I'll bring this meeting to order.
We're continuing our study on “Product of Canada” labelling.
I want to welcome to the table today, from Cloverleaf Grocery Ltd., Mark Loney. Thanks a lot for joining us, Mark.
We have, from Gowling Lafleur Henderson, Ronald Doering.
From the Canadian Council of Grocery Distributors, we have Jeanne Cruikshank and Bernard Leblanc. I want to welcome both of you.
I ask that you keep your opening comments within the 10-minute limit so that we have more time for questions and answers with our members as we start our rounds.
With that, I'm going to turn it over to you, Mr. Loney.
I'm here today in my own personal capacity at the invitation of the clerk, so I'm not representing anyone. I assume that part of the reason I'm here is because my primary practice in law is agriculture and food law. I write widely on issues of food law, and I'm a former president of the Canadian Food Inspection Agency.
I was reminded by Jean-Denis this morning, before we started, Mr. Chair, that he was actually here when we were creating the Canadian Food Inspection Agency in 1995-96. He remembered that I had a bad back then. I still do, Jean-Denis.
The only other people who I think were here at that time we were creating it--I was the only government witness--were Mr. Easter and I think Mr. Steckle. I think you were here then. So this is 12 years later, back in this room, on related issues of the Food Inspection Agency.
I'm going to make three points in my introductory remarks. I think they may be different from what my colleagues are saying today or from what you have heard.
In my opinion, this is not a particularly complicated issue. It's widely discussed and described as complicated. I don't think it's that complicated. There are some fairly easy solutions. That's my first point.
My second point is that I'm going to urge you not to recommend solutions that involve regulatory change. I think that would be a mistake. In the course of this, instead of talking about the law of food and drugs or packaging law or packaging and labelling, I'm going to make reference to another law, which doesn't get enough attention up here, in my opinion. And that is the law of unintended consequences. It seems to me that a regulatory change in this area could have significant unintended consequences that would be hurtful to the industry and to Canadian consumers.
My third point is that on the matter of “Grown in Canada”, on this idea of having another expression, as far as I can see, there's absolutely no reason it can't be done right now. Just do it. In fact, it's remarkable that it hasn't been done before now.
I'll just elaborate on those three points.
It's not a complicated issue. While it's been around for a while, with the Canadian Federation of Agriculture and others being concerned about trying to help Canadian producers and so on, there are actually, as we've heard from the Food Inspection Agency, very few complaints about this issue. If you review your transcript, you'll see a remarkably few number of examples. There's the famous jar of garlic, and there are others that people will trot out. But in many cases, these are labelling issues not directly related to the “Product of Canada” issue.
If a 51% guideline established by Industry Canada many years ago--not with food in mind--is a problem, then all you have to do is change it. It could be done immediately. It requires no regulatory change. The Food Inspection Agency is studying this issue at the direction of the Prime Minister. My assumption is that if people are persuaded that the number should be higher than 51% but less than 100%, then that could be done immediately. It could be done a week after your report is finished. It's simply a direction, a decision. The Food Inspection Agency makes decisions every day to alter the guide to food labelling. They can do that immediately.
Although it's very important to understand that this could be done quickly, it should remain voluntary, not mandatory. One of the things we should keep in perspective here is that in a typical large supermarket there are tens of thousands of SKUs. In fact, Jeanne, you may know. Would there be 40,000 or 50,000 SKUs in a typical large supermarket?
I remember I used to use the number 30,000 to 40,000, so yes, 35,000 SKUs. There are 99.9% of those that are labelled properly as far as “Product of Canada” is concerned, so let's keep this in perspective, ladies and gentlemen.
My second point is that we can easily change your recommendation to help the Food Inspection Agency do this. We can easily change the 51% rule to something higher, such as 80% or 90%. That could be done. It can be done quickly, and it's not complicated. But certainly, do not make it 100%; you've had submissions already on why that would be a silly idea.
Why is it important not to change regulations? Happily, this is one of those areas where we can remain fairly nimble, because we're not stuck with an out-of-date regulation. The Food Inspection Agency makes changes to the guide on food labelling all the time. Subsection 5(1) doesn't need to be changed. It's there now, and it makes it a criminal offence to mislead people.
Leave the statute alone. Leave the regulations alone. Recognize that you can easily have a dramatic impact on the issue of “Product of Canada”, if you want to, by tinkering with the guidance, the guide to food labelling, and by keeping it voluntary, not bringing in regulations.
