Good morning, everybody.
It's a nice chilly morning out there—only -25°. It certainly felt like that walking from where I live.
Welcome to meeting 151 of the Standing Committee on Industry, Science, and Technology, as we continue our study on the impacts of Canada's regulatory structure on small business.
Today we have with us, from the Canadian Trucking Alliance, Stephen Laskowski, president. All the way from beautiful sunny Toronto, we have Kevin Freeborn, President, Food Safety Market. From La Cultura Salumi, we have Jane Abballe, Owner.
Welcome, everybody. You'll each have seven minutes to do your presentations, and then we'll go into our questioning for the balance of the time.
We're going to start with Mr. Laskowski from the Canadian Trucking Alliance. You have seven minutes, sir.
Thank you very much, Mr. Chair and members of the committee, for having us here today.
I'll provide some brief background on what the Canadian Trucking Alliance is. We represent over 4,500 carrier companies from across Canada, both big and small. Our members serve all segments of the economy. With regard to our sector in particular, we have many large companies, but we are an industry dominated by small business. There are thousands of trucking companies with 10 trucks or fewer.
In terms of the topic today, we really appreciate the opportunity to discuss the impact on small business. I think it's important for everyone to understand—and I think you do have an understanding of it—that all laws and rules need to be complied with, but the adaptability of small businesses versus larger businesses can sometimes be a challenge.
With regard to our sector, I think it's also important to keep in mind that we are federally regulated for inter-provincial carriers with regard to trucking, but unlike telecommunications, banking, railways and the marine sector, which are basically dominated by large businesses, we are the exact opposite in terms of numbers. We have small businesses. I think that's something to keep in mind for federal officials and federal politicians.
There's something I just wanted to touch on quickly before I get into my piece. You always have people here testifying and telling you, “We have problems. We need you to fix them.” I think it's also important to recognize when problems have been addressed. In the last year, I think there have been a number of announcements with regard to positive impacts in our sector, specifically in the fall economic statement with regard to the accelerated investment initiative, which is going to be very positive to our sector in terms of accelerated depreciation for equipment. It's a great initiative.
There were two very important infrastructure announcements. One is in Saskatchewan with regard to Highway 6 and Highway 39. The other is obviously the Gordie Howe International Bridge. They're going to bring efficiencies to the trucking industry.
Also, the Council of Ministers Responsible for Transportation and Highway Safety, led by , made some announcements about flexibility in regulations with regard to tires. I won't get into the details. It's early in the morning, and I don't want your eyes to glaze over, but they are important for all businesses, big and small, for flexibility of equipment usage. Obviously, there was also the recent announcement for mandatory entry-level training and minimum training standards across the country. These are all very positive announcements, especially for smaller businesses.
Now I'm going to get into some of the issues we've addressed and what we'd like to see. One of the questions posed to us was about areas for improved efficiency to reduce costs to regulated parties. What we would like to see is the introduction of electronic logging devices. That regulation is in place in the United States. We would like to be basically harmonized with them.
That rule came into place in December of 2017. We'd like to see it hit the road as fast as possible. Why? There are a whole bunch of safety reasons, but you asked us for efficiencies. That's about a $2,000 revenue increase for truck drivers because you're eliminating paper logbooks that they would have to do, keeping up with those paper logbooks and the administrative labour. They can gain about $2,000 a year in efficiency time to make extra revenue. It's a big thing for safety. It's also a big thing for small business.
With regard to infrastructure to reduce regulatory issues, if you were to twin Highway 185, between New Brunswick and Quebec, and invest in this area, trucking companies would be able to use more efficient trucking equipment between the Maritimes, Quebec and Ontario. It's a big thing for small business, whether you're using trucking companies or you are a trucking company.
With regard to the carbon tax and the monies gained after April 1 from the tax on diesel, we would like everyone to consider reinvesting those taxes into our industry through efficiency improvements, a green trucking program, so that small companies can add different types of fairings, aerodynamic devices, tire technology and engine technologies that will reduce carbon emissions. We're saying that if we're going to do something with regard to the carbon tax, let's reinvest in the small companies and create an incentive program based on the monies paid by these companies.
