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House of Commons Emblem

Standing Committee on Fisheries and Oceans


NUMBER 146 
l
1st SESSION 
l
42nd PARLIAMENT 

EVIDENCE

Wednesday, May 15, 2019

[Recorded by Electronic Apparatus]

  (1625)  

[English]

     Good afternoon, everyone. We'll get started with our first set of witnesses.
    Pursuant to Standing Order 108(2), we are holding a briefing session on seafood mislabelling. In our first half hour we have, from Oceana Canada, Kimberly Elmslie, campaign director, and Lesley Wilmot, communications director. As well, as an individual, we have a former employee of Oceana Canada, Julia Levin. Welcome.
    I don't know who has opening remarks. You're going to share the time? Okay.
    When you're ready, Lesley, you have seven minutes or less.
    Thank you very much for asking us to appear before you today to talk about seafood mislabelling, how it impacts Canada and the world, and what we can do to address it.
    Oceana Canada, for anyone who doesn't know, is an independent charity. We're part of the largest international advocacy group focused solely on ocean conservation. We have offices across the Americas, in the EU and in Asia. We believe that Canada has a national and a global obligation to rebuild depleted fisheries and ensure a sustainable source of protein for the world's growing population.
    As for the issue today, we've been investigating the prevalence of seafood fraud and species substitutions since 2017 in Canada, and internationally since 2011. We have dedicated campaigns on this issue in the U.S., the EU, Mexico and Brazil. Seafood fraud or mislabelling is really any activity that misrepresents the product being sold, including swapping a cheaper, less desirable or more readily available species for one that is more expensive, and substituting farmed products for wild-caught ones, or black market fish for legally caught varieties. It undermines food safety; it cheats consumers and the Canadian fishing industry; and it weakens the sustainability of fish populations. It can even mask global human rights abuses by creating a market for illegally caught fish.
    When one fish is substituted for another, consumers risk exposure to allergens, parasites, environmental chemicals, aquaculture drugs or natural toxins found in some species of fish. Cheap or more readily available species are mislabelled so that they can be sold as expensive, desirable or supply limited ones. Not only do consumers get cheated out of what they paid for, but responsible, honest businesses also face unfair market competition. It harms our oceans by disguising threatened and endangered species and allowing illegally caught fish into the market. This undermines efforts to stop overfishing and to manage our fisheries sustainably.
    Unfortunately, it's very common here in Canada and around the world. A 2016 review by Oceana of more than 200 published studies, from 55 countries, found that one in five of more than 25,000 samples was mislabelled. More recently in Canada, in 2017 and 2018, we collected seafood samples from restaurants and retailers in five Canadian cities and found that an alarming 44% of samples were mislabelled. This is consistent with other studies that have taken place in Canada. For example, the University of Guelph, with Dr. Bob Hanner, found that up to 41% of samples were mislabelled, and again, in 2018, the University of British Columbia found that 25% were mislabelled.
    The Canadian Food Inspection Agency's own research found that 15% of mislabelling happened before seafood products even reached the processing stage. Canada produces high quality seafood, however we export roughly 85% of this, and about 80% of what we eat here in Canada is imported from overseas. Seafood is traded globally, more than any other food. The supply chains are long, complex and quite obscure, and they often cross many national borders, sometimes going back and forth across the same border, which allows for many opportunities for mislabelling and illegal activity to be introduced along the way.
    The best way to combat this is with full chain traceability, requiring that key information be paired with the fish product along the entire supply chain, from the point of capture or harvest to the point of sale. This approach has been implemented in the EU, which is the largest importer of seafood in the world, and the rate of mislabelling has dropped. The U.S. also recently implemented boat-to-border traceability for species that are at the highest risk of fraud.
    That's the context in Canada. My colleague, Kim, is going to share recommendations for how we can address this more specifically in Canada.
    I wish I could present you guys with a silver bullet that's an easy fix to this issue, but unfortunately, as Lesley has alluded, it is a very complex issue. What further complicates things is that Canada is lagging behind comparable jurisdictions. There are fewer regulatory requirements governing traceability here in Canada, for now. No single agency is wholly in charge of combatting seafood fraud. It's regulated through multiple government departments at federal and provincial levels, with a patchwork of legislation and regulatory provisions. Then to further complicate things, provinces and municipalities may play a role.
    However, there are other jurisdictions around the world that are doing something to tackle seafood fraud. For instance, in the European Union they're really leading the way on combatting seafood fraud and they have robust proof-of-legality and traceability requirements to deter fraud and to prevent the entry of illegally caught seafood into their markets. Right now, if you're in the EU and you buy a seafood product, as a buyer you're going to know from the label on the product the commercial and scientific name, the production method, the geographical area where the fish was caught or farmed, the fishing gear that was used, whether the product is fresh, frozen or previously frozen, the best-before date and any information on potential allergens.
    We found that these regulations in the EU are working. Before they were in place, we were finding fraud levels of 23% in the EU. Then in 2015, after the regulations were put into place, we found levels of about 7%, so it is effective.
    A few years ago, the United States created a task force to combat fraud and illegal, unreported and unregulated fishing, or IUU. This was the seafood import monitoring program, or SIMP. This has looked at the species that are at greatest risk for fraud. It required traceability from boat or farm to the U.S. border. This is something that is going to be rolled out to other species within the United States. They just started with the most high-risk ones.
    Some of our recommendations for what could be done to combat this issue are, first, to create a multi-department task force in Canada to ensure that all the relevant departments work together to strategize on how to detect and prevent seafood fraud. This would be supported by full-chain traceability requirements.
    Second is to require and share catch documentation to identify the origin and legality of seafood for all domestic and imported seafood, in line with what is currently required by the EU, and recommended by the Food and Agriculture Organization of the United Nations. Canada agreed to this at the G7 summit.
    Our next recommendation is to strengthen the existing safe food for Canadians regulations, so that they require full-chain traceability. Currently, they require one step forward and one step back. When the time comes for review, we would like to see that be more fulsome and go throughout the full system, and also require that the regulatory bodies report this information electronically.
    Fourth is to improve seafood labelling standards. We heard what the EU can find out about their food. We'd like to be able to find that out here as well. We've seen that work; it can work again, so that essential information about the fish is travelling with the fish.
    Finally, we'd recommend the use of DNA testing for imported and domestic species authentification in CFIA's inspection program, and more investment in that department, so they can do this.
    All that to say, we're really looking forward to your questions. We are looking forward to hearing Lyzette's presentation, and to working with CFIA, and to working with other departments because we do want to find a solution to this problem.