The food regulatory system in Canada is huge. There are about 10 federal statutes, and each of these has in the order of 20 or 30 sets of regulations. The food regulations in Canada sit on my desk and they are this high. There are literally hundreds and hundreds of pages of regulations relating to the food industry. It is not a good idea to get into the position where you have to change those in order to achieve something, because you're going to get further change, and you'll still be stuck with Canada's sclerotic regulatory change system, which takes a couple of years. It has to go to government twice, for RIAS and gazetting, just to have some minor change. It is this sclerotic food regulatory system that undermines innovation and investment for the food industry, and it certainly undermines competitiveness.
My argument to you today, and my second point, is do not engage that black hole of Canadian food regulations; make your contribution by recommending guidance changes. This is based on my own sense, as I mentioned in my introduction, that the single biggest problem, and the law we need to think more about on the Hill, is the law of unintended consequences.
If you start to change one part of the regulation because the food commodities are all different--and there are literally dozens of pages about products relative to meat, as the Meat Council told you.... The unintended consequence of the American COOL provisions is that the origin labelling now has a fundamentally flawed system. It's completely unworkable, and it will hurt both Canadians and Americans. We know what it would do to weanling pigs, for example.
I noted in a brief review of your minutes that a lot of people have confused the quality standards. I urge you to leave that alone. We've talked about amending product regulations and quality standards for about 15 to 20 years, Mr. Easter. We still haven't, and there's a reason. It is so complicated and so detailed that if you get into that, you may not get out.
You want to retain things like “Canada Choice”, even if it's not a “Product of Canada”, in the sense that the fruit isn't. It seems to me that there's a big difference between a can of pears produced, packaged, and canned in China, shipped here in a great big ship, and where a struggling Canadian food processor takes Chinese pears, cuts them up, uses Canadians to put them in a can, and hires Canadians to label and sell them. We should be able to distinguish between those two things.
In the case of the Canadian product, we know there have to be very stringent rules about what it means to be “Canada Choice”. For example, we would have a very hard time enforcing some of that stuff with respect to imported product.
To conclude this second point, it's important to realize that while the solution to this problem is not complicated, you could get into a mess tinkering with the regulatory regime.
Here's an example related to juice. A significant Canadian juice company that has survived and done well used “Product of Canada” for anything that was 80% Canadian ingredients. All of the processing, manufacturing, and packaging is carried out in Canada. This is their own voluntary standard. If they're not using 80% Canadian produce, they call it “Prepared in Canada”. This is a product for which all activities of processing, manufacturing, and packaging are done in Canada.
It seems to me that this would be quite adequate to protect the Canadian consumer. The last thing you would want, though, is to specify the country of origin for these kinds of things. You can't source apple juice just from Canada all year long, and many juices have multiple ingredients.
My third point has to do with the “Grown in Canada” designation. It's remarkable to me that the farmers of Canada are still looking for funding from Agriculture Canada to do this. Why don't they simply do it? A voluntary “Grown in Canada” program funded by producers can be done right now. It doesn't need to go through the regulatory system. As far as I'm concerned, it's remarkable that we haven't built on the good programs that many of the provinces have.
So, Mr. Bezan, it's not a complicated problem, really. The solution is easy: raise the 51% guidelines and encourage the producers, who are anxious to use “Grown in Canada”. You have subsection 5(1) to back it up if somebody tries to be misleading. It's surprising it hasn't been done before now.
Thank you, Mr. Chairman. I'll be providing the opening remarks. Mr. Leblanc is with me this morning. He is our labelling resource, and his expertise may be helpful to us all when it comes to the question time.
Thank you again, Mr. Chairman and members of the committee. I'm pleased to be here today to provide information to the Standing Committee on Agriculture and Agri-Food.
My name is Jeanne Cruikshank, and I am vice-president of the Canadian Council of Grocery Distributors. We represent the small, medium, and large grocery distributors on both the retail and food service sides. Our members annually contribute $72 billion in retail sales and $12 billion on the food service side to the Canadian economy. We service companies that you may know, such as Loblaws, Metro, Sobeys, and Safeway, as well as some of the smaller companies, like Thrifty Foods and Co-op Atlantic. You may also recognize our members’ private label products, such as Compliments, President’s Choice, No Name, Master’s Choice, and Safeway Select.
We have more than 428,000 employees in the industry and operate through 24,000 stores in every community in Canada. Our members account for about 85% of all the grocery products distributed in Canada to all of those 24,000 stores, hospitals, restaurants, institutions, and long-term care facilities. Each one of those products passes through a distribution or a retail network. CCGD’s mission is to advance and promote the economic well-being of its members and their efforts to deliver the best value to customers and the consumer.