One last thing on the carbon tax is to make sure that the carbon registry doesn't become an administrative burden for small businesses. Let's make sure it's as efficient as possible.
With regard to areas for legislative and regulatory modernization, here is an issue for CRA. A number of companies and drivers are misclassifying themselves as a small business, which we refer to as “Driver Inc.” The CRA has identified the issue as a personal services business. We believe there are billions of dollars in lost tax revenue for the federal government. We also see this as a very unlevel playing field for legitimate small businesses. Small businesses take risks. With risks come the benefit of the tax system, because you're absorbing that risk. If we have misclassification and individual companies and drivers misclassifying without taking that risk, we need to level the playing field and bring enforcement on this issue.
With regard to the truck driver shortage, we would like to see a trusted employer program. Right now in Canada, we have an acute driver shortage, where individuals—such as those from the companies here today—are having a hard time finding trucking companies to haul freight. Right now we cannot use the immigration system like other sectors can. Truck drivers do not qualify. We would like to see a pilot program that would allow us to bring over and use people from overseas, not on a temporary basis but on a permanent basis, where they become Canadians, work hard in our industry, and build families. We need the people. We want to work with you to make this change.
In essence, guys, this is what we believe needs to be done on the immigration file: a different lens. Times have changed; it's 2019, and we believe we are a profession. We believe we are a skilled trade. According to the historic definition, we're not, and this needs to be addressed.
With regard to the current programs out there, such as the temporary foreign worker program, there are some administrative pilots you could address in our sector that we'd like to see and that would be very good for small businesses. Right now the current system is administratively burdensome. We believe there are ways to address it.
I'll just complement that and add something I left out—the rural and northern immigration pilot for truck drivers; well, it's for everyone, but it includes truck drivers. That was a welcome announcement. We would like to see an evolution of that. We believe that pilot will be successful. If it is successful, we need to remove the word “pilot” and allow every municipality across Canada to participate in that sector so that, once again, we can have access to labour.
Thank you very much. I would welcome your questions.
Thank you for inviting Freeborn & Associates Inc. to participate in the Standing Committee on Industry, Science and Technology's study regarding the impacts of Canada's regulatory structure on small business.
We have been in business since 1997. We're a team working in the high-tech environment, creating educational materials to train and certify food handlers. Our mission is to help food service operators serve safe food to their customers. Our vision is to create a culture of food safety wherever food is being prepared and consumed. With these goals in mind, we provide interactive educational tools to educate people at all levels of the organization, from those who manage food service operations to those who prepare and serve safe food.
By way of introduction, we'd like to say that we appreciate the opportunity to address the impact of regulations on small business. I will elaborate on our experience as it relates to the committee's mandate. I will briefly describe the current situation and requirements for recognition of food handler certification; look at opportunities to improve efficiencies and reduce costs; and the alignment of interprovincial, territorial and international standards. I will also suggest an improvement to the pathway to market.
Currently, in nearly all jurisdictions in Canada, food handler certification is regulated by provincial or territorial government legislation. For a business to develop a nationally recognized training and certification program, it must be presented to each jurisdiction for approval. While all the health authorities reviewing the applications follow a document called the “National Guidelines for Food Safety Training Programs in the Food Retail and Food Service Sector”, there are small variations between each jurisdiction.
These reviews are often carried out by health inspectors, also known as environmental health officers, who are tasked with many day-to-day responsibilities for the protection of public health. Once a program is approved, recognition is posted on each jurisdiction's website, so the business can verify the program's credibility to its clients. We would tell a client that our program has been approved by directing them to a listing on each jurisdiction's website. Recognition is posted there. It's also important to note that the people we work with throughout the approval process are great folks. They're thoughtful, caring individuals who are performing to the best of their ability within the paradigm they've been given.
