industry, basically. But we'll give you a copy of that.
I don't know who can answer that, but what is your view of it? Our view is that the Competition Act doesn't work. What do we need to do to make it work for costs of inputs to the farm sector?
My second question—and Debra, you can think about this while somebody else is answering the first question—is about the definition of 51% of total direct costs. I think the definition was designed for industries that are manufacturing widgets and different parts for cars, and so on, but we're talking about food. Can anybody actually sit there and tell us that 51% of the direct costs, which really have not a darn thing to do with the product in the package, are “Canadian” and believe that's truth in labelling? When a consumer goes to the shelf and picks up a product that says “Product of Canada”, and it's the cost of the packaging, the box, the plastic around it, the labour of mixing water with it, or whatever, and it has nothing to do with the content, do you really think that's truth in labelling for the consumer who goes to the grocery store shelf?
Anyway, think about that, Debra, and tell me what we can do about it. You're a good Islander, so I wouldn't want to criticize you.
An hon. member: Oh, oh!
Mr. Wayne Easter: Now to the Competition Bureau.
Mr. Chair, I'll try to address the honourable member's question on concentration.
We do two things that affect, or could affect or be relevant to, concentration. The first thing is that we review mergers. Those that would lead to unacceptably high levels of concentration we challenge or adjust, pursuant to our legislation, to make sure that the excessive part of the concentration is divested to another hand.
It is true that under our act—under our legislation and guidelines—the safe harbour is at 35%. You don't have to be a mathematical genius to figure out that 35% really means there can be three companies in the sector. That is our legislation, and it's not that different from legislation around the world for certain sectors. Within that level, we enforce the act rigorously. We would have a very close look—and a strong look—at companies that would seek to get 50% or 60% of a market.
I'll use an example from the agricultural space. We spent 10 years reviewing, challenging, and getting divestitures in the grain handling industry, going back to 2001, when we put some severe restrictions on the UGG/Agricore merger. We wanted a bunch of prairie elevators—the good ones too, not the garbage ones or the old ones, but the high throughput new elevators—divested into another company's hands. And we wanted the best terminal in Vancouver divested, and it ultimately went to another competitor.
So we're aware of those issues, and we apply the merger laws rigorously in this sector.
I'll speak to one other point. The second thing that could obviously affect concentration is the abuse of dominance provision. That's when a company does become dominant or large—and again, that 35% is in our guidelines. When a company attains more than 35% of a given market, be it the fertilizer, the grain, or the slaughter industry, then certain things they might do that hurt their competitors, or stymie competition, we will take a close look at as well. And we do that.
Obviously those are two very important things we do.
The final thing, and perhaps one of the most important things we do, is that we make sure there are no agreements among competitors. I think, Mr. Chair, there was some reference to the potential of that happening. We have zero tolerance for that. It's a criminal offence: you go to jail. We have a number of ongoing investigations.
Over the years, I have gathered a list of some 100 cases that we have resolved and that involved cartels. I believe it's on our website. Many of them touched on the farm industry. I'll just mention a few. Lysine is a major ingredient that takes fat out of chickens and hogs, and it's used extensively in the rearing of hogs and chickens. That was subject to an international cartel. We stopped that. And the vitamins that were fed to animals, the bulk vitamins, were from a $1 billion cartel. We stopped that and imposed heavy fines. So when we're aware of these anti-competitive situations, we will look at them.
Right now we're picking up a number of complaints about price differences between the U.S. and Canada—and there are price differences. Let me just tell you about some of the sectors where we are getting price differences: first of all, TVs; books; gasoline; food products of all types, such as chicken, poultry, dairy products, vegetables; barbecues; electronics; cars; ATVs; and boats. In fact, the price of virtually every product is lower in the U.S. This has been the result of an 18% appreciation of the Canadian dollar since August. Prices are moderating, and if there is any evidence—any evidence—that these price differences between Canada and the U.S. are due to a conspiracy, then we'd certainly look at that. As every product in the U.S. is now cheaper than it is in Canada—since August—I find it a little hard to believe that every product is subject to price fixing and that we don't know about it. But there is the remote possibility that people are taking advantage of these exchange rate differentials. If that's the case, we will look into it. And we are looking into certain cases where there is evidence.