Our role is to interface with consumers. CCGD members are the direct interface with consumers. We take very seriously the responsibility of providing information to consumers so they can make informed choices about the products they purchase. From the outset, let me be clear that the issue of “Product of Canada” is not considered a food safety issue by CCGD members. It is about country of origin. We recognize that we are dealing with a highly educated and discerning consumer in the very competitive world of food retailing. To that end, CCGD member products are labelled to comply with the current “Made in Canada” policy from the Competition Bureau. When CCGD members choose to promote products as “Made in Canada” or “Product of Canada”, we choose products that meet the requirements of the bureau.
There is always a better way. The food industry is an ever-changing business, and we recognize that there can always be a better way. We need to look at different scenarios for identifying products that are 100% Canadian, as well as products made in Canada with both Canadian and imported ingredients. Therefore, CCGD proposes considering a two-tier system similar to the CFA “Grown in Canada” proposal. Products that are “100% Product of Canada” would be labelled and/or branded with a unique logo and claim. A second designation would exist for products that are made in Canada with both Canadian and imported ingredients. It would allow enough flexibility to respond to the global economic realities of our industry in cases where ingredients are sourced from different countries.
Particular consideration will also have to be given to products that are processed in Canada with both Canadian and imported ingredients when they do not meet the 51% value-added criteria and therefore cannot display the “Made in Canada” claim. When destined for export, products that do not now qualify for “Product of Canada” are still required by the country importing the goods to declare a country of origin. The current “Made in Canada” guidelines do not address this scenario—yet another reason to review the current “Made in Canada” guidelines to address today’s reality of global marketing.
As for partnering with government, CCGD would be pleased to participate in the development of new claims for identifying products that are 100% Canadian content, as well as new claims to identify products processed in Canada with both Canadian and imported ingredients. These new claims would provide clarity to consumers and industry and must also work for both imported and exported products.
We strongly urge that any new guidelines and/or claims to identify products made in Canada be preceded by consumer surveys, so that it is well understood what message consumers would receive from these new claims. Once new guidelines and claims are established, we recommend that a consumer awareness component be undertaken on the part of government and delivered in partnership with industry. An example of this partnership would be the latest nutrition labelling TV ad campaign. In fact, perhaps part of the discussion currently around “Made in Canada” came about because there was no awareness campaign to explain its purpose, mandate, and criteria.
Opportunities and challenges. A challenge that will need to be addressed is that the claims and conditions that are developed to identify products made or processed in Canada will need to take into account the country of origin policies used by countries exporting food products into Canada. It is essential that there be a level playing field and that both products made in Canada and prepackaged products imported into this country meet the same criteria. To have products imported into Canada declaring, for example, “Product of Country X” when 90% of the product is from country Y would be misleading to Canadian consumers and would create an unlevel playing field. In other words, country of origin claims that are developed for the Canadian market must be compatible with those of our trading partners such that the relabelling of products would not be necessary.
The outcome of the standing committee discussion provides an opportunity to establish a forum to amend and revise regulations and guidelines for “Made in Canada”. This forum, a consultation with all stakeholders, would allow an opportunity for new definitions with clear parameters to be established, defined, and communicated to both consumers and industry.
A key element for the success of this review is the allowance of a considerable transition time for the industry to comply with any new guidelines for “Made in Canada”, thus minimizing the cost of relabelling products.
In conclusion, on behalf of the CCGD members, I would urge the members of the standing committee to establish a forum for full and thorough dialogue with appropriate stakeholders involved, many of whom have presented before you. CCGD members offer our involvement and expertise to what we hope will be a timely and efficient process that meets our mutual objectives.
Thank you for taking time out of your busy schedule to include me in your study. My name is Mark Loney. My daughter Rosalie is here with me.
Our family owns an independent grocery store in northwestern Ontario. For the past 15 years, to complement a retail grocery business, we have been exporting food products, primarily Canadian jam, to the United States. As part of a back haul, we bring food products back into Canada from the U.S. to sell in our store, and this is the product here.
“Product of Canada” is the primary selling point to the jam we sell in the U.S. The perception in the market is that Canadian jam is much superior to American jam. Early in 2007 we got the bad news that the brand we used to sell, Malkin's, was being discontinued due to factory closure. When we heard this news we were taken aback, because this was a large part of our business. After some discussion, we decided to try to retain this business by designing our own jam label. We chose Last Mountain Berry Farms of southeast Saskatchewan, a small family owned business similar in size to ours, to produce the new jam for us. We decided to try to design one label good for both the U.S. and Canadian market. This was important to us as it would save thousands of dollars in segregation costs due to labelling, logistics, warehousing, etc.
We're encouraged in our endeavour by the U.S. Food and Drug Administration, FDA. Their system was designed with small business in mind. They did what they could to move our American label as close as possible to Canadian regulations. We were pleased with how fast and efficiently we were able to have our product for sale in another country. We have been selling there for ten months. We are still not able to sell in Canada.