Regarding some opportunities for improved efficiencies, having every jurisdiction review these programs is a lot of duplication of effort. There is an opportunity to significantly reduce the duplication by centralizing the review process. Currently, programs can take up to a year to be reviewed. Improving efficiency can reduce the approval process to weeks. If the approval process were streamlined, food service businesses would have faster access to state-of-the-art national food safety training and certification resources. They would also have access to more current resources; the more often we update these, the more current the resources available will be. Having better resources manages risk for business, and reduces the likelihood of food-borne illness for the public.
Concerning some opportunities to reduce costs, the costs to business would be reduced by requiring preparation of only one application for approval, instead of the current application for each jurisdiction. There is also the cost to taxpayers, which would be significantly reduced if the duplication of effort in each jurisdiction were eliminated, freeing up public health resources to attend to their core responsibilities. The cost to business, in terms of lost revenues while programs await approval, would be significantly reduced.
Relative to the alignment of interprovincial, territorial and international standards, there are criteria for practices required for food safety. These are all based on accepted science. It means that what is taught can be consistent between jurisdictions, because those jurisdictions rely on the accepted scientific evidence.
Since we already have national guidelines for food safety training programs, and these are generally acceptable to all jurisdictions, the variations in criteria between jurisdictions are nearly always very minor in nature. Having all jurisdictions agree to one set of criteria, without variation, would permit alignment nationally. It's would also be good to look at further alignment of our national standards with other countries, because that would open the doors to international export of training programs from Canada.
The food service and hospitality industry requires workers to move through various jurisdictions, and students of culinary programs travel across the country to get work. Provinces and territories benefit from the alignment of standards, in order to attract these much needed human resources.
I have some suggested improvements to the pathway to market. We should harmonize requirements for food safety between provinces and territories to create one set of national criteria without interprovincial or territorial variations. We should review international standards to align Canada's criteria with them, since they're all based in science. We should create a national body that can independently review and accredit programs meeting those national standards. This body would not be in the business of delivering or promoting food safety training programs, so it would remain objective in its program review. Finally, we should establish a streamlined review process that reduces the time to market for programs that meet the required standards.
Thank you for listening to my comments.
Good morning, ladies and gentlemen.
Before I start, I would like to point out that English is my second language, and please bear with me for any mistakes I may make.
I'm from La Cultura Salumi Inc., a company in Belleville, Ontario. Salumi means “dry-aged meats” in Italian. La Cultura Salumi Inc. is a dry-aging meat plant where we use specialty systems imported from Italy to naturally dry-age the meat. We produce high-quality products with temperature and humidity controls only. We don't inject anything into the meat. We do not put meat in brine. We don't cook the meat or dry-cure it with high temperatures. We use an artisanal way to dry-age bresaola, prosciutto, salami, etc.
We started La Cultura Salumi in 2012, but prior to that my husband had 30 years of experience in the meat industry and had travelled all over Europe to research and understand how to produce high-quality charcuterie products.
Our main product is bresaola. We make beef bresaola, water buffalo bresaola and turkey bresaola. Bresaola is an air-dried salted piece of beef with a long aging procedure. It originated in the Valtellina area of northern Italy. The whole area is dedicated to making bresaola, the speciality product from beef.
There are over 30 major producers, and the biggest one is JBS, and one of the biggest meat processors in the world. They purchased a plant in Valtellina called Rigamonti. Rigamonti produces 125,000 kilos of beef bresaola weekly. But the issue is that over a hundred years ago when Italians started making bresaola, there was enough meat in Italy to supply this product. However, now over the last 40 years, the market in Europe has grown so much that Italy does not have enough beef for the demand for beef bresaola. Italy is now importing beef from South America and Africa to feed the demand.
We knew that Canada is a big resource for beef, providing a wide assortment of quality beef. That is why we decided to make this product in Canada with high-quality Canadian and U.S. beef only. The beef bresaola market is also getting bigger for religious and health reasons, for Muslim and Kosher markets, and also for people who do not eat pork.