Good morning. It's not every day that we can say this in Parliament, but I sincerely believe that we will manage to achieve something concrete on this issue. The proof is there seems to be some political will, not only on the part of the government but of all parties in the House of Commons as well as the stakeholders involved, to do something to improve the way food products are labelled. Perhaps I'm naive to think that we'll really achieve a satisfactory result for everyone. I dare to believe that. Perhaps I would not have come here today or I would not have run for office if I didn't think we could change things.
This is a file that affects a lot of consumers who are entitled to know what they're buying and consuming. There's the whole economic aspect for our agricultural producers, so that their products can be properly identified and that people can make an enlightened choice to consume a local product. There's also the whole issue of food safety that is related to this labelling.
Ms. Bryanton, when you referred earlier to the Throne Speech and the budget, you stated that action had been taken in the area of food safety. I'd like to know what has actually changed. This week, there was a series of articles—you certainly read them in La Presse newspaper—which presented a number of cases of products from overseas which contained salmonella, bacteria, glass, metal and chemical disinfectants.
I've always felt that products entering Canada were not sufficiently scrutinized. It's often been said that the use of pesticides that are prohibited in Canada should suffice to prohibit the entry of a product grown elsewhere, even in the United States. This isn't clear. Unfortunately, this rule has never been applied to the letter. Despite what you say, perhaps the government has uttered some pious wishes about food safety and security, but I get the impression that with the seizures, the recalls... Products are being withdrawn from the shelves. Recently, it was cantaloupe, spinach, carrot juice, pear juice. Those are the examples that spring to mind. We even had trouble with pet food.
I don't know if there's been any improvement, but I'd like to hear your views on this and I'd like to know whether, in concrete terms, we're really moving toward tighter inspection of food entering the country.
First, Canada does have one the safest food supplies in the world. The food inspection systems put into place to verify the actions taken by food manufacturers and importers are based on a risk-based approach, using the history of compliance; and when we take into account that history of compliance, it can, at times, include some of our previous non-compliance data.
Now, with regard to the food safety action plan, as has been noted, the food supply has become more complex. With the globalization of the food supply, we do find there are new products and new ingredients coming in from many countries. That same environment applies domestically, where we do have consumer demand for new and different products. Both industry and governments seek to respond in this new environment to verify that the products continue to be safe for Canadians.
There are occasions when we do find problems with the food supply. If that situation did not exist, you would not need CFIA. When do find there is a problem, we find that both the Canadian industry and importers do work with us to respond quickly to these events when they occur.
Further to that, we work very closely with other governments, and if we do find a problem that emerges with regard to a particular food product, we do work with other governments to verify that actions have been put into place to address some of these risks at source.
So the action plan itself is oriented at enhancing our capacity to do that, to further ensure the safety of the food supply, and it builds on the roles and responsibilities of those engaged in our food safety system, including industry, governments, and consumers. So it looks at better identifying those areas of risk, putting in targeted measures that will help us to address those areas of risk, working with foreign governments to address risks at source, and providing more information to consumers, so they too can play a role in the safety of the food supply.
So this announcement is relatively recent, and certainly we are working very actively to be able to work towards an action plan that will realize some of the objectives the government has identified in that action plan.
Thank you to the witnesses who have come today. Because our time is limited, I am going to try to ask pointed questions. Try, if you can, to keep your answers brief.
One of the main things we're talking about here today is food labelling, and I very much support Mr. Bellavance and where Mr. Easter went. The grapefruit juice that I have every morning, when you pick it up, says “Product of Canada”. Now, I've yet to find a place in Canada where grapefruit is grown, so there is obviously a big problem.
I want to concentrate my questioning today on the Competition Act, and in particular on the food business and how it gets down to the consumer. There's no doubt in my mind—and I think I can fairly well speak for any committee member who was here last spring when we had an in camera session with independent grocers and some other businesses—about the control that is going on in that business.