I think you have a handout now, and I want you to look at it because you'll be surprised at how close the Canadian label and the U.S. label are to each other. This is primarily due to what FDA has done for us, not CFIA. Not only will you see all the French requirements but also both metric and imperial measurements. Regulations on both sides of the border are vague and open to interpretation. USFDA used interpretation to our advantage. As long as the relevant information is there in a readable format and there's truth in the label, they're satisfied.
This is not how the CFIA operates. Food imported into Canada does not go through the registration process. We naively thought this would be the case for jam. To our amazement, it was not. CFIA presumes that foreign product is compliant, and it can be sold the same day it enters our country. Domestic product, like our jam, is presumed non-compliant and is illegal to sell unless it goes through the label registration process.
They're the same, but if you look, there's “20 grams” on the nutritional facts table, and the lines are thicker on the NFT, but the CFIA won't allow me to sell that in Canada. I can't register that label, and it cost me tens of thousands of dollars. As a small business, that's hard to afford. One is actually registered. You might have a hard time telling which one is which, but one is registered in Canada and the other one is compliant for the U.S.
We were warned that the registration process would be long and complicated. For us, this was all too true. We entered the world of the CFIA, where, in our opinion, vague regulations turn into moving targets. I have a handout there as well that explains different interpretations they've had for the same regulation.
CFIA's response time is very slow, as it still relies on mail. Each version of our label had to be resubmitted on paper. We were only advised of its approval or rejection by the return of paperwork, which would specify in vague form what revisions were to be made. Verbal communication was frowned upon and was made worse by a turnaround time of more than 40 days for mail—again, a stark contrast to the FDA's fast and efficient system.
This is the label. One of my attempts was to take a Kraft label and say, “Well, this must be right.” That was the presumption I made. The CFIA took issue with my decision to include U.S. equivalents on our label, insisting that I would have to have two different versions of my own product. Likewise, this led to numerous resubmissions.
This is the Kraft label. I assumed the Kraft label to be correct. We used it as a guideline for our own label. When the paperwork returned after the 40-plus days, we discovered that the capital “T” on “tablespoon” made our label non-compliant. If you look closely at this label, you'll see it has a capital “T”.
The Kraft jam had the same capital “T”. I was infuriated and e-mailed to find out if Kraft had gone through the same registration ordeal that I was going through. I was surprised to learn that this required access to information protocol and would be unavailable to me. Is this Kraft label registered? I'd like to know, because they have mistakes on this.
I then started to look on the grocery store shelves and found massive non-compliance. I've brought some of these products; I have a lot of them here, but I have more. Many are multinational companies—Unilever, Kraft, Cadbury Schweppes—that should know better and have either slipped through the system or did not even bother with it.
Even more non-compliant are imported products that do not go through the registration process and appear to have had no scrutiny, which raises the issue of food safety. One importer in particular shows up as one of the largest importers of confectionery in Industry Canada's Canadian importers' database—I think that's a handout as well. To me, it shows that the system the CFIA has in place now is ineffective and inequitable as compared to domestic products such as ours.
I take some of the blame for not knowing what I was getting into, but I believe this is the plight of small business. We have to know everything. Meanwhile, a large corporation such as Kraft would have a person in the know, and probably a whole department. The system as it is structured now blindsides small business, local producers, and entrepreneurs who do not have access to the resources and expertise of the multinationals like Kraft. I could have brought many genuine local products that are non-compliant. Some businesses, I know, are unaware, and others can't afford the thousands of dollars in compliance costs.
The Canadian Federation of Independent Business surveyed its members recently. Its key findings were that, on average, an agribusiness spends 29 days and $19,000 per year to comply with CFIA regulations. Only one in five businesses believes the CFIA provides good overall service. The CFIA could significantly improve its communication with the small business community, especially with me. And complexity and compliance costs are increasing.
In closing, regardless of what decision you reach in regard to “Product of Canada”, the CFIA must take on a more proactive, facilitative, and lenient role in helping small businesses get their products to market. It is illogical, given such complicated regulations—I think you said those are in a pile “this high”, and I think I've read most of it—that the CFIA treats small business the same as a large corporation. The amount of $19,000 in compliance costs is minuscule to a company such as Kraft, but it's an enormous cost to the true producers of “Product of Canada”, local food that is created, distributed, and sold by small-town, rural Canadians. I believe, as illustrated in my story and accomplished by the United States FDA, that the CFIA can do that at less cost and with an increase in food safety.
I have a challenge for you. Our battle over the last year, as you can see by that label, has been to harmonize the American and Canadian labels. It is important to us because it would save our small business tens of thousands of dollars, and all this is over, basically, “20 grams”. Harmonization on a larger scale would save Canadians hundreds of millions of dollars.