  (1630)  

    Thank you for that.
    Julia, I don't know if you had a presentation to deliver.
    Okay. I know you were listed as an individual, so I wanted to give you that opportunity.
    Thank you.
    At first I didn't know how much time we were going to have, but it looks like we could probably do a seven-seven-seven minute round before we reach five o'clock.
     Mr. Morrissey, you have seven minutes or less, please.
    Thank you for your presentations. Obviously, they're in-depth and you put a lot of thought and research into your statistics.
    When you reference the 44% of samples in restaurants that are mislabelled—I forget the other commercial outlets you were looking at—could you give us an example of the type of mislabelling you uncovered there?
     Yes.
    Of the nearly 400 samples collected from restaurants and grocery stores, and a small number from markets, 44% were mislabelled.
    A common one was snapper, or “red snapper” on the label, but it was actually tilapia. We collected 44 samples of snapper, with 12 of red snapper, and none of those were in the snapper family. It's worth keeping in mind that “snapper” is actually a generic name that can apply to over 200 species, and none of these 44 samples that we collected were any of those 200 species. That was one of the common mislabelling incidents we came across.
    There are also examples of Pacific salmon, and any of those five main species of Pacific salmon were actually Atlantic salmon, which is a big issue. When we were out in Atlantic Canada, we found “Atlantic cod” on the label, and it was actually Pacific cod. All of these really iconic species in the different areas around the country were mislabelled.
    One slightly unpleasant example that we've talked about in the past is where white tuna was almost always escolar, which is indigestible. I'll leave it at that.

  (1635)  

    It's known as the laxative of the sea.
    An hon. member: They don't put that on the menu!
    I'll go back to your reference of the snapper. A fish is a fish. There are all these varieties. Obviously, it tastes good to me or I wouldn't continue eating it. From that side, why should the consumer be concerned?
    There are multiple reasons. Let's start with health. Of the hundreds of mislabelled samples that we found, 60% had health issues.
    They had health issues?
    They had potential health impacts. For example, the type of species substituted had higher risk of certain environmental contaminants. We came to the number by cross-referencing the CFIA's fish list, which lists all of the potential health impacts of certain species.
    We cross-referenced the substituted species that CFIA flagged as having associated health risks with what was on the label. In that 60% of cases, they were fish with flagged health concerns that weren't reflected in the species on the label.
    That would concern me.
    Exactly.
    Also, seafood is a high allergen risk category. You don't want to be served a fish that you're allergic to. That's obviously a huge issue.
    Then there's the impact on our oceans, because 30% of the mislabelled samples are vulnerable or threatened species, and as my colleague mentioned, illegal fishing is also a big issue related to seafood fraud. It often ends up happening, and one of the primary motives for seafood fraud, other than economic incentive, is to launder illegally caught fish into supply chains.
    As we presented before—
    Could you elaborate on that a bit more? They're laundering....
    They're laundering illegally caught fish.
    A minimum of 20% of the global fishing catch is associated with illegal, unreported and unregulated fishing. Imagine how many thousands and thousands of tonnes of fish that is. All of that needs to be laundered into supply chains, and it happens through mislabelling fish along the way.
    Tied to illegal fishing is slavery in seafood supply chains. We'd be happy to present a submission that we put forward to your colleagues a year and a half ago, who were studying supply chains and responsible enterprises. Slavery within the seafood supply chain is very well documented, so that's another reason you wouldn't want to eat a mislabelled fish.
    As well, the last 75% of the mislabelled samples that we collected were for more expensive fish. Most of the time, you're just being ripped off. From a financial standpoint, if you're paying for coho salmon, which is quite a bit more expensive than Atlantic salmon, you want to make sure you get that. If you're paying for Chilean sea bass, you don't want that to be a cheap whitefish.
    I'll give you some examples from a report that we had put together with all of our sampling, which I can certainly supply to committee members. I'll just read from it, because I'm not good at remembering numbers.
     Some of the things we found were that, on the menu, sea bass, which costs $113 per kilogram, was replaced by catfish, which costs $11 per kilogram; and rock lobster at $95 a pound was replaced by crayfish at $20 a pound. This is the thing we're seeing. You've paid for one thing, but you're getting a much cheaper substitute than what you think you're getting.