Now I would like to say a few words about the challenges of pork we found in Canada. To produce a high-end quality pork salumis as they do in Italy and Spain, the pigs should be a minimum of 12 months old. When we started the dry-curing business, we worked closely with Conestoga Meats in Kitchener, Ontario. The company owners are a group of co-op farmers. Because my husband, Frank, used to deal with Conestoga in his previous business, they agreed and were happy to do a test run for us. They tried to raise the pigs to 12 months, but the animals started to die around nine months. This was due to the fact that the pigs in Canada are modified and the carcasses are not able to hold large weights. Another problem we found is that all slaughterhouses in North America have slaughter lines only for small pigs around six months old. Pork from a six-month-old animal is not the best quality to make high-end, dry-aged products as they do in Italy and Spain. We need 12 month-old animals to have firm meat and less moisture in the meat for dry aging.
After searching all over Canada and the U.S.A. for 12-month-old pigs, we could not find any anywhere. To stick to our passion to make only high-quality aged pork products, we started to import frozen pork from Austria and Spain, and they all are from a minimum of 12-month-old pigs.
Also, I would like to bring to your attention that with the high-end standard at our plant, we cannot ship and sell across Canada because we are a provincially inspected plant.
I am receiving a lot of phone calls and emails from people in businesses all over Canada asking if they can buy from us. Even one owner of five casinos and restaurants in the Calgary area asked me why people from Alberta cannot eat products made in Ontario. This question for us is very important. It does not make sense that Canada has two levels of inspection, provincial and federal. In the U.S.A., for example, for the U.S. market, there is only USDA inspection in all states.
Also, we would like to use the artisanal old Italian way to make bresaola. When we asked our meat inspectors about this, they told us to call Guelph and do a validation study, which will cost around $30,000 or $50,000 for validation, and there is no guarantee they will approve it. With the current regulations, we send samples of every batch we make to the lab in Toronto to check for salmonella, E. coli and other bacteria. It's hard to understand why we cannot make small test batches with no preservatives, which are healthier, and check each test batch in the lab to prove whether it's safe or not. It would cost much less.
I appreciate the opportunity to speak in front of this committee. We hope we will see some positive changes in the near future.
First of all, I'm going to steal the sandbox from you. I hadn't heard that one, so I'm going to use that.
Absolutely. From an industry perspective, the ideal situation is always, “Let's go from zero to.... Let's bypass the pilot.” But understanding governments, we need to make sure there are no unintended consequences. I don't see any here, but we do appreciate the role of government and the need to perhaps sometimes walk before you run, but that is indeed the case. We have a severe driver shortage, and the current system....
I'll back up a little bit. You're always pressed to give everything in under six minutes.
Indeed, the Canadian Trucking Alliance and its membership are looking at current Canadians to find ways to attract young people and different people to our industry and to put those people to work. It is a challenge, especially for long-haul trucking operations. In terms of moving to the next step, indeed, we need to think a little bit out of the box, which think governments are doing, and we need to continue to evolve.
I saw an announcement on Sunday or Monday morning, I believe, with regard to another pilot for, I believe, child care workers coming over into a pilot in the same type of thing.
The trucking industry moves the Canadian economy. We have a severe driver shortage, and we need to address it quickly.
Yes. There's a real movement for that. In fact, the Windsor and district Chamber of Commerce and the institute for trucking at the University of Windsor's logistics program are looking at the potential for a hub and other services. They have recently deserved a lot of credit for getting people together, even just to try to see about some best practices.
I do want to shift gears a bit and stay with you, because it is very important. You mentioned staffing personnel for the trucking industry and immigration. I remember that back in 2002 when I was at the Canadian embassy, Raymond Chrétien was the ambassador when the first suggestion from the United States was to bring in the US-VISIT program. They identified that three sets of Canadians that happened to be born in different countries would be identified and screened differently.
I protested that immediately, because I come from a border community where lawyers and accountants cross into Detroit every single day. Doctors and nurses—up to 10,000 medical professionals a day—cross into Detroit to save American lives. That has now transgressed into a series of Canadians who happen to have been born even 30 or 40 years ago somewhere else and who are now being screened differently in the United States when going in there. We still have yet to have a prime minister object to that.
What I'm asking, though, is this. If we are going to have a newer force coming in, which I guess we do need to work with about cross-border screening, are you concerned? Again, this is a policy where I can tell you that they'll have all kinds of problems on the border at different times, just depending upon where a person came from originally, even if they're a Canadian citizen, let alone a landed immigrant.