We hear in the news almost daily where Canadians pay more than Americans for such things as automobiles and electronics. Sometimes, as in the case of Canadian farmers, they pay twice as much for their brand of fertilizers than in the U.S.
The price differences are extensive in the independent grocery system we are in. Heinz ketchup is close to twice the price in Canada as in the U.S. Like the farmers' fertilizer, it is not the cost but what the market will bear. Having different regulations, even minor differences, allows the American and Canadian markets to be price segregated.
The price differences can be proven. We recently made national headlines because one of our competitors, Wal-Mart, threatened to sue us for unfair competition for importing products like Heinz from the United States. The Competition Bureau explains this difference using economies of scale. This would work, except for where this bottle of Heinz ketchup is made. Does anyone have any idea where this is made? It's sold in the U.S., for half the price, and it's made in Canada: “Product of Canada”.
Label harmonization would end this price segregation, as it would fully open free trade to small businesses such as ourselves. The official opinion of the government on this is that it cannot happen because of significant differences. There are significant differences between some labels. I believe for other labels, such as those you have in front of you, the differences are insignificant, and I'd like you to look really closely to see what the differences are.
It is one of the goals of the CFIA to harmonize labels, but their approach appears to be that all the labels should harmonize or none of them should. This will never happen. The process needs to be gradual. One label would break the barrier. Pressure for further labels would ensue, and regulations would change and harmonize, one at a time.
If you look at the labels, you'll conclude that the USFDA has done its part. I believe, as politicians and being on this committee, you can make a difference.
This is my story and these are my concerns and ideas. I thank you again for involving me in your study, and I hope this opens up a discussion. I have ideas that I feel will make a difference.
I would have been selling this in Canada 10 months ago, and I still think it should be compatible to sell in Canada. As compared to some of these other labels, this is compliant, other than the fact that they don't want me to put the “20 grams” and the nutritional facts table.
To me, 20 grams is probably a better measurement, because if you look down the whole table...if you said that one tablespoon equals 15 millilitres, how much of that is sugar? Sugar is 12 grams. With “15 millilitres”, no one knows. But if you say, “Well, one tablespoon is 20 grams”, and you know that 13 grams of it is sugar, you say, “Holy cow, over half of what's there is sugar.” But “15 millilitres” tells you nothing.
One tablespoon is 20 grams and one tablespoon is 15 millilitres, so it is fact. The lab analysis, which I paid $800 for, came back, and one tablespoon equals 15 millilitres, equals 20 grams. It's very truthful that 20 grams is actually 15 millilitres. So why not let it in there?
It has nothing to do with the truth.
Sure. You don't have all morning, but I could spend all morning, because I do this for a living--help people work their way through this maze. Maybe I'll build on the one the gentleman just mentioned.
The real solution to that problem is to not have pre-label approval for jams. Of 100 products in a grocery store, all of the meat labels have to be approved prior to marketing. The label registration unit--Dr. Mark Bielby's group in Ottawa--has to approve every meat label and every jam label. None of their labels is subject to pre-market approval, simply because it's a product of historical reality that nobody is exactly sure where it all comes from.
If you have a cereal, if you were doing any kind of product that's not under supply management—and that's another story—for thousands of other food products, you'd simply sell it, and if somebody complains that it's a defective label, then they take action. They have to work on competitor complaint, because they get thousands of these a year.
The solution to the problem, for example, of the jams is to say why would jams be any different from all kinds of other food products? Simply, don't have pre-market label registration, so you get rid of all that detailed...my work.
I warned you not to go there, all this regulatory stuff. But here's an example of where, if you tried to have a regulatory change, it would be quite different for meat and jams than it would be for all other food products, because these are already pre-approved. You would take the JPEG, go through it in detail, and look at every little thing, whereas with all these other food products you don't.
So that's another example of where the law of unintended consequences could create trouble for you if you tried to deal with all products as though some were pre-market approved and some were not.
I didn't argue for no changes; I argued for no regulatory change.
If you recommend regulatory change to the Government of Canada, you won't see it for a couple of years from now, minimum. You won't have had an impact on Canadian consumers, because the regulatory change process is so slow and sporadic. It happens, though. This is a solution you could achieve without regulatory change. All you have to do is recommend to the government that the 51% rule developed by Industry Canada years ago, which is incorporated into the guide to food labelling, be changed so that it would be 80% or 90% or something like that. If they accept your recommendation, it will be changed. Then no company could say they used “Product of Canada” because the bulk of the cost of the production of this, even though the last transformation was in Canada, was spent in Canada, and therefore they could rely on that. They couldn't any longer.