  (1640)  

     How do you define mislabelling? There's an obvious side to it, but it takes many different forms.
    Yes, it does.
    Seafood fraud is actually an umbrella term that can also refer to things like overglazing, underweighting and different issues of that sort, where you're pretending there's more fish matter than there is in what you're selling.
    Oceana's focus on species substitution is due to the ocean impacts of that form of seafood fraud.
    Is that enough of an answer to your question?
    Well, I would interpret or define it as simply telling me I'm getting a particular species when I'm not, but you're getting into the mislabelling of volumes. I know that in some fish processing operations, you can increase the weight volume by doing things with it.
    Does that...?
    I'll just clarify that our study does not look at things like volumes. It's really about species mislabelling—species substitution.
    Okay, it's strictly.... It should be, so you can isolate that.
    Right.
    Yes, all of our numbers are strictly of substituted species: It was one thing on the menu, and from doing did DNA testing we found that it was something completely different. We didn't look at all of the other issues that can be present.
    Now we go to the Conservative side, and Mr. Doherty, for seven minutes or less, please.
    Mr. Chair, thank you to our guests.
    Where does your data on illegal and unreported fishing come from?
    It comes from studies by Daniel Pauly, out of UBC, and Sylvain Charlebois at Dalhousie. Daniel Pauly is on our board, and is a global scientist who's looked at these global numbers. In the scientific community, that is the accepted number.
    Does that data go directly to where those food sources come from and where they end up on consumers' plates, or do they have the numbers of the actual amount of illegal and unreported fishing that goes on?
    Do you mean in biomass?
    Yes.
    Yes, I know it is up to 30% of the global biomass of the catch.
    Okay, but would they have the actual data of the illegal and unreported fishing that's going on off our coast?
    Yes, I believe so. There is a paper that came out recently called “Global Fisheries' Sunken Billions”. I can get you a copy of that. It goes into great detail.
    That would be great. This leads to my next question. Have you been consulting with government departments, such as CFIA and DFO, and industry stakeholders on this?
    Yes, we have, when we do our reports. We've gone through an interesting progression, with the departments in the past viewing it as not really being a problem, to now, when I think there's an understanding that this is a problem that needs to be tackled. However, no one department seems to be wholly responsible. If no one person's responsible, then no one is responsible. We haven't seen anybody take leadership on this, and we've been pushing on issues. We want to continue to consult and to be helpful and additive to this, but it has been difficult to navigate the legislative framework in order to figure out what the solutions would be.
    Could you forward a copy of the report to us?
    Mr. Chair, you can correct me. Does it have to go through the clerk, or can she send it directly to us? We're not studying this, so...? Can the information be shared with us?
    I think I'd rather see it go to the clerk and distributed to everybody.
    Either way. The witnesses will also get my card at the end of this, and we can direct it accordingly.
    With that, I'm going to turn my time over to my colleague, Mel Arnold.
    Your comments just a few seconds ago are tied in with one of the questions I had about whose jurisdiction and whose responsibility it is. This brings me back to the study we did on fish diseases, the aquaculture industry, and so on. There seems to be a hot-potato issue happening between CFIA and Department of Fisheries and Oceans, as no one really has the lead. I believe the last document we saw said that DFO was going to recommend that CFIA take the lead, instead of CFIA saying, “Okay, we've got the ball, we'll run with it.”
    Do you see that as one of the biggest challenges? As you said, no one has the lead or the jurisdiction, so no one is responsible.

  (1645)  

     I think that's also something the next witness can speak to more as to where those boundaries are in that regulatory framework. It's also why we are calling for a multi-departmental task force to be put together to untangle this web to see who is going to be responsible for each piece and how we can come to a solution with all of the different departments involved,
    I'll add that when the United States came up with their seafood import monitoring program, it took 16 departments working together and coming up with recommendations. It is a vital first step to have all of those key players sit down at the table and tackle it together.
    I'm glad you indicated what that first step needs to be. It may only be in B.C., but I believe oysters have to be tracked from the point of origin to the point of consumption. Why is that not necessary for other fish in B.C.?
    That's a fantastic question. Certain kinds of shellfish have increased traceability, I think because of the disease and health risks associated with them, but it's a proof of concept that can be applied to make sure that all of the seafood we eat is tracked.
    I'm going to pass the rest of my time to Mr. Calkins.
    You have two minutes.
    When the EU process you talked about was put in place, was there an impact on the costs associated with the market price of seafood now going through the legal channel? I'm curious what the impact is because I'm a farmer from central Alberta. When we put traceability requirements on beef and other things, there is a cost to a producer in the system for that. I'm not saying there isn't a cost-benefit relationship, but I'm just wondering what the cost was, if it were part of the information you gleaned.
    Our colleagues didn't look at that specifically, and a cost distribution conversation definitely has to happen with the players. One thing we heard from industry that has included traceability in their business operations, both internationally in those jurisdictions as well as domestically, is that the benefits of traceability far extend regulatory need and include.... Because seafood is so perishable and 30% of the product can be lost, it means that's not happening to the same extent. It means your supply chain just becomes efficient on whole new levels. There are interesting intrinsic economic benefits. Market access and traceability software are added costs, and different jurisdictions have approached cost-sharing between government and industry in various ways as well. That would be something for the task force.
    A lot of our seafood is already exported, a fair amount of it to the EU and U.S. To be internationally competitive and have a market, many companies are already doing increased traceability.
    They're already certified.
     DFO's catch monitoring program requires that a certain amount of information be shared with other countries that we are not sharing internally.
    I understand.
    The chair is going to take my time. I have a lot of great questions.
    Voices: Oh, oh!
    Mr. Blaine Calkins: He's going to silence me, and—
    I'm not taking his time; I'm telling him he's gone over time.
    Mr. Johns, you have seven minutes or less, please.
     I'll keep on the same thread as Mr. Calkins. He talked about the benefit. We've seen traceability programs. On Fogo Island, they're doing really good work on this with the fish, and we're seeing that value going back to the fishers.
    Are there traceability programs in the U.S. and the EU that have demonstrated that significant benefit?
    I see a lot of our fishers, and this is a cost to them. It has a huge impact on a commercial fleet that is already struggling to stay afloat.
    Can you speak about some of the modelling in other countries?
    Really interesting things have been happening around this concept of Fishcoin, the use of blockchain and how money is allocated to incentivize fishers to participate in the program. I can send more information on fishcoin, but there are different ways in which fishers are seeing the benefits of the increased financial cost to them of traceability.