First of all, the Competition Act, as Mr. Easter said, is not working. It's either that the Competition Act people are not doing their job—and I'm not suggesting that, necessarily—or the mandate is too loose. Something is wrong; it's not doing its job.
One question I have, Mr. Taylor, or whoever wants to answer, is this. Do you believe it's okay for a huge conglomerate, e.g., Loblaws, Sobeys, or whoever, to dictate that a small local supplier have only them as a customer? Do you think that's right?
We're getting pretty soft here. I don't want to cut you off, but either we believe in the fact that terms should be clearly and explicitly given so that they're understood.... When a company like Kraft challenges the committee for taking an action in committee, in terms of putting forward part of a bill that they felt was intruding into their territory, where they threatened to pull Kraft out of Canada, it's ridiculous; it would never have happened, but this is how it impacted. This is what kind of power these people have.
When you list butter as part of the product or cheese as part of the product, there should be a requirement that at least there should be some element of that in there in terms of the way it's advertised, and that's not happening today, as we speak. And what is being done about it?
We talked this morning about taking action. Mr. Taylor has indicated they do take action when it's warranted. Sometimes we're working from guidelines rather than from principles of law, where basically a law has been broken and therefore we need to take the pecuniary action that has to be taken because of that.
I think in many cases we're sitting back and letting the big oligopolies and monopolies of this world dominate, and they are dominating. It's been said time and time again, and we'll hear it again before you leave this morning. I can go on and on.
I think we have to start looking at what we're doing and whose responsibility it is to change the way the labelling is done. If we want to say “Grown in Canada”, then it should be grown in Canada. But we should have a defined descriptive of what that is: “Grown in Canada” means this.
Another question is this. Do taxes, in terms of excise taxes on wine or liquors, factor into the 51%? Those are taxes that are not put on at the end; they're put on ahead of the pricing.
Thank you very much, Mr. Chair.
Welcome to our guests. It's good to have you here, and I'm enjoying the discussion.
I think it's worthwhile mentioning that, thanks to a whole bunch of cooperation amongst a whole bunch of people, starting with our agricultural people—with the farmers—Canada has the safest source of food supply. Sometimes we lose sight of that. This doesn't mean we can't make it better, but I think it's important to appreciate that we have a wonderful food supply, a good source of food. When I go home to eat dinner this evening, there's a good chance I'm not going to get food poisoning, because I know that the quality of the food is second to none—as long as I don't cook it, I suppose; I think that's what was saying.
The whole idea around “Product of Canada” labelling is to give the consumer the opportunity to make informed decisions. I think everybody is on the same page here. When I go to the supermarket, I want to be able to make an informed decision, so that I know what I'm consuming.
One of the good things about , is that he, I understand, has commissioned a full review of “Product of Canada” labelling. Am I correct in that? So we're going to get there. We're going to settle once and for all this labelling of Canadian product. That's a step in the right direction.
Another step in the right direction, I thought, was when, a few months ago, the announced Canada's food and consumer safety action plan. Mrs. Bryanton, is the $114 million you referred to going to be part of that? Will it fund part of that? Okay.
The whole idea of the action plan, I understand, is to preserve and to strengthen—not only to keep what we have, but to strengthen—the safety of Canada's food supply. Am I correct in assuming that?
Now the million-dollar question: what has happened since December, and where are we on the progress list?
Thank you, Mr. Chairman.
My question is for you, Ms. Bryanton, because you didn't answer the question about food safety.
In Quebec and in Canada, food inspection is very good. That's not what worries me. In Quebec newspapers—I don't know if the same is true elsewhere in Canada—we read this week that only 2% of foods imported into Canada were inspected.
How come products from the United States, from Brazil or elsewhere are entering our country in vast quantities, when these countries are allowed to use pesticides, fungicides and herbicides that we're not allowed to use in Canada?