The companies we're talking about here, which are relying on the 51% rule, were actually living up to the law that we now have. So what do we mean by mislabelling? Well, there was some guidance about “Product of Canada”. I didn't say “no changes”; I said “I recommend”. It would be good for my business if you tampered with the regulatory system, because you would just create another whole mess. I make my living doing that, in part.
My recommendation, if you want to make a difference, is that the existing guideline--it's not a regulation--of Industry Canada be higher than 51%. Make it 80% or 90%. It's there. You've stopped that problem for the jar of garlic that came in from another country, for which the bulk of the costs were actually spent on packing and processing rather than on the product. Therefore, if it were higher, then you couldn't bring that famous jar of garlic in and call it “Product of Canada”.
On the other side, regarding “Grown in Canada” and the issue that Canadians should be able to distinguish between pears grown in Canada and pears grown in China, in terms of the actual pear, that law is very clear. If you import pears from China, they're a product of China, and they won't get into this country unless they're described that way. I guarantee it. The law is clear. It's right there in the processed product regulations. The difference arises when you can those pears in China. If we want to distinguish that product, which you cannot legally bring in and call “Product of Canada” now, if it's produced there.... Whereas, if a Canadian company processed those pears and, say, had some Canadian pears and some Chinese pears, depending on the source, they would still be able to make that distinction.
I'm not arguing, sir, that you shouldn't make changes. I'm saying that the “Grown in Canada” can be done right now, and you don't need to make any regulatory changes whatsoever. Let's get off our butts and start really promoting “Grown in Canada” the way they promote “Australian grown” or “Foodland Ontario”. That's a really good program for Ontario. Why wouldn't we have a national program for this?
It's amazing to me that the farm community has not done this before now. It's interesting that Mr. Easter's old organization, the National Farmers Union, passed a major resolution at their last meeting. Who did they direct it to? It was to the National Farmers Union, not to the Government of Canada.
Thank you, Mr. Chairman.
Thanks very much to the witnesses for coming here today.
Truth in labelling, which is really what this is all about in a roundabout way, is something I've personally being involved in fighting for, I guess you could say, through local farm organizations for years.
Mr. Chairman, everyone here--the committee anyway--has heard me talk about the proverbial jug of grapefruit juice, which seems to have no problem in this country being labelled “Product of Canada”. But Mr. Loney is talking about a product here that comes from Canada, is grown in Canada, and is packaged in Canada, and he's having a hell of a time getting it through. It just shows that one of the reasons this committee is reviewing this is that it's long overdue. I know the minister is reviewing this right now, and he knows there's a problem. Finally, we're getting some action on this after years.
Ms. Cruikshank, you made a statement that this is not about food safety; it's about country of origin. Would you agree that the consumers today are more educated? I find that there's definitely a move out there. People want to know where their food is coming from. It isn't just that. I get people--and I'm talking about people from the urban parts of my riding--phoning me up. They read the papers, and they know the problems in agriculture. Not very long ago it was in the grains and oilseeds, and right now it's in the livestock sector. They say they want to be able to do their part to support agriculture. They say that if I tell them where our food comes from, they'll spend the little extra to buy that. I guess, in a way, I'm disagreeing a little bit with your statement.
Do you want to enlarge on that or agree or disagree with me?
I'll say it again. I'm not saying that the way we do food labelling is acceptable. It is awful. It significantly undermines innovation in Canada. It significantly undermines competitiveness, and it significantly hurts investment in the food industry.
I said that if you want to make a difference on the “Product of Canada” issue.... It's not the 500 other label issues or whether we should have pre-market label registration on jams or not. If you want to get into all that, fine. We can do all that stuff. My recommendation is to change it completely.
I was talking about the “Product of Canada” issue. There I was saying that if you really want to make a difference soon, you would recommend to the government that the Industry Canada guideline that says rather than look at the product in the can, we will look at all the costs associated with the production of that, and if it's more than 51%, you can still call it “Product of Canada”. If you want to change that, fine. Make it 90%; it could be done tomorrow. That solves the problem of those pre-packaged products that fall under this legislation and regulations. Unless they can show that 90% of the production costs were spent in Canada, they can't call it “Product of Canada”. That solves that problem.
In terms of “Grown in Canada”, you can use that now. If you want to say “Prepared in Canada”, as opposed to “Product of Canada”, you can use that now. The actual expression, “Product of Canada”, doesn't actually exist in the kind of thing we're talking about here. It doesn't. There are hundreds and hundreds of food commodities, and each of them has their own regulatory regime.