  (1650)  

    I'm sure a lot of fish is being substituted. Obviously, lower value fish are being substituted for higher value fish. That hurts the fishers directly.
    Exactly. It changes market prices.
    Who do you think would be the best, if there were a government department to take the lead on a national traceability program? Have you put some thoughts into that?
     The issue is that imports are dealt with by one agency and labelling by another agency and, in order to implement this, it requires input all the way from the Canada Border Agency to DFO to CFIA. Right now, it really needs to be a larger group that comes together to figure out how to tackle it, because there isn't the regulatory or jurisdictional ability for any one department to address this.
    I have a question for Kim.
    Why do you think seafood traceability hasn't been addressed more successfully in Canada compared with the U.S., the EU and other parts of the world? I think Australia has also had some success.
    I think there are a few reasons. One is that it wasn't really a very well-known issue. I don't think Canadians were completely aware of it. When we first started doing the testing, we did it around the country to draw attention to the issue. It seems, from the response that we got from the public, they're shocked that this is what's happening. I think it's one of those things that weren't part of our psyche as a problem, but now that we're seeing that food fraud is becoming more prevalent, such as with honey, olive oil and these other products, we're starting to understand our food chains. I think we're a little bit disconnected from our food. Seafood is one of those things that changes hands many times and, by the time you get it on your plate, it's almost indistinguishable from what it was.
    We have a fun game that we play for anyone who has come to one our university food fraud lunches. We put up two fillets and ask people which one is the salmon. We don't know, even people from the coast—not to out anyone here. It's hard to know because it is a disguised quantity. Then I think again about the complexity of whose jurisdiction it is. What regulations are required? How do we do this? There isn't a straight path to that.
    How much time do I have left?
    You have three minutes.
    Obviously, in British Columbia right now, we're dealing with a lot of money laundering. This must be an easy thing to park your money: illegal fishing with human rights abuses attached to it. I mean, this is a lot of money. Can you speak to the amount of money that is possibly being pushed into this area?
    Absolutely. The following is a global number, because we don't have a Canada-specific number. Again, it's from Sylvain Charlesbois. Food fraud represents a $52-billion problem worldwide and is allegedly worth more than the heroin trade and firearms trafficking combined. It is a huge global issue that does not get anywhere near the same kind of attention as the drug problem or trafficking. It really is a huge hidden problem.
    The B.C. government announced today that they're going to do an inquiry into money laundering, and I hope they take a look at this fish fraud, because, obviously, we're bringing in so much illegal fish.
     Can you talk about the direct impact of fish fraud on our ecosystem in the oceans? You talked about illegal fishing. Can you maybe talk about some species that might really be under threat and especially close to Canada?
    To go back to the overall statistic, of the mislabelled substitutes that we found, we did find that 30% were vulnerable or threatened species, and that was a variety of species.
    An additional 38% was unknown because the state of the fish stock was unknown. Of the health status of fish stocks that we know of, 30% were from vulnerable species.
    One thing I can imagine, just to go back to the cost of this, is that the GDP boost to our own country's fisheries would be massive. Do you know what that number would be if we stopped fish fraud? That is a significant amount of money that's coming into our country potentially illegally, and it could be put back into fishing communities and coastal communities. That traceability program should pay for itself.

  (1655)  