Thank you to our witnesses for their expertise and for helping us in the study of this important area.
I'd like to start with the Canadian Trucking Alliance.
Sir, you mentioned, in your initial testimony, the discussion around the federal trucking registry for the carbon tax.
I'm very concerned because, obviously, your industry spans east-west, but in my area, if I'm speaking to local truckers, a lot of their business involves north-south trucking, so there are going to be a lot of concerns around competitiveness.
Can you please, maybe, just tell us a little bit more about the federal registry for the carbon tax and what some of the concerns are around double taxation and competitiveness?
Thank you to the three of you for your testimony on this important matter.
I'll keep going with Stephen.
My family is in the trucking industry too. I have cousins up in northern Ontario and Elk Lake, the Fisets, who have been trucking for years. I used to work for them when I was younger. And my best friend in Sault Ste. Marie, where I'm from, owns the Steel City Truck Lines.
It's an important industry, and I really appreciated your observations, in particular about the fall economic statement and being able to accelerate and write off the depreciation of equipment. I really didn't think about that until you mentioned it. Even as just consumers of equipment ourselves, we know how much and how quickly it depreciates.
Do you have any stats or have you crunched the numbers on what the potential savings or investment would be to the trucking industry for that particular one?
Also, I was reading some other news about what some in the trucking industry were talking about in relation to the fall economic statement, including removing barriers to trade within Canada and moving goods to markets efficiently in Saskatchewan and British Columbia. Those were the two pieces of investment: $160 million for ports and rail infrastructure in Vancouver to increase the efficiency and capacity for trade; and the $53.3 million to upgrade Highways 6 and 39 between Regina and Estevan, near the United States border.
Do you have any further comments on that?
Sure. I have them all in my speech, and I had to look over them.
In terms of your first question, if the company bought five trucks at about $1 million each.... I want to put a big asterisk here: this doesn't downplay it, but assumes that the company is profitable. That's always an important reminder, because my members would say, “Hey, well, we have to make money to get this.”
At $1 million for five trucks, which would be about right for the overturn of a smaller company, typically, right now, it would be $200,000. Under the new system it's $600,000, so that's significant. It's very significant. If you just scale that down to a one- or two-truck operator, it's very important, yes.
Obviously the railhead investment at the port of Vancouver is important to the members of the B.C. Trucking Association. A number of them use that port, with all the freight coming in. The Regina investment was also important, as is any investment. When made an announcement a couple of years ago that a different lens would be brought to infrastructure investment with regard to return on investment and funds, that was a very positive change in direction.
Our members like to see announcements like this. We pay a lot in fuel tax and registration, and we have an expectation for investment back into the highway infrastructure. You can't fix everything, but it makes sense to identify the bottlenecks and the problem areas. There's a return on investment for the Canadian economy. If a truck moves more efficiently—whether it's into a port or across the border or across a bridge—and the prosciutto can get across the bridge, it's good for business all around.
What's happening is that there are thousands of drivers who work for these hundreds of trucking companies that have said, “No, you don't have to take any risk; you're going to incorporate yourself.” Then Steve Laskowski incorporates himself and he is a small business.
They don't pay for a truck, they don't pay for the fuel, they don't pay for the licence plates. They basically bring a pair of boots to work and they're going to deduct all the things that Jane gets to deduct because she takes risk and all the rest of it as our small members do.
However, they take no risk, none. They are getting all the benefit of the tax system of a small business, with none of the risk, and we expect it's costing the taxpayers of Canada over $1 billion at a minimum.
In terms of a level playing field, imagine being a small employer. That small employer is saying to you, “I take on all this risk, for what? I can go down the street and just incorporate myself for $300 and I can get all the deductions.”
To CRA's benefit, last year they stepped in and said, “No, these people are not owner-operators; they do not own a truck, they do not buy plates, they do not do all this and take the risk.”
They are what's referred to as a personal services business and not eligible for any of the small business deductions, but now, the issue for us in 2019 is to enforce the law.