That's simply because the 51% rule is based on cost, not content. It was never designed for food. It was presumably for something like importing T-shirts from Asia and then putting on some crests or doing some embroidery. If 51% of the costs are incurred here, you can call it “Product of Canada”--rather than the basic T-shirt or the cotton. If you want to have a direct impact, change that. If it was more than 80% or 90%, you'd probably cut out most of these things where people think that people have been misled.
As far as “Grown in Canada” goes, people use that now. There's absolutely no prohibition against using “Grown in Canada” now. In fact, it surprises me that people don't use it more. It's partly because of the integrated nature of our food system and partly because of our climate. But if someone had “Grown in Canada” on their label today and it wasn't grown in Canada, a single competitor complaint, a single consumer complaint, would go to the Food Inspection Agency. They have 6,000 or 7,000 people there. I am sure that somebody would be sent out to do one of their thousands of investigations. If it was clear that the product was not grown in Canada, they would take one of their many very significant enforcement powers to stop that. It happens every day.
I don't see any reason why you would have any mandatory rules about using “Grown in Canada”. If it's not grown in Canada, it's misleading; therefore under subsection 5(1) of the Food and Drugs Act you could stop its importation. You could seize and detain the product. You couldn't require a recall, but increasingly these days—and I spend a lot of time doing this—they end up talking to the big retailers and they have a product withdrawal, even though it isn't a public health problem.
So we have all the law we need to deal with somebody calling something “Grown in Canada” if it wasn't grown in Canada. There's absolutely no need for any regulatory change to deal with that.
Thank you very much, Mr. Chair.
Thank you to all our witnesses for coming today. It's a rather interesting conversation we're having here.
The whole idea here, when the minister commissioned or struck out on this study, was to make this work for Canadians, make it work for the Canadian consumer and for the producer. You know, everybody around here says we have the best food in the world and the safest food in the world. I think we continue to say that and I think it continues to be true. We have a system that has some problems, some grey areas and confusion, and I guess the minister wants to straighten that out.
Mr. Doering, you talked about easy solutions. One of the things I agree with you on, 110%, is “Grown in Canada”, and doing this in a voluntary way. As I was just saying to someone a few minutes ago, I can't believe we're not there already. I think this is probably the greatest marketing tool the marketers would have, “Grown in Canada”. When I go into a supermarket--very rarely, but when I do go...or when my wife goes, hopefully she looks for Canadian-made products. Sometimes, when you get the damn thing home, you realize that it really isn't made in Canada, and that gets pretty frustrating. So we have to get that straight, there's no question about that.
The other thing that I think you said is that it has to be simple, and I agree with that.
To Ms. Cruikshank, let's say it was decided that 95% of a Canadian product had to be Canadian. In other words, if you had a whole chicken and it was grown in Canada, produced in Canada, it could be called Canadian. If you had a chicken pot pie, as you suggested, and it had different ingredients from...then it wouldn't be called Canadian. Would the people in your industry agree with that, grosso modo?
First of all, on those 35,000 SKUs, we're only talking about a few hundred SKUs out of that vast array of what you'll get in a supermarket that actually deals with this “Product of Canada” issue.
So let's drill down now to where this is really relevant. Let's take juice. You have a really good Canadian company reasonably close to that lady's riding, I believe. That's a good Canadian company; they do apple juice. To the extent they can, they're using Canadian product as much as possible; however, during the wintertime there may not be enough apples. So they need the ability to access concentrate or juice from other countries and still be able to keep on producing. We don't want to put that good Canadian juice processor out of business. That's why you don't want to go with 100%. A lot of juices, in fact, are accessed from a mixture of various fruit juices. There aren't a whole lot of other products other than apples that you can make juice from, so that's why my point about the law of unintended consequences. Be careful.
If you say it was made at 80%, that it had to be Canadian content--let's say that--then for that good Canadian juice company, they may be able to keep on being a product of Canada and buying Canadian apples. As you know, most Canadian apple growers have gone out of business because you can't make a profit with it. It would be a shame if your actions resulted in putting even more people out of business.
So let's say it was 80%. They may be able to do apples and still be a product of Canada, because they don't want to be in the position of saying, well, during January we access some apple juice from another country and now we can't call it a product of Canada. So they would then be on the same footing as a product that was completely produced in China and shipped here, and there were no Canadian jobs related to it.
So if you pick a number like 80% or 90%, you can deal with those few cases where people are relying on the old Industry Canada rule to say this is a product of Canada, because basically if you look at our costs, after the transformation, we meet it. These people couldn't any longer.
Thank you very much. I'll have to ask to be excused. We have a lot of students coming to Ottawa these days and they're very important to members of Parliament.
I found your presentations very interesting. We found many of them interesting, but I was particularly enamoured of Mr. Doering's comments. I could almost give an “amen” to everything you had to say. I'm sure there were places where we might have some differences, but much of what you said goes right to the core of what we've come to do—to do something as expeditiously as we can, as quickly as we can, and with as little government red tape as possible.