    That figure could probably be arrived at by looking at U.S. numbers and then at the size of imports and exports between Canada and the U.S. We don't have that number right now. We can try to get that. I'm not sure if it exists, but we can certainly try.
    It's a difficult thing to quantify because the impact on your market prices is devalued, and there are just so many economic impacts.
    Absolutely. For the Australians, this was kick-started by the prawns, right? The fishers in Australia had a big thing with prawns coming in illegally and being substituted for Australian prawns.
     That is certainly happening here too.
    Yes, right, so consumers and the fishers are basically being ripped off.
    There are a couple of minutes left. I have a question I'd like to ask.
    You were talking about traceability and knowing which fish is in it. In Newfoundland and Labrador, we get processors—I have one company, Ocean Choice International, for example, in my riding, and Mr. Rogers has Icewater Seafoods Inc.—who talk about the MSC certification and the fact that the label can tell you when it was caught, where it was caught, when it was processed and where it has gone to.
    Does that type of certification and labelling help eliminate the illegitimate labelling of seafood products?
    MSC is a great example of chain-of-custody traceability. The problem is that it applies to less than 10% of the seafood being sold. Access to safe, honestly labelled and legally caught seafood shouldn't be a luxury; it should be a right that every Canadian has, no matter where they buy their seafood.
    The approach the United States has taken right now of only applying traceability to 40% of their imports is that we see more mislabelling of what is no longer included in that segment. When you have 10% that's MSC, you tend to have issues with the species that aren't being regulated.
    It's a kind of all-or-nothing situation. You need to trace all of your fish in order to really hit the hammer on this one.
    I'm just glad to know that the companies that operate locally in my riding are doing this—
    Yes, and they're doing the right thing.
    —to a higher level of confidence.
    MSC is great, yes.
    Thank you to our three witnesses. It's been an informative half hour or so. When this was first put forward for study by Mr. Morrissey, I was thinking it was going to be a bit on the boring side, but it's not. It's great information that you're providing, and something that I think most of us didn't realize was happening, especially with the illegitimate valuing of something that's $95 a pound when there's a $20 per pound product in the package.
    I have one question for purposes of explanation.
    Ask quickly, please.
    How do you audit or verify the information you are giving here? You said that you went across the country and did spot samples. I would be curious to know whether you could tell the committee how you independently verify what you've been reporting to the committee.
    We work with Robert Hanner's lab. He's the leading scientist in Canada on this and is part of the sea BOL, the Barcode of Life initiative. “Barcode” means you take a snippet of the DNA, and that snippet, like a bar code, tells you exactly what species you're working with. They're developing the most comprehensive bar code of DNA sequences for seafood, and they did all our DNA analysis. They came up with the species for each of the samples, and then we cross-referenced back with the menu or label. They were responsible for the science.
    We also had the same survey design as many of the international studies that are consistent with our results. In the document we'll be sharing with the committee, we'll have information about that as well.
    If the committee does study this further, I would recommend bringing Robert Hanner to present as well on this.
    Thank you for that.
    We'll suspend for a moment to change our witnesses.

  (1655)  


  (1700)  

    All right, we'll start again.
    Next up for presentation is the Canadian Food Inspection Agency. We are joined by Lyzette Lamondin, the executive director of the food safety and consumer protection directorate, policy and programs. Now that's a title and a half.
    Whenever you're ready, you can start with your opening statement, for seven minutes or less, please.
    Good day.
    As mentioned, my name is Lyzette Lamondin.

[Translation]

    I want to thank the committee for giving me the opportunity to speak about seafood labelling.

[English]

    More specifically, I appreciate being able to explain how labelling fits into the mandate of the Canadian Food Inspection Agency, the CFIA, and into our ongoing work in this area.

[Translation]

    The CFIA is a risk-based scientific agency. As part of the health portfolio, the CFIA strives to maintain a strong and reliable food safety system.

[English]

     Food products, whether domestic or imported, must comply with Canada's food safety and labelling laws. This includes a requirement that food be labelled in a way that is truthful and not misleading. It applies to all food, including seafood and fish.
    The CFIA is well aware of the growing attention to the fish and seafood labelling issue and the associated risk of food fraud.

[Translation]

    We also recognize that this is a global issue and not just a national issue.

[English]

     Today I would like to discuss three points regarding the issue—how CFIA works to protect Canadians when it comes to fish and seafood, how our new safe food for Canadians regulations support CFIA in this area and how we continue to work to maintain public trust.
    First, fish and seafood represent one of several commodities that can be false or misleading. The CFIA monitors for fish mislabelling and substitution as part of regular inspection programs and does conduct laboratory analysis when necessary to detect fish species substitution.
    In addition to our own inspection activities, there are a number of third party studies, such as the reports by Oceana Canada, that have examined the issue and contribute to our knowledge base on these issues. I appreciated the presentation by Oceana today to share their perspective, and I appreciated their offer to brief me earlier this week.

  (1705)  

[Translation]

    Third-party studies are a useful source of information for the CFIA.

[English]

     Still, it is without question the responsibility of businesses, our regulated parties, to make sure that the labels on their food products are truthful and not misleading, and that all labelling requirements are met.
    The CFIA plays a key oversight role, verifying that food labels and advertising materials comply with regulations. The CFIA works to protect Canadians from intentional adulteration, substitution or product misrepresentation in a number of ways. For example, the CFIA has been routinely using DNA bar coding technology for fish species since 2013, so we can check that the fish and seafood product is what it says it is. The CFIA provides tools such as online labelling tools to promote compliance and help businesses themselves verify that their labels meet all the regulatory requirement.
    Another key tool is the CFIA fish list, which links the scientific name of a fish or seafood to the common name that the consumer would look for—in other words, what the fish is known as in Canada.
    There are many potential causes of food misrepresentation, as well. Without question, there are situations when there is a clear intent to commit a fraudulent act for an economic benefit. This is a criminal act, the enforcement of which involves not just the CFIA but law enforcement agencies.
    Misrepresentation can also occur, however, without intent. For example, in some cases we are learning that the mislabelling may occur when our trading partners call a species by one name and we call it by another. This may be compounded by the fact that names must appear in both official languages in Canada. There may also be situations where companies substitute species out of convenience, not recognizing the seriousness of the action they're taking.

[Translation]

    I want to make it clear that we take appropriate action in all cases of non-compliance.