What are you doing about all this? Our system is 100% safe. I'm not afraid of eating any food produced in Quebec or in Canada, because I'm sure they're good. Our farmers have enough inspectors and agronomists on their backs to make sure of that.
How come foods that come from elsewhere are not inspected? This makes me furious because I get the impression that foods from elsewhere are unsafe. What is your responsibility in all this? Don't talk to me about Health Canada. It's all very nice to say there are action plans, but let's stop coming up with those and let's actually do something. This is 2008. We have to stop coming up with action plans. You are aware of the problems.
I'd like you to answer that question.
As the member has pointed out, the provinces in Canada have also played a very important role in food safety and food inspection, that being part of the shared responsibility of the federal government and the provinces as it relates to food safety. And we certainly do congratulate the provinces on that.
When it comes to imported food products, of course that is a federal jurisdiction. The measures we have put in place verify the safety of imported foods against Canadian standards, similar to the way we verify that the Canadian industry is meeting those standards.
Those import programs are based on risk. That risk can be associated with some of the pesticides or microbial issues. It could be associated with a particular food product as well as the volume of the product, and the origin of the product may also be taken into consideration when we're doing that risk profile.
We do monitor a large number of products through our pesticide residue monitoring programs. We do hundreds of thousands of samples of these products, and that does include imported products as well as domestic. The compliance rate is very high. When it comes to pesticide residues on foods coming into Canada, the compliance rate is very high.
If there is a pesticide residue that is identified on a food product, for example, we follow up on that. We work with Health Canada to determine if there is any health risk associated with it. If there is a health risk, appropriate follow-up action will be taken, and that can include a food recall.
When we do find a pesticide residue that is of concern, we also follow up with the importer of the product, and quite frequently the country of origin as well. So if we do find an area of concern that relates to an imported product, we certainly work with the importer, because the importers are responsible for the products they bring into the country. But we may also work with the foreign government to make sure they are aware of the issue as well, and that they are taking steps to bring a product back into compliance with Canadian law.
Reference is quite frequently made to pesticides being used that are not approved for use in Canada. It is important to understand the difference between a pesticide that has not yet been presented for registration by PMRA, the Pest Management Regulatory Agency, versus a product that has been banned--it has been assessed and determined to be unsafe. If a pesticide or a veterinary drug has been assessed and is identified as being unsafe, our action is very clear and quick. We take very rigorous action on these products. If a product has not yet been assessed, there are provisions under the Food and Drugs Act and regulations that provide for a 0.1 default level. We assess the product against that default level.
When we do identify a problem area--
Stop, you're telling me a story. That's not what I wanted.
Let's go back a bit and talk about the lead found in toys at Christmastime. These toys were sent back to China. There was no talk of doing any testing. You know that, in imported products, there are pesticides, fungicides and herbicides that we are not allowed to use in Canada. You simply have to shut the door to these products, that's all. We have Canadian and Quebec products that we do not manage to sell here because we are importing inedible products from China and the United States.
What are you doing? That is what I am asking you. You are going to be receiving another $100 million. Food safety does not come from outside the country. At any rate, up until now, you have not proven to me that the Canadian Food Inspection Agency is doing a good job.
I have been an MP for five years, and you have been hearing the same thing for five years. This is the third time that I have sat on the Standing Committee on Agriculture and Agri-Food, and in five years, nothing has changed. Why is that?
The same thing applies to the Pest Management Regulatory Agency (PMRA). We're going to have to fire you and hire someone else. At any rate, personally, I am not satisfied with the Food Inspection Agency, particularly with respect to the inspection of foreign products. We are tough when it comes to Canadian products. It's not possible to be any tougher. But when we import foreign products, this is not important, it's free trade. Let's stop talking about free trade and defend ourselves, so that our products can be good and so that the products we eat are good as well.
Thank you, Mr. Chairman.
Thank you very much, Mr. Chair.
I want to follow up on some of these questions.
It is very important that we, as a committee, try to drill down and find some of the answers to some of the points that have been brought up in the discussion we had today, so forgive me if I interrupt you. I'm trying to get as many answers as I can, because quite frankly, the farmers and producers we all represent around this table feel they are not getting the results they should be getting from the Competition Bureau.