We know that labelling is important, particularly during these difficult times in agriculture. Perhaps never in history have we experienced, particularly in the red meat industry, such difficult times. We know what Canadians will do. Canadians expressed their appreciation for the safety of our food supply during the BSE crisis. Nothing could come close to giving us the kind of feeling we had when Canadians clamoured for Canadian beef during that time.
I think we need to move quickly. I believe the Canadian brand should be a new branding that denotes the safety of our food supply through CFIA, PMRA, Health Canada, and Agriculture Canada. All of these agencies have given assurances. Canadians have that. It's one thing that Canadians truly believe in. They have assurances: when a product is Canadian and they know it's Canadian, they will buy it. We need that brand, and this is where government needs to become involved. We should sell that idea to Canadians and promote Canada. Let's become salesmen for our country, as provinces and certain regions of our country have done.
I want to know from all of you what you think about that whole idea of a Canadian brand. I'm not even sure that we need to change the 51%. At the end of the day, it's not going to matter a whole lot if we continue with the “Product of Canada” label. When it says “Product of Canada” now, we may need to do some promoting to tell Canadians that it may not necessarily be a product of Canada in its entirety. We know that the one brand is the best we can do. The quickest way we can do it is by taking your advice, staying away from regulations, and moving quickly towards making these changes.
I'm wondering whether we have consensus or whether there's a difference of feeling about this. Jeanne, I know you're in the marketing in a different level, in a different way. Certainly, Mr. Loney, I sympathize with what you've had to go through. We're seeing it with PMRA and in many other areas.
Those are my comments. So take it away. Take whatever time we have and tell us. We need direction quickly, to move forward. We've been here 12 years. Mr. Doering and I go back 12 years, maybe longer. I'm not going to be here 12 years from now, but I'd like to see something happen before I leave this place.
Thank you, Mr. Chairman.
When Mr. Bezan asked his first question he pointed out the real issue here. Contrary to what you said at the start, Ms. Cruikshank, it's not about country of origin; it's about identifying Canadian content, Canadian products, whatever. That's what the consumer wants to know.
If there's any one thing I've seen today, we all know there's a consensus among consumers that we need some changes. Certainly it's in the agricultural end of it, where I come from. And I think there's a consensus around this table as a committee that we need some changes in this country. I'm not convinced there's a consensus among the witnesses that change is really wanted.
But one thing I have noticed here today from all of you is that whatever changes are made--and I think they're inevitable--they should be simple, and I agree with that. Mr. Storseth commented about government involvement and that it gets so confusing. What also complicates it is that every few weeks or every month in the House of Commons somebody brings forth a private member's bill on labelling. We're dealing with one right now concerning genetically modified labelling. This complicates things and adds extra costs.
At the end of the day, the consumer really wants to know about Canadian content so he or she can make that choice. I think that's the thing.
When it comes to simplicity, Mr. Doering talked about 80% or 51%. Mr. Bezan and Mr. Easter really touched on this. It's about getting away from the packaging being part of the cost. To me there has to be a minimum of 51% content in there; anything less than that and you're in a minority situation. I think the consumer wants to know that at least a majority, if not all--which is even better--is there.
So in a nutshell, how do we make that simple? Do we stick with “Product of Canada”, the way we have it now, but change the rules of anything that qualifies under it and keep it simple?
I would like to come back to several comments that you made, Ms. Cruikshank. Earlier, you talked about the confusion surrounding some of the testimony presented to the committee. Perhaps we are somewhat to blame for that. I spoke about food safety. In the case of labels bearing the “Product of Canada” designation, you maintain that a distinction must be made and that such a designation does not guarantee the safety of food products.
However, as Mr. Bezan pointed out, several bills are currently in the works, specifically bills C-51 and C-52, and these will be examined shortly in committee. I'm not sure which committee will have the honour, agriculture or health, but that's not important.
Let me explain why we associated food safety with product labelling. I confess that I'm guilty of linking the two as well. You have to understand that over the past three years, the Canadian Food Inspection Agency has ordered at least 50 food product recalls. The fact is that when the provenance of the products was checked in the case of recalls for health reasons or for salmonella contamination, various types of bacteria were discovered in the products. In some instances, glass or metal was found in the products. The recalls involved black pepper from Pakistan, cantaloupe from Honduras and spinach from the United States. For the consumer, the “Product of Canada” designation provides a measure of safety. Of course, it is not a 100% guarantee that there will not be a problem with the product. For me as a consumer, when I see a product from Canada, whether processed or fresh, I am confident that this is a good product, one that I can buy with confidence.