[English]

     Finally as noted in the Oceana Canada report, the international seafood supply chain is highly complex. Once a fish is caught, it can cross many national borders.
    Thanks to the safe food for Canadians regulations, which came into force on January 15, 2019, we do have new tools at our disposal, which brings me to the next point.
    The safe food for Canadians regulations now require all businesses, including importers, to be licensed, to have traceability and records in place, and to have a preventive control plan. The preventive control plan requirement enables our CFIA inspectors to verify control measures are in place—for example, how the business is ensuring that its labels are truthful and not misleading, and how it monitors and responds to complaints There is also clear accountability for importers to ensure that their product meets Canadian requirements. In essence, they need to know their suppliers and the food they are bringing into the country.
    The safe food for Canadians regulations also allow for significant new fines up to $15,000 and prosecution, providing an additional incentive for businesses to comply. Morever, businesses could lose their licence or have it suspended.
    These regulations include traceability requirements for all foods, and these requirements are based on the international standards set by Codex Alimentarius. The regulations require businesses to keep records one step forward and one step backward throughout the food chain so that a food can be traced through the supply chain when required.
    Traceability requirements are driven by food safety. The primary purpose of the traceability is to be able to rapidly remove a product from the marketplace when that's required. However, they will also facilitate trace-back during investigation of food fraud. This brings me to my last point.

[Translation]

    Public confidence in the products that food companies produce and market to Canadians is key to market access and consumer acceptance. Canadian consumers want safe and quality products that are properly labelled.

[English]

     Budget 2019 provides $24.4 million over five years to the CFIA, starting in 2019-20, and $5.2 million per year ongoing to enhance our capacity to address food fraud.

  (1710)  

[Translation]

    This funding helps us to better understand and better focus our inspection activities.

[English]

    These funds will allow us to better understand and target our enforcement activities to areas of food fraud.
    We will continue to collaborate with industry, governments and international partners, and to engage Canadians to address this important issue.
    Thank you.
    Now we'll go to the government side and Mr. Hardie, for seven minutes or less, please.
    I'll look up and down the line to see if anybody else wants to ask any questions here, but I'll certainly have a few.
    Have you ever done an audit of seafood that you found to be fraudulently mislabelled? Where did it enter the system and where did it come from?
    We routinely do look at.... We have done some testing ourselves, and even with Dr. Hanner, whom they mentioned, in 2018, similarly looking at the DNA elements. With those we looked more at imported product and our processors. The rates of seafood misrepresentation were much lower earlier in the food chain.
     In terms of where food comes from, we do maintain country-of-origin requirements for where the seafood is coming from, but I don't think we've done a direct audit of this issue versus that.
    You're saying that the fish somehow arrives on our shores. Has it been processed when it arrives, as in being ready to go on to the shelf, or is it processed here?
    I don't have specific data but seafood comes in all forms. Some of it comes in a form to be processed here. A great deal happens that way. We also allow fish into Canada fish has already been processed.
    We have some of the world's best fish here, and it would appear that we ship most of it offshore because somebody over there is willing to pay a premium price. Then we import a lot of the fish. Presumably, like televisions and sweatshirts, it's cheap. If Canadians were to buy homegrown fish, shall we say, what premium do you think we would pay? How much more would our fish and chips cost us if we were using Canadian-caught fish?
    I'm sorry, Mr. Chairman, I'm a food safety expert, not an economist. I really can't speculate on that.
    I wasn't expecting you to. I just thought I'd lay that question out there to get some people thinking about that, because it does seem to be a little unusual.
    One of the issues that comes up—even out my way, where we have the west coast fishery, which is not in great shape, but there's a lot of other food that's grown in Canada—is food sovereignty. It has become a bit of an issue. I am concerned from time to time when we hear of foreign substances ending up in all manner of food products, including dairy products. Cocaine was found in shrimp in Britain, for heaven's sake. What is that all about? How wide open is the trade of seafood in the world? With all due respect for the work you've done or that Oceana has done, it really seems to be kind of a wild west show out there.
    If you'll permit me, Mr. Chairman, I can respond from a food safety perspective. For the food to come into Canada, it has to comply with Canadian food safety requirements.
    You can't inspect everything that's coming in.
    No, but we test 18,000 samples per year for pathogens. We test 500 to 700 samples for veterinary drug residues, approximately 500 for metals and 100 for samples of pesticides. Then we look at other elements, contaminants such as PCBs, dioxins, for instance—and granted, not every fish. They're samples, but our compliance rate is quite high.
    Going back to my first question then, do you have any anecdotal evidence of food coming into the country that is clearly not up to standard? If so, do you know where it came from?
    Off the top of my head, no, I don't have any evidence of food coming into Canada that's clearly substandard. If we did, it would be investigated and either held, turned back or destroyed. That's what we do.
     You don't actually keep or publish records on your enforcement activities, or sanctions against those responsible for mislabelling.
    Yes, we do keep records for mislabelling of products. As I said, our data isn't showing a significant impact at the importer level, which I think goes to the nature of your question. It's something we're looking into, as I said, more strongly now that we're taking a more focused look at food fraud. We have traditionally been looking more at the food safety elements, as I said: pathogens, drug residues and elements like that.