We need to find out whether or not it's a problem on your side or if it's a problem with the act itself that restricts or inhibits you from doing what we need to get done.
It seems in your conversation, Mr. Taylor, that you talk....
First, coming from a rural background, I take offence to hearing you talk about cheaper prices in the United States for things like automobiles and televisions and barbecues and things that are produced in the United States, and in any way whatsoever comparing that to fertilizer cost. As Mr. Easter said very clearly, the primary cost in fertilizer production is natural gas. In 2005-06 we had some of the lowest natural gas prices we've had in quite some time. In my riding we have an Agrium fertilizer plant, and my producers are paying sometimes double and triple what producers in the United States are paying for fertilizer. There is no comparison between barbecues and television sets.
I don't want this to be confrontational. I want to ask you this. It seems as if the two components you have in this are dominance and profitability, as you yourself have said.
Mr. Taylor, I believe when Mr. Miller was raising questions earlier and you were talking about Loblaws, your answer was—and I understand this—something along the lines of making sure consumers get the best price. And that's fine. But I think where we have difficulty...and I'll use that example to explain what I mean, where our producers are in the same kind of box as independent grocers.
Somebody on the Conservative side as well mentioned the big chain stores. We've had the independent grocers before this committee, and they were so fearful that their business would be taken away from them that we had to have the meeting in camera. The only one who could talk publicly was the executive director of the organization based in Toronto. If they don't go back to the warehouse of the chain, then they're penalized gravely, number one. That's why you don't see local Ontario product or local Nova Scotia product in some of the chain stores, because they're not allowed to do it due to the penalties, even though they're called an independent grocer.
In your descriptions of Loblaws.... Yes, get the best price, but the independent grocers find themselves under other restraints, and that is not adding to competition; that in fact is causing, I think, great problems.
We have the same thing on the farm. The Competition Bureau is geared to consumer pricing. But there are other players in that system, in the middle, who are in a uncompetitive position because of the dominance in the market, and how they exercise that dominance is not related to the pricing issue. That's what we've got to get to somehow, to make the Competition Bureau work for us and, I think, the independent grocers.
I certainly see the issue, and it's an issue that is obviously of great concern to all Canadians and the bureau: that our farmers, who are deeply respected across the country and produce some of the best food at the best price, are having trouble. It is of concern to us.
The issue is the lever that the bureau has to do anything about this, when our act is about market power and making sure there's no market power excess profitability, so that consumers get the best price. We do that in all sectors: in fertilizers, in seeds, in herbicides, in grocery distribution and retailing, and in food trucking. We look and we make sure.
But our act has certain limits as to what we can and cannot do, and I've explained those. By and large, a company can have 35% of the market, and that won't raise an issue under our act. Simple math would tell you that under the Competition Act we would have a tolerance for three companies and not let it go below three.
Having said that, if somebody like a Loblaws, with over 30% of the market, were to announce tomorrow an intention to buy Sobeys, with 15%, I think we'd have a strong look at that. We would have a concern, because it goes through our concentration levels under the act.
For the committee's information, we are going to go in camera. We have a couple of housekeeping motions we want to deal with.
Before I let the witnesses go, I have a couple of questions for you.
Everybody is using different examples of “Product of Canada”, “Made in Canada”, and one that came to mind for me is “Made in Canada” or “Product of Canada” packaged olives on the shelf. We don't grow a single olive in this country, yet in grocery stores across this country we have “Product of Canada” olives in nice green jars.
You talk about truth in labelling and making sure they don't violate that. How can you call something like that a product of Canada? I guess you can under the definition of the law today.
I'm wondering, as we move forward and as this committee considers this “Product of Canada” labelling, whether it is going to require regulatory change, or does it require legislative change, especially as you look at how it affects the food industry differently from the manufacturing industry, which the Competition Bureau has to oversee? Are we looking at changes within a particular act or a particular regulation so that we can bring about the changes we're interested in?