  (1715)  

    Thank you.
    I believe Mr. Morrissey wanted to ask a question as well.
    Go ahead.
    The last group, Oceana, made a reference to 44% of the samples they took at commercial restaurants were mislabelled. Do you agree with that?
    I have no reason to doubt their data. I think it's probably quite true.
    Does it alarm you?
    It does alarm me. Every case of food without a label corresponding with what it says it's supposed to be should alarm us. It's false and misleading, and I agree there are always food safety risks. We're finding that the challenge is where on the supply chain it is happening. The data seems to show that it's happening a whole lot more in the restaurants and the retail space than it is at the processing plant and the importer. The problem seems to get worse as it goes down the supply chain.
    Based on that, what methods would the consumer, meaning the commercial consumer, the restaurant or the seafood broker, have to confirm what they bought? How would they be able to verify that?
    You're right. That's the root and the biggest problem at issue here. Fish are easy to substitute because they look alike. It's hard to distinguish between them.
    Who's responsible? Who should be responsible?
    The actual person or entity that should be responsible is the company that broke the law and tried to do whatever it could to dupe it. In terms of catching it, without question, we have to continue to look at how we enforce it. Restaurants are particularly difficult because they are inspected on a regular basis by municipalities and provinces, not necessarily by the Canadian Food Inspection Agency. It's just hard to be in every single restaurant across the country.
    We have found, while we're looking at food fraud, that the best possible case is to be able to trace back to where the root of the problems happen and start looking at that. Certainly, the processors and the importers are where we can make the biggest impact. If there are problems there, we are in there and we have the tools, but you're absolutely right that it's a big challenge once it gets past the regulated entities of processors and importers.
    Now to the government side, we have Mr. Calkins for seven minutes or less.
    I really appreciate your referring to this side as the government side, Mr. Chair.
    Some hon. members: Oh, oh!
    I'm just teasing you.
    I couldn't agree with you more.
    Ms. Lamondin, I would like to ask you some questions along the following line. Is there information that you or your department wishes was on the bill of lading or on the label when we have a seafood product in any shape or form, from a raw product all the way to a processed product, to help you do your job?
    Yes, one of the things we're really pushing for, and the new regulations have allowed us to do, is lot codes, because lot codes at least help us start to trace that back and be able to find the root cause of everything. Again, it's driven by food safety, but it works for food fraud too. Our new regulations have extended some of the requirements to all foods.
    To be honest, fish, ironically, has probably been one of the best-regulated products there is on the market, and our regulations brought other elements back. Fish has actually been, on the traceability side, one of our shining stars when you do have to do a recall. We do recalls on fish products and we are able to find it and trace it back.
    I was going to ask you about that. Do you believe the legislation and the new regulatory framework that you have actually have the right penalties or corrective actions in place? Are they sufficient to change behaviour that needs to be changed, or to be a deterrent going forward?
    We've have had them in place for only about four months now, but yes, I do think that the ability.... It's the first time that we have put the obligation completely on the importer or the processor to be responsible for meeting the regulations, and we have said that their licence is contingent on their meeting those. That ability now to say that if you are demonstrating harm or an intent to break the regulations, you can lose your licence, is huge. The new fines and the ability to impose monetary penalties also give us more tools.
    Between that and the ability to trace back to where we think the root is, we think we're going to have far more in the arsenal than we've ever had before. Is it enough? We will certainly find out.
    One thing on the traceability side, if you'll permit me to add, is that our regulations have brought traceability requirements up to the international standard for food, which is the keeping of records, one step forward, one step back. There is absolutely no doubt that industry is starting to make strides in the areas of blockchain and digitization. That is going to take all industries miles further ahead than where we are now, including the produce industry and the fish industry, to where, at the touch of a button, you can do a trace back to the original source. We haven't yet seen an industry where that is actually in place to the extent that we're hoping for.

  (1720)  

     When answering previous questions, you mentioned that you do a number of tests primarily for food safety. I'm guessing that would include things like ciguatera, methylmercury and all kinds of other things like that. Am I correct? You talked about dioxins. You talked about all of these things.
    Do you capture the DNA or any of the genetic information while you're doing those tests on those samples?
    No. I believe—and I hope I'm correct here—that the DNA testing that we're doing for species verification is a more directed approach than when we're doing our regular review for pathogens and other elements that shouldn't be there. They're unique types of tests done in our scientific area.
    Has there been any evidence of or are you aware of any situation where, when someone attempted to ship fish in or bring it across the border in any form, whether unprocessed or processed, they were actually questioned as to whether or not it was what it said on the bill of lading?
    I'm not aware of any, but that doesn't mean it hasn't happened and that our inspectorate wouldn't have any cases of that.
    I don't have any more questions. Some of my colleagues do.
    Mr. Arnold, you have three minutes.
    In your opening statement you said that you want to make it clear that in all cases of non-compliance, you take appropriate action. What appropriate action is taken? Are fines issued? Are companies shut down? What happens if the mislabelling has taken place outside of the country? What appropriate action is taken?
    That's a very good question.
    We can only take appropriate action against a regulated party in Canada. We can't take any extra-territorial action outside of Canada. What we have done with the new requirements—again, I keep going back to them because they're so significant and we haven't had this tool before—is that if we do find that a Canadian importer has fraudulently brought in food and called it something else, we could take action on that. That's one element. As I said, it would depend, case by case, on what the inspector would like to do.
    At the same time—and this is something we've been trying to convey to importers—if we found that an importer sourced from someone who has misled them, we'll go back and find out if they fixed their sourcing material. We recognize that people can buy fish and be misled themselves.
    What we tend to require is a corrective action plan to demonstrate how they then would perhaps fix the problem the next time around.
    So what appropriate action would there be against someone who knowingly brought in mislabelled food?
    As I said, it can be a range from hefty fines to prosecution. We have not removed or suspended anybody's licence yet, but it's quite possible. As I said, the new regulations came out in January. With this new focus we've had recently—as I said, we just got money for food fraud—we are learning from groups like Oceana and others the extent of the issue, so I think you will see them getting stronger over time than they might have in the past. In the past they might have been corrective actions. Now they can be stronger.
    Has any coordination been started between CFIA and Fisheries and Oceans Canada on seafood labelling and on who's responsible for that jurisdiction?
    No. We have focused entirely on our labelling—on the international conventions and standards related to food labelling and food safety through Codex. To my knowledge, we haven't engaged at a formal level on how labels might be used to address potentially illegal and unrelated fishing, which is not anything that the agency works on directly.
    Now we'll go to Mr. Johns for seven minutes or less, please.
    Thank you for being here.
    When we're looking at the EU and the U.S., how do you feel that the Canadian Food Inspection Agency stacks up to those agencies?

  (1725)  

    Again, I can only come from the perspective of the food safety side, and I can say that, from their equivalent organizations—the U.S. Department of Agriculture and the U.S. Food and Drug Administration—when it comes to food labelling and traceability, we are on par with them. We have the same requirements in place. I'm actually just learning about the elements that were referred to in the EU and the U.S. where the purpose is actually driven from a conservation perspective. I am not able to speak on that because we haven't done a comparison from a conservation perspective.
    From a food safety traceability and labelling perspective, we are meeting the international standards in the same way their food organizations do.
     Do you feel you are on par with the EU?
    In terms of labelling requirements for consumer protection and food safety on the food safety side, I would say so. I haven't done a direct comparison, but we both use Codex Alimentarius.
    Yes.
    As Oceana mentioned, they include other things on their labels that the CFIA hasn't looked at that are related to the—
    Are you looking at those options?
    No, it's not within our mandate at this time.
    I'm just thinking about the number they gave us—$52 billion in fish fraud that's happening globally and the amount of fish that's coming into Canada. We've heard again through the Province of B.C., through this money laundering scheme, that some of it has even ended up in commercial fishers' quota. If someone's going to launder money into quota, they're going to overfish too and they're going to commit fish fraud. I believe that there are no limits once people start breaking laws.
    We could be talking about hundreds of millions of dollars coming into our country. When I look at the $5.4 million being budgeted, it's a drop in the bucket considering the economic leakage that could be happening in our country and costing our fishers.
    Do you agree that $5.4 million just isn't adequate, considering the potential losses to our fishers and to our economy?
    Again, that question is a bit beyond my capacity to say.
    I can say that food fraud and food misrepresentation do have a massive economic impact, not just on fisheries. We recently did a targeted blitz on honey and found that the amount of honey that was being misrepresented from imports was having a significant impact. So I couldn't agree more on that.
    I think with respect to the label, it's important to talk about it. In Canada we've made a commitment here to regulatory burden and really looking seriously to see if we are using the right regulatory tools to achieve certain outcomes.
    The label for an industry is a very costly piece. We are doing some labelling modernization right now to make sure that what's on a label is something that industry can comply with and it's what consumers actually need and want.
    We're also trying to—
    I appreciate that, but I can't imagine that the cost of having fish come in and replace high-quality fish, being misrepresented.... The cost of the labelling must be nominal compared with the loss.
     I'm talking more about the need to look at whether the label is the right tool to achieve the outcomes.
    Yes. Okay.
    We have an ocean protection plan and $1.5 billion budgeted to protect our oceans and to create value. I imagine that a traceability program would be an excellent investment for Canada to create value for fishers and to ensure that we're protecting our oceans and the species in our oceans.
    Do you think that would be a good use of the department or the vehicle to invest in this kind of area?
    I am a huge proponent and supporter of robust traceability systems. As I said, we brought our regulations up to the minimum international standard, noting that they apply to the biggest businesses and the smallest moms and pops. We were trying to be very focused on that.
    Having said that, our agency is very eager to start working with industry to explore new technologies, like blockchain and digitization, and see how we can facilitate industry adoption of these. It is not just for the conservation purpose, but as I mentioned, if you can push a button and find out where that fish came from or where that mango came from, you can find out quickly the source of the recall or an illness.
    We are very strong supporters of robust traceability. Whether everybody is there to the point that we all want to get to, I'm not entirely sure that all industries are ready for that yet.

  (1730)  

    You haven't done an audit.
    Here, Mr. Hardie, I thank you for your good question.
    Is it something that's maybe potentially in the plans, to look at the EU, do an audit, scale up and also make recommendations to those other departments that have resources, like Fisheries and Oceans through their ocean protection plan? Is that in the plans?
    One of the things we are planning to do with the money in this first year is to really focus on understanding, first of all, the issues of food fraud, including fish. Fish is the priority for us this year. We are looking internationally and working with our international partners very much—and I can't understate this—to understand the supply chain of where the misrepresentation is happening, where it is introduced and what the drivers of it are, because the responses are different.
    If it is a small processor, for example, who runs out of one fish and substitutes another and mixes it in because it doesn't seem like a big deal, the proper response is probably compliance promotion and education and saying they are actually breaking the law here with what seems like a simple thing.
    If it is criminal intent, then that is something we would probably want to involve our law enforcement partners with.
     Is that happening very often?
    We have, but not on fish.
    That's a lot of fish coming in without a track record on that.
    The challenge with criminality is that they're very good at it.
    Yes, but we want to get to the bottom of it. That's the idea of an inquiry.
    Our biggest fine ever was for a country-of-origin issue related to green peppers. They got the biggest fine ever, and they went to criminal court and whatnot. It took years of investigation to prove it was actually fraud.
    Thank you so much.
    Thank you, Mr. Johns, and thank you to Ms. Lamondin for being here this afternoon. That concludes our session today. Again, thank you one and all.
    The meeting is adjourned.
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